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Type: Op-ed

  • Why the Indo-Pacific has assumed significance for Europe after the pandemic

    The article highlights Asia’s growing significance in the wake of the pandemic. This is underscored by Europe’s meaningful engagement with Asia which is based on an understanding of the region’s geopolitical and economic significance.

    Asia’s rise

    • The pandemic has upended many certainties. But it has reinforced one major trend in global politics: The rise of Asia.
    • The region’s rise has created three Asias.
    • First, there is the familiar Asia of business — open, dynamic, interconnected.
    • Second, an Asia of geopolitics, with ever-starker nationalisms, territorial conflicts, arms races and Sino-American rivalry.
    • Lastly, we have an Asia of global challenges.
    • These three Asias are also marked by 3 dynamics:
    • 1) Geopolitical rivalries that threaten free trade.
    • 2) The fight against the pandemic is mutating into a systemic competition between democracy and authoritarianism.
    • 3) And frenzied economic growth is fuelling climate change.

    European strategy for Indo-Pacific

    • Germany together with France and the Netherlands, have commenced work on a European strategy for the Indo-Pacific.
    • The strategy seeks cooperation with all countries of the region: For open economies and free trade; for the fight against pandemics and climate change; and for an inclusive, rules-based order.
    • Such a European strategy for the Indo-Pacific must take all three Asias into account.
    • Europe is a key trading, technology and investment partner for many countries of the region.
    •  The EU recently concluded groundbreaking free trade agreements with Japan, Singapore and Vietnam that set environmental and social standards.
    • In late 2020, the countries of East and Southeast Asia signed Regional Comprehensive Economic Partnership, encompassing one-third of the global economy.
    • It is time for the EU to swiftly conclude the ongoing negotiations on trade agreements with Australia and New Zealand – and to move forward with negotiations with Indonesia and India.

    Reducing dependencies

    • Following the above policies, Europe will also reduce dependency and following the principle of diversification.
    • Together with its Indo-Pacific partners, Europe can set standards for new technologies, human-centred digitisation and sustainable connectivity. 
    • In this endeavour, Europe can draw on its innovative and economic strength as well as its regulatory power.
    • At the EU-India Summit in May, the launch of a connectivity partnership with India will further connect India’s and Europe’s digital economies.

    Rising tensions and rules-based Indo-Pacific

    • Meanwhile, tensions are rising in the Asia of geopolitics.
    • New cold wars or even hot conflicts in the Indo-Pacific would be an economic and political nightmare.
    • Europe must, therefore, take a firmer stand against polarisation and more strongly advocate an inclusive, rules-based Indo-Pacific.
    • The strategic partnership concluded between the EU and the Association of Southeast Asian Nations (ASEAN) last December connects us with like-minded middle powers.

    Asia of geopolitical challenges

    • Containing geopolitical rivalries in Asia is also a precondition for shaping the future with the Asia of global challenges.
    •  As the biggest emitters of CO2, the US, China, India and the EU will only win the fight against climate change together.
    • The Leaders Summit on Climate that will be hosted by the US next week sets the stage for cooperation.
    • Europe and the countries of the Indo-Pacific need each other also in the fight against the virus.
    • The EU is by far the biggest supporter of the international vaccine platform COVAX, and India as a leading producer of vaccines is the most important COVAX supplier.
    • We will all benefit from this as, without the worldwide vaccination rollout, mutations will keep on setting us back in the fight against the pandemic.
    • Europe will continue to stand up for human rights and democracy in the Indo-Pacific.
    • This was demonstrated with sanctions against those responsible for human rights violations in Xinjiang — and also against Myanmar’s generals.

    Conclusion

    Europe is ready for a new partnership — a partnership founded on seeking dialogue with the open Asia of business, taming geopolitical rivalry in Asia together and coming up with responses to the world of tomorrow with the Asia of global challenges. This must be the objective of European policy — for and with the Indo-Pacific

  • 7th Fleet’s patrol in India’s EEZ was an act of impropriety

    The explains the implications of a recent incident in which the US 7th fleet asserted navigation freedom and rights inside India’s Exclusive Economic Zone.

    Freedom of navigation operation in India’s EEZ

    • The US 7th fleet recently declared that on 7th April, 2021 USS John Paul Jones asserted navigational rights and freedom inside India’s EEZ, without requesting India’s prior consent.
    • The statement also said that  “India requires prior consent for military exercises or manoeuvres in its EEZ, a claim inconsistent with international law.

    Which international law the statement referred to

    • The “international law” being cited by Commander 7th Fleet is a UN Convention which resulted from the third UN Conference on Law of the Seas (UNCLOS 1982).
    • India has ratified the Convention, which came into force in 1994.
    • However, amongst the 168 nations who have either acceded to or ratified UNCLOS 1982, the US is conspicuous by its absence.

    Background of the UNCLOS

    • In 1945, the US unilaterally declared its jurisdiction over all natural resources on that nation’s continental shelf. 
    • Taking cue from the US, some states extended their sovereign rights to 200 miles, while others declared territorial limits as they pleased.
    • To bring order to a confusing situation, conferences for codifying laws of the seas were convened by the UN.
    • After negotiations, an agreement was obtained on a set of laws that formalised the following maritime zones:
    • (a) A 12-mile limit on territorial sea;
    • (b) A 24-mile contiguous zone.
    • (c) Amnewly conceived “exclusive economic zone” (EEZ) extending up to 200 miles within which the state would have sole rights over natural resources.
    • The EEZ was said to be unique in that it was neither high seas nor territorial waters.

    Issues with the UNCLOS 1982

    • The signatories UNCLOS 1982 have chosen to remain silent on controversial issues with military or security implications and mandated no process for resolution of ambiguities.
    • Resort to the International Tribunal for the Law of the Sea or a Court of Arbitration are amongst the options available.
    • However, many states have expressed a preference for “negotiating in good faith”.
    • The time has, perhaps, come for signatories of UNCLOS 1982 to convene another conference to review laws and resolve issues of contention.

    Why US refused to ratify UNCLOS

    • It was accepted that the seabed beyond the limits of national jurisdiction was not subject to national sovereignty but would be “the common heritage of mankind” .
    • This seems to have been at the root of the US opposition to UNCLOS.
    • It was felt in the US that this concept favoured the under-developed countries thereby denying America the fruits of its technological superiority.
    • The US Senate, therefore, refused to ratify UNCLOS.
    • Amongst the areas of major contention or sharp divergence in the interpretation of rules are:
    • 1) Applicability of the EEZ concept to rocks and islets.
    • 2) The right of innocent passage for foreign warships through territorial seas.
    • 3) Conduct of naval activities in the EEZ and the pursuit of marine scientific research in territorial waters and EEZ.

    Containing China

    • China has insulated itself against US intervention, through the progressive development of its “anti-access, area-denial” or A2AD capability.
    • China has accelerated its campaign to achieve control of the South China Sea (SCS).
    • In 2013, China commenced on an intense campaign to build artificial islands in the SCS on top of reefs in the Spratly and Paracel groups.
    • In 2016, China disdainfully rejected the verdict of the UN Court of Arbitration in its dispute with the Philippines.
    • So far, none of the US initiatives including Obama’s abortive US Pivot/Re-balance to Asia, Trump’s Indo-Pacific Strategy and Asia Reassurance Initiative Act, seem to have had the slightest impact on China’s aggressive intent
    • Therefore, it seems pointless for the US Navy to frighten the Maldives or friendly India and it needs to focus on China instead.

    Consider the question “What are the different types of maritime zones under the United Nations Convention for the Law of the Sea 1982? What are the flaws in the convention?

    Conclusion

    In this fraught environment, the ever-expanding, worldwide FONOP campaign needs a careful reappraisal by US policy-makers for effectiveness — lest it alienates friends instead of deterring adversaries.

  • India’s refugee Policy & Issues with it

    The article highlights the issue of the lack of refugee protection framework in India and suggests enacting domestic law to deal with the issue. 

    India’s record on refugee protection

    • India, for the most part, has had a stellar record on the issue of refugee protection.
    • But this moral tradition has come under great stress of late.
    • New Delhi has been one of the largest recipients of refugees in the world in spite of not being a party to the 1951 Refugee Convention and its 1967 Protocol.

    Confusion in policies for immigrants and refugees

    • Much of the debate in India is about illegal immigrants, not refugees, the two categories tend to get bunched together.
    • Our policies towards illegal immigrants and refugees is confused is because as per Indian law, both categories of people are viewed as one and the same and are covered under the Foreigners Act, 1946.
    • The act offers a simple definition of a foreigner — “foreigner” means “a person who is not a citizen of India”.
    • There are fundamental differences between illegal immigrants and refugees, but India is legally ill-equipped to deal with them separately due to a lack of legal provisions.
    • Also, India is not a party to the 1951 Refugee Convention and its 1967 Protocol, the key legal documents pertaining to refugee protection.

    How absence of policy framework creates problems

    • The absence of legal framework for refugees leads to policy ambiguity whereby India’s refugee policy is guided primarily by ad hocism and ‘political utility’.
    • At the same time, the absence of a legal framework increases the possibility of the domestic politicisation of refugee protection and complicates its geopolitical faultlines.
    • The absence of a clearly laid down refugee protection law also opens the door for geopolitical considerations while deciding to admit refugees or not.
    • For example, India’s decision in the recent case of admitting Myanmarese refugees fleeing to India was influence by the possibility of irking the Generals in Naypyitaw.
    • However, hypothetically speaking, if New Delhi had domestic legislation regarding refugees it could have tempered the expectations of the junta to return the fleeing Myanmarese.

    Why India has not signed convention and protocol on refugee protection

    • The definition of refugees in the 1951 convention only pertains to the violation of civil and political rights, but not economic rights, of individuals.
    • If the violation of economic rights were to be included in the definition of a refugee, it would clearly pose a major burden on the developed world.
    • This argument, if used in the South Asian context, could be a problematic proposition for India too.
    • India also need to argue that the North is violating the convention in both letter and spirit, and make its accession conditional on the Western States rolling back the non-entrée (no entry) regime.
    • The non-entrée regime is constituted by a range of legal and administrative measures that include visa restrictions, carrier sanctions, interdictions, third safe-country rule, restrictive interpretations of the definition of ‘refugee’, withdrawal of social welfare benefits to asylum seekers, and widespread practices of detention.”
    • In other words, India must use its exemplary, though less than perfect, history of refugee protection to begin a global conversation on the issue.

    Way forward

    • What other options do we have to respond to the refugee situation we are faced with?
    • The answer perhaps lies in a new domestic law aimed at refugees.
    • The CAA, however, is not the answer to this problem primarily because of its deeply discriminatory nature.
    • What is perhaps equally important is that such a domestic refugee law should allow for temporary shelter and work permit for refugees.
    • India must also make a distinction between temporary migrant workers, illegal immigrants and refugees and deal with each of them differently through proper legal and institutional mechanisms.

    Consider the question “What are the reasons for India’s not singing 1951 Refugee Convention? What are the options India can explore for refugee protection? 

    Conclusion

    Our traditional practice of managing these issues with ambiguity and political expediency has become deeply counterproductive: It neither protects the refugees nor helps stop illegal immigration into the country.

  • Give small savers what is due to them

    The article highlights the issues with linking small savings interest rates with the yield on G-sec and its resetting on a quarterly basis.

    Issue of small savings interest rate

    • For decades, small savings have constituted an important source of household savings, funded development programmes of state governments and offered a safe and secure source of income to senior citizens.
    • Recently, a notification on reducing the interest rates on small savings schemes quickly made headlines and was rescinded after 12 hours.
    • For small savers, the pandemic turned into a triple whammy: Battling job losses, higher food prices and a sharp devaluation in the value of their savings and earnings thereof. 
    • Interest on the Senior Citizens’ Saving Scheme was cut to 7.4 per cent, effective from April 2020, from 8.7 per cent before,
    • This was done despite the Gopinath Committee had recommended the rates should never be revised more than 100 basis points in a single year.

    Linking small savings rate to G-sec yields

    • The suggestion to link small savings rates to G-Sec yields was first made in 2001 by Y V Reddy, then deputy governor of RBI.
    • Reddy committee suggested small savings rates should be reset once a year, allowing for a spread of up to 50 basis points.
    • Reddy’s recommendations were reiterated by his successor Rakesh Mohan.
    • The Gopinath Committee,  set up in 2009 gave its report in June 2011 and annual revisions in small savings rates linked to G-sec yields got underway effective April 2012.
    • In 2016, however, the government decided to reset them on a quarterly basis. 

    Why link small savings rate to G-sec yields

    • Such linking is premised on the argument that the money collected through these schemes is invested in central and state government securities. 
    • While the yield on the government securities progressively declined over time, small savings rates remained downwardly rigid.
    • This resulted in an asset-liability mismatch that threatened the viability of the NSSF.
    • It is also argued that people’s dependence on small savings schemes had significantly declined since formal banking had rapidly expanded.
    • Moreover, for those who used small savings as safety nets there were other alternatives such as old-age pension and other similar schemes.

    Issues with resetting rates on quarterly basis

    • All expert committees that examined the issue had strongly argued against resetting the rates on a quarterly basis.
    • The fear was it could result in unfair rewards for small savers in the event the G-sec yields remain artificially low for a certain period of time.
    • It did happen in the pandemic year when small savings rates faced the steepest cut in five years.
    • The changed policy on small savings is also premised on the belief that markets offer fair outcomes.
    • More often than not, that is not true.
    • The experience of the past year bears it out.
    • While retail inflation spiked, the RBI used every trick in its bag to hold G-sec yields down.

    Way forward

    • The government could go back to resetting the rates annually, keeping the revision under 100 basis points and allowing small savings rates a spread of at least 50 basis points, not up to 50 basis points, over and above the G-sec yields.
    • Also, it may revisit the suggestion made by the Rakesh Mohan Committee to use a weighted average of G-sec yields over preceding two years — two-thirds weight for the later year, one-third for the earlier year.

    Consider the question “What was the rationale for linking the interest rates on small savings to yield on G-sec? What are the issues with it?

    Conclusion

    Adopting the changes suggested here may require setting aside a few thousand crores to fill the resultant gap in the NSSF. But it is worth doing.

  • Maoist Attack in Sukma

    The article deals with the counterinsurgency strategies to deal with the issues of left wing extremism in India

    Threat of left-wing extremism

    • The killing of 22 security personnel by Maoists serves as a grim reminder that left-wing insurgency continues to be one of the biggest internal security threats for the country.
    • In the past few years, Maoist violence seemed to have been on a downward spiral.
    • The figures associated with the key indicators of violence like the number of incidents also support the contention that “insurgency is on the downward spiral”.
    • But the attack should thus serve as a wake-up call to those who had begun to get complacent about the Maoist threat.

    Approach in counterinsurgency strategy

    • One school believes that given the Maoist insurgency posturing itself as a “people’s war”, the mandate is for a people-centric approach of “winning hearts and minds”.
    • Others argues that an enemy-centric approach predicated on kinetic operations is best suited for the Maoist insurgency, where the fear of the population seceding from India is remote.
    • The success of the erstwhile state of Andhra Pradesh in curbing the Maoist problem is often attributed to this enemy-centric approach.
    • However, there is robust scholarly work available that shows that the Andhra government based its counterintelligence strategy on a judicious mix of the enemy-centric and population-centric approaches.
    •  Andhra Pradesh had successfully implemented short-gestation-period developmental works in the Maoist-affected rural areas.
    • Moreover, the erstwhile state is also the first state to have a comprehensive surrender-cum-rehabilitation policy.
    • After the 2014 guidelines of the central government were brought out, many states have crafted attractive surrender and rehabilitation policies.
    • Another important question is whether the government should keep the option of talking to Maoists open.
    • The willingness to talk to rebel groups seems to incentivise insurgents and may demonstrate that violence pays.
    • But bringing an end to civil war invariably involves negotiating with the enemy.

    Way forward

    • Indian counterinsurgency has to work with a dual objective of defeating the insurgents militarily and fully quell the insurgent impulses.
    • This will need institutional overhauls.
    • In the last decade or so, insurgency-affected states have started to raise special forces on the lines of Greyhounds.
    • These forces are being given rigorous training in “counter-guerrilla” tactics and jungle warfare.
    •  Besides, the jungles around the interstate borders have always been the preferred hiding spaces for the Maoists.
    •  States must do more to synergise their efforts by launching coordinated operations, thereby denying Maoists any space for manoeuvrability.
    • These efforts need to be supplemented by well-crafted development schemes.
    • It is also important to segregate the population from the insurgents both operationally and ideologically.
    • The conflict over the distribution of resources can be mended with economic development.
    • But the bigger challenge would be to create a system where the tribal population feels that the government is representative, not repressive.
    • Opening negotiation channels and policies like surrender and rehabilitation can give such a representative sense to the rebels.

    Consider the question “Discuss the causes of left wing extremism in India. Suggest the way forward to deal with the issue.”

    Conclusion

    The government needs to follow these policies to end the challenge of left wing extremism from India.

  • Lok Adalats

    The article highlights the important role played by the Lok Adalats in dispute resolution and raises concerns over underminig of justice for the sake of speedy disposal.

    Background of Lok Adalat

    • The Constitution (42nd Amendment) Act, 1976, inserted Article 39A to ensure “equal justice and free legal aid”.
    • To this end, the Legal Services Authorities Act, 1987, was enacted by Parliament and it came into force in 1995.
    • The Act seeks “to provide free and competent legal services to weaker sections of the society” and to “organise Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity”.
    • As an alternative dispute resolution tool, Lok Adalats are regularly organised to help parties reach a compromise.
    • Motor-accident claims, disputes related to public-utility services, cases related to dishonour of cheques, and land, labour and matrimonial disputes (except divorce) are usually taken up by Lok Adalats.

    Significance of Lok Adalats

    • As per the National Judicial Data Grid, 16.9% of all cases in district and taluka courts are three to five years old.
    • For High Courts, 20.4% of all cases are five to 10 years old, and over 17% are 10-20 years old.
    • Furthermore, over 66,000 cases are pending before the Supreme Court, over 57 lakh cases before various HCs, and over 3 crore cases are pending before various district and subordinate courts.
    • Moreover, Lok Adalats are economically affordable, as there are no court fees for placing matters before the Lok Adalat; finality of awards, as no further appeal is allowed.
    • As a result, litigants are forced to approach Lok Adalats mainly because it is a party-driven process, allowing them to reach an amicable settlement.

    Why Lok Adalats are fast

    • When compared to litigation, and even other dispute resolution devices, such as arbitration and mediation, Lok Adalats offer parties speed of settlement.
    • Cases are disposed of in a single day.
    • The speed is due to procedural flexibility, as there is no strict application of procedural laws such as the Code of Civil Procedure, 1908, and the Indian Evidence Act, 1872.
    • More importantly, the award issued by a Lok Adalat, after the filing of a joint compromise petition, has the status of a civil court decree.

    Some figures about cases disposed

    • In 2015 and 2016, ten National Lok Adalats (NLAs) were held each year that disposed of 1,83,09,401 and 1,04,98,453 cases respectively.
    • In 2017 and 2018, the number of NLAs dropped to five, with 54,05,867 and 58,79,691 cases settled respectively.
    • In 2019, four NLAs were organised, and they disposed of 52,93,273 cases.
    • In 2015, the average number of cases settled per NLA was 18,30,940, which came down to 10,81,174 in 2017, but rose to 11,75,939 in 2018, and 13,23,319 cases in 2019.
    • This throws up questions about the efficiency of NLAs.
    • The data show that the average number of cases disposed of per NLA since 2017 has gone up even when the number of NLAs organised each year has reduced.
    • This proves that on average, the system is certainly efficient.

    Concerns

    • The Supreme Court, in State of Punjab vs Jalour Singh (2008), held that a Lok Adalat is purely conciliatory and it has no adjudicatory or judicial function.
    • As compromise is its central idea, there is a concern that in the endeavour for speedy disposal of cases, it undermines the idea of justice.
    •  In a majority of cases, litigants are pitted against entities with deep pockets, such as insurance companies, banks, electricity boards, among others.
    •  In many cases, compromises are imposed on the poor who often have no choice but to accept them.
    • Similarly, poor women under the so-called ‘harmony ideology’ of the state are virtually dictated by family courts to compromise matrimonial disputes under a romanticised view of marriage.
    •  Even a disaster like the Bhopal gas tragedy was coercively settled for a paltry sum, with real justice still eluding thousands of victims.

    Consider the question “Examine the significance of Lok Adalats as an alternative dispute resolution tool. What are the concerns with speedy disposal of cases by Lok Adalats?”

    Conclusion

    A just outcome of a legal process is far more important than expeditious disposal, so what we need is concrete and innovative steps in improving the quality of justice rendered by National Lok Adalats.

  • A holistic review of internal security challenge and response to them is needed

    The article highlights the issues facing India’s internal security architecture and suggests the restructuring of roles and capacity building to address the challenge.

    Recent setback to internal security (IS) capability

    • The COMBING OPERATION by local and central police forces in the Tekulguda region of Bastar went terribly wrong and resulted in the death of 22 security personnel.
    • This tragic incident is a major and embarrassing setback to the IS (internal security) capability of India at many levels and highlights the challenge that LWE (left-wing extremism) continues to pose. 

    Strategic inadequacies

    • India has been dealing with three variants of the internal security challenge for decades.
    • These three are: 1) a proxy war and terrorism in Kashmir 2) sub-national separatist movements in the Northeast. 3) the Naxal-Maoist insurgency ( LWE) in the Red Corridor.
    • And these challenges have warranted different responses.
    • The first two strands have been reasonably contained.
    • LWE and the current Maoist movement has its genesis in poor governance, lack of development in the tribal belt and an oppressive/exploitative hierarchy of the state and society.
    •  In November 2005, then PM Manmohan Singh described the LWE challenge as the most serious security threat to India and exhorted the professionals to evolve appropriate responses.

    Need for restructuring

    • One of the recommendations of the Kargil Review Committee (KRC) report was the restructuring of the role and the tasks of the para-military forces particularly with reference to command and control and leadership functions.
    • This critical component of restructuring the leadership of the central police forces (in this case the CRPF and BSF) has not been addressed, much less redressed.
    • By training, the police officer is expected to be a competent Superintendent and to maintain law and order.
    • This is not the skill-set that is relevant when an officer has to “command” and lead his men into insurgency operations.
    • In the current scenario, barring a few exceptions, many of the senior police officers (IPS cadre) who are introduced into the central police forces at senior ranks have little or no platoon/battalion experience. 

    Consider the question “What are the factors making Left Wing Extremism such a persistent internal security problem for India? Suggest the measure to improve the internal security architecture in India.”

    Conclusion

    The political leadership of the country needs to act and complete the task of restructuring and capacity building to address India’s internal security challenge.

  • Need to remove the secrecy around the electoral bonds

    The article highlights the issues with the electoral bond scheme and suggests an alternatives.

    Secrecy in donations

    • Before the electoral bond scheme, every transaction of more than Rs 20,000 was reported to the Election Commission.
    • Now even Rs 20 crore or Rs 200 crore could be donated anonymously. 
    • Why should donors want secrecy? To hide return favours, like contracts, licences and bank loans.
    • Both the RBI and ECI, standing up to their mandates, had registered their strong protest.

    How electoral bond scheme led to changes in provisions of other Acts

    • To make way for electoral bonds amendments were introduced in the Reserve Bank of India Act, Companies Act, Income Tax Act, Representation of the People Act and Foreign Contribution Regulations Act.
    • There were three serious changes which did not receive the deserved attention.

    1) Limit of 7.5 per cent removed

    • First, the limit of 7.5 per cent of its profits which a company could donate was not just increased but completely done away with by amending section 182 of the Companies Act, 2013.
    • Thus a company could donate 100 per cent of its profits to a political party.
    • Even a loss-making company could make political donations.
    • This is a sure step to legitimise and legalise crony capitalism.

    2) Requirement of resolution removed

    • The requirements for a resolution by the board of directors for a company to make donations to political parties and to declare the political donations in the profit and loss accounts were also removed.
    • This would allow keeping the donations secret not only from the public but the owners of the company, the shareholders — ironically, all in the name of transparency.

    3) Secrecy in contribution from foreign source

    • Section 29B of the Representation of the People Act, 1951 prohibits all political parties from accepting any contribution from a “foreign source.”
    • Section 3 of the 2010 Foreign Contribution (Regulation) Act bars candidates, legislative members, political parties and party officeholders from accepting foreign contributions.
    • When the High Court of Delhi in 2014 found Congress and BJP having accepted foreign funds in violation of the FCRA 1976, the government passed a retroactive amendment through a 2016 Finance Bill which repealed the 1976 Act and replaced it with the modified 2010 statute.
    • If any foreign country is financing our elections, it will now be a protected secret.

    Way forward

    • The Supreme Court’s concern about the possibility of misuse of funds is very pertinent.
    • The EC has been demanding that a law be passed to make political parties liable to get their accounts audited by an auditor from a panel suggested by the CAG or EC.
    • If the government don’t want to abolish the electoral bond scheme it should just make changes to it to disclose the donor and the recipient.
    • Another alternative is to do away with private fund collection altogether and replace it with public funding of political parties.
    • This is not likely to be more than Rs 10,000 crore every five years, if we were to go by the entire collection all the parties make together.
    • Another feasible option is to establish a National Election Fund to which all donations could be directed.
    • This would take care of the imaginary fear of political reprisal of the donors. 

    Consider the question “What were the changes introduced in various Acts for the introduction of the electoral bond scheme? What are the issues with these changes?”

    Conclusion

    We must not forget the finance minister’s opening statement in the 2017 Budget speech that “without transparency of political funding, free and fair elections are not possible”.

  • A post-Covid fiscal framework for India

    The article highlights the failure of FRBM Act to contain India’s rising debt and suggests an alternative framework.

    Issues with the FRBM Act

    • Economic disruption caused by the COVID has prompted calls for a relook atthe Fiscal Responsibility and Budget Management Act (FRBM).
    • The introduction of the FRBM in 2003 reflected the belief that setting strict limits on fiscal deficits, both for the centre and the states, was the solution.
    • But this framework didn’t work.
    • Apart from the initial period, when growth was booming, the deficit targets were largely honoured in the breach, leaving the primary balance [Revenue-Non-intrest expenditure] essentially unchanged (Figure 2, phase 2).

    Debt has increased to record levels

    • India’s general government debt has soared.
    • It is now close to 90 per cent of GDP — the highest independent India has ever seen.
    • The debt ratio will come down naturally as GDP normalises.
    • Even so, on current policies, it is likely to exceed 80 per cent for the foreseeable future.

    Would such a high level of debt be sustainable?

    • Briefly, sustainability depends on two key factors:
    • 1) The primary balance (PB), revenue less non-interest expenditures.
    • 2) The difference between the cost of borrowing and the nominal growth rate (r-g).[interest-growth differential]
    • Debt does not explode when the primary balance is greater than the interest-growth differential.
    • In India’s case, PB has been negative as the government has run primary deficits.
    • But this has been counterbalanced over the past decade by favourable differentials, as interest rates have been lower than growth.
    • Hence, the broadly stable debt ratio.
    • This equilibrium has now been upset by the sudden increase in debt.
    • If the interest-growth differential consequently turns unfavourable, as occurred during the previous period of high debt in the early 2000s (Figure 2, phase 1), then debt sustainability could only be preserved by shifting the primary balance into surplus.
    • And this would not be easy.

    Why shifting primary balance intro surplus is not easy

    • Primary deficit of the Centre and states combined is typically about 3 per cent of GDP. [say PB is -3% of GDP]
    • So, shifting the primary balance into a modest surplus [i.e. turning PB from -ve to +ve] would require an adjustment of 4 percentage points of GDP.
    • But non-interest expenditure is only roughly 20 per cent of GDP.
    • If tax increases were ruled out, then a sudden adjustment would require non-interest spending to be cut by no less than 20 per cent (4 divided by 20 times 100).[20% of 20 is 4]
    • Clearly, this would be politically impossible.
    • But this would render India susceptible to panic and possibly even crises.
    • The government needs to eliminate the tension, undertaking a pre-emptive consolidation to prevent the need for a sudden adjustment.

    Strategy based on 4 principles

    • The government should start by defining a clear objective, based not on arbitrary targets but on sound first principles: It should aim to ensure debt sustainability.
    • To this end, the government could adopt a strategy based on four principles.

    1) Abandon multiple fiscal criteria

    • The current FRBM sets targets for the overall deficit, the revenue deficit and debt.
    • Such multiple criteria impede the objective of ensuring sustainability since the targets can conflict with each other,
    • This creates confusion about which one to follow and thereby obfuscating accountability.

    2) Don’t get fixated on specific number

    • Around the world, countries are realising that deficit targets of 3 per cent of GDP and debt targets of 60 per cent of GDP lack proper economic grounding.
    • In India’s case, they take no account of the country’s own fiscal arithmetic or its strong political will to repay its debt.
    • Any specific target, no matter how well-grounded, encouraging governments to transfer spending off-budget such as with the “oil bonds” in the mid-2000s and subsidies more recently.

    3) Focus on one measure for guiding fiscal policy

    • In this regard, Arvind Subramanian and Josh Felmanwe propose targeting the primary balance.
    • This concept is new to India and will take time for the public to absorb and accept.
    • But it is inherently simple and has the eminent virtue that it is closely linked to meeting the overall objective of ensuring debt sustainability.

    4) Don’t set yearly target for the primary balance

    • The Centre should not set out yearly targets for the primary balance.
    • Instead, it should announce a plan to improve the primary balance gradually, by say half a percentage point of GDP per year on average.
    • Doing so will make it clear that it will accelerate consolidation when times are good, moderate it when times are less buoyant, and end it when a small surplus has been achieved.
    • This strategy is simple and easy to communicate; it is gradual and hence feasible.

    Consider the question “Despite the FRBM framework India’s debt level have touched a historic high. In light of this, examine the reasons for the failure of FRBM in controlling the debt level and suggest the way forward to make India’s debt level sustainable.”

    Conclusion

    COVID has upended India’s public finances. It is time to learn from past experience and adapt. Adopting a simple new fiscal framework based on the primary balance could be the way forward.

  • Why police reform recommendations have not been implemented

    The article discusses the status of implementation of the Supreme Court directives in the Prakash Singh case by the States.

    Background of the Prakash Sing judgement

    • Over the years, the National Police Commission made several recommendations for reform of the police force.
    • But many of these were not implemented effectively.
    • In 1996, two retired Directors General of Police, Prakash Singh and N. K. Singh, filed a public interest litigation (PIL) to know whether those recommendations had ever been implemented.
    • A decade later in 2006 that the Court delivered its verdict in what is popularly referred to as the Prakash Singh case.
    • In Prakash Singh v. Union of India, the SC relied on the eight reports of the National Police Commission (1979-1981) appointed by the Union.

    Following are some of the recommendations and provision and status of their implementations.

    Selection and minimum tenure of DGP

    • The provision regarding the selection of and minimum tenure for the DGP post has had partial if any, effect.
    • Corruption, politicking, and patronage-seeking at the top is so endemic that this provision has lost its sting.
    • The Security Commission consisting of the Home Minister, the Leader of the Opposition, the Chief Secretary, the DGP and five independent members is likewise ineffective.
    • How can one have at the apex of the reform system for the police those who have a vested interest in not reforming the police?

    Separation between investigation and prosecution wings

    • The Commission’s recommendation that there ought to be a separation between the investigation and prosecution wings, as is the system in many developed countries, required immediate enforcement by the judiciary.
    • Doing so will help weed out the corruption in criminal investigations would get a second look by the prosecutorial wing.
    • But, for that, it would require that this department be placed not under the Home Minister, but under the Ministry of Law and Justice.
    • This was never done.

    The Police Complaint Authority

    • Obviously, for police criminality, one cannot expect the police or the home department to take action against themselves.
    • An independent body was necessary.
    • The commission recommended that there should be a PCA at the state level, headed by a retired judge of the SC or high court chosen out of a panel of names proposed by the chief justice of the state.
    • A similar structure was envisaged for the PCA at the district level.
    • In addition, the PCAs would be assisted by members selected by the state from panels prepared by the State Human Rights Commission, Lokayuktas and the State Public Service Commissions.
    • The most important part of this decision was that the recommendations of the PCA would be binding on the state.
    • However, affidavits filed in the SC showed that not a single state or UT has implemented the PCA provision.
    • States have not constituted panels and appointed officials as chairpersons in the place of retired judges.
    • In many states, the name Police Complaints Authority has been changed.
    • For example, in Tripura and Mizoram, it is called The Police Accountability Commission, diverting attention away from the fact that the commission is for entertaining complaints against police persons.

    Consider the question “What are the Supreme Court directives for police reform in the Prakash Singh vs. Union of India case? To what extent states have implemented these directives?” 

    Conclusion

    On police reform, the recommendations exist, the SC order has been made but the Union remains defiant. Perhaps, now, after the Maharashtra fiasco, the SC may decide that this case pending for eight years merits listing.

    Back2Basics: The SC directives in the Prakash Singh case

    1) Limit Political Control

    • Constitute a State Security Commission to:
    • Ensure that the state government does not exercise unwarranted influence or pressure on the police.
    • Lay down broad policy guidelines.
    • Evaluate the performance of the state police.

    2) Appointment based on merit

    • Ensure that the Director General of Police is appointed through a merit–based, transparent process, and secures a minimum tenure of 2 years.

    3) Fix minimum tenure

    • Ensure that other police officers on operational duties (including Superintendents of Police in charge of a district and Station House Officers in charge of a police station) are also provided a minimum tenure of 2 years.

    4) Separate police functions

    • Separate the functions of investigation and maintaining law and order.

    5) Set up fair and transparent systems

    • Set up a Police Establishment Board to decide and make recommendations on transfers, postings, promotions and other service-related matters of police officers of and below the rank of Deputy Superintendent of Police.

    6) Establish a Police Complaints Authority in each state

    • At the state level, there should be a Police Complaints Authority to look into public complaints against police officers of and above the rank of Superintendent of Police in cases of serious misconduct, including custodial death, grievous hurt or rape in police custody.

    7) Set up a selection commission

    • A National Security Commission needs to be set up at the union level to prepare a panel for selection and placement of chiefs of the Central Police Organizations with a minimum tenure of 2 years.