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  • Cashless Society – Digital Payments, Demonetization, etc.

    Analysing the success of NPCI

    op-ed snap | Economics | Mains Paper 3: Awareness in various sc and tech fields

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: MDR, IMPS, RTGS, NEFT

    Mains level: Paper 3- Role of NPCI in transforming digital payment infrastructure in India

    The article tracks the evolution of digital payments system in India and the transformational role played by the NPCI in it.

    Adoption of digital payments in India

    • Digital payments have found strong ground in India reducing all other modes of payments to the background.
    • Through a faster system of simultaneous debits and credits, the money value is transferred from one account to the other across banks.
    • With such versatility and ease of settling financial transactions, the growth of digital payments is going to be phenomenal, supported by banks and Fin-Tech companies.

    Evolution of digital payments in India

    • A major thrust toward large value payments was effected through the Real Time Gross Settlement System, or RTGS, launched by the RBI in March 2004.
    • The large value payments on stock trading, government bond trading and other customer payments were covered under the RTGS.
    • It substantially reduced the time taken for settlements.
    • Around the same time, the RBI introduced National Electronic Funds Transfer, or NEFT to support retail payments.
    • Now, NEFT is available round the clock and RTGS will follow from December 2020 — only a few countries have achieved this.
    • These systems were seeded and reinforced with the setting up of the umbrella retail payments institution: National Payments Corporation of India (NPCI).
    • NPCI was set up by 10 lead banks at the instance of the RBI in 2009.
    •  The NPCI as a not-for-profit company

    How NPCI transformed retail payment systems in India

    • The NPCI’s success against deeply entranced formidable international players, supported by innovative technology, viz. Unified Payments Interface (UPI) and Immediate Payment Service (IMPS), is well recognised by central banks in many other countries.
    • The Bank for International Settlements’s endorsement of the NPCI model in 2019 is a major accolade.
    • With digital payment being a public good like currency notes, it was necessary that the corporation was fully supported by the RBI and the government as an extended arm of the sovereign.
    • It was also necessary to contain expectations on profits, avoiding direct or indirect control by powerful private interests could dilute the public good character of the outfit.

    Issue of converting NPCI into for-profit

    • Converting NPCI intro for-profit company will be a retrograde step with huge potential for loss of consumer surplus along with other strategic implications.
    • Instead the strategy should be to assist the NPCI financially, either by the RBI or the government, to provide retail payment services at reduced price (in certain priority areas).
    • This may also help support expansion of the payment system network and infrastructure in rural and semi-urban areas in partnership with Fin-Tech companies and banks.

    Issue fo MDR

    • In Budget 2020-21, the government prescribed zero Merchant Discount Rate (MDR) for RuPay and UPI, both NPCI products.
    • Zero MDR on UPI and RuPay will help to popularise digital payments benefiting both customers and merchants.
    • There is justification in this zero MDR prescription by the government.
    • It is justified because depositors implicitly pay around 3% to banks as net interest margin, being the difference between saving and risk free bond rate, for enjoying certain payments services traditionally.
    • When banks enjoy such a huge amount of current account savings account (CASA) deposits, in return, is it not incumbent on them to provide such payment services?
    • The government left out other providers of digital payment products from this MDR prescription.
    • Taking advantage of this dichotomy, many issuing banks switched to mainly Visa and Master cards for monetary gains.
    • As customers were induced by such supplier banks, it created a kind of indirect market segmentation and cartel formation, though there is hardly any quality difference in payment products.
    • It may be noted that even the European Central Bank imposed a ceiling on MDR for all, protecting consumer interest.
    • It is hoped that the government will take corrective action in the next Budget to ensure a level playing field and to relieve the NPCI from such policy-induced market imperfection.

    Pricing for digital payments

    • The ideal pricing for digital payments products should be based on an analysis of-(i) producer surplus (ii) consumer surplus (i.e. gain or loss of utility due to pricing) (iii) social welfare for which we need cost-volume-price data.
    • A factor which needs to be reckoned is the float funds digital payments allow (cash withdrawal is a drain on the banking system), which is a source of sizeable income for banks.
    • The RBI will do well to study and arrive at a rational structure of pricing including MDR (possibly also penalty on default by customer).

    Consider the question “Elaborate on how the NPCI has been successful in transforming the digital payment landscape in the country through innovations? What are the challenges facing retail payments infrastructures?”

    Conclusion

    Given that the digital payment system is like a national superhighway, for which the government has a crucial role to play in protecting consumers against exploitation.

    Back2Basics: RTGS and NEFT

    • With NEFT (National Electronic Funds Transfer)
      you can transfer any amount to the recipient’s account in a one-on-one transfer basis.
    • NEFT transactions don’t have a maximum limit for funds that can be transferred in a single day.
    • The NEFT system is available round the clock throughout the year on all days (24x7x365).
    • Funds are transferred in batches that are settled in 48 half-hourly time slots throughout the day.
    • There is no maximum or minimum limit on the amount of funds that could be transferred through NEFT.

    RTGS (Real Time Gross Settlement)

    • Business owners can use RTGS when they need to transfer large amounts instantly.
    • One advantage that RTGS has over the other methods is the transaction speed, since the entire amount is transferred in real time.
    • The available hours for RTGS transactions vary based on the individual banks and their branches.
    • There’s a minimum limit of Rs. 2 lakhs for RTGS transactions, and there’s no maximum limit as such.

    What is MDR?

    • The merchant discount rate (MDR) is charged to merchants for processing debit and credit card transactions.
    • To accept debit and credit cards, merchants must set up this service and agree to the rate.
    • The merchant discount rate is a fee, typically between 1%-3%, that merchants must consider when managing business costs

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  • Defence Sector – DPP, Missions, Schemes, Security Forces, etc.

    Issues with dilution of offset condition for defence procurement

    op-ed snap | Security Issues | Mains Paper 3: Indigenization Of Technology

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: The offset clause

    Mains level: Paper 3- Implications of dilutions of offset clause in defence procurement

    The ‘offset clause’ could help the country achieve the technological expertise and consequently self-reliance. However, India recently relaxed some norms in the policy. The article discusses the stated reasons for tweaking and its implications for the defence manufacturing industry in India.

    Context

    • Recently, the government diluted the “offset” policy in defence procurement, reportedly in response to a Comptroller and Auditor General (CAG) of India’s report tabled in Parliament last month.

    Let’s understand ‘offset’ policy

    •  In order to safeguard national interest, most countries restrict trade in defence equipment and advanced technologies.
    • Yet, for commercial gains and for global technological recognition, governments and firms do like to expand the trade through negotiated bilateral sales.
    • Restrictions are often imposed on the buyer country on use, modification and resale of such equipment and technologies.
    • The product and technology compel buyers to stick to them for: the advantages of bulk purchase, and dependence on the supplier for spares and upgrades.
    • The price and the terms of the contract often reflect the government’s relative bargaining strength and also domestic political and economic considerations.
    • Large buyers such as India seek to exercise their “buying power” to secure not just the lowest price but also try to acquire the technology to upgrade domestic production and build R&D capabilities.
    • The offset clause — used globally — is the instrument for securing these goals.

    Changes in the offset policy

    • Initiated in 2005, the offset clause has following requirements:
    • 1) Sourcing 30% of the value of the contract domestically.
    • 2) Indigenisation of production in a strict time frame.
    • 3) Training Indian professionals in high-tech skills, for promoting domestic R&D.
    • However, the policy has been tweaked many times since.
    • According to the recent CAG report,  between 2007 and 2018, the government reportedly signed 46 offset contracts worth ₹66,427 crore of investments.
    • However, the realised investments were merely 8%, or worth ₹5,457 crore.
    • Reportedly, technology transfer agreements in the offsets were not implemented, failing to accomplish the stated policy objective.
    • Recently, the government has changed this policy further so that the offset clause will not be applicable to bilateral deals and deals with a single (monopoly) seller, to begin with.

    Implications of the changes in offset policy

    • The dilution means practically giving up the offset clause, and a setback to India’s prospects for boosting defence production and technological self-reliance.
    • The government, however, has defended the decision by claiming a cost advantage.
    • Howver, price is but one of many factors in such deals, as explained above.
    • The higher (upfront) cost of the agreement due to the offset clause would pay for itself by: reducing costs in the long term by indigenisation of production and the potential technology spill-overs for domestic industry.
    • Hence, giving up the offset clause is undoubtedly a severe setback.

    How did offset policy work for aerospace industry?

    • Despite the heft of Hindustan Aeronautics Limited, India is a lightweight in global civilian aircraft manufacturing, as the public sector giant mostly devotes itself to defence production.
    • The National Civil Aircraft Development (NCAD) project — to come up with an indigenously designed Regional Transport Aircraft (RTA) — has remained a non-starter from day one.
    • However, with the introduction of the offset policy in 2005, things changed dramatically.
    • For contracts valued at ₹300 crore or more, 30% of it will result in offsets, implemented through Indian offset partners.
    • As aerospace imports rose rapidly, so did the exports via the offsets, by a whopping 544% in 2007, compared to the previous year.
    • By 2014, exports increased to $6.7 billion from a paltry $62.5 million in 2005, according to the United Nations Comtrade Database.
    • The offset clause enabled India to join the league of the world’s top 10 aerospace exporters; the only country without a major domestic aerospace firm.
    • However, exports reduced after the offset clause was relaxed, primarily when the threshold for the policy was raised from the hitherto ₹300 crore to ₹2000 crore, in 2016.
    • The offset exports fell to $1.5 billion by 2019.
    • The 2005 policy helped promote a vibrant aerospace cluster, mostly micro, small and medium enterprises (MSMEs) around Bengaluru.

    Consider the question “How far has the offset clause been successful in enhancing the domestic capabilities of India in defence manufacturing? What are the challenges in achieving the objectives of the policy?”

    Conclusion

    There are successful examples to draw lessons from, as the aerospace industry episode demonstrates. India needs to re-conceive or re-imagine the offset clause in defence contracts with stricter enforcement of the deals, in national interest, and in order to aim for ‘Atma Nirbhar Bharat Abhiyaan’, or a self-reliant India.

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  • Police Reforms – SC directives, NPC, other committees reports

    Reforms police in India need

    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- Police reforms

    The article highlights the challenges facing the police force in India and suggests the measures to deal with them.

    Urgency of the police reforms

    • In a well-ordered democracy, the police are supposed to be a disciplined force trained to uphold the law and enforce the functioning of democracy on constitutional lines.
    • However, police in India suffers from a triad of malaises:
    • 1) The lack of sensitisation of police personnel.
    • 2) Absence of accountability.
    • 3) Politicisation of the police.

    Objectives of the reforms:

    1) Police sensitisation about their role in society

    • The sensitisation module should aim at bringing about attitudinal change in police — especially pertaining to gender and power relations and police behaviour.
    • There has to be promptness of action and decency of behaviour.
    • They need to be trained in body language and strictly advised to refrain from abusive behaviour.
    • It is necessary to increase public confidence in the police by upgrading levels of police service delivery as well as by investigating and acting in cases of police misconduct.

    2) Increasing accountability

    • Public confidence in police decreases when the public perceives that police abuses are not investigated effectively.
    • Enhancing accountability will improve police legitimacy and increase public confidence, which, in turn, will reinforce the integrity of the system.
    • The Police Ombudsman of Northern Ireland, the Danish Independent Police Complaints Authority are some examples of mechanisms for accountability of the police for acts of abuse of power.

    3) De-politicisation of the police

    • Linked to accountability is de-politicisation of the police force.
    • This is a must for the effective functioning of the country’s criminal justice system.
    • The police, as the custodian of maintenance of law and order, must stay away from agenda-driven politics.

    Need to resolve the structural issues

    In order to achieve the above-stated objectives, structural issues within the force must be given priority.

    1) Vacancies and fair representation to women

    • According to a report by Common Cause in 2019, the Indian police force is at only 77 per cent of its sanctioned strength.
    • India has 144 police personnel for one lakh population and, in some states, the figure is less than 100.
    • One in every five posts sanctioned in the Indian Police Service remains vacant.
    • In low and middle-rank posts, the vacancies of 5.28 lakh personnel account for nearly one-fourth of the total sanctioned strength of over 22 lakh.
    • A fully-staffed police force would only increase India’s police-to-population ratio to 185 against the UN recommended ratio of 222.
    • The police-to-people ratio should be improved by at least 50 per cent to meet the challenges faced by the force.
    • Women are grossly underrepresented in our police force at less than 7 per cent of our total police strength.
    • With the increase in the number of gender crimes, it has become a necessity to augment the strength of police by recruiting more and more women police personnel.
    • The situation in Uttar Pradesh is the worst where police are at roughly 50 per cent of sanctioned strength.
    • When the numbers are inadequate, police personnel are stretched, leading to shoddy policing.

    2) Lack of in-service training

    • The existing police personnel are also not adequately trained. Less than 7 per cent police get in-service training.
    • Gujarat scores the lowest, with less than one per cent having received any in-service training.

    3) Implementation of guidelines and recommendations

    • After the National Police Commission in 1977, several committees were set up, including the Gore Committee, Padmanabhaiah Committee and Malimath Committee.
    • These commissions and committees have made far-reaching recommendations.
    • The top police leadership should be selected by apolitical representatives and an impartial body as suggested by Dharma Vira Commission have farsighted implications.
    • It was a strong antidote to opportunistic appointments and transfers.
    • Recommendations of the commission, if implemented, along with the Supreme Court directives of 2006 by Justice Sabharwal, in true letter and spirit, will go a long way in police reform.

    4) Reforms in criminal justice system

    • Reforms in the criminal justice system and separation of law and order from investigation and prosecution are the other areas that need the attention of the authorities.
    • These aspects have been highlighted by many commissions and committees constituted by the Centre.

    Consider the question “What are the challenges facing the police force in the country? Suggest the measures to deal with these challenges.”

    Conclusion

    A new role and new philosophy have to be defined for the police to not only make it a capable and effective body but also one accountable to the law of the land and to the people whom they serve.

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  • Foreign Policy Watch: India-Bangladesh

    Opportunities for India in Bangladesh’s economic success

    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: BBIN, SAARC

    Mains level: Paper 2- Economic progress of Bangladesh and its implications for the subcontinent

    Bangladesh is expected to cross India in terms per capita income. This speaks volumes about the achievements of Bangladesh when contrasted with Pakistan. At the same time, it has several implications for the region. The elaborates on such implications.

    What other countries can learn from Bangladesh

    • The International Monetary Fund’s latest World Economic Outlook published recently predicts that Bangladesh’s per capita GDP will overtake that of India this year.
    • The projected difference is rather small — $1,888 to $1,877 — and unlikely to last beyond this year.
    • International development institutions are convinced that the rest of the subcontinent and developing countries around the world can learn much from Dhaka’s experience — the so-called “Bangladesh model”.

    5 Implications for the region

    1) Rising global interest in the subcontinent

    • Rapid and sustained economic growth in Bangladesh has begun to alter the world’s perception of the subcontinent.
    • India and Pakistan dominated the region and other countries were considered small.
    • But Bangladesh was far from being small, demographically it’s  the eighth-largest nation in the world.
    • The economic rise of Bangladesh is changing some of that.

    2) Changing economic weights of Bangladesh and Pakistan

    • This year, Bangladesh’s GDP is expected to reach about $320 billion.
    • The IMF did not have the 2020 numbers from Pakistan to report but in 2019, Pakistan’s economy was at $275 billion.
    • The IMF suggests that Pakistan’s economy will contract further this year.
    • Bangladesh has controlled its population growth and Pakistan has not.
    • Dhaka has a grip over its inflation and Islamabad does not.
    • There is no question that Pakistan’s negative geopolitical weight in the world will endure.
    • But Bangladesh’s growing economic muscle will help Dhaka steadily accumulate geopolitical salience in the years ahead.

    3) Accelerate regional integration

    • Bangladesh’s economic growth can accelerate regional integration in the eastern subcontinent.
    • The region’s prospects for a collective economic advance are rather dim.
    • Due to Pakistan’s opposition to economic cooperation with India and its support for cross-border terror, the main regional forum for the subcontinent, the South Asian Association for Regional Cooperation (Saarc), is dormant.
    • Instead of merely praying for the revival of Saarc, Delhi could usefully focus on the BBIN.
    • BBIN is sub-regional forum among Bangladesh, Bhutan, India and Nepal, activated in the middle of last decade — has not advanced fast enough.
    • It is time for Delhi and Dhaka to take a fresh look at the forum and find ways to widen the scope and pace of BBIN activity.
    • Meanwhile, there is growing interest in Bhutan and Nepal for economic integration with Bangladesh.

    4) Increasing importance of Bangladesh in geopolitics of Indo-Pacific

    • The economic success of Bangladesh is drawing attention from a range of countries in East Asia, including China, Japan, South Korea, and Singapore.
    • The US, which traditionally focused on India and Pakistan, has woken up to the possibilities in Bangladesh.
    • Bangladesh does not want to get into the fight between Beijing and Washington, but the great power wooing of Dhaka is bound to intensify in the new geopolitics of the Indo-Pacific.

    5) Development of India’s eastern and north-eastern states could accelerate

    • Bangladesh’s economy is now one-and-a-half times as large as that of West Bengal; better integration between the two would provide a huge boost for eastern India.
    • Also, connectivity between India’s landlocked Northeast and Bangladesh would provide a boost to the development of north-eastern states.
    • Delhi and Dhaka are eager to promote greater cooperation, but there has been little political enthusiasm in Kolkata.
    • In Assam, the issue of migration continues to impose major political constraints.

    Way forward

    • Parliamentary approval of the boundary settlement in 2015, despite the opposition, was a step in the right direction from India.
    • So was the acceptance of the 2014 international arbitration award on the maritime boundary dispute between India and Bangladesh.
    • But the positive dynamic surrounding the bilateral relationship acquired a negative tone in the second amidst the poisonous rhetoric in India around the Citizenship Amendment Act.
    • There is much room for course correction in Delhi and to shift the focus from legacy issues to future possibilities.

    Conclusion

    Both the countries need to jointly develop and pursue with Dhaka an ambitious framework for shared prosperity.

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  • Terrorism and Challenges Related To It

    Security implications of Doha Accord for India

    op-ed snap | Security Issues | Mains Paper 3: External State & Non-State Actors: Challenges To Internal Security.

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Doha Accord

    Mains level: Paper 3- Threat of terrorism

    We have been spared of some unfortunate news of terrorist attacks in the recent past, however, it would be mistake to discount the threat posed by the terrorist organisations especially when we consider the backdrop of Doha Accord. The article deals with the threat of terrorism.

    Declining support

    • Terrorist organisations like Taliban, al-Qaeda, Islamic State, Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM) have been dormant during a pandemic.
    • This is partly explained by the fact that open terror attacks have been reducing, presumably because:
    • 1) Terror outfits lack resources.
    • 2) Because of temporary loss of support from those normally hostile to the non-Islamic world and tolerant Muslims.
    • However, given their past resilience, they continue to pose threats to modern society, especially to India and its neighbourhood.

    But threat persists

    • These terrorist organisations continue to be attractive to misguided youth in India whose loyalties are extraterritorial.
    • Their numbers may not be formidable, but they can cause a ripple effect that cannot be underestimated.
    • Terrorist cells are probably engaged in the quiet process of collecting resources for future lethal assaults against India and other countries in the neighbourhood.
    • Once the pandemic eases, we may see a resurgence of terror.
    • The aggravation of poverty in developing nations due to COVID-19 could offer a fertile ground for recruitment.
    • The al-Qaeda and the Islamic State are carrying out their recruitment undiminished by the problems posed by the pandemic.
    • Only these two outfits have an impressive global reach backed by global ambitions.

    What are the implications of Doha Accord?

    • The Doha Accord signed this year between the Taliban and the U.S., which has brought about an improved relationship between the two.
    • The U.S. has agreed to a near-total withdrawal of its troops in return for the Taliban’s promise to preserve peace in Afghanistan.
    • The Taliban and the al-Qaeda need each other in many areas.
    • Both are friendly towards Pakistan and could pose a problem or two to India in the near future.
    • Many recent raids by the National Investigation Agency point to an al-Qaeda network in India.
    • Once the situation gets better, the al-Qaeda, in cahoots with other aggressive Islamic outfits in and around Pakistan, is bound to escalate the offensive against India.
    • This is one factor that makes the al-Qaeda and other terror outfits still relevant to India’s security calculus.

    Consider the question “What are the implications of Doha Acord for India’s security architecture?”

    Conclusion

    The threat posed by the changing geopolitical landscape is bound to increase in the coming days and hence India should prepare itself to tackle the challenge.

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  • Financial Inclusion in India and Its Challenges

    [pib] Framework for Regulatory Sandbox

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Regulatory sandbox

    Mains level: Paper 3- Regulatory sandbox

    The International Financial Services Centres Authority (IFSCA) has introduced a framework for Regulatory Sandbox to tap into innovative Fin-tech solutions.

    Try answering this simple question:
    Q.What is Regulatory Sandbox? What are its salient features?

    Regulatory Sandbox

    • A regulatory sandbox usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may permit certain regulatory relaxations for the limited purpose of the testing.
    • The objective of the sandbox is to foster responsible innovation in financial services, promote efficiency and bring benefit to consumers.
    • It provides a secure environment for fintech firms to experiment with products under supervision of a regulator.
    • It is an infrastructure that helps fintech players live test their products or solutions, before getting the necessary regulatory approvals for a mass launch, saving start-ups time and cost.

    Its inception

    • The concept of a regulatory sandbox or innovation hub for fintech firms was mooted by a committee headed by then RBI executive director Sudarshan Sen.
    • The panel submitted its report in Nov 2017 has called for a regulatory sandbox to help firms experiment with fintech solutions, where the consequences of failure can be contained and reasons for failure analysed.
    • If the product appears to have the potential to be successful, it might be authorised and brought to the broader market more quickly.

    What is the new framework?

    • IFSCA has introduced a framework for “Regulatory Sandbox”.
      Under this Sandbox framework, entities operating in the capital market, banking, insurance and financial services space shall be granted certain facilities and flexibilities.
    • It will experiment with innovative FinTech solutions in a live environment with a limited set of real customers for a limited time frame.
    • These features shall be fortified with necessary safeguards for investor protection and risk mitigation. The Regulatory Sandbox shall operate within the IFSC located at GIFT City (Gandhinagar).
    • IFSCA shall assess the applications and extend suitable regulatory relaxations to commence limited purpose testing in the Sandbox.

    Other propositions

    • As additional steps towards creating an innovation-centric ecosystem, the IFSCA has proposed the creation of an “Innovation Sandbox”.
    • It will be a testing environment where Fin-tech firms can test their solutions in isolation from the live market.
    • This would be based on market related data made available by the Market Infrastructure Institutions (MIIs) operating in the IFSC.
    • The Innovation Sandbox will be managed and facilitated by the MIIs operating within the IFSC.

    Back2Basics: GIFT City, Gandhinagar

    • GIFT city is India’s first operational smart city and international financial services centre (much like a modern IT park).
    • The idea for GIFT was conceived during the Vibrant Gujarat Global Investor Summit 2007 and the initial planning was done by East China Architectural Design & Research Institute (ECADI).
    • Currently approximately 225 units/companies are operational with more than 12000 professionals employed in the City.
    • The entire city is based on concept of FTTX (Fibre to the home / office).The fiber optic is laid in fault tolerant ring architecture so as to ensure maximum uptime of services.
    • Every building in GIFT City is an intelligent building. There is piped supply of cooking gas. India’s first city-level DCS (district cooling system) is also operational at GIFT City.

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  • What are District Development Councils (DDCs)?

    op-ed snap | Polity | Mains Paper 2: Panchayats & Local Bodies

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: District Development Councils

    Mains level: Paper 2- DDCs in J and K

    The Centre has amended the Jammu and Kashmir Panchayati Raj Act, 1989, to facilitate the setting up of District Development Councils (DDC).

    Tap to read more about: Reorganization of J&K

    What are DDCs?

    • DDCs structure will include a DDC and a District Planning Committee (DPC).
    • The J&K administration has also amended the J&K Panchayati Raj Rules, 1996, to provide for establishment of elected District Development Councils in J&K.
    • This system effectively replaces the District Planning and Development Boards in all districts, and will prepare and approve district plans and capital expenditure.

    Composition of DDCs

    • Their key feature, however, is that the DDCs will have elected representatives from each district.
    • Their number has been specified at 14 elected members per district representing its rural areas, alongside the Members of
    • Legislative Assembly chairpersons of all Block Development Councils within the district.

    Term of reference

    • The term of the DDC will be five years, and the electoral process will allow for reservations for Scheduled Castes, Scheduled Tribes and women.
    • The Additional District Development Commissioner (or the Additional DC) of the district shall be the Chief Executive Officer of the District Development Council.
    • The council, as stated in the Act, will hold at least four “general meetings” in a year, one in each quarter.

    What will be the process here onward?

    • The 14 constituencies for electing representatives to the DDC will have to be delimited.
    • These constituencies will be carved out of the rural areas of the district, and elected members will subsequently elect a chairperson and a vice-chairperson of the DDC from among themselves.

    Within the third tier, where do the DDCs fit in?

    • The DDCs replace the District Planning and Development Boards (DDBs) that were headed by a cabinet minister of the erstwhile state of Jammu and Kashmir.
    • For Jammu and Srinagar districts, as winter and summer capitals, the DDBs were headed by the Chief Minister.

    However, for Leh and Kargil districts, the Autonomous Hill Development Councils performed the functions designated for the DDBs.

    How will DPC work, then?

    • For every district there will be DPC comprising MPs representing the area, Members of the State Legislature representing the areas within the District etc. among others.
    • The MP will function as the chairperson of this committee.
    • The committee will “consider and guide” the formulation of development programmes for the district.
    • It would indicate priorities for various schemes and consider issues relating to the speedy development and economic uplift of the district.
    • It would function as a working group for formulation of periodic and annual plans for the district; and formulate and finalise the plan and non-plan budget for the district.

    Centre’s objective behind this new structure

    • The J&K administration in a statement said that the move to have an elected third tier of the Panchayati Raj institution marks the implementation of the entire 73rd Amendment Act in J&K.
    • The idea is that systems that had been made defunct by earlier J&K governments such as the panchayati raj system are being revived under the Centre’s rule in the state through the Lieutenant Governor’s administration.
    • In the absence of elected representatives in the UT, senior government officials argue that DDCs will effectively become representative bodies for development at the grassroots in the 20 districts of the UT.
    • They hope that this may draw some former legislators in as well.

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  • President’s Rule

    Issues related to the Office of Governor

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Constitutional provisions related to the Governor

    Mains level: Paper 2- Misuse of discretionary power by the Governor

    The article deals with the role of Governor in the state and issue of misuse of discretionary power vested in him.

    Constitutional provision related to Governor

    • Various Raj Bhavans have become embroiled in controversies over the decade.
    • This is partly because the Constitution of India does allow a certain discretion to the Governor.
    • And a discretion invariably does get abused.
    • The framers of the Constitution had rejected an elected Governor because they were unambiguously clear that political power would only be vested with elected executives.
    • Yet, they were not inclined to put in a formal Instrument of Instructions for the Governors and were content to believe that political decencies and correctness would be observed both by the Governor and the Chief Minister.

    As the distinguished constitutional expert, Nani A. Palkhivala explained it “the Constitution intended that the Governor should be the instrument to maintain the fundamental equilibrium of the people of the State and to ensure that the mandates of the Constitution are respected in the State”. 

    Misuse of ‘discretion’ by Governors

    • As an appointee of the Union Government, the Governors have been prone to act on the instructions by ruling party at the Centre.
    • Inevitably the “discretion” in choosing a Chief Minister, or requiring a Chief Minister to prove his/her majority, or dismissing a Chief Minister, dissolving the legislature, recommending President’s Rule — came to be tainted with partisan political considerations.
    • More often than not, the governor’s discretion was abused, sometimes absurdly, even whimsically.
    • In the S.R. Bommai case, the Supreme Court did try through its judgment to prevent the misuse of power.

    Conclusion

    The guidelines given in the S.R. Bommai case should be adhered to by the Governor and should avoid conflict with the elected governments in the States.

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  • Police Reforms – SC directives, NPC, other committees reports

    Still awaiting police reform

    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- Police reforms

    The police have been in the news for incidents involving violence and killings. These instances points to the urgent need for the implementation of the Supreme Court directives given in the Prakash Singh case. The article deals with the issues of delay in the implementation.

    Need for immediate remedial measures

    • Police has been in the news for incidents involving police brutalities like thrashing of a Dalit Ahirwar couple by the police Madhya Pradesh, torture and killing of father-son duo in Tamil Nadu and killing of gangster in UP.
    • These incidents and several others show that we need immediate remedial measures.

    Past attempts for police reforms

    • The first serious attempt was when the National Police Commission (NPC) was set up in 1977.
    • The NPC submitted eight reports to the Ministry of Home Affairs between 1979 and 1981.
    • Seven of these reports were circulated to the States in 1983.

    Prakash Sing Case

    • No action was taken on the reports of the reports until 1996.
    • In 1996 Prakash Singh, a retired IPS officer, filed a PIL in the apex court in 1996 demanding the implementation of the NPC’s recommendations.
    • In 2006, the Supreme Court issued a slew of directives on police reform.

    Status of implementation of directives by Staes

    • The one directive that would hurt the most is the setting up of a State Security Commission (SSC) in each State.
    • State Security Commission would divest the political leaders of the unbridled power that they wield at present.
    • Of the States that constituted an SSC, only Andhra Pradesh and Karnataka have made SSC recommendations binding on the State government.
    • Only six States provided a minimum tenure of two years to the Director General of Police (DGP).
    • Many States have not implemented a single directive of the Supreme Court.

    Way forward

    • Expecting political will to implement police reforms is difficult to come by, it is for the judiciary to step in and enforce the directives it had passed.
    • Fourteen years is too long a period for any further relaxation.
    • The Court has to ensure that its directives are not dismissed lightly.

    Consider the question “What are the issues facing police administration? What are the reasons for lack of full implementation of the directives given by the Supreme Court in the Prakash Singh case?

    Conclusion

    A bold step towards bringing down crimes is possible only when the politicians-criminals-police nexus is strangled.

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  • Analysing the trends in India’s population growth

    op-ed snap | Trivia | Mains Paper 1: Population & Associated Issues

    The article analyses some trends in India’s population growth as found in the Sample Registration System Statistical Report (2018).

    Context

    • There have been some encouraging trends in India’s population in the Sample Registration System (SRS) Statistical Report (2018) and global population projections made by the Institute of Health Metrics and Evaluation (IHME), US.

     Declining TFR

    • SRS report estimated the Total Fertility Rate (TFR), the number of children a mother would have at the current pattern of fertility during her lifetime, as 2.2 in the year 2018.
    •  It is estimated that replacement TFR of 2.1 would soon be, if not already, reached for India as a whole.
    • As fertility declines, so does the population growth rate.
    • This report estimated the natural annual population growth rate to be 1.38 per cent in 2018.
    • A comparison of 2011 and 2018 SRS statistical reports shows that TFR declined from 2.4 to 2.2 during this period.
    • Fertility declined in all major states.
    • In 2011, 10 states had a fertility rate below the replacement rate. This increased to 14 states.
    • The annual natural population growth rate also declined from 1.47 to 1.38 per cent during this period.

    So, when will India’s population stabilise

    • Duet to population momentum effect, a result of more people entering the reproductive age group of 15-49 years due to the past high-level of fertility, population stabilisation will take some time.
    • The UN Population Division has estimated that India’s population would possibly peak at 161 crore around 2061.
    •  Recently, IHME estimated that it will peak at 160 crore in 2048.
    • Some of this momentum effect can be mitigated if young people delay childbearing and space their children.

    Factors affecting fertility rates

    • Fertility largely depends upon social setting and programme strength.
    • Programme strength is indicated by the unmet need for contraception, which has several components.
    •  The National Family Health Survey (2015-16) provides us estimates for the unmet need at 12.9 per cent and contraceptive prevalence of 53.5 per cent for India.
    • Female education is a key indicator for social setting, higher the female education level, lower the fertility.
    • As the literacy of women in the reproductive age group is improving rapidly, we can be sanguine about continued fertility reduction.

    Declining sex ratio at birth: Cause for concerrn

    •  The SRS reports show that sex ratio at birth in India, measured as the number of females per 1,000 males, declined marginally from 906 in 2011 to 899 in 2018.
    • Biologically normal sex ratio at birth is 950 females to 1,000 males. 
    • The UNFPA State of World Population 2020 estimated the sex ratio at birth in India as 910, lower than all the countries in the world except China.
    • This is a cause for concern for following 2 reasons:
    • 1) This adverse ratio results in a gross imbalance in the number of men and women.
    • 2) Impact on marriage systems as well as other harms to women.
    • Increasing female education and economic prosperity help to improve the ratio.
    • It is hoped that a balanced sex ratio at birth could be realised over time, although this does not seem to be happening during the period 2011-18. 

    Conclusion

    In conclusion, there is an urgent need to reach young people both for reproductive health education and services as well as to cultivate gender equity norms. This could reduce the effect of population momentum and accelerate progress towards reaching a more normal sex-ratio at birth. India’s population future depends on it.

    Back2Basics: Total Fertility Rate and Replacement rate

    • Total fertility rate (TFR) in simple terms refers to total number of children born or likely to be born to a woman in her life time if she were subject to the prevailing rate of age-specific fertility in the population.
    • TFR of about 2.1 children per woman is called Replacement-level fertility (UN, Population Division).
    • This value represents the average number of children a woman would need to have to reproduce herself by bearing a daughter who survives to childbearing age.
    • If replacement level fertility is sustained over a sufficiently long period, each generation will exactly replace itself without any need for the country to balance the population by international migration.

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