Note4Students
From UPSC perspective, the following things are important :
Prelims level: FPI and FDI
Mains level: Paper 3- Equity market bubble
Context
Even as the real economy returns to the doldrums after being hit by the second wave of COVID-19 infections, the continuing bull run in India’s equity market in the April-June quarter has baffled many observers.
V-shaped recovery of equity market
- The benchmark BSE Sensex had nosedived to below 28,000 in March-April 2020, following the nationwide lockdown.
- The equity market posted a sharp V-shaped recovery in 2020-21.
- The Sensex surged beyond 50,000 in February 2021 and is currently closing on the 53,000 level.
Factors suggesting bubble in equity market
- There was an 81%-plus growth in the Sensex between April 2020 and March 2021 in the backdrop of real GDP growth plummeting to -7.3% during the same period.
- While output contraction had reversed from the third quarter of 2020-21, the inflation rate also rose and remained way ahead of the real GDP growth rate in the last two quarters (Chart 1).
- It is difficult to find any rationality behind the skyrocketing BSE Sensex in the context of such stagflation in the real economy.
- Just like the fall in the equity prices was driven by the exit of foreign portfolio investors (FPI), the return of massive FPI inflows has driven the Indian equity bubble since then (Chart 2).
- Net FPI inflows clocked an unprecedented ₹2.74 lakh crore in 2020-21, the previous high being ₹1.4 lakh crore in 2012-13.
- The Reserve Bank of India (RBI)’s annual report (2020-21) to state stated that: “This order of asset price inflation in the context of the estimated 8 per cent contraction in GDP in 2020-21 poses the risk of a bubble.”
Global factors
- The global liquidity glut, following the expansionary, easy money policies adopted by the fiscal and monetary authorities of the OECD and G20 countries, has led to equity price inflation in several markets driven by FPIs, especially in Asia.
- Following cues from the U.S. and the U.K., Asian equity markets in Singapore, India, Thailand, Malaysia and Hong Kong are currently witnessing price-earnings (P/E) ratios significantly above their historic means.
- The BSE Sensex’s P/E ratio of 32 in end-June 2021 is way above its historic mean of around 20.
What could burst the bubble?
- Change in monetary policy: With COVID-19 vaccination and economic recovery proceeding apace in the U.S., the U.K. and Europe, fiscal and monetary policy stances will change soon.
- Exit of FPIs: Once the U.S. Federal Reserve and other central banks start raising interest rates, the direction of FPI flows will invariably change bringing about corrections in equity markets across Asia.
- India remains particularly vulnerable to a major correction in the equity market because of two reasons.
- Low pace of vaccination: The pace of COVID-19 vaccination in India, given the vast population, lags behind most large countries.
- In the absence of a substantial increase in the vaccination budget and procurement, large segments of the Indian population will remain vulnerable to a potential third wave of COVID-19, with its attendant deleterious impact on the real economy.
- Weak fiscal stimulus: India’s economic recovery from the recession will remain constrained by the weak fiscal stimulus that has been delivered by the Central government.
- Data from the IMF clearly show that while the total global stimulus consisted of additional public spending or revenue foregone measures amounting to 7.4% of global GDP, India’s fiscal measures amounted to 3.3% of GDP only.
Consider the question “What are the factors driving equity market boom globally? What are the factors that could threaten such boom with a major correction?”
Conclusion
With all agencies, including the RBI, downsizing India’s growth projections for 2021-22, it remains to be seen how long India’s equity bubble lasts.
Back2Basics: P/E ratio
- The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).
- The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
- To determine the P/E value, one simply must divide the current stock price by the earnings per share (EPS).
P/E Ratio=Earnings per share / Market value per share
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 19 and 21
Mains level: Paper 3- Issues with surveillance by the government
Context
The ‘Pegasus Project’ report says that over “300 verified Indian mobile telephone numbers, including those used by ministers, opposition leaders, journalists, the legal community, businessmen, government officials, scientists, rights activists and others”, were targeted using spyware made by the Israeli firm, NSO Group.
Threat to press freedom
- Revelations highlight a disturbing trend with regard to the use of hacking software against dissidents and adversaries.
- A significant number of Indians reportedly affected by Pegasus are journalists.
- This is not surprising since the World Press Freedom Index produced by Reporters Without Borders has ranked India 142 out of 180 countries in 2021.
- The press requires (and in democracies is afforded) greater protections on speech and privacy.
- Privacy and free speech are what enable good reporting.
- This has been recognised in Supreme Court decisions.
- In the absence of privacy, the safety of journalists, especially those whose work criticises the government, and the personal safety of their sources is jeopardised.
- Such a lack of privacy, therefore, creates an aura of distrust around these journalists and effectively buries their credibility.
Issues with the legal provision
- Provisions of law under the Indian Telegraph Act of 1885 and the Information Technology (IT) Act of 2000 are used by the government for its interception and monitoring activities.
- While the provisions of the Telegraph Act relate to telephone conversations, the IT Act relates to all communications undertaken using a computer resource.
- Both provisions are problematic and offer the government total opacity in respect of its interception and monitoring activities.
- Section 69 of the IT Act and the Interception Rules of 2009 are even more opaque than the Telegraph Act, and offer even weaker protections to the surveilled.
- No provision, however, allows the government to hack the phones of any individual since the hacking of computer resources, including mobile phones and apps, is a criminal offence under the IT Act.
Issues with surveillance system
- Surveillance itself, whether under a provision of law or without it, is a gross violation of the fundamental rights of citizens.
- Violation of freedom of speech: The very existence of a surveillance system impacts the right to privacy and the exercise of freedom of speech and personal liberty under Articles 19 and 21 of the Constitution, respectively.
- It prevents people from reading and exchanging unorthodox, controversial or provocative ideas.
- No scope for judicial scrutiny: There is also no scope for an individual subjected to surveillance to approach a court of law prior to or during or subsequent to acts of surveillance since the system itself is covert.
- No oversight: In the absence of parliamentary or judicial oversight, electronic surveillance gives the executive the power to influence both the subject of surveillance and all classes of individuals, resulting in a chilling effect on free speech.
- Against separation of power: Constitutional functionaries such as a sitting judge of the Supreme Court have reportedly been surveilled under Pegasus.
- Vesting such disproportionate power with one wing of the government threatens the separation of powers of the government.
- The existing provisions are insufficient to protect against the spread of authoritarianism since they allow the executive to exercise a disproportionate amount of power.
Way forward
- There needs to be oversight from another branch of the government.
- Judicial oversight: Only the judiciary can be competent to decide whether specific instances of surveillance are proportionate, whether less onerous alternatives are available, and to balance the necessity of the government’s objectives with the rights of the impacted individuals.
- Surveillance reforms: Not only are existing protections weak but the proposed legislation related to the personal data protection of Indian citizens fails to consider surveillance while also providing wide exemptions to government authorities.
- Surveillance reform is the need of the hour in India.
Consider the question “Discuss the threats posed by the use of surveillance systems by the government. Suggest the measures to deal with these threats.”
Conclusion
The only solution to the problem of spyware is immediate and far-reaching surveillance reform.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Limits on China's role in Afghanistan
Context
Amid the gloom that has enveloped Afghanistan, one hope for many countries has been China’s potential role in stabilising it.
Factors that call for China to play role in Afghanistan
- Scope for India-China cooperation: In the past, even India thought that Afghanistan would be a natural area for India and China to work together.
- But little came out of the understanding after the Wuhan summit in 2018.
- Northern neighbours: Afghanistan’s northern neighbours, Turkmenistan, Uzbekistan, and Tajikistan all have expanding political and economic ties with China but have traditionally relied on Russia for their security.
- They might support a larger role for Beijing in Afghanistan in partnership with Russia.
- Iran, Kabul’s western neighbour, also has deepening ties with China.
- Bilateral cooperation with the U.S.: Washington, now locked in an escalating confrontation with Beijing, sees Afghanistan as a potential area of bilateral cooperation.
- Role of Pakistan: Beijing is indeed critical in Pakistan’s plans for Afghanistan.
- Afghan leaders have also been eager to draw China’s BRI into their plans for economic modernisation.
- China was also important for Kabul’s political calculus in limiting Pakistan’s quest for dominance.
Two challenges in China playing role in stabilising Afghanistan
1) Caution in Chinese policy
- The first relates to the deep sources of caution in Chinese policy.
- Neither the prospect of mining Afghanistan’s natural resources nor the vanity of being the newest superpower will compel China to rush into the Afghan vacuum.
- China has deep concerns about Taliban’s ideology and its potential role in fomenting instability in its restive Muslim-majority province, Xinjiang.
- Beijing cannot depend on its special relationship with the Pakistan army to ensure the security of China’s frontiers as well as its investments in Afghanistan.
- The growing attacks on CPEC projects in Pakistan, underline the difficulty of pursuing economic development amid endemic violence.
2) Priorities of Taliban
- The second set of problems relate to the priorities of Taliban.
- It remains to be seen whether the economic development of Afghanistan is a top priority for the Taliban or not.
- Also, is it open to let in foreign capital and all the baggage that comes with it?
- More fundamentally, there is no clarity on the role of economic modernisation in Taliban’s fierce insistence on the creation of an Islamic emirate in Afghanistan.
Conclusion
It is against this backdrop that the chances of China playing a major role in stabilising Afghanistan remain slim.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 21
Mains level: Paper 2- Addressing the issue of undertrials
Context
After the death of Stan Swamy, questions about the conditions of jails and treatment of the incarcerated have been raised anew.
Issue of deaths of prisoners
- The NCRB data reports the death of over 1,800 prisoners in the year 2018. An estimated 70 percent of prison inmates are undertrials.
- Despite constitutional provisions like Article 21, which says, no person shall be denied life or liberty except by the due process of law, the number of undertrials is increasing.
How prisoners are subjected to additional torture
- Overcrowding, delayed medical attention, unhygienic conditions and malnutrition exist in all Indian prisons.
- It is the responsibility of the State and the judiciary to ensure that they are only deprived of their liberty and are not exposed to any additional torture in the form of medical deprivation, unhygienic conditions, bad or inadequate food, etc.
- Yet, thousands are dying every year and the prison authorities are not made accountable.
Way forward
- Acts of extreme neglect that could result in the death of inmates should be acknowledged as extrajudicial torture and made an offense.
- The SC in Sunil Batra (I) v. Delhi Administration (1978), held that “the humane thread of jail jurisprudence that runs right through is that no prison authority enjoys amnesty for unconstitutionality”.
- ARC Recommendations on Prison Reforms: The Union and State Governments should work out, fund and implement at the
earliest, modernization and reforms of the Prison System as recommended by the All India Committee on Jail Reforms (1980-83).
b. The attendant legislative measures should also be expedited.
c. Rules regarding Parole and Remission need to be reviewed.
- Infrastructure: Prisoner Information System, Biometric Identification, facilities for pregnant women, up-gradation of hospitals, etc is needed.
- Strengthening the Open Prison System.
Conclusion
The government needs to take urgent measures to address the issue of additional torture in various forms and the death of prisoners.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ministry for Cooperation
Mains level: Paper 3- Performance of cooperative movement
Context
Two weeks ago, the government created a new Ministry for Cooperation. India is, perhaps, the first country to have such a ministry. The Ministry can play an important role in the transformation of cooperatives in the country.
How 1991 economic reforms benefited agriculture
- On July 24, 1991, India decided to unshackle the spirit of private sector entrepreneurship through the move to de-license industry and reduce tariffs on a host of commodities.
- Trade policy changes improved the terms of trade for agriculture and benefitted millions of farmers.
- Agri-exports increased, but this led to higher domestic prices.
The success story of dairy sector in India
- In 1991, Manmohan Singh, then finance minister wanted to delicense the dairy sector as well, but there was stiff opposition from Verghese Kurien.
- It was after 10 years in 2002 that the dairy sector was fully de-licensed.
- The competition between cooperatives and corporate dairy players has benefitted millions of farmers around the country.
- With the entry of the private sector, the growth of the dairy sector accelerated at double the speed.
- Today, both procure roughly the same quantities and growth in the organised private sector is faster than in cooperatives.
Performance of cooperative movement in India
- India’s experience with the cooperative movement has produced mixed results — few successes and many failures.
- There are cooperatives in the financial sector, be it rural or urban.
- But the performance of these agencies when measured in terms of their share in overall credit, achievements in technology upgradation, keeping NPAs low or curbing fraudulent deals has been poor to average.
- Sugar cooperatives of Maharashtra initially touted as exemplars of the movement, are in the doldrums now.
- Many are being sold to the private sector.
Performance of cooperatives in dairy sector
1) Amul
- The performance of the cooperative champion, Gujarat Cooperative Milk Marketing Federation (GCMMF) — with its poster brand, Amul — has been most successful.
- During Operation Flood, it received a lot of capital at highly concessional terms.
- But its success is also the result of professionalism, business and, therefore, keeping politics away.
- But despite the grand success of Gujarat’s milk cooperatives in Gujarat, the model did not spread to other states as successfully.
2) Karnataka Milk Federation
- In its eagerness to please milk farmers, the Karnataka Milk Federation (KMF), which sells its products under the brand name of Nandini, gives them Rs 5 to Rs 6 extra per litre.
- This subsidy, given by the state government, cost the exchequer Rs 1,260 crore till 2019-20.
- KMF procures a lot of milk and then dumps it at lower prices in the market for consumers.
- This depresses prices in adjoining states like Maharashtra, affecting the fortunes of Maharashtra milk farmers.
- If Maharashtra and Karnataka were two different countries, Maharashtra would be challenging Karnataka at the WTO.
Way forward
- The new Ministry of Cooperation can work towards ironing out distortions in state price policies due to subsidization such as in Maharastra and Karnatak milk prices.
- Cooperatives desperately need technological upgradation.
- The Ministry of Cooperation can give them soft loans for innovation and technology upgradation.
- But such loans should also be extended to the private sector to ensure a level playing field.
- The Ministry of Cooperation needs to ensure the least political interference in the operation of cooperatives.
Conclusion
The new Ministry of Cooperation can work towards bringing in professionalism in cooperatives and make them more competitive.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Recommendation 202
Mains level: Paper 2- Social security for migrant labour
Context
The migrants’ crisis after the two covid waves compelled policy-makers to make certain provisions for them in the schemes announced for the assistance of the poor.
Supreme Court judgement on the issue
- On June 29, the Supreme Court finally delivered its judgment on the plight of migrant labour.
- The judgement was notable for two main reasons.
- First, it recognised that there was the large-scale exclusion of migrant workers and other informal workers from existing schemes due to the lack of their registration and outdated eligibility lists.
- It noted that no benefits will be denied to migrant workers for want of an Aadhaar card and that food assistance will be provided for migrants who were not covered by the National Food Security Act.
- Second, it connected informal workers and migrant workers, both of whom experience exclusion, and mandated that the portal for registration of all informal/migrant workers should be fully operational before July 31.
Advantages of providing social protection
- Investment in social protection is not charity, it is an investment in workers’ productivity and in equitable growth.
- Providing social protection is, as the UN mooted in 2009 when it spelt out the social protection floor (SPF) initiative after the global financial crisis, the surest way out of a crisis by boosting demand at the bottom of the pyramid.
- The report of the Advisory Committee of the ILO, in which India was represented by its labour secretary, provides a strong rationale for instituting a universal SPF during economic crises.
- As a result, all constituents of the ILO adopted Recommendation 202 on social protection floors at the International Labour Conference in 2012.
Inadequate provisions by government
- The Unorganised Workers’ Social Security Act, was approved by Parliament in December 2008.
- But it lacks the mandatory elements of the NCEUS’s proposals and included neither a National Minimum Social Security Package, nor the provision for mandatory registration.
- Estimates show that the central government’s expenditure on all major social protection programmes declined from 1.96 per cent of GDP in 2008-09 to 1.6 per cent in 2013-14 and to only 1.28 per cent in 2019-20.
Way forward
- The National Commission for Enterprises in the Unorganised Sector (NCEUS) had pointed out that the circular migrant workers were a disadvantaged segment among informal workers.
- Comprehensive law: The NCEUS had advocated a comprehensive law for the protection of the rights of all informal workers, including migrants, home workers, and domestic workers.
- Universal registration: NCEUS had also recommended a universal registration mechanism based on self-declaration, with the issuance of a smart social security card, and a National Minimum Social Security Package.
- Guaranteed social security/social protection: We need the provision of a minimum level of guaranteed social security/social protection for all informal workers and their households within a definite time frame.
- More public spending: Guaranteed social protection would involve a clear framework and a commitment to greater public resources being spent on social protection as a large class of workers in India do not have an identifiable employer and a contributory social insurance framework will not work for them.
- Recommendation 202: Government should embrace ILO’s Recommendation 202 and work towards these in a time-bound manner.
Conclusion
To end the silent, painful, and enduring crisis for the workers, as well as the crisis for the economy, the government must urgently recognise the right to social security, embedded both in the Indian Constitution and international covenants.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: BIT
Mains level: Paper 2- State sovereignty
Context
Last year, an arbitration tribunal indicted India for breaching its obligations by imposing taxes retrospectively on Cairn. As a result, Cairn Energy has been attempting to seize Indian assets in several jurisdictions to recover $1.7 billion due from India.
How asset seizure order affects India?
- This episode projects India as an unfriendly country for investors at a time when it wishes to project itself as a prime destination for foreign investment.
- This episode puts India in the league of countries like Pakistan, Congo, Venezuela, Russia and Argentina, who have been part of attachment proceedings overseas due to their failure to comply with international arbitral awards.
- Fighting cases will consume an enormous amount of time, money, and resources, in addition to attracting bad press internationally.
Understanding the doctrine of state immunity
- State immunity is a well-recognised doctrine in international law.
- It safeguards a state and its property against the jurisdiction of another country’s domestic courts.
- Despite the universal acceptance of this doctrine, there is no international legal instrument in force administering its implementation.
- Attempts are underway to create binding international law on the application of the rules of state immunity such as the United Nations Convention on Jurisdictional Immunities of States and Their Property (UNSCI).
- However, this convention is yet to be ratified by 30 countries — the minimum number required to bring it in force, as per Article 30(1) of UNSCI.
- India has signed the convention, but not ratified it.
- The doctrine of state immunity has progressed from absolute immunity to restrictive immunity in which immunity is only for the sovereign functions of the state.
Can India invoke state immunity?
- Most prominent jurisdictions follow the concept of restrictive immunity.
- State immunity can be invoked to resist the seizure of sovereign assets, but not commercial properties.
- In the context of the execution of the investment treaty arbitration awards, properties serving commercial functions are available for seizure.
- In the case of India, the most popular commercial property that foreign investors would target for attachment are the global assets of India’s public sector undertakings such as Air India.
Way forward
- If India wishes to continue the case, it needs to carefully study the laws on state immunity in different jurisdictions where attachment proceedings are likely to come up.
- A better option would be to admit that amending the tax law retrospectively was a mistake and comply with the international ruling.
Conclusion
At the time when India seeks to project itself as an attractive investment destination, such cases could be a setback. India needs to avoid such disputes in the future.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Judicial interference in investigation
Context
Instances of judiciary directing the investigating officer point to the need for restraint from the judiciary.
Challenging the discretion of investigating officer
- There have been growing instances of subordinate judicial officers, and even High Courts sometimes, directing the investigating officer to effect the arrest of a particular individual.
- To deal with the issue, the Supreme Court of India recently made the observation that courts have no authority to direct an investigating officer to in turn direct the arrest of any particular individual connected with a crime
- This points to the need for a slightly kindlier view of police conduct and more latitude to them in the standard operating procedures which they follow, especially when they investigate a complicated crime.
- The Code of Criminal Procedure (CrPC) vests sufficient discretion in the investigating officer to take such decisions as arrests and searches.
Issues with court’s directions
- Court observations that smack of a lack of faith in police ability and integrity will make grass-root level policemen even more arbitrary than now and force them into carrying out questionable actions that will cast aspersions on an officer’s ability to think for himself.
- Court interference in the day-to-day investigation is not only undesirable but is also not sanctioned by law.
- Only the Supreme Court, has been vested with enormous authority and discretion by the Constitution, the lesser courts shall not give directions in the matter of arrests and searches.
Safeguard against police misconduct
- We need to educate the Executive and the common man that it is now well-established law that the police have to register an FIR.
- It is mandatory that every police station in the land should register a complaint under the relevant sections of a statute the moment a cognisable offence is made out in the complaint
- There is another safeguard against police misconduct.
- The CrPC makes it obligatory for the investigating officer to write a diary that details the action taken every day following registration.
- When in doubt, the competent court, which already has a copy of the first information report, can demand to see the case diary.
- Courts should remember that the police are a well-established hierarchy that is obligated to ensure objectivity during a criminal investigation.
- Every investigation is supervised by at least two immediate senior officers.
Conclusion
Judicial interference in an investigation is counterproductive to the idea of justice. Therefore, there is a need for allowing more freedom to the investigating officers in the standard operating procedure that they follow.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Social backwardness
Mains level: Paper 2- Claim of backwardness and challenges
Context
Two rulings of the Supreme Court have frayed nerves in Maharashtra on the broader question of “reservation”. The other pertains to OBC reservation in local bodies. Both issues have relevance beyond Maharashtra.
Challenges in addressing the demand for reservation
- Lack of quantitative data: The issue of actual numbers or population share of OBCs has been talked about for over a decade.
- Besides, there is a need to understand the socio-economic situation of different backward communities.
- In the last instance, we have to decide which groups are backward and what needs to be done for them.
- The political class have consistently avoided the juridical reality.
Consensus between judiciary and political class
- That consensus after implementation of Mandal commission recommendation had three dimensions:
- 1) Accepting that caste is the main cause of tradition-born backwardness among a large section of the population.
- 2) Resorting to “reservation” as the easiest policy response.
- 3) Recognising and accommodating the political aspirations of the backward sections by expanding the social base of the political elite.
- But this resulted in the current deadlock on the question of social justice.
- Today, not only the Marathas, but Jats and Patidars, too, claim that vast numbers among them have been left behind in the contemporary economy.
- These demands have deflected attention from two matters.
- 1) That the enabling provision of the Constitution aims at social backwardness (caused by societal location).
- 2) That the causes of economic distress originating in development policies are distinct from backwardness primarily originating in caste location.
- Granting reservations on an economic basis seems to have complicated matters.
Five reservation-related issues gaining renewed urgency
- Intra-OBC differentiations: This issue was already raised by a member of the Mandal Commission itself.
- Most states have failed to come up with an effective arrangement to addressing the issue.
- The Centre is currently waiting for a report on this question.
- Intra-caste stratification: Intra-caste stratification is increasing — something that was rather limited at the time of Mandal.
- What sociologist D L Sheth called as classification is now becoming the central issue, with many complications.
- Advantages and logic: The third question is about the specific advantages and logic of reservation in the three different arenas of employment, education and political representation.
- Limits of reservation: There is need to discuss the limits of reservation and the need to think of additional measures to augment the policy of social justice.
- Setting boundaries: With such widespread poverty and suffering, how do we distinguish between backwardness primarily caused by a group’s social location in traditional social order and backwardness resulting from distortions of the political economy?
- Unless we grapple with this question, reservation is bound to remain a contentious issue.
Way forward
- The above questions are best left ideally to a third backward classes commission whose time has come.
- Removing the 50 per cent cap legislatively needs to be considered.
Conclusion
We need to devise a mechanism to verify the claims of backwardness to address the increasing demands for reservation from the politically strong section of society.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Right to reproductive freedom
Mains level: Paper 2- Coercive policy measures to control population
Context
Recently, the government of Uttar Pradesh released a “Population Policy” in which it stated its intention to bring the gross fertility rate in the State down from the existing 2.7 to 2.1 by 2026.
Provisions in the Bill
- This draft law, titled the Uttar Pradesh Population (Control, Stabilisation and Welfare) Bill, 2021, seeks to provide a series of incentives to families that adhere to a two-child norm.
- The Bill also intends on disentitling families that breach the norm from benefits and subsidies.
- It promises public servants who undergo sterilisation and adopt a two-child norm several benefits.
- The draft Bill also contains a list of punishments.
- A person who breaches the two-child norm will be debarred from securing the benefit of any government-sponsored welfare scheme and will be disqualified from applying to any State government job.
- Existing government employees who infringe the rule will be denied the benefit of promotion.
- Transgressing individuals will be prohibited from contesting elections to local authorities and bodies.
Issues with coercive population control policies
1) Counter-productive measure
- Through an affidavit filed in court, the central government argued that “international experience shows that any coercion to have a certain number of children is counter-productive and leads to demographic distortions”.
2) Against international obligations
- India is committed to its obligations under international law, including the principles contained in the International Conference on Population and Development Programme of Action, 1994.
- Foremost in those principles was a pledge from nations that they would look beyond demographic targets and focus instead on guaranteeing a right to reproductive freedom.
3) Against right to reproductive freedom and privacy
- In Suchita Srivastava & Anr vs Chandigarh Administration (2009), the Court found that a woman’s freedom to make reproductive decisions is an integral facet of the right to personal liberty guaranteed by Article 21.
- This ruling was endorsed by the Supreme Court’s nine-judge Bench verdict in K.S. Puttaswamy vs Union of India (2017).
- A reading of the plurality of opinions there shows us that the Constitution sees a person’s autonomy over her body as an extension of the right to privacy.
- A simple reading of U.P.’s draft law will show us that, if enacted, it will grossly impinge on the right to reproductive freedom.
- However, In Javed & Ors vs State of Haryana & Ors (2003), the Court upheld a law that disqualified persons with more than two children from contesting in local body elections.
- But the present UP Bill is far more disproportionate, therefore, the judgment in Javed can no longer be seen as good law.
- The UP government will likely argue that there is no violation of privacy here because any decision on sterilisation would be voluntary.
- But, as we ought to by now know, making welfare conditional is a hallmark of coercion.
- Therefore, the proposed law will fall foul of a proportionality analysis.
4) Negative consequences
- An already skewed sex ratio may be compounded by families aborting a daughter in the hope of having a son with a view to conforming to the two-child norm.
- The law could also lead to a proliferation in sterilisation camps, a practice that the Supreme Court has previously deprecated.
- In Devika Biswas vs Union of India (2016), the Court pointed to how these camps invariably have a disparate impact on minorities and other vulnerable groups.
Way forward
- Experiences from other States in India show us that there are more efficacious and alternative measures available to control the growth of population, including processes aimed at improving public health and access to education.
Conclusion
For one thing, the reasoning of the Bill goes against the Puttaswamy case. But as rousing as the nine-judge Bench verdict is, its legacy depends on how its findings are applied.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Inventory model vs marketplace model
Mains level: Paper 3- Issues with regulation of e-commerce
Context
The proposed Consumer Protection (E-Commerce) Rules, 2020, have been drafted ostensibly in the name of the consumer. The rules are driven more by the desire to shield the traditional brick-and-mortar stores, and handicap e-commerce firms, especially the foreign ones.
Issues with the provisions of draft Consumer Protection (E-Commerce) Rules, 2020
1) Fall-back liability clause is unfair for those operating through marketplace model
- Under this provision, e-commerce entities will be liable in case suppliers on the platform fail to deliver the goods to consumers, causing them a loss.
- E-commerce firms in India operate through either the inventory model or the marketplace model.
- As FDI is permitted only in the marketplace model.
- Under the marketplace model, e-commerce platforms don’t hold inventory, but simply connect buyers and sellers.
- Foreign players typically operate through this model.
- Considering that these platforms exercise little or no control over the inventory under this model, how can they be held liable for the sellers’ actions.
2) Identifying goods based on country of origin and providing fair opportunity to domestic sellers
- The draft rules also require e-commerce platforms to identify goods based on their country of origin.
- And when goods are being viewed for purchase by consumers, the rules also mandate platforms to provide suggestions to ensure “fair opportunity” for domestic sellers.
- This raises the question as to why the Make in India campaign is being pushed through the Consumer Protection Act.
- Surely, if domestic manufacturers are competitive, consumers will automatically gravitate towards them.
- Interests of consumers, not domestic manufacturers, should be at the core of the consumer protection framework.
3) Overlapping/competing jurisdictions
- Data protection: The draft rules have sought to safeguard consumer data by restraining e-commerce firms from sharing consumer data without consent.
- But the data protection should be governed by the provisions under the Personal Data Protection Bill and not the Consumer Protection Act.
- Considering the graded approach that is likely to be adopted under the Data Protection Bill, an e-commerce user’s data could be classified as per its vulnerability and be left under the jurisdiction of the data protection authority.
- Dominant position: The rules also state that e-commerce entities are prohibited from abusing their dominant positions in the market.
- The “abuse of dominant position” has been given the same meaning as that prescribed under Section 4 of the Competition Act, 2002.
- This will open the scope for new consumer protection authority to enter into issues of abuse of dominant position — the domain of the Competition Commission of India.
Consider the question “Over-regulation tends to curb competition and create monopolies instead of ensuring its holistic growth dovetailed with fair competition. In light of this, examine the issues with the draft Consumer Protection (E-Commerce) Rules, 2020?”
Conclusion
The lines of demarcation that have been drawn up in the retail landscape — single brand vs multi-brand, online vs offline, domestic vs foreign — serve only to protect powerful vested interests, not benefit the consumer as is often proclaimed.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Federal structure
Mains level: Paper 2- Challenges to India's federalism
Context
In 2026, there will be the challenge of addressing the conflict between the democratic principles and the federal principles, when there will be a reallocation of Lok Sabha seats. India needs to reimagine the current federal compact to address the challenges to federalism.
Population freeze for Lok Sabha seats
- Since 1976, seats in the Lok Sabha have reflected the 1971 census and have not taken into account changes in the population.
- The primary reason for this has been unequal population growth among States.
- India’s most highly developed and prosperous States have been successful at family planning, while the poorer States continue to expand.
- The freeze was thus a chance to ensure that India’s most successful States are not punished politically for their success.
- Therefore, the Indian Constitution may face an unprecedented crisis in 2026 when there will be a dramatic change in the composition of the Lok Sabha.
Challenge of balancing the principle of democracy and federalism
- As Article 1 of the Indian Constitution says, India is a Union of States.
- However, the history of the linguistic reorganisation of States in 1956, and subsequent movements for Statehood afterwards demonstrates that States are distinct associative communities, within the federal structure of the Indian Union.
- In a democratic set-up, all citizens are equal and are thus entitled to equal representation in governance.
- But this would imply that bigger States are likely to dominate the national conversation over smaller States.
- This leads us to an inherent contradiction between the principles of democracy and federalism when federal units are unequal in size, population and economics.
- The small States fear that they would get a smaller share of the pie economically, a much reduced say in national issues, and be irrelevant in the political governance of the country.
How the US Constitution addresses the concerns of small states
- When the Americans adopted their Constitution, they protected smaller States in four ways.
- First, national powers over the States were limited.
- Second, each State regardless of size had two seats in the Senate, giving smaller States an outsized role in national governance.
- Third, Presidents are elected by electoral votes, which means they must win States rather than the total national population.
- Fourth, the slave-owning states were allowed to count the slaves for purposes of representation, with each slave being counted as three-fifths of a person.
- This essential structure remains the bedrock of the American Constitution today.
How Indian Constitution deals with the issue?
- India’s quasi-federal structure has always been sui generis.
- Our founders knew that India’s diversity made federalism inevitable, but, fearing separatist tendencies among States that had never been a single political unit, they also created a strong centre.
- However, the 1956 reorganisation of States on linguistic lines was a popular recognition of federal principles and yet did not result in separatist tendencies.
- Since then, new States within the Union have been created in response to the demands of people for greater autonomy.
Way forward on addressing the challenges to federalism
- There is an urgent need to reimagine our national compact.
- Following are the components of such a new balance that need to be fine-tuned to Indian realities.
- Give more powers to States: The powers of States vis-à-vis the Centre contained in the Lists and in the provisions dealing with altering boundaries of States must be increased to assuage the fear of smaller States that they will be dominated by bigger ones.
- More localised decision-making is bound to increase national prosperity.
- Indeed, this was the entire goal of the creation of Panchayat governance through the 73rd and 74th Amendments to the Constitution.
- Expand the role of Rajya Sabha: The role and composition of the Rajya Sabha, our House of States, must be expanded.
- This would allow smaller States a kind of brake over national majoritarian politics that adversely impact them.
- Consent of all states on financial redistribution: Constitutional change and the change in financial redistribution between the States must require the consent of all or nearly all States.
- Constitutional provisions dealing with language and religion must also be inviolate.
- Break the bigger States: Serious thought must be given to breaking up the biggest States into smaller units that will not by themselves dominate the national conversation.
Conclusion
The unity of India is, of course, the fundamental premise underlying this discussion; but this unity does not depend on an overbearing Centre for its survival.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Independent director
Mains level: Paper 3- Dual approval system for independent directors
Context
While the regulators have taken giant strides to enhance board independence in India, one significant conundrum persists about appoint and removal process of the independent directors.
How appointment and removal process affects the independence of independent directors?
- Independent directors are appointed just like other directors through shareholder voting by a simple majority.
- This confers a significant power in the hands of significant shareholders to handpick the independents.
- In case of family-owned companies, it is not uncommon to appoint “friendly” independent directors.
- As for public sector undertakings, there is a demonstrable affiliation between independent directors and the ruling political parties.
Dual Approval System: Way forward
- The above trends suggest that unless independent directors owe their allegiance to the shareholder body as a whole, independence is likely to remain largely in form and not function.
- In its consultation paper, SEBI proposed a “dual approval” system.
- Under this system, the appointment of an independent director required the satisfaction of two conditions:
- First, the approval by a majority of all shareholders.
- Second, the approval of a “majority of the minority”, namely the approval of shareholders other than the promoters.
- SEBI recommended the same “dual approval” system for the removal of independent directors as well.
- SEBI drew inspiration from Israel and the premium-listed segment of the United Kingdom, which confers greater power to minority shareholders in installing or dethroning independent directors.
- SEBI has not yet made any mention of implementing the dual approval system.
Issues with Dual Approval System
- The first issue is that it militates against the majority rule principle that is intrinsic in a corporate democracy.
- While understandable, that is hardly an immutable rule as corporate law does make exceptions in cases involving oppression of minority shareholders.
- The second concern is that placing too much power in the hands of minority shareholders would be counterproductive, as it could result in a tyranny of the minority.
- However, the dual approval system instead represents the best of both worlds. It does not negate the promoter’s involvement in the process of appointing or removing independent directors.
- Only consensus candidates would end up becoming independent directors.
- The third issue is one of shareholder apathy: Will minority shareholders be motivated to exercise an informed and meaningful choice?
- Minority shareholders tend to be passive when they are unable to influence the outcome of shareholding voting.
- However, where they do have a significant say, like in the “majority of the minority” process, they are likely to be more active in exercising their franchise.
Consider the question “How far has the provision of appointing independent directors to safeguard the interest of minority shareholders succeeded in its objectives? Suggest the changes to improve the challenges faced by the independent directors.”
Conclusion
In all, the appointment and removal system continues to undermine the independence and efficacy of corporate boards. The SEBI needs to implement the dual approval system at the earliest.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAD
Mains level: Paper 3- Forex reserves and its significance
Context
The ascending stock of forex reserves has led to the view this will enable the sole devotion of monetary policy to domestic objectives.
Assessing the significance of forex reserves
Let’s look into the experinec of China and India in this regard.
1) Learning from China’s experience
- In 2016, China had a strong external position—current account surplus and more than $3tn forex reserves.
- However, investors’ expectations on renminbi (RMB) value began to shift due to rising concerns about its growth outlook, domestic rate cuts and eventual depreciation, and imminent tightening of US monetary policy, resulting in net capital outflows of $725 billio (bn) over the year.
- This put sustained pressure upon the RMB.
- Eventually, China resorted to capital control measures, which slowed the outflow and supported the RMB in the first half of 2017.
2) India’s own historical record
- India’s own historical record shows that, high or low, forex reserves didn’t prevent investors from reappraising positions.
- India experienced this in case of oil prices (2018) or taper fears (2013).
- The CAD was moderate, at 1.1% and 1.4% of GDP in two quarters to December 2017.
- But as oil prices climbed, current account projections were rapidly revised to 2.5-3% of GDP in less than a quarter seeing the jump in the import bill, lagging exports and continuous outflow of portfolio capital.
- Reserves totalled $424 bn then (end-March 2018); foreign currency assets were $399 billion.
- Against a mere $9 bn capital outflow, the peak-to-trough decline in reserves was $19 bn in April-June 2018, with 5% depreciation of the rupee.
- The sharper, $21 bn fall in mid-April to July 20, 2018 equalled the reserves decline in April-August 2013 taper episode when the rupee depreciated three times more or 15%!
- Forex reserves were much lower in 2013 ($255 bn range) and it had taken only a quarter for the current account gap to widen from 4.0% of GDP in April-June 2012 to 5.4% and a record 6.7% in subsequent two quarters to December 2012!
Key takeaways
- History shows that no level of reserves is a foolproof guarantee for macroeconomic stability or interest rate immunity.
- The important lesson these episodes hold is that repressive attempts do not always convince markets or prevent shifts in expectations and often compel large, abrupt adjustment.
- Investors reassess positions, including global factors, whatever the reserves’ stock.
- The crucial role of reserves is psychological, i.e. market confidence and liquidity insurance that is immediate and unconditional that allows central banks to buy time, whether for a gradual adjustment, soft landing, or as the case may be.
Distortion in bond market and RBI’s role in it
- RBI has been systematically suppressing bond yields, particularly the 10-year benchmark, the reference rate for banks.
- So effective was the repression that the bond market became irrelevant as yields altogether stopped responding to inflation or fiscal developments.
- The 207-basis-point jump in retail inflation in a month in May, which exceeded expectations, caused not even a flicker in the yield premium for example.
- This did not prevent responses elsewhere though – the overnight indexed swap (OIS), which signals future interest rate movements, increased 20-30 basis points at different tenures with fresh inflation risks.
- Clearly, the market reading was inconsistent with RBI’s, whose rigid adherence to a particular level (6% in the case of the old, 10-year bond) was disregarded outright.
- The monetary policy cue was not being accepted, failing to soothe ruffled feathers about inflation.
Risk involved in RBI’s policy
- If the global financial cycle were to suddenly turn, risk-aversion set in, or oil prices shoot up to risky levels, investors will undoubtedly look at actual differentials, not the one set in stone by RBI.
- There will be exchange rate pressures, which RBI can no doubt manage with liberal reserves.
- But the duration and degree of adjustment is not in RBI’s control, identically to the bond market one, where it has infinite capacity to keep local yields where it wants.
- There’s a limit to how much foreign currency it can sell—the $609bn reserve holding is finite.
- Currency depreciation can, therefore, worsen a bad situation as higher inflation pressurises domestic interest rates to rise.
- RBI’s issuance of the new 10-year benchmark bond at 6.10%, which came as a surprise against its previous inflexibility, indicates RBI has internalised the above risks.
- The disparate movements were undermining RBI, whose commitment to continue the accommodative monetary policy as long as necessary to revive and sustain growth has been reassuring.
Conlcusion
When the economy is open, financially integrated and subject to cross-country dynamics, it is more prudent to let market forces play out a bit than persist with a stance that could turn unsustainable despite the high reserves.
Back2Basics: What is Current Account Deficit (CAD) ?
- The current account deficit is a measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the products it exports.
- The current account includes net income, such as interest and dividends, and transfers, such as foreign aid, although these components make up only a small percentage of the total current account.
- The current account represents a country’s foreign transactions and, like the capital account, is a component of a country’s balance of payments (BOP).
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SCO members
Mains level: Paper 2- Afghanistan after the US withdrawal
Context
A regional conclave of foreign ministers taking place in Dushanbe this week under the banner of the Shanghai Cooperation Organisation (SCO) should give us a sense of the unfolding regional dynamic on Afghanistan.
SCO addressing challenges in Afghanistan
- Geography, membership and capabilities make the SCO an important forum to address the post-American challenges in Afghanistan.
- The SCO was launched 20 years ago by China and Russia to promote inner Asia stability.
- The current members of the SCO are China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Pakistan, and India.
- The SCO has four observer states — Iran, Afghanistan, Mongolia and Belarus.
- The idea of a regional solution to Afghanistan has always had much political appeal.
- But divergent regional strategic perspectives limit the prospects for a sustainable consensus on Afghanistan.
Implications of the US exit for the region
- The quiet satisfaction in Moscow, Beijing, Tehran and Rawalpindi at the US’s exit from Afghanistan, however, is tinged by worries about the long-term implications of Washington’s retreat
- Regional players have to cope with the consequences of the US withdrawal and the resurgence of the Taliban.
- Neither Moscow nor Beijing would want to see Afghanistan becoming the hub of international terror again under the Taliban.
- For China, potential Taliban support to the Xinjiang separatist groups is a major concern.
- Iran can’t ignore the Sunni extremism of the Taliban and its oppressive record in dealing with the Shia, and Persian-speaking minorities.
- Pakistan worries about the danger of the conflict spilling over to the east of the Durand Line, and hostile groups gaining sanctuaries in Afghanistan.
Three factors that drive India’s Afghan policy
- The US exit means a new constraint on Delhi’s ability to operate inside Afghanistan.
- There is also the danger that Afghanistan under the Taliban could also begin to nurture anti-India terror groups.
- If India remains active but patient, many opportunities could open up in the new Afghan phase.
- Three structural conditions will continue to shape India’s Afghan policy.
- One is India’s lack of direct physical access to Afghanistan.
- This underlines the importance of India having effective regional partners.
- Second, it remains to be seen if Pakistan’s partnership with China and the extension of the China Pakistan Economic Corridor into Afghanistan can address Pakistan’s inability to construct a stable and legitimate order in Afghanistan.
- Third, the contradiction between the interests of Afghanistan and Pakistan is an enduring one.
- While many in Pakistan would like to turn Afghanistan into a protectorate, Afghans deeply value their independence.
- All Afghan sovereigns, including the Taliban, will inevitably look for partners to balance Pakistan.
Way forward for India
- India must actively contribute to the SCO deliberations on Afghanistan, but must temper its hopes for a collective regional solution.
- At the same time, Delhi should focus on intensifying its engagement with various Afghan groups, including the Taliban, and finding effective regional partners to secure its interests in a changing Afghanistan.
Conclusion
India should pursue the regional solution to Afghanistan challenge after the US exit while increasing the engagement with the various players in Afghanistan including the Taliban.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-Japan-Italy partnership
Context
Recently, Mr. Draghi, Italy’s Prime Minister described Chinese competitive practices as “unfair” and invited the EU to be franker and more courageous in confronting Beijing on various issues. Against this backdrop, a trilateral partnership between India-Japan-Italy could play important role in the Indo-Pacific region.
India’s growing centrality in Indo-Pacific strategic architecture
- Countries that share similar values and face similar challenges are coming together to create purpose-oriented partnerships.
- In the context of the Indo-Pacific, the challenges posed by China’s assertive initiatives clash with a region lacking multilateral organisations capable of solving problems effectively.
- But as a new pushback against China takes shape and as Indian foreign policy becomes strategically clearer, there is new momentum to initiatives such as the Quad.
India-Italy-Japan trilateral partnership
- Recently, Italy has also begun to signal its intention to enter the Indo-Pacific geography.
- It has done so by seeking to join India and Japan in a trilateral partnership.
- Italy has become more vocal on the risks emanating from China’s strategic competitive initiatives.
- On the Indian side, there is great interest in forging new partnerships with like-minded countries interested in preserving peace and stability in the Indo-Pacific.
- The responsibility of keeping the Indo-Pacific free and open, and working for the welfare of its inhabitants falls on like-minded countries within and beyond the region.
Potential of trilateral partnership
- Their compatible economic systems can contribute to the reorganisation of the global supply chains that is now being reviewed by many players as a natural result of the Chinese mismanagement of the COVID-19 pandemic.
- At the security level, the well-defined India-Japan Indo-Pacific partnership can easily be complemented by Italy.
- At the multilateral level, the three countries share the same values and the same rules-based world view.
The way forward for trilateral cooperation
- The Italian government must formulate a clear Indo-Pacific strategy that must indicate its objectives.
- But Rome must go beyond that in defining and implementing, at the margins of the EU’s common initiatives, its own policy with respect to the Indo-Pacific.
- The India, Italy and Japan trilateral initiative can be a forum to foster and consolidate a strategic relationship between these three countries, and specifically expand India-Italy bilateral relations.
- A trilateral cooperation can be the right forum for India and Italy to learn more from each other’s practices and interests and consolidate a strategic dialogue that should include the economic, the security and the political dimensions.
- To consolidate the trilateral cooperation in this field, the three countries need to define a common economic and strategic agenda.
Conclusion
A clear political will is needed from all sides, and Italy, in particular, should recognise its interests in playing a larger role towards the maintenance of a free and open Indo-Pacific. Robust India-Italy strategic ties can be the first step towards the realisation of this goal.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Arbitrations and issues with it in India
Context
Plagued by delays and rising costs, arbitration in India needs urgent attention. The pandemic has only worsened the situation.
Issues with arbitrations process in India
- Arbitrations in India suffers from rising costs and sluggish proceedings.
- Arbitration proceedings are often dragged on by lawyers on either side filing misconceived applications at various stages of the proceedings.
- Litigants, too, at times contribute to this delay with their stubbornness in not conceding a loss or defeat.
- The courts have narrowed down the scope of judicial interference under Section 34 of the Arbitration and Conciliation Act.
- The very limited recourse for setting aside an arbitral award under the Act invariably means that it will be upheld, even if it appears unfair or illogical.
- The aggrieved party may well be stuck with the award and precluded forever from challenging it.
- Arbitration hearings are generally held in camera, and decisions are usually not publicly accessible, giving rise to doubts about impartiality and fairness.
- Arbitration proceedings have become more complex with time.
- The Supreme Court, in Guru Nanak Foundation v. Rattan Singh and Sons, had expressed disappointment against the procedural delays and tardiness in the resolution of disputes through arbitration.
- Even the clauses providing for fees of the arbitrators and fixed timelines for disposal are often disregarded by the players
- The inevitable consequence of these drawbacks is a slow departure of the biggest litigant, the government, from the arbitration spectrum.
- A sector that is dominated by approvals, protocols and scrutiny, uncertainty about the budget outlay towards arbitrations and unexpected delays in disposal does not inspire confidence and detracts from the sanctity of the process.
Way forward
- Arbitrators have endeavoured to simplify the proceedings by limiting the pleadings, insisting on written arguments, reducing the number of sittings and laying down a schedule for various milestones.
- Some restraint is needed from all quarters to bring its wheels back on the tracks. These are:
- A small check on the arbitral fees and timelines.
- Careful drafting of arbitration clauses.
- Stringent procedural safeguards to curb delays.
- Expeditious disposal of the court proceedings and legislative intent towards all of the above.
Consider the question “What are the issues faced by the arbitration in India? Suggest the measures to deal with these issues.”
Conclusion
Arbitration still has the inherent potential and characteristics to outperform other modes of dispute resolution, but for that to happen, some changes are a must.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Farmer Producer Companies
Mains level: Paper 3- Cooperatives in India and challenges
Context
India now has a Ministry of Cooperation that aims to strengthen the country’s cooperative movement. This is an opportune moment to look at the movement’s history, examine the potential of cooperatives and analyse the challenges they face.
Development of Farmer Producer Companies in India
- India’s significant tryst with dairy cooperatives began in the 1950s with the success of what we know today as Amul.
- The nation took note of this initiative and the National Dairy Development Board was set up in 1965.
- However, the expansion wasn’t working the way it had been envisaged.
- The need for a new model was felt soon as cooperatives outside Anand were not holding regular and proper elections.
- Their accounts were not audited.
- As a result, a committee was set up in the Company Affairs Ministry to allow farmers to set up companies.
- The Farmer Producer Companies (FPCs) would run on the principle of “one share one vote” and the essence of cooperatives would not be diluted.
- The Parliamentary Committee looked into the Bill to give legal backing to FPCs, with this, the Companies Act (Second Amendment), 2002 became law.
Funding the FPCs
- The existing funding vehicles were designed to cater to cooperatives, not FPCs
- Around 2010, the Boston Consulting Group (BCG) had been commissioned to develop a plan for restructuring NABARD.
- As a result, the restructured NABARD had a special window for FPCs.
Community-based cooperatives
- The Cheliya community set up a chain of Hearty Mart “cooperative” supermarkets in villages in Gujrat using the franchise model.
- Just as the network of Charotar Patels that Kurien relied on in the case of Amul —Cheliya community have played a key role in the spread of the model.
- The idea of leveraging the community network was tried in some parts of the country in the context of re-imagining economic infrastructure.
- To deal with the electricity board failures, a distribution company was run on a community basis.
- This model has, in fact, worked in places like Kanpur, even Kerala.
Social cooperatives
- The concept of social cooperatives builds on the idea of communities creating infrastructure by using local material and family labour.
- These can be the village tank, paving the village road — with or without MGNREGA — finishing the last-mile construction of a canal network or even keeping watch on the contractor.
- The pandemic seems to have increased the significance of community effort.
- Reducing vaccine hesitancy, providing food to those waiting outside hospitals and, most importantly, looking after orphaned children are imperatives crying out for the cooperative model.
Way forward for new Ministry of Cooperatives
- Keeping in mind social needs while using resources is a large part of the solution to our current predicament.
- The pandemic will not follow the laws of corporate finance, cooperation has a lot to speak for itself, the new ministry should take this message.
- The new work-from-home model will create several problems as well as offer opportunities.
- The new ministry is a recognition of the needs of our times.
- But it should not be just about pumping in money.
Conclusion
This is the time to design models that help those who help themselves. We will wait expectantly to see how the new ministry works.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Issues with school education in India
Context
Proportion of children attending the government schools has been on the decline. This has several implications.
Issues with school education in India
- A quality, free and regular school education represents our most potent infrastructure of opportunity, a fundamental duty of the state.
- Meritocracy represents the idea that people should advance based on their talents and efforts.
- But India’s meritocracy is sabotaged by flailing government schools.
- The proportion of India’s children attending a government school has now declined to 45 per cent.
- This number is 85 per cent in America, 90 per cent in England, and 95 per cent in Japan.
- India’s 100 per cent plus school enrolment masks challenges; a huge dropout ratio and poor learning outcomes.
- We have too many schools and 4 lakh have less than 50 students (70 per cent of schools in Rajasthan, Karnataka, J&K, and Uttarakhand).
- China has similar total student numbers with 30 per cent of our school numbers.
It is not Government Vs. Private schools
- Demand for better government schools is not an argument against private schools.
- Because, without this market response to demand, the post-1947 policy errors in primary education would have been catastrophic for India’s human capital.
Way forward
- We need the difficult reforms of governance, performance management, and English instruction.
- Governance must shift from control of resources to learning outcomes; learning design, responsiveness, teacher management, community relationships, integrity, fair decision making, and financial sustainability.
- Performance management, currently equated with teacher attendance, needs evaluation of scores, skills, competence and classroom management. Scores need continuous assessments or end-of-year exams.
- The new world of work redefines employability to include the 3Rs of reading, writing, and arithmetic and a fourth R of relationships.
- India’s farm to non-farm transition is not happening to factories but to sales and customer services which need 4R competency and English awareness.
- English instruction is about bilingualism, higher education pathways, and employability.
- Employment outcomes are 50 per cent higher for kids with English familiarity because of higher geographic mobility, sector mobility, role eligibility, and entrance exam ease.
- India’s constitution wrote Education Policy into Lists I (Centre), II (State), and III (concurrent jurisdiction); this fragmentation needs revisiting because it tends to concentrate decisions that should be made locally in Delhi or state capitals.
Conclusion
Government needs urgent measure to addreess the issues which has bearing on its future.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Crime and Criminal Tracking Network and Systems and the National Intelligence Grid
Mains level: Paper 2- Need for a coordinated database of fugitives
Context
India lacks a domestic tracking system for fugitives. That makes it easier for them to evade the criminal justice system.
Challenges at investigation and prosecution level
- Central agencies have developed reasonable expertise in investigation and prosecution because they are focussed only on investigation and prosecution work.
- On the other hand, State police forces (except specialised wings) are engaged in law-and-order work as well as investigations.
- The bulk of the investigation and prosecution work happens at police stations in the States.
- There is a tendency to close investigations once the accused have absconded.
- Some police stations do initiate proceedings for attachment of property and declaration of the accused as proclaimed offenders, but the number of cases where coordinated efforts are made to pursue fugitives – domestically or internationally – are hardly documented.
No system for tracking criminals domestically
- Through Interpol Notices and the sharing of immigration databases of different countries, there exists a system of tracking criminals worldwide.
- However, there is no coordinated system or database for tracking criminals or wanted persons domestically in India.
- In the absence of such a system, it is relatively easy for criminals from one police station/jurisdiction to melt into the population in any other area, almost undetected.
Way forward
- The creation of a nationwide database of wanted persons, which could be accessible for police agencies, the public and others is needed.
- A nation-wide system of ‘Wanted Persons Notices’, similar to Interpol Notices, is required, to help track fugitives domestically.
- The Crime and Criminal Tracking Network and Systems and the National Intelligence Grid are efforts in the right direction/
- Countries like the U.S. have functional inter-State extradition and fugitive tracking systems.
- India needs to set up such dedicated ‘fugitive tracking units’.
- There needs to be enhanced integration between immigration agencies, State police agencies, Interpol-New Delhi, the External Affairs Ministry and Home Ministry and central investigation agencies.
- Sharing India’s ‘wanted’ database or providing access to it to foreign embassies on a reciprocal basis or through treaties or arrangements would also be helpful.
- Signing of more bilateral and multilateral conventions on criminal matters would help plug legal infirmities.
- Signing bilateral agreements on cooperation in policing matters would also help.
- All relevant legal processes and requirements should be incorporated into one consolidated law on international cooperation.
- The entire gamut of activities pertaining to fugitives, from investigation to extradition, needs to be incorporated into a specialised set-up.
Conclusion
In the absence of a coordinated database, criminals can go undetected. What we need is a watertight system that would deter criminals from hoodwinking the law.
Back2Basics: Crime and Criminal Tracking Network and Systems (CCTNS)
- CCTNS aims at creating a comprehensive and integrated system for enhancing the efficiency and effective policing at all levels and especially at the Police Station level.
- It aism at adoption of principles of e-Governance, and creation of a nationwide networked infrastructure for evolution of IT-enabled state of- the-art tracking system around “investigation of crime and detection of criminals” in real time.
- It is is a critical requirement in the context of the present day internal security scenario.
- The scope of CCTNS spans all 35 States and Union Territories and covers all Police Stations (15,000+ in number) and all Higher Police Offices (6,000+ in number) in the country.
- The CCTNS project includes vertical connectivity of police units (linking police units at various levels within the States – police stations, district police offices, state headquarters, SCRB and other police formations – and States, through state headquarters and SCRB, to NCRB at GOI level) as well as horizontal connectivity, linking police functions at State and Central level to external entities.
National Intelligence Grid (NATGRID)
- First conceptualised in 2009, NATGRID seeks to become the one-stop destination for security and intelligence agencies to access database related to immigration entry and exit, banking and telephone details of a suspect on a “secured platform”.
- All State police are mandated to file First Information Reports (FIR) in the CCTNS.
- It is only a repository and the data pertaining to FIRs of a particular police station are a State subject.
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