Climate Change Negotiations – UNFCCC, COP, Other Conventions and Protocols

A climate change narrative that India can steer

Note4Students

From UPSC perspective, the following things are important :

Prelims level : COP 26, Paris Agreement

Mains level : India's committment for Paris Agreement

A recent report by the Ministry of Earth Sciences (MoES) reveals that India has warmed up 0.7° C during 1901-2018.

What was the report?

Title: Assessment of Climate Change over the Indian Region (by MoES)

(a) Climate severity

  • The 2010-2019 decade was the hottest with a mean temperature of 0.36° C higher than average.
  • Heatwaves continued to increase with no signs of diminishing greenhouse gas emissions despite lower activity since the novel coronavirus pandemic.
  • India may experience a 4.4° C rise by the end of this century.
  • Within 2050, rainfall is expected to rise by 6% and temperature by 1.6° C.
  • India’s Deccan plateau has seen eight out of 17 severe droughts since 1876 in the 21st century (2000-2003; 2015-2018).

(b) Land degradation

  • To make things worse, India lost about 235 square kilometres to coastal erosion due to climate change-induced sea-level rise, land erosion and natural disasters such as tropical cyclones between 1990-2016.

(c) Rising Internal Displacement

  • According to the Internal Displacement Monitoring Centre, India’s Internally Displaced Populations (IDPs) are rising due to damaging climate events.
  • Uttarakhand residents began deserting their homes after the Kedarnath floods in 2013 due to heavy precipitation that increases every year.
  • Recent figures are more alarming with 3.9 million displaced in 2020 alone, mostly due to Cyclone Amphan.

India’s commitment to Climate Mitigation

  • India held the top 10 position for the second year in a row in 2020’s Climate Change Performance Index (CCPI).
  • The country received credit under all of the CCPI’s performance fields except renewable energy where India performed medium.
  • India vowed to work with COP21 by signing the Paris Agreement to limit global warming and submitted the Nationally Determined Contributions (NDCs).
  • It set a goal of reducing emissions intensity of GDP by 33%-35% and increasing green energy resources (non-fossil-oil based) to 40% of installed electric power capacity by 2030.
  • India cofounded with France at COP21, in 2015, the International Solar Alliance (ISA).

Core concern

(a) Good policies, weak practices

  • The question is, are these global alliances and world-leading policies being practised or are merely big promises with little implementation?
  • Despite leading ISA, India performed the least in renewable energy according to the CCPI’s performance of India.

(b) Low compliance

  • India is not fully compliant with the Paris Agreement’s long-term temperature goal of the NDCs and there are still risks of falling short of the 2° C goal.
  • According to India’s carbon emission trajectory, the country is en route to achieve barely half of the pledged carbon sink by 2030.
  • To achieve the Paris Agreement’s NDC target, India needs to produce 25 million-30 million hectares of forest cover by 2030 — a third of current Indian forestation and trees.
  • Going by the facts, it seems India has overpromised on policies and goals as it becomes difficult to deliver on the same.

Why COP26 matters

  • The Glasgow COP26 offers India a great opportunity to reflect on the years since the Paris Agreement and update NDCs to successfully meet the set targets.
  • India is expected to be the most populated country by 2027, overtaking China, contributing significantly to the global climate through its consumption pattern.
  • India is in a rather unique position to have a significant influence on global climate impact in the new decade.

Conclusion

  • India believes that climate actions must be nationally determined.
  • However, the Paris Agreement for developing countries should be at the core of decision-making.
  • India has the ability to improve its global positioning by leading a favourable climate goal aspiration for the world to follow.
  • The country has the opportunity to not only save itself from further climate disasters but also be a leader in the path to climate change prevention.

Back2Basics: COP26, Glasgow

  • The 2021 United Nations Climate Change Conference, also known as COP26, is the 26th United Nations Climate Change conference.
  • It is scheduled to be held in the city of Glasgow, Scotland between 31 October and 12 November 2021, under the presidency of the United Kingdom.
  • This conference is the first time that Parties are expected to commit to enhanced ambition since COP21.
  • Parties are required to carry out every five years, as outlined in the Paris Agreement, a process colloquially known as the ‘ratchet mechanism’.

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Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

Caste census of Backward Classes difficult: Centre

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Socio-economic Caste Census, 2021

Mains level : Subcategorization within OBCs in states

The government has made it clear in the Supreme Court that a caste census of the Backward Classes is “administratively difficult and cumbersome”.

About Socio-Economic and Caste Census

  • The SECC 2011 was conducted for the 2011 Census of India.
  • Then government approved the Socio Economic and Caste Census 2011 to be carried out after discussion in both houses of Parliament in 2010.
  • The SECC 2011 was conducted in all states and union territories of India and the first findings were revealed in July 2015.
  • SECC 2011 is also the first paperless census in India conducted on hand-held electronic devices by the government in 640 districts.
  • SECC 2011 was the first caste-based census since 1931 Census of India and it was launched on 29 June 2011 from the Sankhola village of Hazemara block in West Tripura district.

Issues with SECC

Ans. Data NOT available

  • The SECC data is stored in the Office of the Registrar General and had not been made official.
  • It cannot be used as a source of information for population data in any official document.

What did the Centre say?

  • The Centre reasoned that even when the census of castes were taken in the pre-Independence period, the data suffered in respect of “completeness and accuracy”.
  • It said the caste data enumerated in the Socio-Economic and Caste Census (SECC) of 2011 is “unusable” for official purposes as they are “replete with technical flaws”.
  • The infirmities of the SECC 2011 data makes it unusable for any official purposes and cannot be mentioned as a source of information for population data in any official document.
  • Besides, the Centre said, it was too late now to enumerate caste into the Census 2021.

Why not OBCs?

  • Unlike the constitutional mandate for collection of census data on SCs and STs, there is no obligation to provide the census figures of OBCs.
  • The census data on SCs and STs are used for delimitation of electoral constituencies as well as for reservation of seats, as mandated under the Constitution.

Reason: Official discouragement of Caste

  • The center was replying to a writ petition filed by the State of Maharashtra to gather Backward Classes’ caste data in the State while conducting Census 2021.
  • The Centre clarified that exclusion of information regarding any other caste — other than SCs and STs — from the purview of the census is a “conscious policy decision”.
  • The government said caste-wise enumeration in the Census was given up as a matter of policy from 1951.
  • It said there was a policy of “official discouragement of caste”.

What is the plea about?

  • To Maharashtra’s plea to reveal the SECC 2011 “raw caste data” of Other Backward Classes (OBC), the Centre said the 2011 Census was not an “OBC survey”.
  • It was, on the other hand, a comprehensive exercise to enumerate the caste status of all households in the country in order to use their socio-economic data to identify poor households.

Why is the Centre reluctant?

  • The Centre explained that a population census was not the “ideal instrument” for the collection of details on caste.
  • There is a “grave danger” that the “basic integrity” of census data would be compromised.
  • Even the fundamental population count may get “distorted”.

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Judicial Appointments Conundrum Post-NJAC Verdict

Judicial selection needs more than a tweak

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Collegium system, NJAC

Mains level : Transparency issues is Judicial Appointments

In recent weeks, the Supreme Court of India’s collegium has been busy. New judges have been appointed to the Court on its advice and long overdue vacancies have been filled up.

Read this before proceeding:

Collegium recommends nine judges for Supreme Court

What is the matter of concern?

Ans. Transparency in appointments

  • These recommendations are seen as reflective of a new and proactive collegium.
  • What ought to concern us, though, is that long-standing apprehensions about the collegium’s operation remain unaddressed: specifically, its opacity and a lack of independent scrutiny of its decisions.
  • These misgivings are usually seen in the context of a battle between the executive and the judiciary.
  • Less evident is the effect that the failings have on the status of the High Courts.
  • Today, even without express constitutional sanction, the collegium effectively exercises a power of supervision over each of the High Courts.

No specified reasons for Exclusion

  • For nearly two years, despite vacancies on the Bench, the collegium made no recommendations for appointments to the Supreme Court.
  • The conjecture in the press was that this logjam owed to a reluctance amongst some of its members to elevate Justice Akil Kureshi to the Court.
  • Indeed, it was only after a change in its composition that the panel recommended on August 17 a list of names for elevation. This list did not contain Justice Kureshi’s name.
  • The perfunctory nature of the collegium’s resolutions means that we do not know the reasons for his exclusion.
  • We also do not know why five Chief Justices, including Justice Kureshi, and several other puisne judges are now being transferred to different courts.

The public has right to know

  • This is not to suggest that these decisions are unfounded. It is possible that each of the choices made is predicated on administrative needs.
  • But whatever the rationale, surely the public has a right to know.

What is needed?

Ans. Striking a balance in Separation of Power

  • Separation of powers is a bedrock principle of Indian constitutionalism. Inherent in that idea is the guarantee of an autonomous judiciary.
  • To that end, the process of appointing and transferring judges assumes salience.
  • But the question of how to strike a balance between the sovereign function of making appointments and the need to ensure an independent judiciary has long plagued the republic.

As suggested by Dr. Ambedkar

  • The Constitution’s framers wrestled over the question for many days. Ultimately, they adopted what Dr. B.R. Ambedkar described as a “middle course”.
  • That path stipulates the following: Judges to the Supreme Court are to be appointed by the President of India in consultation with the Chief Justice of India (CJI) and such other judges that he deems fit.
  • Judges to the High Courts are to be appointed by the President in consultation with the CJI, the Governor of the State and the Chief Justice of that court.
  • In the case of transfers, the President may move a judge from one High Court to another, after consulting the CJI.

Where does primacy rest?

Ans. In a transparent Collegium system

  • In this design, there is no mention of a “collegium”.
  • But since 1993, when the Supreme Court rendered a ruling in the Second Judges Case, the word consultation has been interpreted to mean “concurrence”.
  • What is more, that concurrence, the Court held there, ought to be secured not from the CJI alone, but from a body of judges that the judgment described as a “collegium”.
  • Thus, the Court wound up creating a whole new process for making appointments and transfers and carved out a system where notional primacy came to rest in the top echelons of the judiciary.

This procedure has since been clarified.  But there is, in fact, no actual guidance on how judges are to be selected.

The NJAC and after

  • In 2015, Parliament sought to undo the procedures put in place by the Court through the 99th Constitutional Amendment.
  • The National Judicial Appointments Commission (NJAC), that the law created, comprised members from the judiciary, the executive, and the lay-public.
  • But the Court scrapped the efforts to replace the collegium and it held in the Fourth Judges Case that judicial primacy in making appointments and transfers was an essential feature of the Constitution.
  • In other words, the Court held that a body that found no mention in the actual text of the Constitution had assumed a position so sacrosanct that it could not be touched even by a constitutional amendment.

Assessing the NJAC

Ans. The NJAC was far from perfect

  • There were legitimate fears that the commission might have resulted in the appointment of malleable judges.
  • Therefore, it is plausible to argue that until a proper alternative is framed, the collegium represents the best solution.
  • This is that allowing senior judges of the Supreme Court primacy in matters of appointments and transfers is the only practical way to guarantee the independence of the judiciary.

Promises are yet unfulfilled over transparency

  • When the Court struck down the NJAC, it also promised to reform the existing system. Six years down the line those promises have been all but forgotten.
  • The considerations that must go into the procedure for selecting judges is left unexplained.
  • The words “merit” and “diversity” are thrown around without any corresponding debates on what they, in fact, mean.
  • Somehow, amidst all of this, we have arrived at a consensus that enveloping a veil over the process of selection is essential to judicial autonomy, and that there is no legitimate reason why the public ought to know how judges are chosen and transferred.

Way forward

  • It is clear that we have come a long way from a time when Chief Justices of High Courts declined invitations to the Supreme Court, because they valued the work that they were already entrusted with.
  • Restoring High Courts to that position of prestige must be seen as essential to the process of building trust in our Constitution.
  • Achieving this will no doubt require more than just a tweak in the process of appointments.

Conclusion

  • It is clear is that the present system and the mysteries underlining the decision-making only further dilute the High Courts’ prominence.
  • At some point we must take seriously the task of reforming the existing scheme because the status quo is ultimately corrosive of the very institutions that it seeks to protect.

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Foreign Policy Watch: India-SAARC Nations

Why the SAARC meeting was cancelled

Note4Students

From UPSC perspective, the following things are important :

Prelims level : SAARC

Mains level : Success and failures of SAARC

A meeting of foreign ministers from the South Asian Association for Regional Cooperation (SAARC) countries, which was set to be held in New York has been cancelled.

About SAARC

  • The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of states in South Asia.
  • Its member states are Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.
  • The SAARC comprises 3% of the world’s area, 21% of the world’s population and 4.21% (US$3.67 trillion) of the global economy, as of 2019.
  • The SAARC was founded in Dhaka on 8 December 1985. Its secretariat is based in Kathmandu, Nepal.
  • The organization promotes development of economic and regional integration. It launched the South Asian Free Trade Area in 2006.
  • The SAARC maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union.

Formation of SAARC

  • After the USSR invaded Afghanistan in 1979, the security situation in South Asia rapidly deteriorated. In response, the foreign ministers of the initial seven members met in Colombo in 1981.
  • At the meeting, Bangladesh proposed forming a regional association that would meet to discuss matters such as security and trade.
  • While most of the countries present were in favour of the proposal, India and Pakistan were sceptical.
  • Eventually, both countries relented and in 1983 in Dhaka, joined the other five nations in signing the Declaration.

What has SAARC done so far

  • Despite its lofty ambitions, SAARC has not become a regional association in the mould of the European Union or the African Union.
  • Its member states are plagued by internal divisions, most notably the conflict between India and Pakistan.
  • This in turn has hampered its ability to form comprehensive trade agreements or to meaningfully collaborate on areas such as security, energy and infrastructure.
  • The 18th and last SAARC summit was held in 2014 with Pakistan scheduled to host the 19th summit in 2016.
  • Many nations pulled out of the summit, citing fears of regional insecurity caused by Pakistan and a lack of a conducive environment for the talks.

Limited success to count

  • Despite these setbacks, SAARC has achieved a modicum of success.
  • It has provided a platform for representatives from member countries to meet and discuss important issues, something that may have been challenging through bilateral discussions.
  • India and Pakistan for example would struggle to publicly justify a meeting when tensions between the two are particularly high, but representatives from both countries could come together under the banner of SAARC.
  • The bloc has also made some headway in signing agreements related to climate change, food security and combatting the Covid-19 crisis.
  • It has the potential to do far more but that is contingent upon cooperation on key issues between member states.

Why was the recent meet cancelled?

Ans. Pakistan’s insistence to include the Taliban

  • The member states are unable to agree upon the participation of Afghanistan, with Pakistan and India in particular at loggerheads over the issue.
  • After Pakistan objected to the participation of any official from the previous Ghani administration, SAARC members reportedly agreed to keep an “empty chair” as a symbolic representation of Afghanistan.
  • However, Islamabad later insisted that the Taliban be allowed to send its representative to the summit, a notion that all of the other member states rejected.
  • After no consensus could be formed, Nepal, the ‘host’ of the summit, officially cancelled the meeting.

Why did countries object?

Ans. Taliban is not a legitimate govt

  • The Taliban has not been recognised as the official government of Afghanistan by any SAARC countries barring Pakistan.
  • Several top Taliban leaders are blacklisted by the US and/or designated as international terrorists.
  • Senior leaders who are not blacklisted are known for supporting terrorist activities or affiliating with terrorist organisations.
  • Allowing Taliban to represent Afghanistan in SAARC would legitimise the group and serve as a formal recognition of their right to govern.
  • Apart from Pakistan, which has close ties to the Taliban, particularly its violent subgroup, the Haqqani Network, none of the other SAARC members recognise the Taliban.

Why nations should not recognize the Taliban?

  • PM Modi has referred to the Taliban as a non-inclusive government, warning other nations to think before accepting the regime in Afghanistan.
  • SAARC members are deeply aware of the threat of spillover terrorism from Afghanistan under the Taliban regime, with Bangladesh in particular, concerned with the effect it may have on extremism.
  • Developments in Afghanistan could lead to uncontrolled flow of drugs, illegal weapons and human trafficking.

Conclusion

  • With Pakistan headfast in its support for the Taliban and the rest of SAARC weary to acknowledge the group, any future summit is unlikely until the issue has been resolved.

Primary and Secondary Education – RTE, Education Policy, SEQI, RMSA, Committee Reports, etc.

Kasturirangan panel for National Curriculum Framework

Note4Students

From UPSC perspective, the following things are important :

Prelims level : National Curriculum Framework (NCF)

Mains level : Need for curriculum revamp in India

The Centre has started the process to revise school textbooks by appointing former Indian Space Research Organisation (ISRO) chairman K. Kasturirangan as the head of a 12-member steering committee responsible for developing a new National Curriculum Framework (NCF).

National Curriculum Framework (NCF)

  • The new NCF is in line with the National Education Policy (NEP) 2020.
  • The committee will be headed by K Kasturirangan, who had also led the NEP 2020 drafting committee.
  • The national curriculum framework serves as a guideline for syllabus, textbooks, teaching and learning practices in the country.
  • India is currently following its fourth national curriculum framework that was published by the NCERT in 2005.

What was the last NCF?

  • The last such framework was developed in 2005.
  • It is meant to be a guiding document for the development of textbooks, syllabi and teaching practices in schools across the country.

Why revamp NCF?

  • The subsequent revision of textbooks by the National Council of Educational Research and Training will draw from the new NCF.
  • In fact, the steering committee will develop four such frameworks, one each to guide the curriculum of school education, teacher education, early childhood education, and adult education.

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Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

Key Findings about the Religious Composition of India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Demographic transition of India

Mains level : Minority population issues

The religious composition of India’s population since Partition has remained largely stable according to a new study published by the Pew Research Centre, a non-profit based in Washington DC.

About the report

  • The study, based on data sourced from India’s decennial census and the National Family Health Survey (NFHS), looked at the three main factors that are known to cause changes in the religious composition of populations — fertility rate, migration, and conversions.
  • Both Hindus and Muslims, the two largest religious groups, shown not only a marked decline but also a convergence in fertility rates.
  • In terms of absolute numbers, every major religion in India saw its numbers rise.

Significance of the report

  • These findings, which come as a complement on religious tolerance and segregation in India.
  • It is significant in the context of two major issues that have occupied centre stage in recent times — the controversy over the Citizenship Amendment Act (CAA) and the National Register of Citizens (NRC).
  • This report also gives a strong message to those fundamentalists who perceive India as a living hell for minorities.

Key findings

(a) Fertility Rates are declining

  • With regard to fertility rates, the study found that Muslims, who had the highest fertility rate, also had the sharpest decline in fertility rates.
  • From 1992 to 2015, the total fertility rates of Muslims declined from 4.4 to 2.6, while that of Hindus declined from 3.3 to 2.1.
  • This indicates that the gaps in childbearing between India’s religious groups are much smaller than they used to be.
  • The average fertility rate in India today is 2.2, which is higher than the rates in economically advanced countries such as the U.S. (1.6), but much lower than what it was in 1992 (3.4) or 1951 (5.9).

(b) Marked slowdown

  • Although growth rates have declined for all of India’s major religious groups, the slowdown has been more pronounced among religious minorities, who outpaced Hindus in earlier decades.
  • From 2001 to 2011, the difference in growth between Muslims (24.7%) and Indians overall (17.7%) was 7 percentage points.
  • India’s Christian population grew at the slowest pace of the three largest groups in the most recent census decade — gaining 15.7% between 2001 and 2011, a far lower growth rate than the one recorded in the decade following Partition (29.0%).

(c) ‘No’ Religions group

  • Interestingly, out of India’s total population of 1,200 million, about 8 million did not belong to any of the six major religious groups.
  • Within this category, mostly comprising adivasi people, the largest grouping was of Sarnas (nearly 5 million adherents), followed by Gond (1 million) and Sari Dharma (5,10,000).

(d) Migration

  • The study says that since the 1950s, migration has had only a modest impact on India’s religious composition.
  • More than 99% of people who live in India were also born in India, and migrants leaving India outnumber immigrants three-to-one, with “Muslims more likely than Hindus to leave India”, while “immigrants into India from Muslim-majority counties are disproportionately Hindu.”

(e) Religious conversions

  • Religious conversion has also had a negligible impact on India’s overall composition, with 98% of Indian adults still identifying with the religion in which they were raised.

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Foreign Policy Watch: India-United States

What is Havana Syndrome?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Havana Syndrome

Mains level : Sonic Warfare tactics

A US intelligence officer traveling with CIA director William Burns has reported symptoms of Havana Syndrome.

What is Havana Syndrome?

  • Havana Syndrome refers to a set of mental health symptoms that are said to be experienced by US intelligence and embassy officials in various countries.
  • It typically involves symptoms such as hearing certain sounds without any outside noise being present, nausea, vertigo and headaches, memory loss and issues with balance.
  • As the name suggests, it traces its roots to Cuba.
  • In late 2016, US officials in embassy began experiencing sudden bursts of pressure in their brain followed by persistent headaches, feeling of disorientation and insomnia.

How severe is it?

  • In 2018, at least three CIA officers working under diplomatic cover in Cuba had reported troubling sensations that seemed to leave serious injuries.
  • Some officers are being compulsorily retired for their inability to coherently discharge his duty and another needing a hearing aid.

Has Havana Syndrome been reported anywhere else?

  • Since the Cuban incident, American intelligence and foreign affairs officials posted in various countries have reported symptoms of the syndrome.
  • In early 2018, similar accusations began to be made by US diplomats in China.
  • The US media has reported around 130 such attacks across the world including at Moscow in Russia, Poland, Georgia, Taiwan, Colombia, Kyrgyzstan, Uzbekistan, and Austria, among others.

What are the causes of Havana Syndrome?

  • No one is entirely sure. But it is speculated to be a “sonic attack”.
  • Medical examination of the victims began to suggest that the victims may have been subjected to high-powered microwaves that either damaged or interfered with the nervous system.
  • It was said to have built a pressure inside the brain that generated the feeling of a sound being heard.
  • Greater exposure to high-powered microwaves is said not only to interfere with the body’s sense of balance but also impact memory and cause permanent brain damage.
  • It is suspected that beams of high-powered microwaves are sent through a special gadget that Americans have begun calling “microwave weapon”.

Who is doing this in India?

  • Sources in the Indian security establishment say they are not aware of any such weapon being in the possession of an Indian agency.
  • Even if there was one, it is unlikely the government would admit to having acquired such counter-espionage technology given the sensitive nature of intelligence work.

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Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

The end of the doing business rankings

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Ease of Doing Business Report

Mains level : Read the attached story

The World Bank Group has scrapped its flagship publication, the ‘Doing Business’ report.

Doing Business Report

  • This report publishes the influential annual ranking of countries on the Ease of Doing Business (EDB) index.
  • It ranks countries by the simplicity of rules framed for setting up and conducting businesses.

Utility of the index

The World Bank’s decision has wide ramifications, as the index serves varied purposes.

  • Many countries showcase improved ranking to signal market-friendly policies to attract foreign investments. National leaders often set EDB rank targets.
  • This helps them measure domestic policies against global “best practices” and browbeat domestic critics.
  • India, for instance, wanted its administration to ensure that India breaks into the top 50 ranks of the EDB index.
  • Some countries seem to use their political heft to improve their rank, polish their international image and sway public opinion (as appears to be China’s case).

Issues with the credibility of the report

  • The Group acted on its commissioned study to examine the ethical issues flagged in preparing the 2018 and 2020 editions of the EDB index.
  • It is accused of having exerted pressure on the internal team working on the Doing Business report to falsely boost China’s rank by doctoring the underlying data.
  • Similarly, tensions were also reportedly brought to bear in the case of Saudi Arabia’s rank, among others.

EDB index rank vs economic outcomes

  • There is a disconnect between the stellar rise in EDB index rank and economic outcomes.
  • The theory underlying the EDB index could be suspect, the measurement and data could be faulty, or both.
  • For example, China’s phenomenal economic success, especially its agricultural performance (after the reforms in 1978), is perhaps the most unmistakable evidence demonstrating that lack of clarity of property rights may not be the binding constraint in a market economy.
  • What matters is economic incentives.
  • Measuring regulatory functions underlying the index could be tricky and subjective and possibly politically motivated as well, as the controversies surrounding the index seem to suggest.

EODB in India: At what cost

Ans. Weakening labour regulations

  • Closer home, India has weaponised the mandate to improve the rank in the EDB index to whittle down labour laws and their enforcement and bring them close to the free-market ideal of ‘hire and fire’.
  • Most States have emulated Maharashtra’s lead of administrative fiat, which renders labour laws toothless by dismantling official labour inspection systems and allowing employers to file self-regulation reports.
  • The government has farmed out critical safety regulations such as annual inspection and certification of industrial boilers to ‘third party’ private agencies.
  • The Labour Department’s inspection is now not mandated; it is optional only by prior intimation to employers.

Implications of such moves

  • Such abdication of the government’s responsibility towards workers has reportedly affected industrial relations.
  • The workers’ strike at Wistron’s iPhone assembly factory in Karnataka last year is an example.
  • Further, severe industrial accidents are rising, damaging life and productive industrial assets.

Why did World Bank scrap the index?

  • Investigations into “data irregularities” in preparing the EDB index, as brought out by the independent agency, seems to confirm many shortcomings repeatedly brought to light for years now.
  • The index appears motivated to support the free-market ideal.
  • It is dressed up under scientific garb and is underpinned by seemingly objective methods and data collection.
  • Strong leaders (and motivated officials) seem to have used their position to manipulate the index to suit their political and ideological ends.

Conclusion

  • India claimed the success of its Make in India initiative by relying on its ranking on the EDB index without tangible evidence.
  • Handing over law enforcement to employers by self-reporting compliance seems to have increased industrial unrest and accidents.
  • It perhaps calls for honest soul-searching as to what havoc a questionable benchmark can wreak.

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Food Safety Standards – FSSAI, food fortification, etc.

Front-of-pack labelling of Food Stuffs

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Front of Pack Labelling System

Seven years, four committees and two draft regulations later, India still does not have a clear labelling system to warn consumers about harmful levels of fat, salt and sugar in processed foods.

Context

  • According to the Food Safety and Standards (Packaging and Labelling) Regulations, 2011, every pre-packed processed food product sold in the country must be labelled with nutritional information.
  • To ensure that consumers are able to easily see and interpret the nutritional information on food packets, an expert committee was established by the Food Safety and Standards Authority of India (FSSAI).
  • The committee, set up following an order of the Delhi High Court which was hearing a public interest petition seeking a ban on the sale of junk food in and around schools.

Why label nutritional information?

  • This helps the consumer know everything about the food they buy and make an informed decision about what and how much to eat.
  • Such information is particularly crucial because the packaged food contain ultra-processed foods that are high in fat, salt or sugar and low in fibre and other essential micronutrients.
  • On the one hand, these foods cause malnutrition.
  • On the other hand they are linked strongly with obesity and diet-related non-communicable diseases, such as Type-2 diabetes, hypertension, heart ailments and certain cancers, like that of the colon.
  • All these increase the risk of premature death.

Issues with labelling in India

  • Not to mention that most products provide information in English understanding which can be daunting for a vast number of people in India.

What is FoP labelling?

  • The front-of-pack (FoP) labelling system has long been listed as one of the global best practices to nudge consumers into healthy food choices.
  • It works just the way cigarette packets are labelled with images to discourage consumption.
  • Countries such as Chile, Brazil and Israel have laws to push the packaged food industry to adopt FoP labelling.
  • They have used FoP labelling as a measure to fight obesity and NCDs.

FoP labelling in India

  • The system is yet to be implemented in India even seven years after it was first proposed by FSSAI.
  • The fact is, makers of packaged foods are also a powerful lot, with strong business acumen.
  • While companies in other countries have acceded to the FoP labelling laws, they are unwilling to do so in India — a country experiencing a dietary shift.

Why must we have FoP labels?

  • Countries are working to find ways to nudge consumers into healthy food choices and to contain the growing crisis of obesity and diet-related non-communicable diseases (NCDs).
  • It is a crisis that increasingly impacts children and also exacerbates novel coronavirus disease (COVID-19) symptoms. Front-of-pack (FoP) labelling is definitely an effective tool in this effort.

India definitely needs ‘warning labels’ on front-of-pack, but this must be a symbol-based label with no text and numbers. This is because:

(1) Junk foods have high levels of unhealthy nutrients

  • There is strong evidence that sugar, salt and fat in junk foods are addictive, like nicotine in tobacco.
  • FoP ‘warning’ labels have helped reduce cigarette consumption. It is time we adopted the same for junk foods.

(2) Warning labels are easy to notice and understand

  • They do not confuse consumers with mixed messages.
  • Their distinct shape, colour and size make them noticeable in the otherwise cluttered and colourful packaging.
  • With one label for one nutrient, it becomes easier to know if a product is high in more than one nutrient.

(3) Warning labels are the global best practice now

  • At least seven countries have adopted warning labels in the past five years. These include Chile, Peru, Mexico, Israel and Uruguay.
  • Low- and middle-income mothers have shown profound changes in attitudes towards food purchases as they now understand the nutritional content of packaged foods.
  • Even children can read the labels and take an informed decision. This has also forced food companies to reduce the amount of sugar and sodium in foods and beverages.

(4) They are best suited for India

  • Warning labels are best suited for India as they do not include numbers unlike many other FoP labels.
  • In fact, warning labels that are symbol-based, like that of Israel, can transcend the barriers of literacy and language in India.

(5) FSSAI has experience of successfully implementing symbol-based FoP labels

  • Its “green filled circle in green outlined square” logo to depict vegetarian food has been hugely successful in informing consumers.
  • In recent years, FSSAI also has made similar laws to depict fortification (+F logo) and organic food (a green-coloured tick for Jaivik Bharat logo).

Way forward

  • FoP labels must include information on nutrients that make food injurious to health.
  • This should be distinct from the details on the back-of-pack. FoP labels should aim to inform the consumer, while the back-of-pack label serves the purpose of scientific compliance and enforcement.
  • FoP labels should have information on ‘total sugar’ and not ‘added sugar’. There is no analytical laboratory method to differentiate ‘added sugar’ from total sugar and quantify it.

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Insolvency and Bankruptcy Code

EoDB at risk if issue of appointments to tribunals is not resolved

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NCLAT, NCLT

Mains level : Read the attached story

While hearing a challenge to the Tribunal Reforms Act, 2021, the Supreme Court came down heavily on the government of India for vacancies not being filled on time. This could severely impact the ease of doing business in India, said the court.

Background

  • The government has lauded the role of the Insolvency and Bankruptcy Code, 2016 (IBC), for improving India’s ranking on the “Ease of Doing Business” index over the last couple of years.
  • However, the SC’s observation is spot-on as vacancies in the tribunals have slowed down insolvency resolution due to the huge pendency of cases.
  • When the SC made its observations, the NCLT had only 30 members against a total strength of 63.

About NCLAT and NCLT

  • National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT) in 2016.
  • NCLAT is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI).
  • It is also the Appellate Tribunal to hear and dispose of appeals against the orders of the National Financial Reporting Authority.

Difference between NCLT AND NCLAT

NCLT

NCLAT

·         NCLT is established as per Section 408 of companies act, 2013 ·         NCLAT is established as per Section 410 of companies act, 2013
·         It holds primary jurisdiction on cases of insolvency and bankruptcy ·         It holds appellate jurisdictions over the cases judged by NCLT
·         NCLT accepts and analyzes the evidence from creditors and debtors ·         NCLAT accepts and analyzes the decision made by NCLT
·         NCLT collects facts and evidences ·         NCLAT analyzes facts and evidences

CJI’s reservations over Pendency

  • The NCLAT had a sanctioned strength of a chairperson plus 11 members but its functioning strength was of eight members.
  • Both the NCLT and NCLAT have been without chairpersons for several months respectively.
  • These vacancies are concerning because as of May 31, 13,170 insolvency petitions were pending before benches of the NCLT.
  • Of these, 2,785 petitions have been filed by financial creditors and 5,973 by operational creditors.

Note: The IBC created an institution called an information utility to be the repository of information on debts and defaults in India.  The sole utility in India at present is the National E-Governance Services Ltd. (NeSL).

Basis of these cases

  • The financial creditors are facing criticism for taking haircuts as high as 90 per cent against their claims.
  • A longer approval period would entail greater value erosion of a corporate debtor which would be an unattractive proposition for any prospective resolution applicant.
  • This uncertainty can be cured by a faster approval process by the NCLTs by the creation of more benches and filling up of current vacancies.

Why is the Supreme Court fuming over vacancies?

(a) Covid impact

  • The Indian economy is recovering from the adverse effects of the Covid-19 pandemic.
  • During the downturn, financial institutions and banks have suffered higher defaults than usual, impacting the robustness of the system.
  • Lending has decreased during this time and can only be encouraged now by shoring up the mechanism under the IBC to inspire confidence in creditors.

(b) Non-compliance by the govt

  • The SC had granted time to the government till September 13 to take substantial steps in this regard, which was partially complied with by appointing 18 members.
  • The government, however, failed to avoid embarrassment as the CJI expressed his anger at the appointment process which had ignored candidates recommended by the selection committee.

(c) Burden of pendency

  • There is a real risk of the court taking matters into its own hands by making appointments itself, or by taking harsher steps like transferring jurisdiction under the IBC to high courts.
  • One hopes that the situation is resolved quickly to make strict time-bound insolvency resolutions a reality.

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Judicial Reforms

Need for ‘Indianization’ of Legal System: CJI

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Indianization of Judiciary

Chief Justice of India NV Ramana has asserted the need for the “Indianisation of our legal system”, pointing out that the colonial system being followed currently may not be best suited to the complexities of India.

Prospects of Indianization by CJI

  • CJI meant that the need to adapt to the practical realities of our society and localize our justice delivery systems.
  • For example, parties from a rural place fighting a family dispute are usually made to feel out of place in the court.
  • They do not understand the arguments or pleadings which are mostly in English, a language alien to them.
  • These days judgments have become lengthy, which further complicates the position of litigants.
  • For the parties to understand the implications of a judgment, they are forced to spend more money.
  • For whom do the court’s function, the CJI asked. For the litigants, who are the “justice seekers”. They are the ultimate beneficiaries.

What did CJI say?

  • CJI has said the ordinary Indian feels out of place in our courts where proceedings are lengthy, expensive and in English.
  • Besides, judgments are either too long or technical or manage to be both.
  • It is time for courts to wake up from their colonial stupor and face the practical realities of Indian society.
  • Rules and procedures of justice delivery should be made simple.
  • The ordinary, poor and rural Indian should not be scared of judges or the courts.

Reasons for Indianization

  • Multiple barriers continue to thwart the citizen’s way to the courts.
  • The working and the style of courts do not sit well with the complexities of India.
  • The systems, practices and rules of courts are foreign and sourced from our colonial days. They do not take care of the practical realities of India.

Major suggestions by CJI:

(A) Simplification

  • The simplification of justice delivery should be our pressing concern.
  • It is crucial to make justice delivery more transparent, accessible and effective.
  • Procedural barriers often undermine access to justice.
  • The Chief Justice said both judges and lawyers have to create an environment which is comforting for the litigants and other stakeholders.

(B) Alternate dispute mechanisms

  • The CJI said alternate dispute mechanisms like mediation and conciliation would go a long way in reducing pendency, unnecessary litigation and save resources.

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Right To Privacy

Deployment of Facial Recognition Systems (FRS) in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : FRS

Mains level : Right to Privacy Issues

India has seen a rapid deployment of Facial Recognition Systems (FRS) in recent years, both by the Centre and State governments, without putting in place any law to regulate their use.

Facial Recognition System

  • A FRS is a technology capable of matching a human face from a digital image or a video frame against a database of faces.
  • It is typically employed to authenticate users through ID verification services, works by pinpointing and measuring facial features from a given image.

Why in news?

  • There is a growing unabated use of this potentially invasive technology without any safeguards.
  • This poses a huge threat to the fundamental rights to privacy and freedom of speech and expression of the citizens.

FRS in India

  • Currently, 18 FRSs are in active utilisation by the Centre and State governments for the purpose of surveillance, security and authentication of identity.
  • 49 more systems are in the process of being installed by different government agencies.
  • Delhi Police was the first law enforcement agency in the country to start using the technology in 2018.
  • Only Telangana is ahead of Delhi at present with four facial recognition systems in active utilization for surveillance and authentication of identity.

Judicial scrutiny of the move

  • States say that they are authorized by the Delhi High Court in terms of the decision in the case of ‘Sadhan Haldar vs NCT of Delhi’.
  • In that particular case, the High Court had authorized the Delhi police to obtain facial recognition technology for the purpose of tracking and reuniting missing children.
  • FRS may be used in the investigation in the interest of safety and security of the general public.

A potential mis-use?

Ans. Can’t say!

  • Activists pointed out that Delhi Police was now using the FRS, which was meant for tracking missing children, for wider security and surveillance and investigation purpose.
  • There is a “function creep” happening with Police gradually using the technology beyond its intended purpose.
  • For example, the use of FRS to identify accused who took part in the farmers’ tractor rally violence in January this year.

Need of the hour

Ans. Bring accountability

  • Surveillance of any kind happens in secret and the people generally don’t know that they are being watched.
  • The idea behind is to bring light to the fact that these technology systems are being used without any laws in place to regulate them.
  • Police and state authorities should use such technologies for specific and special purposes with proper authorization.

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Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

National Monetization Pipeline shows promise — and limits

Note4Students

From UPSC perspective, the following things are important :

Prelims level : National Monetization Pipeline

Mains level : Issues with Asset Monetization in India

The government of India recently announced an asset monetization plan, wherein existing public assets worth Rs 6 trillion would be monetized by leasing them out to private operators for fixed terms.

The plan has generated a lot of print so it is worth discussing its pros and cons.

About NMP

  • The identified assets are primarily concentrated in roads, railways, power, oil and gas, and telecoms.
  • The lease proceeds are expected to be used for new infrastructure investment which, in turn, will contribute to the government’s ambitious Rs 111 trillion infrastructure investment plan.

Important issues raised by the plan

[I] How much should the government expect to raise from the plan?

Revenue Potential

  • In deciding the amount to bid for leasing rights, bidders compute the present discounted value of the annual cash flow from the asset for the duration of the lease.
  • The biggest uncertainty in this calculation surrounds the cash flow on these public assets.
  • Rates of return estimates on public capital in the US have been estimated to be upwards of 15 per cent.
  • However, this is India with its myriad uncertainties regarding pricing, bill collection, asset quality, regulatory framework as well as policy reversals.
  • Hence there is significant uncertainty regarding the revenue potential of the plan.

[II] Is the plan likely to increase the efficiency of the economy?

a. Efficiency of the economy

  • The NITI Aayog believes that the private sector is better at managing and operating the identified public assets than the public sector.
  • There is certainly scope for efficiency gains. However, there are significant efficiency impediments too.
  • One set of efficiency issues surrounds usage fees. A second factor related to efficiency is the effect of the plan on competition.

b. Stressed sectors

  • The identified assets belong to core sectors of the economy spanning transport, energy and communication.
  • Sectors like telecoms and ports have already seen rising concentration of ownership in recent years.
  • An acceleration and extension of this trend to other segments of the infrastructure landscape would be seriously worrying.
  • While some of this could well be rationalized through the stipulation of rules for the allocation of leasing rights, the plan is silent on this.

c. Financing of the lease bids

  • If bidders finance their bids using domestic savings, there is a clear opportunity cost of the plan since these savings would otherwise have been invested in alternative projects.
  • Moreover, the bidding for scarce domestic savings by prospective investors will also raise domestic interest rates which will put downward pressure on domestic private investment.
  • It would also be worth reminding ourselves that the last round of PPP-based infrastructure funding routed through banks ended up with a heap of NPAs in public sector bank balance sheets.

Biggest flaw of the NMP

  • No clear objective: The biggest drawback of the plan is that it fails to articulate the reasons for public sector inefficiency in asset management.
  • No focus on management: If it is personnel-related, then privatizing management may be the right answer. If the inefficiency is related to constraints on pricing and bill collection, then the roots of the problem are unlikely to be addressed by leasing out their management to private operators.
  • No clear assessment of underperforming sectors: The plan document also fails to outline whether the identified brownfield assets are the public sector’s highest cash flow assets or the relatively under-performing ones.

Better alternatives for the govt

  • The way around this is to welcome foreign investors to bid for the assets.
  • But this will require serious political will since entrenching foreign influence on Indian public assets will generate controversy.
  • On this aspect too, the announced plan is low on details.

Way forward

  • If the private sector is indeed more efficient in running infrastructure assets, the most efficient strategy would be to lease out the worst-performing assets rather than the best performing ones.
  • The NITI Aayog would do the policy landscape a big service by following up the proposal with a white paper that addresses some of these efficiency-related issues.
  • Without that, the monetization plan, while intriguing, is incomplete.

Conclusion

  • A monetization plan envisages the private sector paying an upfront fee to the government which the government uses for new infrastructure investment.
  • As much as private bidders finance themselves by borrowing, this amounts to the private sector borrowing and handing over the funds to the government to invest in infrastructure.
  • This could enhance efficiency in infrastructure investment only if the government faces higher interest rates in capital markets than the private sector.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

E-Shram

Note4Students

From UPSC perspective, the following things are important :

Prelims level : E-Shram Portal

Mains level : National database for workers: Prospects and challenges

The E-Shram portal has come into existence more than a decade after the passage of the Unorganized Workers’ Social Security Act in 2008.

E-Shram

  • On August 26, 2021, the Ministry of Labour and Employment (MOLE) launched the E-Shram, the web portal for creating a National Database of Unorganized Workers (NDUW), which will be seeded with Aadhaar.
  • It seeks to register an estimated 398-400 million unorganized workers and to issue an E-Shram card.

Better late than never move

  • It has come about even after repeated nudging by the Supreme Court of India.
  • It is the result of state apathy.
  • Had the Central and the State governments begun these legally mandated processes on time, much of the distress of lakhs of vulnerable workers would have been avoided.
  • In fact, the political class owe an ‘apology’ to informal workers.

Issues with E-Shram

(A) Time constraints

  • Long process: Given the gigantic nature of registering each worker, it will be a long-drawn process.
  • No gestation period: The Government has not mentioned a gestation period to assess its strategy and efficiency.
  • No hasty process: Employers are or required their workers to register even.While the Government can appeal to them, any penal measure will hurt the ease of doing business.

(B) Pandemic hides

  • Considering the estimated 380 million workers as the universe of registration — debatable as the novel coronavirus pandemic has pushed lakhs of workers into informality.

(C) Data security

  • Privacy: One of the vital concerns of e-portals is data security, including its potential abuse especially when it is a mega-sized database.
  • No national framework yet: There are also media reports pointing out the absence of a national architecture relating to data security.
  • Local server issues: It has been reported that in some States such as Maharashtra, the server was down for a few days.

(D) Structural issue

  • Aadhaar seeding: Many workers will not have an Aadhaar-seeded mobile or even a smartphone. Aadhaar-seeding is a controversial issue with political overtones, especially in the North-eastern regions.
  • Eligibility: There are several issues concerning the eligibility of persons to register as well as the definitional issues.
  • Exclusion: By excluding workers covered by EPF and ESI, lakhs of contract and fixed-term contract workers will be excluded from the universe of UW. Hazardous establishments employing even a single worker will have to be covered under the ESI, which means these workers also will be excluded.
  • No benefits for the aged: The NDUW excludes millions of workers aged over 59 from its ambit, which constitutes age discrimination.

(D) Complex identities of workers

  • Migration: Many are circular migrant workers and they quickly, even unpredictably, move from one trade to another.
  • Mixed work: Many others perform formal and informal work as some during non-office hours may belong to the gig economy, for example as an Uber taxi or a Swiggy employee. They straddle formal and informal sectors.
  • Gig workers: Even though MOLE has included gig workers in this process, it is legally unclear whether the gig/platform worker can be classified first as a worker at all.

(E) Other impediments

  • Dependence on States: The central government will have to depend on the State governments for this project to be successful.
  • Lack of coordination: In many States, the social dialogue with the stakeholders especially is rather weak or non-existent. The success of the project depends on the involvement of a variety of stakeholders apart from trade unions.
  • Corruption: There is also the concern of corruption as middle-service agencies such as Internet providers might charge exorbitant charges to register and print the E-Shram cards.

Benefits: No immediate carrot

  • Workers stand to gain by registration in the medium to long run.
  • But the instant benefit of accident insurance upto ₹0.2 million to registered workers is surely not an attractive carrot.
  • The main point of attraction is the benefits they stand to gain during normal and crisis-ridden periods such as the novel coronavirus pandemic now which the Government needs to disseminate properly.

Way forward

  • E-Shram is a vital system to provide hitherto invisible workers much-needed visibility.
  • It will provide the Labour Market Citizenship Document to them.
  • The govt should go one step further for triple linkage for efficient and leakage-less delivery of all kinds of benefits and voices to workers/citizens: One-Nation-One-Ration Card (ONOR), E-Shram Card (especially bank account seeded) and the Election Commission Card.
  • Last but not least, registrations cannot be a source of exclusion of a person from receiving social assistance and benefits.

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Insolvency and Bankruptcy Code

Government sets up ‘bad bank’ to clear the NPA mess

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Bad Banks

Mains level : Asset reconstruction initiaitives by the govt

Paving the way for a major clean-up of bad loans in the banking system, the Union Cabinet has cleared a ₹30,600-crore guarantee programme for securities to be issued by the newly incorporated ‘bad bank’ for taking over and resolving non-performing assets (NPAs) amounting to ₹2 lakh crore.

What is a Bad Bank?

  • A bad bank conveys the impression that it will function as a bank but has bad assets to start with.
  • Technically, it is an asset reconstruction company (ARC) or an asset management company that takes over the bad loans of commercial banks, manages them and finally recovers the money over a period of time.
  • Such a bank is not involved in lending and taking deposits, but helps commercial banks clean up their balance sheets and resolve bad loans.
  • The takeover of bad loans is normally below the book value of the loan and the bad bank tries to recover as much as possible subsequently.

Bad Banks to be established

  • The NARCL-IDRCL structure is the new bad bank.
  • The National Asset Reconstruction Company Limited (NARCL) has already been incorporated under the Companies Act.
  • It will acquire stressed assets worth about Rs 2 lakh crore from various commercial banks in different phases.
  • Another entity — India Debt Resolution Company Ltd (IDRCL), which has also been set up — will then try to sell the stressed assets in the market.

How will the NARCL-IDRCL work?

  • The NARCL will first purchase bad loans from banks.
  • It will pay 15% of the agreed price in cash and the remaining 85% will be in the form of “Security Receipts”.
  • When the assets are sold, with the help of IDRCL, , the commercial banks will be paid back the rest.
  • If the bad bank is unable to sell the bad loan, or has to sell it at a loss, then the government guarantee will be invoked.
  • The difference between what the commercial bank was supposed to get and what the bad bank was able to raise will be paid from the Rs 30,600 crore that has been provided by the government.

Will a bad bank resolve matters?

  • From the perspective of a commercial bank saddled with high NPA levels, it will help.
  • That’s because such a bank will get rid of all its toxic assets, which were eating up its profits, in one quick move.
  • When the recovery money is paid back, it will further improve the bank’s position.
  • Meanwhile, it can start lending again.

Why do we need a bad bank?

  • The idea gained currency during Rajan’s tenure as RBI Governor.
  • The RBI had then initiated an asset quality review (AQR) of banks and found that several banks had suppressed or hidden bad loans to show a healthy balance sheet.
  • However, the idea remained on paper amid lack of consensus on the efficacy of such an institution.
  • ARCs have not made any impact in resolving bad loans due to many procedural issues.
  • While commercial banks resume lending, the so-called bad bank, or a bank of bad loans, would try to sell these “assets” in the market.

Good about the bad banks

  • The problem of NPAs continues in the banking sector, especially among the weaker banks.
  • The bad bank concept is in some ways similar to an ARC but is funded by the government initially, with banks and other investors co-investing in due course.
  • The presence of the government is seen as a means to speed up the clean-up process.
  • Many other countries had set up institutional mechanisms such as the Troubled Asset Relief Programme (TARP) in the US to deal with a problem of stress in the financial system.

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Higher Education – RUSA, NIRF, HEFA, etc.

NEET

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Issues with the NEET

The Tamil Nadu Assembly has passed a bill exempting the State from the National Eligibility-cum-Entrance Test (NEET) for admission to undergraduate (UG) medical courses.

About NEET

The NEET has replaced the formerly All India Pre-Medical Test (AIPMT).

It is an all-India pre-medical entrance test for students who wish to pursue undergraduate medical (MBBS), dental (BDS) and AYUSH (BAMS, BUMS, BHMS, etc.) courses.

The exam is conducted by National Testing Agency (NTA).

TN law: Permanent Exemption for NEET

  • The Bill exempts medical aspirants in Tamil Nadu from taking NEET examination for admission to UG degree courses in Indian medicine, dentistry and homeopathy.
  • Instead, it seeks to provide admission to such courses on the basis of marks obtained in the qualifying examination, through “Normalization methods”.
  • The aim of the Bill is to ensure “social justice, uphold equality and equal opportunity, protect all vulnerable student communities from being discriminated”.
  • It seeks to bring vulnerable student communities to the “mainstream of medical and dental education and in turn ensure a robust public health care across the state, particularly the rural areas”.

Why TN is against NEET?

  • Non-representative: TN opposes because NEET undermined the diverse societal representation in MBBS and higher medical studies.
  • Disfavors the poor: It has favored mainly the affordable and affluent sections of the society and thwarting the dreams of underprivileged social groups.
  • Exams for the elite: It considers NEET not a fair or equitable method of admission since it favored the rich and elite sections of society.
  • Healthcare concerns: If continued, the rural and urban poor may not be able to pursue medical courses.

Can any state legislate against NEET?

  • Admissions to medical courses are traceable to entry 25 of List III (Concurrent List), Schedule VII of the Constitution.
  • Therefore, the State can also enact a law regarding admission and amend any Central law on admission procedures.

Views of the stakeholders appointed by TN

  • A majority of stakeholders were not in favor of the NEET requirement.
  • NEET only worked against underprivileged government school students, and had profited coaching centres and affluent students.
  • NEET had not provided any special mechanism for testing the knowledge and aptitude of the students.
  • The higher secondary examination of the State board itself was an ample basis for the selection of students for MBBS seats.

A move inspired by a SC Judgement

  • This thinking of the State may be due to the observation made by the Supreme Court in the selection process of postgraduate (PG) courses in medicine.
  • The Medical Council of India (MCI) had prescribed certain regulations providing reservations for in-service candidates.
  • The Supreme Court struck down regulation 9(c) made by the MCI on the ground of the exercise of power beyond its statute.

Not a similar case

  • It must be remembered that the Supreme Court was only dealing with a regulation framed by the MCI.
  • The requirement of NEET being a basic requirement for PG and UG medical courses has now been statutorily incorporated under Section 10D of the Indian Medical Council (IMC) Act.
  • When the Tamil Nadu government issued an order in 2017 providing for the reservation of 85% of the seats for students passed out from the State board it was struck down by the Madras High Court.
  • The introduction of internal reservation for government school students is under challenge before the Madras High Court. Similarly, NEET as a requirement is also pending in the Supreme Court.
  • Unless these two issues are decided, NEET cannot be removed by a State amendment.

The bill cannot be passed

  • The present move to pass a fresh Bill on the same lines is most likely to meet the same fate.
  • The President refused to give his assent to this bill.
  • It is significant that no other State in India has sought an exemption from NEET and, therefore, exempting Tamil Nadu alone may not be possible.
  • Even among the seats allotted to the State, there is no bar for students from other States from competing or selecting colleges in Tamil Nadu.

The bigger question

  • The question is not whether the State government can amend a law falling under the Concurrent List.
  • The question is whether the State government can exempt Section 10D of the IMC Act, which is a parliamentary law that falls under the Central List (Entry 66).
  • Moreover, the Supreme Court has also upheld NEET as a requirement.
  • Mere statistics highlighting that a majority of the stakeholders do not want NEET in Tamil Nadu is not an answer for exempting the examination.

Again, it is State and Centre are at crossroads

  • Normally, a Bill requires assent from the Governor to become a law. Stalin’s contention is that this Bill deals with education, which is a Concurrent List subject.
  • Admissions to medical courses fall under Entry 25 of List III, Schedule VII of the Constitution, and therefore the state is competent to regulate the same.
  • Yet, as far as matters relating to the determination of standards for higher education are concerned, the central government has the power to amend a clause or repeal an Act.
  • So, just the passing of the Bill doesn’t enable the students to get exempted from writing NEET.
  • Already, Union Higher Education Secretary Amit Khare has held that if any State wants to opt out of the exam, it has to seek permission from the Supreme Court.

Options for Tamil Nadu

  • Data is necessary only when there is power to legislate on the subject concerned.
  • Since the Bill, which will become an Act only after the President’s nod, will come into effect only from the next academic year, the battle for and against the NEET requirement will continue in courts.
  • Hopefully, the courts will determine the legality and have a definite solution to the question of medical admissions within the next year.
  • Till such time, students who wrote NEET will fill the seats under the State quota.

Way forward: Preventing Commercialization of Medical Education

  • The time may also have come to examine whether NEET has met its purposes of improving standards and curbing commercialization and profiteering.
  • Under current norms, one quite low on the merit rank can still buy a medical seat in a private college, while those ranked higher but only good enough to get a government quota seat in a private institution can be priced out of the system.
  • The Centre should do something other than considering an exemption to Tamil Nadu.
  • It has to conceive a better system that will allow a fair admission process while preserving inter se merit and preventing rampant commercialization.

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Goods and Services Tax (GST)

GST Council may consider bringing petrol, diesel under GST

Note4Students

From UPSC perspective, the following things are important :

Prelims level : GST Council

Mains level : Commodities left out of GST purview

The GST Council might consider taxing petrol, diesel and other petroleum products under the single national GST regime.

About GST Council

  • The GST Council is a constitutional body that aims to bring together states and the Centre on a common platform for the nationwide rollout of the indirect tax reform.
  • It is an apex member committee to modify, reconcile or to procure any law or regulation based on the context of goods and services tax in India.
  • It dictates tax rate, tax exemption, the due date of forms, tax laws, and tax deadlines, keeping in mind special rates and provisions for some states.
  • The predominant responsibility of the GST Council is to ensure to have one uniform tax rate for goods and services across the nation.

How is the GST Council structured?

  • The GST is governed by the GST Council. Article 279 (1) of the amended Indian Constitution states that the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
  • According to the article, the GST Council will be a joint forum for the Centre and the States. It consists of the following members:
  1. The Union Finance Minister will be the Chairperson
  2. As a member, the Union Minister of State will be in charge of Revenue of Finance
  3. The Minister in charge of finance or taxation or any other Minister nominated by each State government, as members.

Terms of reference

  • Article 279A (4) specifies that the Council will make recommendations to the Union and the States on the important issues related to GST, such as the goods and services will be subject to or exempted from the Goods and Services Tax.
  • They lay down GST laws, principles that govern the following:
  1. Place of Supply
  2. Threshold limits
  3. GST rates on goods and services
  4. Special rates for raising additional resources during a natural calamity or disaster
  5. Special GST rates for certain States

Why bring Petro/Diesel under GST?

  • GST is being thought to be a solution for the problem of near-record high petrol and diesel rates in the country, as it would end the cascading effect of tax on tax.
  • The state VAT is being levied not just on the cost of production but also on the excise duty charged by the Centre on such output.

Why were they left out of GST?

  • When a national GST subsumed central taxes such as excise duty and state levies like VAT on July 1, 2017, five petroleum goods – petrol, diesel, ATF, natural gas and crude oil – were kept out of its purview.
  • This is because both central and state government finances relied heavily on taxes on these products.
  • Since GST is a consumption-based tax, bringing petroleum under the regime would have mean states where these products are sold get the revenue and not the producer ones.
  • Simply put, Uttar Pradesh and Bihar with their huge population and a resultant high consumption would get more revenues at the cost of states like Gujarat.

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Goods and Services Tax (GST)

What is Input Tax Credit?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Input Tax Credit

Mains level : Not Much

The Supreme Court has confirmed a Madras High Court judgment which upheld a fiscal formula included in the Central Goods and Service Tax Rules to execute refund of unutilized Input Tax Credit (ITC) accumulated on account of input services.

What is Input Tax Credit?

  • Input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs.
  • Say, you are a manufacturer – tax payable on output (FINAL PRODUCT) is Rs 450 tax paid on input (PURCHASES) is Rs 300 You can claim INPUT CREDIT of Rs 300 and you only need to deposit Rs 150 in taxes. See here:

Pc: Cleartax.in

The case in discussion

  • The apex court Bench led, by Justice D.Y. Chandrachud, passed the judgment in the face of two contradicting judgments of Gujarat and Madras High Courts on the validity of Rule 89(5) of the Central GST Rules, 2017.
  • Rule 89(5) provides a formula for the refund of ITC, in “a case of refund on account of inverted duty structure”.
  • The Gujarat High Court had held that by prescribing a formula in sub-Rule (5) of Rule 89 to execute refund of unutilized ITC accumulated on account of input services.
  • The Madras High Court, while delivering its judgment declined to follow the view of the Gujarat High Court.

Answer this PYQ in the comment box:

Consider the following items:

  1. Cereal grains hulled
  2. Chicken eggs cooked
  3. Fish processed and canned
  4. Newspapers containing advertising material

Which of the above items is/are exempt under GST (Goods and Services Tax)?

(a) 1 only

(b) 2 and 3 only

(c) 1, 2 and 4 only

(d) 1, 2, 3 and 4

 

Post your answers here

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North-East India – Security and Developmental Issues

In Manipur, a case for asymmetric federalism

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Autonomous districts, Sixth Schedule

Mains level : Issues related to Assymetric Federalism in India

As a normative idea and an institutional arrangement that supports the recognition and provision of an expansive ‘self-rule’ for territorially concentrated minority groups, asymmetric federalism has recently received bad press in India.

India’s Federalism: A backgrounder

  • Nations are described as ‘federal’ or ‘unitary’, depending on the way in which governance is organised.
  • In a unitary set-up, the Centre has plenary powers of administration and legislation, with its constituent units having little autonomy.
  • In a federal arrangement, the constituent units are identified on the basis of region or ethnicity and conferred varying forms of autonomy or some level of administrative and legislative powers.
  • In India, the residuary powers of legislation, that is the power to make law in a field not specified in the Constitution, is vested in Parliament.
  • Hence India has a quasi-federal framework.

Why is it said that India has asymmetric federalism?

  • The main forms of administrative units in India are the Centre and the States.
  • Just as the Centre and the States do not have matching powers in all matters, there are some differences in the way some States and other constituent units of the Indian Union relate to the Centre.
  • This creates a notable asymmetry in the way Indian federalism works.
  • But there are other forms, too, all set up to address specific local, historical and geographical contexts.

The asymmetric structure

  • Besides the Centre and the States, the country has Union Territories with a legislature, and Union Territories without a legislature.
  • When the Constitution came into force, the various States and other administrative units were divided into Parts A, B, C and D.
  • Part A States were the erstwhile provinces, while Part B consisted of erstwhile princely states and principalities. Part C areas were the erstwhile ‘Chief Commissioner’s Provinces’.
  • They became Union Territories, and some of them initially got legislatures and were later upgraded into States.
  • Himachal Pradesh, Manipur, Tripura, Mizoram, Arunachal Pradesh and Goa belong to this category.

Power apparatus in these asymmetries: Sixth Schedule

  • The Sixth Schedule to the Constitution contains provisions for the administration of tribal areas in Assam, Meghalaya, Tripura and Mizoram.
  • These create autonomous districts and autonomous regions.
  • Any autonomous district with different Scheduled Tribes will be divided into autonomous regions.
  • These will be administered by District Councils and Regional Councils.
  • These Councils can make laws with respect to allotment, occupation and use of land, management of forests other than reserve forests and water courses.
  • Besides they can regulate social customs, marriage and divorce and property issues.

An integrationist approach adopted by the Constituent Assembly

  • Post-independence, India was criticized for arguably becoming a ‘homogenous Hindu nation’ after Partition.
  • To counter this, the Gopinath Bordoloi Committee, a sub-committee of the Constituent Assembly sought to accommodate the distinctive identity, culture and way of life of tribal groups in the NE by envisioning ‘self-rule’.
  • This distinctive constitutional status to territorially concentrated minorities fosters centrifugal tendencies.
  • Asymmetric federalism fosters subversive institutions, political instability and breakup of States.

Curious case of Manipur: Recent developments

  • Article 371 gives expansive constitutional powers to Manipur’s Hill Areas Committee (Article 371C) over tribal identity, culture, development and local administration, are exemplars.
  • The integrationist approach resonates powerfully in two recent attempts by Manipur’s government to
  1. stall the introduction and passage of the Manipur (Hill Areas) Autonomous District Council (Amendment) Bill, 2021, and
  2. induct nine Assembly members from the valley areas into the Hill Areas Committee.
  • This move is being perceived as a “malicious” and “direct assault” on the Hill Areas Committee and the constitutional protection accorded to the Hill Areas of Manipur under Article 371C.

A determined move

  • These moves marks a calculated initiative to use this as a double-edged sword to simultaneously set apace electoral agenda for the upcoming Assembly elections in early 2022 and reclaim its agency to fortify state-level constitutional asymmetry.
  • The attempt to increase membership of the six district councils to 31 members each and secure more powers to the councils by giving more developmental mandate are welcome.

Managing HAC: A difficult task

  • If history is any guide, the task of reclaiming the Hill Areas Committee’s agency is not going to be easy.
  • Its members often leverage tribe/party loyalty over-commitment to protect constitutional asymmetry and common tribals’ cause.
  • How the HAC and various tribal groups strategically navigate their politics to offset the majoritarian impulse to manipulate the legal and political process to dilute/dissolve extant constitutional asymmetry remains to be seen.

Way forward

  • There should be sincere commitment to promote tribal development, identity and culture that Article 371C seeks to bridge.
  • Recognizing and institutionally accommodating tribal distinctiveness is not just as a matter of political convenience
  • This valuable and enduring good will be key to promote the State’s integrity, stability and peace in the long run.

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Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

National Edible Oil Mission (OP)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : National Edible Oil Mission-Oil Palm (NEOM-OP)

Mains level : Edible oil scarcity in India

Last week, the government announced the minimum support prices (MSP) of rabi crops for the marketing season 2022-23.

Key Highlight: Hike for Oilseeds MSPs

  • The MSP for wheat is up by 2 per cent while that of rapeseed-mustard is up by 8.6 per cent.
  • This indicates that the government wants to focus more on edible oils/oilseeds than on wheat.
  • It is important to note that PM recently announced a Rs 11,000-crore National Edible Oil Mission-Oil Palm (NEOM-OP), as a part of the Aatmanirbhar Bharat Abhiyan.

About NEOM-OP

  • This is a bold step to augment domestic edible oil supplies, given that 60 per cent of the edible oil consumed in the country is imported — more than half of this is palm oil followed by soybean and sunflower.
  • In FY 2020-21, edible oil imports touched $ 11 billion or about Rs 80,000 crore (for 13.5 million tonnes).
  • Despite these imports, edible oil inflation remains very high (July 2021 was 32.5 per cent).
  • Against this backdrop, the move to promote oil palm is a step in the right direction.

Reasons for oil price hikes

  • Effective duty for rapeseed and cottonseed oils ranges from 38.5 per cent for crude and 49.5 per cent for refined oils.
  • It’s this high import duty, at a time when global edible oil prices have gone up by almost 70 per cent (y-o-y), that has caused high domestic inflation (32.5 per cent) in edible oils.

Why Oil Palm?

  • It is the only crop that can give up to four tonnes of oil productivity per hectare under good farm practices.
  • But it is a water-guzzling crop, loves humidity (requires 150 mm rainfall every month) and thrives best in areas with temperatures between 20 and 33 degrees Celsius.
  • The National Re-assessment Committee (2020) has identified 28 lakh hectares suitable for oil palm cultivation in the country — the actual area under oil palm cultivation, as of 2020, is only 3.5 lakh hectares.
  • Much of this (34 per cent) is in the Northeastern states, including Assam, followed by Andhra Pradesh (19 per cent) and Telangana (16 per cent).
  • A large potential is thus waiting to be tapped.

No reasons for farmers to switch

  • The government has a massive procurement programme for wheat, but a very meagre one for rapeseed-mustard even when the prices rule below MSP.
  • This relative incentive structure remains in favour of wheat.
  • So, we doubt if farmers will switch from wheat to mustard in any meaningful manner to bridge the edible oil deficit.

What can be done to make NEOM-OP more effective?

The NEOM-OP intends to focus on productivity and area expansion by supporting the farmers in the following ways:

(A) Financial assistance

  • Input assistance for planting material, additional assistance to cover maintenance/opportunity costs of farmers, with no limits on acreage.
  • Big-budget assistance to industries that plan to set up a five tonnes/hour processing unit.
  • Such a comprehensive assistance package will attract farmers as well as incentivize the industry to work with agriculturists and augment domestic edible oil production.

(B) Pricing mechanism for OP

  • There will be no MSP, but the FFB price for farmers would be fixed at 14.3 per cent of average landed crude palm oil price of the past five years, adjusted with the wholesale price index.
  • This is the most critical part of the pricing policy and the formula needs to be carefully calibrated.
  • However, the litmus test of pricing will be dovetailing it with the import tariff policy to protect the farmers in case landed prices fall below the cost of production.

Way forward

(1) Rationalizing import duties

  • The Commission for Agricultural Costs and Prices (CACP, which recommends MSP) recommended that India should keep an import duty trigger at $800/tonne (say).
  • If the import price falls below $800/tonne, the import tariff needs to go up in countercyclical manner.
  • Thus, import duty needs to be in sync with rational domestic price policy.
  • It is a necessary condition to give a fillip to aatmanirbharta in edible oils.

(2) Neutral incentive structure

  • But the sufficient condition would be revisiting the existing incentive structure that unduly favours rice, wheat and sugarcane through heavy subsidisation of power, fertilisers and open-ended procurement.
  • The need is to devise a crop-neutral incentive structure where cropping patterns are aligned with demand patterns, and the crops are produced in a globally competitive manner.

Conclusion

  • There is a huge deficit in edible oil production in the country.
  • Achieving self-sufficiency in edible oil production through the other oilseeds complex would require adding about 45 million hectares under oilseed cultivation.
  • This is not possible without drastically cutting down the area under cereal crops.
  • The best alternative is, therefore, to ensure proper care of palm oil crops, provide good planting material, better irrigation management, fertilizers and other inputs to raise productivity to four tonnes of oil/hectare.

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