Note4Students
From UPSC perspective, the following things are important :
Prelims level: Inner Line Permit
Mains level: Paper 2- Assam-Mizoram border dispute
Context
The violent stand-off between the Assam and Mizoram armed policemen at Vairengte in Mizoram, on July 26, took six lives and left over 50 injured is the culmination of a long-standing border dispute.
History of the boundary issue
- The ‘inner line’ boundary of the Lushai hills was ‘fixed’ in 1875 on the southern border of Assam’s Cachar district.
- In line with the colonial practice of ‘fixing’ borders, this boundary was however not ‘precise’ as it was drawn largely using natural markers such as rivers and hills.
- In post-independent India, the Mizoram government has accepted this boundary in preference over the subsequent revisions made by the colonial government.
- There was a change in boundary when the Inner Line Permit under the Bengal Eastern Frontier Regulation, 1873 was extended to the Lushai hills district in 1930 and 1933.
- The Mizoram government perceives that the boundary instituted by these revisions amounted to unilateral superimposition.
- These revisions are also seen to conspicuously fail to recognise the Mizo’s long-standing historical rights to use the un-demarcated southern border of Cachar as their hunting ground, for jhum cultivation, and as sites of their resource extraction including rubber and timber.
- However, considering that borders cannot be driven by perception but by institutionalised rules and laws, Assam’s government continues to refuse to accept Mizoram’s standpoint.
- The Assam government considers Mizo plantation and settlements in the Inner Line Reserve Forest areas as an ‘encroachment’.
People-centric Vs. State-centric approach in dispute
- At the heart of this dispute is the contending approaches of the Assam and Mizoram governments to ‘borders’, namely ‘state-centric and ‘people-centric approaches.
- The Assam government represent a continuum of the colonial ‘state-centric’ approach to borders which gives premium to legal, juridical and administrative recognition and protection of the border.
- The Mizoram government advocate a ‘people-centric approach seeks to give a premium to the historical and traditional rights of the local indigenous people.
- The Mizoram government also advocate the principle of uti possidetis juris (‘as you possess under law’, including customary law) on the other hand.
Way forward
- Historical context: Fixing the Assam-Mizoram border and resolve the dispute need to be sensitive to the historical context.
- Deep historical knowledge, sensitivity and an accommodative spirit need to inform dialogue and negotiation under the neutral supervision of the Centre.
- Inter-governmental forum: It is about time that the Centre sets up a permanent inter-governmental forum to involve important stakeholders in order to effectively manage border and territorial conflicts.
- Quick-fix solution should be avoided: Any quick-fix solution driven by temporal electoral considerations should be avoided if we were to resuscitate and sustain interdependent Assam-Mizoram borders and beyond.
Conclusion
The resolution should be sensitive to the possibility of fluid and overlapping sovereignty, where forest ‘commons’ are seen not simply as sites of revenue-extraction but as powerful symbols of identity and sustainable livelihood resources for the local people.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SOFI report
Mains level: Paper 2- Rising food insecurity
Context
The latest edition of the State of Food Security and Nutrition in the World (SOFI) report, released jointly by five UN organisations in July, reveals that the pandemic and failure on the part of state to combat its effects, has led to a significant increase in the prevalence of hunger and food insecurity in the country.
About the report
- Estimates on food insecurity presented in the SOFI report are based on two globally-accepted indicators of food insecurity:
- 1) The Prevalence of Undernourishment (PoU), which estimates the proportion of people suffering from chronic deficiency of calories.
- 2) A more recently developed an experience-based indicator called the Prevalence of Moderate and Severe Food Insecurity (PMSFI).
- The PoU estimates are based on estimates of per-capita supply of food and distributional parameters estimated using the national consumption surveys
- On the other hand, PMSFI estimates are based on data collected through surveys that attempt to capture people’s experiences of food insecurity (such as eating less, modifying diet to eat cheaper food etc).
- No assessment of food insecurity during a pandemic: The PMSFI estimates presented in the report are particularly important because, since the outbreak of the pandemic, the Indian government has not undertaken any official assessment of food insecurity in the country.
- Not only has the government not conducted its own consumption or food security surveys, it does not approve the publication of results based on the Gallup World Poll.
- As a result, estimates for India are not published in the SOFI reports.
- However, these can still be obtained indirectly because the data are presented for South Asia and for “South Asia (excluding India)”.
- Estimates for India can be obtained by comparing the two sets of data.
What the report says
- According to the data presented in the report, the prevalence of moderate to severe food insecurity in India rose by about 6.8 percentage points in 2018-20.
- Data show that there were about 43 crore of moderate to severe food-insecure people in India in 2019.
- As a result of the pandemic-related disruptions, this increased to 52 crore in one year.
- In terms of prevalence rates, moderate to severe food insecurity increased from about 31.6 per cent in 2019 to 38.4 per cent in 2021.
Causes of food insecurity in India
- Economic distress: The problems of hunger and food insecurity are grave in India because of widespread economic distress, high unemployment and high levels of inequality.
- Dependence on informal economy: A large proportion of the poor is dependent on the informal economy in which incomes are too low and uncertain.
- Unemployment: Unemployment rates have risen sharply over the last few years, shrinking public investment and the economic slowdown have compounded the distress among working classes and the peasantry.
- With low and uncertain incomes, families dependent on the informal economy do not have assured access to adequate and nutritious food.
Way forward
- Monitoring system: There is an urgent need for the government to establish systems for regular monitoring of the food security situation in the country.
- Universal access to food: It is ironic that the country with the largest stock of grain in the world — 120 million tonnes as of July 1, 2021 — accounts for a quarter of the world’s food-insecure population.
- Universalising access to the public distribution system is the need of the hour at least during the pandemic.
Conclusion
The increasing severity of food insecurity in India points to the urgent need for measures by the government to ensure the right to food of citizens of India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: 1991 reforms
Mains level: Paper 3- Changes brought about by 1991 reforms
Context
It has been 30 years since the spirit of liberalisation was unleashed in 1991 economic reforms. The private sector, which had been seen very differently up to 1990, was placed at the centre of the reform process. And this has continued and grown since then.
Challenges and opportunities for Indian industry after economic reforms
1) Entry of MNCs and centrality to consumers
- The first challenge was the entry of MNCs through the joint venture (JV) route.
- Centrality to consumers: The reforms gave centrality to the consumer who till 1991 did not have a choice.
- The Indian consumer was given choices and companies, both foreign and Indian, wanted to be their first choice.
- Growth in demand: The surge of new demand from the marketplace transformed the scenario, reflected in GDP growth rapidly moving up to 7 per cent per annum.
2) Increased competition
- For the first time, Indian companies faced real competition from other Indian as well as foreign companies.
- But, many corporates restructured themselves and transformed into competitive forces.
- The new reality of reduced customs duties and industrial licensing disappearing, removed the protection umbrella and Indian companies, by and large, who had been planning for this day, were ready to face this challenge.
3) Government-industry partnership
- Till June 1991, the government and industry were at a distance from each other.
- June 1991 changed all of that, the government’s dialogue with industry deepened, consultations were frequent.
- Feedback on what was happening on the ground was taken regularly.
- A government-industry partnership became a reality.
4) Boost to aspiration of industries
- The most significant change brought about by the reforms pertained to the level of “aspirations” of the industry.
- There was excitement and ambition to be world-class.
- Rise of IT industry: In this, the IT industry led by TCS, Infosys and Wipro played a major role.
- They showed that Indian engineers and managers were the best in the world.
- They exuded confidence which spread to others.
5) Boost to entrepreneurship
- Not just the big industry, but also, the small and medium sectors that became part of the new energy in industry.
- Component manufacturing and exports were new initiatives from ancillaries and suppliers of major manufacturers.
6) Infrastructure
- The public sector had a monopoly over infrastructure.
- This changed and the private sector was invited to participate, to get into public-private partnerships and end the government’s monopoly.
7) Birth of new private sector bank
- Banking had been nationalised in 1969.
- But the reforms of 1991 gave birth to a new private sector bank — HDFC Bank — which, after due diligence by the government and the Reserve Bank of India, opened its doors in 1994.
- This was a huge step forward in the reform process.
8) Improvement in corporate governance
- An industry-led initiative brought out the first-ever task force guidelines and report on corporate governance.
- This was followed by many other actions and policies.
Conclusion
There is still a long way to go, but the die that was cast in 1991 has led to a new tsunami of change.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Retrospective taxation
Mains level: Cairn Issue
The government took the first step towards doing away with the contentious retrospective tax law of 2012, which was used to raise large tax demands on foreign investors like Vodafone and Cairn Energy.
Retrospective Tax Law: A backgrounder
- The roots of this law date back to 2007, when Vodafone bought over a majority stake in the telecom operations of Hutch in India for $11.1 billion.
- While the deal involved the changing of hands of Indian operations of Hutch, the companies party to it were registered outside India and all the paperwork and financial transactions, too, were done outside the country.
- But the Indian government ruled that Vodafone was liable to pay capital gains tax to it as the deal involved the transfer of assets located in India.
- Importantly, there was no rule in the Indian statutes then that allowed such taxation.
- Vodafone challenged this claim and the case went to Supreme Court, which ruled in 2012 that there was no tax liability on Vodafone’s part to Indian authorities.
What was the law made then?
- In 2012, Parliament amended the Finance Act to enable the taxman to impose tax claims retrospectively for deals executed after 1962 which involved the transfer of shares in a foreign entity whose assets were located in India.
- The target, of course, was the Vodafone deal. Very soon, tax claims were also raised on Cairn Energy.
How did the Companies react?
- The changes to the Finance Act allowed India to reimpose its tax demand on Vodafone.
- Tax authorities had slapped a tax bill of Rs 7,990 crore on Vodafone, saying the company should have deducted the tax at source before making a payment to Hutchison.
- By 2016, reports say, the bill had risen to Rs 22,100 crore after adding interest and penalty.
- The demand on Cairn was for Rs 10,247 crore in back taxes over its move, beginning in 2006, to bring its Indian assets under a single holding company called Cairn India Ltd.
- A few years later, when Cairn India Ltd floated an IPO to divest about 30 per cent of its ownership of the company, mining conglomerate Vedanta picked up most of the shares.
- However, Cairn UK was not allowed to transfer its stakes as Indian officials held that the company had to first clear the tax liability.
Note: This story is of no use to aspirants. But one must understand how such cases create regression for the Indian economy in the long run.
A case in the Hague
- That prompted Cairn UK to move the Permanent Court of Arbitration to The Hague, Netherlands.
- It said that India had violated the terms of the India-UK Bilateral Investment Treaty by imposing a retrospective tax due on it.
- The treaty provides protection against arbitrary decisions by laying down that India would treat investment from the UK in a “fair and equitable” manner.
- Vodafone, too, had sought arbitration before the Permanent Court of Arbitration, citing the “fair and equitable” treatment clause in the India-Netherlands BIT.
India’s response
- In September last year, the Hague court ruled in favour of Vodafone, quashing India’s tax claim after holding that it violated the “equitable and fair treatment standard” under the bilateral investment treaty.
- India refused to pay the compensation, Cairn launched recovery proceedings across countries as part of which a French court ordered the freezing of some Indian assets in Paris.
- This move discourages foreign investors from coming to India and that the Centre should look to resolve the case at the earliest.
- The amendments now mooted are designed to do just that.
Taxation Laws (Amendment) Bill, 2021
- The Bill offers to drop tax claims against companies on deals before May 2012 that involve the indirect transfer of Indian assets would be “on fulfilment of specified conditions”.
Various conditions:
- The condition includes the withdrawal of pending litigation and the assurance that no claim for damages would be filed.
- As per the proposed changes, any tax demand made on transactions that took place before May 2012 shall be dropped, and any taxes already collected shall be repaid, albeit without interest.
- To be eligible, the concerned taxpayers would have to drop all pending cases against the government and promise not to make any demands for damages or costs.
Why is the amendment necessary?
- The retrospective taxation was termed “tax terrorism”.
- It is argued that such retrospective amendments militate against the principle of tax certainty and damage India’s reputation as an attractive destination.
- This could help restore India’s reputation as a fair and predictable regime apart from helping put an end to taxation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Non-Proliferation Treaty (NPT), IAEA
Mains level: India's nunclear energy programme
Other than the imported Russian-built reactor-based project in Tamil Nadu, which is grandfathered under an earlier 1998 agreement, progress of greenfield projects since the Indo-US nuclear deal has been tardy.
Indo-US Nuclear Deal
- The deal was signed in 2008 jointly by then Indian PM Dr. Manmohan Singh and then US President George Bush.
- India agreed to separate its civil and military nuclear facilities and to place all its civil nuclear facilities under International Atomic Energy Agency (IAEA) safeguards.
- In exchange, the United States agreed to work toward full civil nuclear cooperation with India.
- The implementation of this waiver made India the only known country with nuclear weapons which is not a party to the Non-Proliferation Treaty (NPT) but still allowed to carry out global nuclear commerce.
Q. In India, why are some nuclear reactors kept under “IAEA Safeguards” while others are not? (CSP 2020)
(a) Some use Uranium and others use thorium.
(b) Some use imported uranium and others use domestic supplies.
(c) Some are operated by foreign enterprises and others are operated by domestic enterprises.
(d) Some are State-owned and others are privately-owned.
Answer this PYQ in the comment box:
Implementation not in spirit
- The US has been discussing the sale of nuclear reactors to India since the 2008 pact, two subsequent agreements were signed only in 2016 and 2019.
- A “project proposal” to set up six reactors in collaboration with Westinghouse Electric Company (WEC) has been announced, but work is yet to begin.
- WEC, alongside Wilmington-based GE Hitachi Nuclear, has been negotiating to build reactors in India since the nuclear deal was inked.
- The project, however, came under a cloud after WEC filed for bankruptcy in mid-2017 following cost overruns on reactors coming up in the US.
- The GE Hitachi project has barely made any progress.
Back2Basics: Non-Proliferation Treaty (NPT)
- NPT, is an international treaty whose objective is:
- to prevent the spread of nuclear weapons and weapons technology,
- to promote cooperation in the peaceful uses of nuclear energy, and
- to further the goal of achieving nuclear disarmament and general and complete disarmament
- Between 1965 and 1968, the treaty was negotiated by a Committee on Disarmament, an UN-sponsored organization based in Geneva, Switzerland.
- The treaty defines nuclear-weapon states as those that have built and tested a nuclear explosive device before 1 January 1967; these are the United States, Russia, the United Kingdom, France, and China.
- Four UN member states have never accepted the NPT, three of which possess or are thought to possess nuclear weapons: India, Israel, and Pakistan.
- In addition, South Sudan, founded in 2011, has not joined.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Horizontal quota
Mains level: Debate over 50% cap of reservations
The Bihar government recently announced 33% horizontal reservation for women in State engineering and medical colleges.
What are vertical and horizontal reservations?
- Reservation for Scheduled Castes, Scheduled Tribes, and Other Backward Classes is referred to the as vertical reservation.
- It applies separately for each of the groups specified under the law.
- Horizontal reservation refers to the equal opportunity provided to other categories of beneficiaries such as women, veterans, the transgender community, and individuals with disabilities, cutting through the vertical categories.
How are the two categories of quotas applied together?
- The horizontal quota is applied separately to each vertical category, and not across the board.
- For example, if women have 50% horizontal quota, then half of the selected candidates will have to necessarily be women in each vertical quota category.
- This means half of all selected SC candidates will have to be women, half of the unreserved or general category will have to be women, and so on.
- The interlocking of the two types of reservation throws up a host of questions on how certain groups are to be identified.
- For example, would an SC woman be put in the category of women or SC? Since quotas are fixed in percentages, what percentage of quota would be attributed to each?
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Agalega Island
Mains level: Indian ocean power competition
Mauritius has denied a report that it has allowed India to build a military base on the remote island of Agalega.
Agalega Island
- Agaléga are two outer islands of Mauritius located in the Indian Ocean, about 1,000 kilometers north of Mauritius island.
- The islands have a total area of 2,600 ha (6,400 acres).
- There is an MoU between the governments of Mauritius and India to develop the Agaléga islands and resolve infrastructural problems faced by Agaleans.
Why in news?
- India asserts that these new facilities are part of its Security and Growth for All in the Region (SAGAR) policy, which aims to increase maritime cooperation between countries in the region.
- Mauritius, for its part, has indicated that its coastguard personnel will use the new facilities.
- But it is clear that the Indian investment of $250m in developing an airfield, port, and communications hub on this remote island is not aimed at helping Mauritius develop its capacity to police its territorial waters.
Significance of this area
- The Agalega area is currently a blind spot for the Indian Navy and by building a military facility in it, New Delhi hopes to expand its maritime domain awareness.
- In times of conflict, knowing the location of enemy ships and submarines, without being detected in the process, creates a significant advantage.
- China’s naval forays into this region are the true motivator for its expanding naval presence.
- In peacetime, effective maritime domain awareness helps establish international partnerships with like-minded militaries and also acts as a deterrent to both state and non-state adversaries, by signaling reach.
Conclusion
- The Indian Ocean is now increasingly contested.
- Whether or not China is deterred by India’s surveillance efforts, Agaléga is now a pawn in this new era of major power competition across the Indian Ocean and indeed the wider Indo-Pacific region.
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