Note4Students
From UPSC perspective, the following things are important :
Prelims level: Snake Island
Mains level: Not Much
Ukraine has said it has caused “significant losses” to the Russian military in airstrikes on Zmiinyi Island, also known as Snake Island, in the Black Sea.
Snake Island
- Zmiinyi Island, also known as Snake or Serpent Island, is a small piece of rock less than 700 metres from end to end, that has been described as being “X-shaped”.
- It is located 35 km from the coast in the Black Sea, to the east of the mouth of the Danube and roughly southwest of the port city of Odessa.
- The island, which has been known since ancient times and is marked on the map by the tiny village of Bile that is located on it, belongs to Ukraine.
Why does Russia seek to control the Black Sea?
- Domination of the Black Sea region is a geostrategic imperative for Moscow.
- The famed water body is bound by Ukraine to the north and northwest, Russia and Georgia to the east, Turkey to the south, and Bulgaria and Romania to the west.
- It links to the Sea of Marmara through the Bosporus and then to the Aegean through the Dardanelles.
- It has traditionally been Russia’s warm water gateway to Europe.
- For Russia, the Black Sea is both a stepping stone to the Mediterranean as well as a strategic buffer between NATO and itself.
- Cutting Ukrainian access to the Black Sea will reduce it to a landlocked country and deal a crippling blow to its trade logistics.
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From UPSC perspective, the following things are important :
Prelims level: Sao Joao Festival
Mains level: Not Much
As in every monsoon, Catholics in Goa will celebrate Sao Joao, the feast of St John the Baptist.
Note: The name typically sounds like a North-Eastern festival, but it is not.
What is Sao Joao and where is it celebrated in Goa?
- In Goa, Catholics celebrate all the feasts of the Roman Catholic Church, which include the feast of St John the Baptist on June 24.
- John the Baptist is the person who he had baptised Jesus Christ on the river Jordan.
- Traditionally, there are spirited Sao Joao festivities in the villages of Cortalim in South Goa and Harmal, Baga, Siolim and Terekhol in North Goa.
- However, over the years, pool parties and private Sao Joao parties in Goa have been a “complete package of merriment and joy” for tourists.
Course of celebration
- The celebrations will include revellers sporting crowns made of fruits, flowers and leaves, and the major draw of the feast is the water bodies – wells, ponds, fountains, rivers – in which the revellers take the “leap of joy”.
- Enjoyed by children and adults alike, the festival also includes playing the traditional gumott (percussion instrument), a boat festival, servings of feni, and a place of pride for new sons-in-law.
What does jumping into water bodies symbolise?
- The youngsters in Goa celebrate this occasion with revelry and perform daredevil feats, by jumping into over flowing wells or rivulets.
- The boys are found merrily jumping into the water to commemorate the leap of joy, which St John is said to have taken in the womb of his mother St Elizabeth when virgin Mary visited her.
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From UPSC perspective, the following things are important :
Prelims level: Green mobility
Mains level: NA
Mo Bus, the bus service of Odisha’s Capital Region Urban Transport (CRUT) authority, has been recognized by the United Nations as one of 10 global recipients of its annual Public Service Awards for 2022.
Mo Bus service
- The Mo Bus service was launched on November 6, 2018.
- It aimed to ensure transformation of the urban public transport scenario in the city and its hinterland through use of smart technology, service benchmarking and customer satisfaction.
- The buses are designed to integrate smart technologies such as free on-board Wi-Fi service, digital announcements, surveillance cameras, and electronic ticketing.
- CRUT says that to increase women’s participation in the workforce, and to make women riders feel safer, it is committed to ensuring that 50% of Mo Bus Guides (conductors) are women.
What is the recent award?
- The public transport service has been recognised for its role in “promoting gender-responsive public services to achieve the SDGs (Sustainable Development Goals)”.
- The “impact” is that 57 per cent of the city’s commuters now use the Mo Bus, the UN said.
- Mo E-Ride is estimated to reduce pollution by 30-50 per cent.
About UN Public Service Award
- The UN describes its Public Service Awards as the “most prestigious international recognition of excellence in public service”.
- The first Awards ceremony was held in 2003, and the UN has since received “an increasing number of submissions from all around the world”.
- It is intended to reward the creative achievements and contributions of public service institutions that lead to a more effective and responsive public administration in countries worldwide.
- Through an annual competition, the UN Public Service Awards promotes the role, professionalism and visibility of public service.
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From UPSC perspective, the following things are important :
Prelims level: Contingency Reserve Arrangement (CRA)
Mains level: Paper 2- The Ukraine conflict and BRICS
Context
China is hosting the 14th BRICS summit in virtual mode. The focus of the summit will be centred on the conflict and the association’s future.
About BRICS
- BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
- The BRICS Leaders’ Summit is convened annually.
- It does not exist in form of an organization, but it is an annual summit between the supreme leaders of five nations.
- The grouping was formalized during the first meeting of BRIC Foreign Ministers on the margins of the UNGA in New York in September 2006.
- The first BRIC Summit took place in 2009 in the Russian Federation and focused on issues such as reform of the global financial architecture.
- South Africa was invited to join BRIC in December 2010, after which the group adopted the acronym BRICS.
- South Africa subsequently attended the Third BRICS Summit in Sanya, China, in March 2011.
- The Chairmanship of the forum is rotated annually among the members, in accordance with the acronym B-R-I-C-S.
Significance of BRICS
- Economically, militarily, technologically, socially and culturally, BRICS nations represent a powerful bloc.
- 40 per cent of the world’s population: They have an estimated combined population of 3.23 billion people, which is over 40 per cent of the world’s population.
- 25 per cent of global GDP: They account for over more than a quarter of the world’s land area over three continents, and for more than 25 per cent of the global GDP.
- Two fastest growing large economies: The grouping comprises two of the fastest-growing nations, India and China.
- It has proved its mettle to an extent by establishing the BRICS New Development Bank (NDB) and the Contingency Reserve Arrangement (CRA).
How the Ukraine crisis creates challenges for the BRICS
- The leaders of BRICS countries — Brazil, Russia, India, China and South Africa — will navigate the crucial dilemma of evolving a common stance on the Russian-Ukraine conflict.
- The primary agenda of BRICS was rebalancing an international system dominated by the West.
- However, the Ukraine crisis could act as a distraction from that primary agenda.
- The geopolitical considerations of its members can come in the way of attaining the grouping’s original goal.
- Target of economic warfare: Some of the BRICS members could be potential targets of the kind of economic warfare deployed by the West against Russia.
- The West has so far not expected the BRICS countries to stringently adhere to its sanctions against Russia.
- But it will be naïve to expect that they will persist with this attitude.
Way forward
1] Create institutional arrangement
- Challenging the economic might of the West in the near future might be close to impossible.
- Despite the group comprising China, India and Russia, intra-BRICS trade accounts for less than 20 per cent of global trade.
- BRICS is far from having its own payment mechanisms, international messaging systems or cards.
- The Ukraine crisis should drive home the need to create institutional arrangements that can cushion against similar financial turbulence in the future.
2] Recalibrate structure and expand
- BRICS requires a recalibration of its structure and agenda.
- Creating financial mechanisms and technological institutions could turn BRICS into a G20 for developing nations.
- It’s time to revisit the idea of expanding the grouping by inviting new members.
- This could also impart new vigour to the BRICS’s developmental goals.
3] Economic cooperation between India and China
- Economic cooperation between India and China is vital for the success of any future BRICS endeavour.
- The border conflict has created a mistrust of China in India.
- In the current situation, New Delhi is unlikely to take an anti-West stance.
- India, unlike China, is neither a UN Security Council member nor does it have major sticking points with the West.
- At the same time, India is not a part of the Western camp.
- That does open up the possibility of New Delhi taking a more proactive position in BRICS.
- The two powers need to come together for the sake of global governance reform.
Conclusion
The Ukraine crisis could be an occasion for the leaders of BRICS nations to commit themselves to the original goal of the bloc. It’s an opportunity they shouldn’t let go of.
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From UPSC perspective, the following things are important :
Prelims level: AFS
Mains level: Paper 3- Agreement on Fisheries Subsidies (AFS)
Context
The recently concluded twelfth ministerial conference of the World Trade Organisation (WTO) adopted the trade agreement called the Agreement on Fisheries Subsidies (AFS).
About the AFS
- WTO negotiations on fisheries subsidies were launched in 2001 at the Doha Ministerial Conference, with a mandate to “clarify and improve” existing WTO disciplines on fisheries subsidies.
- At the 2017 Buenos Aires Ministerial Conference (MC11), ministers decided on a work programme to conclude the negotiations by aiming to adopt, at the next Ministerial Conference, an agreement on fisheries subsidies which delivers on Sustainable Development Goal 14.6.
- The recently concluded twelfth ministerial conference of the World Trade Organisation (WTO) adopted a sustainability-driven trade agreement called the Agreement on Fisheries Subsidies (AFS).
Provisions adopted in the AFS
- Prohibits three subsidies: Fundamentally, AFS prohibits three kinds of subsidies:
- First, illegal, unreported, or unregulated (IUU) fishing.
- Second, fishing of already over-exploited stocks.
- Third, fishing on unregulated high seas.
- Two-year transition period for developing countries: As part of special and differential treatment (S&DT), developing countries like India have been given a two-year transition period for phasing out the first two kinds of subsidies within their Exclusive Economic Zone (EEZ).
- However, the final negotiated outcome, most crucially, lacks the much-needed discipline on subsidies for fishing in other members’ waters and those that contribute to overcapacity and over-fishing (OCOF).
- Limited AFS: WTO member countries agreed to a limited AFS sans regulations disciplining OCOF subsidies, which have been pushed to the future and are expected to be completed within four years.
- If negotiations fail, the AFS will stand terminated, as provided in Article 12.
- Meanwhile, all countries can continue providing most OCOF subsidies, that is, except for fishing on unregulated high seas.
What are the implications for India?
- Longer transition period required: India has been demanding that developing countries be given a longer transition period of 25 years to put an end to OCOF subsidies within their EEZ.
- Economic growth through ocean resources: Given its long coastline of nearly 7,500 kilometres, the blue economy — sustainable use of ocean resources for economic growth — occupies a cardinal place in India’s development trajectory.
- India has set a target of exporting marine products worth $14 billion by 2025.
- Policy space for marine infrastructure: India needs the policy space to invest in developing the marine infrastructure to harness the full potential of the blue economy.
- Livelihood concerns: Moreover, India needs to protect the livelihood concerns of close to four million marine farmers, the majority of whom are engaged in small-scale, artisanal fishing, which does not pose a great threat to sustainability.
- However, India’s demand for a longer transition period was not acceptable to many countries who insisted on this period being seven years
The disparity between Developed countries and Developing countries
- India rightly contends that WTO disciplines should not be developed in a manner that throttles its emerging sector while richer nations continue to negotiate exemptions for indefinite subsidisation and exclusion of horizontal, non-specific fuel subsidies in the text.
- Rich countries have historically provided massive subsidies to build capacity for large-scale fishing and fishing in distant waters, thereby contributing the most to depletion.
- India provided subsidies worth a mere $277 million in 2018, in sharp contrast to the top five subsidisers: China, EU, US, South Korea, and Japan, whose subsidies range from $7,261-$2,860 million respectively.
Way forward
- Comprehensive agreement: For the sake of sustainability, countries need to overcome their differences soon and forge a comprehensive agreement with the inclusion of meaningful S&DT, else they risk the indefinite continuation of harmful subsidies by all players.
- One balancing act could be to consider different ways to effectuate such flexibilities while accommodating the demands in a more targeted manner.
- Strengthening infrastructure: India could strengthen infrastructure and mechanisms to be able to utilise any future exemptions.
Conclusion
For India, the AFS is less-than-perfect, with a potential of no real outcome at the end of four years if the negotiations fail. But negotiations over the global commons are not easy.
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From UPSC perspective, the following things are important :
Prelims level: Anti-Defection Law
Mains level: Political turmoil in states and horse trading
The unfolding political crisis in Maharashtra has thrown the spotlight on the anti-defection law, and the roles of the Deputy Speaker and the Governor.
What is the news?
- Some legislators have aligned themselves with the party’s rebel leader and are camping in Guwahati.
- The party has warned its MLAs that their absence from the meeting would lead to the presumption they wanted to leave the political party.
- And this would therefore lead to action against them under the anti-defection law.
What is the Anti-Defection Law?
- The anti-defection law provides for the disqualification of MLAs who, after being elected on the ticket of a political party, “voluntarily give up their party membership”.
- The Supreme Court has interpreted the term broadly and ruled an MLA’s conduct can indicate whether they have left their party.
- The law is also applicable to independent MLAs.
- But the anti-defection law does not apply if the number of MLAs who leave a political party constitute two-thirds of the party’s strength in the legislature.
- These MLAs can merge with another party or become a separate group in the legislature.
How does the two-thirds rule work in the current situation in Maharashtra?
- Reports indicate that 30 MLAs are with rebel leader.
- Taking this number at face value means it does not reach the two-thirds (37) mark of the 55 MLAs the party has in the Maharashtra Assembly.
- Therefore, the protection under the anti-defection law would not be available to the rebel group.
What adds more to this high-stage political drama?
- It is the Assembly Speaker who decides whether an MLA has left a party or a group that constitutes two-thirds of a party.
- The position of the Speaker of the Maharashtra Assembly is, however, currently vacant.
- Article 180(1) of the Constitution states that the Deputy Speaker performs the Speaker’s duties when the office is vacant.
- Since then, the Deputy Speaker has been acting as the Speaker.
How would a decision be taken whether the anti-defection law applies in this case?
Under the current circumstances, two ways would lead to adjudication under the law.
(1) Approaching the acting Speaker to file defection petition
- First, any MLA of the Assembly can petition that certain MLAs have defected from their political party.
- Such a petition has to be accompanied by documentary evidence.
- The Deputy Speaker would then forward the petition to the MLAs against whom their colleagues are making the charge of defection.
- The MLAs would have seven days or such time that the Deputy Speaker decides is sufficient to enable them to put across their side of the story.
(2) Proving of two-third majority
- Rebel leader and MLAs supporting too can write to the Deputy Speaker with evidence claiming that they represent two-thirds of the strength and claim protection under the anti-defection law.
- In either case, Speakers will decide the matter after hearing all parties, which could take time.
How much time does it usually take? Why delay occurs?
- In recent years, one of the fastest decisions in a defection proceeding was delivered by Rajya Sabha Chairman Venkaiah Naidu.
- However in state legislatures, defection petitions have taken much longer.
- For example, in 2020, the Supreme Court used its extraordinary power to remove a Manipur minister from his position.
- But whether the Speaker decides quickly or takes time, the Speaker is usually challenged in court, which further delays the decision.
- Both Venkaiah Naidu and the Supreme Court have recommended that Speakers decide on defection cases in three months.
What is the Governor’s role?
(1) Declaration of Presidents Rule (NA)
- The Governor has a crucial role when there is political instability in a state.
- Before 1994, Governors were quick to dismiss a state government, charging that it did not have a majority in the state legislature and recommending the imposition of the President’s rule in the state.
- But the Supreme Court ended this practice with its judgment in the S R Bommai case in 1994.
(2) Holding Assembly
- In this landmark case, the court ruled that the place for deciding whether a government has lost its majority was in the legislature.
- Hence, Maharashtra Governor can ask Chief Minister to convene the Assembly and prove his majority on the floor of the House.
(3) Governors Discretion
- The CM can recommend to the Governor to dissolve the legislature before the end of its five-year term and call for elections under Article 174(2)(b).
- Here, the Governor’s discretion comes into play.
- The Governor may choose not to dissolve the legislature.
- This is when if he or she believes that the recommendation is coming from a council of ministers who do not enjoy the confidence of the state legislature.
Note: In 2020, the Supreme Court, in Shivraj Singh Chouhan & Ors versus Speaker, MP Legislative Assembly & Ors, upheld the powers of the Speaker to call for a floor test if there is a prima facie view that the government has lost its majority.
(4) Floor test
- Under Article 175(2), the Governor can summon the House and call for a floor test to prove whether the government has the numbers.
- In a detailed judgment, the Court also explained the scope of the power of the Governor and the law revolving around floor tests.
- When the House is in session, it is the Speaker who can call for a floor test.
- But when the Assembly is not in session, the Governor’s residuary powers under Article 163 allow him to call for a floor test.
Conclusion
- The spectacle of rival political parties whisking away their MLAs to safe destinations does little credit to the state of our democratic politics.
- It is an unfortunate reflection on the confidence which political parties hold in their own constituents and a reflection of what happens in the real world of politics.
- Political bargaining, or horse-trading, as we noticed, is now an oft repeated usage in legal precedents.
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From UPSC perspective, the following things are important :
Prelims level: G7, G12, G20
Mains level: G7
PM Modi will fly to the Germany as a special invitee to the meeting of G-7 countries.
Group of 7
- The G-7 or ‘Group of Seven’ includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
- It is an intergovernmental organisation that was formed in 1975 by the top economies of the time as an informal forum to discuss pressing world issues.
- Initially, it was formed as an effort by the US and its allies to discuss economic issues.
- The G-7 forum now discusses several challenges such as oil prices and many pressing issues such as financial crises, terrorism, arms control, and drug trafficking.
- It does not have a formal constitution or a fixed headquarters. The decisions taken by leaders during annual summits are non-binding.
- Canada joined the group in 1976, and the European Union began attending in 1977.
Evolution of the G-7
- When it started in 1975—with six members, Canada joining a year later—it represented about 70% of the world economy.
- And it was a cosy club for tackling issues such as the response to oil shocks.
- Now it accounts for about 40% of global GDP.
- Since the global financial crisis of 2007-09 it has sometimes been overshadowed by the broader G20.
- The G-7 became the G-8 in 1997 when Russia was invited to join.
Why was Russia expelled?
- The G-7 was known as the ‘G-8’ for several years after the original seven were joined by Russia in 1997.
- The Group returned to being called G-7 after Russia was expelled as a member in 2014 following the latter’s annexation of the Crimea region of Ukraine.
- Since his election in 2016, President Trump has suggested on several occasions that Russia be added again, given what he described as Moscow’s global strategic importance.
Why in news now?
- New Delhi is preparing for more pressure from the G-7 countries.
- These countries (Canada, France, Germany, Italy, Japan, the UK, the US and the EU) have unitedly imposed sanctions on Russia since it invaded Ukraine.
- They want India to cooperate in restricting its purchase of Russian oil, not circumvent the sanctions by using a rupee-rouble mechanism.
- It also wants India to lift the ban on the export of wheat.
Relevance of G7 for India
- India will get more voice, more influence and more power by entering the G7.
- After UN Security Council (UNSC), this is the most influential grouping.
- If the group is expanded it will collectively address certain humongous issues in the global order.
- Diplomatically, a seat at the high table could help New Delhi further its security and foreign policy interests, especially at the nuclear club and UNSC reforms.
- It will further protect its interests in the Indian Ocean.
Challenges for India’s entry
- The decision to expand the grouping cannot be taken by the US alone.
- There needs to be a consensus.
- However, a special invitation to India is no mean achievement.
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From UPSC perspective, the following things are important :
Prelims level: Santhal Tribe, Rebellion
Mains level: Tribal progress and successfull upliftement
The Santhal community is in the spotlight after a political alliance nominated one of its leaders for the Presidential election, Droupadi Murmu, for the election to the highest Constitutional post of India.
Santhal Tribe
- Santhal, also spelt as Santal, literally means a calm, peaceful man. Santha means calm, and ala means man in the Santhali (also spelt as Santali) language.
- Santhals are the third largest Scheduled Tribe community in India after Gonds and Bhils.
- The Santhali population is mostly distributed in Jharkhand, Odisha and West Bengal.
Historical background
- The Santhals were a nomadic stock before they chose to settle in the Chotanagpur plateau.
- By the end of the 18th century, they had concentrated in the Santhal Parganas of Jharkhand (earlier Bihar).
- From there, they migrated to Odisha and West Bengal.
Demographic details
- Tribal communities, outside the Northeast, generally have lower levels of literacy.
- But the Santhals have higher – a result of a pro-school education awareness since at least the 1960s – literacy rate compared to other tribes in Odisha, Jharkhand and West Bengal.
- Many of the community have entered the creamy layer of Indian society.
- For example, Jharkhand CM Hemant Soren is a Santhal.
- The incumbent Comptroller and Auditor General of India (CAGI) Girsh Chandra Murmu, who was the first Lt Governor of the UT of Jammu and Kashmir, is also a Santhal.
Cultural features of Santhals
(1) Religion
- Despite their social upliftment, the Santhals are usually connected to their roots.
- They are nature worshippers and could be seen paying obeisance at Jaher (sacred groves) in their villages.
- River Damodar holds a special place in the religious life cycle of a Santhal.
- When a Santhal dies, his or her ashes and bones are immersed in the Damodar for a peaceful afterlife.
- Their traditional dress includes dhoti and gamuchha for men and a short-check saree, usually blue and green, for women, who generally put on tattoos.
(2) Society
- Various forms of marriage are accepted in the Santhal society – including elopement, widow remarriage, levirate, forced (rare) and the one in which a man is made to marry the woman he has impregnated.
- Divorce is not a taboo in the Santhal society. Either of the couple could divorce the other.
(3) Artforms
- Santhals are fond of their folk song and dance that they perform at all community events and celebrations.
- They play musical instruments like kamak, dhol, sarangi and flutes.
- Most Santhals are agriculturists, depending on their farmlands or forests.
- Their homes, called Olah, have a particular three-colour pattern on the outer walls.
- The bottom portion is painted with black soil, the middle with white and the upper with red.
(4) Language
- Their tribal language is called Santhali, which is written in a script called Ol chiki, developed by Santhal scholar Pandit Raghunath Murmu.
- Santhali language belongs to the Munda group.
- Santhali written in OI-Chiki script is recognised as one of the scheduled languages in the Eighth Schedule to the Constitution.
Back2Basics: Santhal Rebellion
- The Santhal rebellion also known as Santhal Hool was a revolt by the Santhal in present-day Jharkhand, India, against the British East India Company and the Zamindari System.
- It began on June 30, 1855, and the East India Company declared martial law on November 10, 1855, which lasted until January 3, 1856, when martial law was lifted.
- The insurrection was put down by the Presidency soldiers.
- The four Murmu Brothers – Sidhu, Kanhu, Chand, and Bhairav – spearheaded the revolt.
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From UPSC perspective, the following things are important :
Prelims level: Bedti-Varada Interlinking Project
Mains level: River interlinking and associated issues
Environmental groups in Karnataka have criticised the project to link the Bedti and Varada rivers in Karnataka, calling it ‘unscientific’ and a ‘waste of public money’.
Bedti-Varada Interlinking Project
- The Bedti-Aghanashini-Varade river-linking project was also included in the country’s major rivers project devised by the then PM Vajpayee government.
- The Central Government had created a task force to prepare action plans for interlinking the riverbeds in 2002.
- The project cost and the source of investments were ascertained and suggested that the project be taken up in 2016.
Key details
- The Bedti-Varada project was envisaged in 1992 as one to supply drinking water by the then government.
- The plan aims to link the Bedti, a river flowing west into the Arabian Sea, with the Varada, a tributary of the Tungabhadra river, which flows into the Krishna, which in turn flows into the Bay of Bengal.
- A massive dam will be erected at Hirevadatti in Gadag district under the project. A second dam will be built on the Pattanahalla river at Menasagoda in Sirsi, Uttara Kannada district.
- Both dams will take water to the Varada via tunnels of length 6.3 kilometres and 2.2-km. The water will reach at a place called Kengre.
- It will then go down a 6.88 km tunnel to Hakkalumane, where it will join the Varada.
- The project thus envisages taking water from the water surplus Sirsi-Yellapura region of Uttara Kannada district to the arid Raichur, Gadag and Koppal districts.
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From UPSC perspective, the following things are important :
Prelims level: Keibul Lamjao National Park (KLNP)
Mains level: Not Much
Activists surrounding the Keibul Lamjao National Park (KLNP) in Manipur have now taken up the cudgels to ensure that the government does not shift the proposed heritage park from the approved site.
Keibul Lamjao National Park (KLNP)
- The KLNP is a national park in the Bishnupur district of the state of Manipur in India.
- It is 40 km2 in area, the only floating park in the world, located in North East India, and an integral part of Loktak Lake.
- The national park is characterized by floating decomposed plant material locally called Phumdi at the south–eastern side of the Loktak Lake, which has been declared a Ramsar site.
- It was created in 1966 as a wildlife sanctuary to preserve the natural habitat of the endangered Eld’s deer.
- In 1977, it was gazetted as national park.
Key faunas
- KLNP is home to the last of the brow-antlered deer (Rucervus eldii eldii), one of the most endangered deer in the world.
- It is locally called as Sangai.
- The animal is, in fact, in danger of losing its home—most of the phumdis, or floating swamps, are unable to sustain its weight.
- In 1951, it was reported extinct, but British tea planter and naturalist Edward Pritchard Gee rediscovered it in 1953.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- New phase of globalisation and challenges ahead
Context
After the go-go 1990s and 2000s the pace of economic integration stalled in the 2010s, as firms grappled with the aftershocks of a financial crisis, a populist revolt against open borders and President Donald Trump’s trade war.
Background of globalisation
- After the Berlin Wall fell in 1989, main theme of globalisation was efficiency.
- Companies located production where costs were lowest, while investors deployed capital where returns were highest.
- Governments aspired to treat firms equally, regardless of their nationality, and to strike trade deals with democracies and autocracies alike.
- Low prices: All this kept prices low for consumers and helped lift 1bn people out of extreme poverty as the emerging world, including China, industrialised.
Recent worries with globalisation
- Volatile capital flows destabilised financial markets. Many blue-collar workers in rich countries lost out.
- Recently, two other worries have loomed large.
- Cost in case of disruption is high: First, some lean supply chains are not as good value as they appear: mostly they keep costs low, but when they break, the bill can be crippling.
- Covid-19 was a shock, but wars, extreme weather or another virus could easily disrupt supply chains in the next decade.
- Dependencies on autocracies have increased: The second problem is that the single-minded pursuit of cost advantage has led to a dependency on autocracies that abuse human rights and use trade as a means of coercion.
- Hopes that economic integration would lead to reform—what the Germans call “change through trade”—have been dashed: autocracies account for a third of world gdp.
The fragile state of the international trade and beginning of new phase in globalisation
- The pandemic and war in Ukraine have triggered a once-in-a-generation reimagining of global capitalism in boardrooms and governments.
- Supply chain resilience: The supply chains are being transformed, from the $9trn in inventories, stockpiled as insurance against shortages and inflation, to the fight for workers as global firms shift from China into Vietnam.
- Preferring security over efficiency: This new kind of globalisation is about security, not efficiency: it prioritises doing business with people you can rely on, in countries your government is friendly with.
- One indication that companies are shifting from efficiency to resilience is the vast build-up in precautionary inventories: for the biggest 3,000 firms globally these have risen from 6% to 9% of world gdp since 2016.
- Many firms are adopting dual sourcing and longer-term contracts.
- Investment pattern is inverted: The pattern of multinational investment has been inverted: 69% is from local subsidiaries reinvesting locally, rather than parent firms sending capital across borders.
- Strategic autonomy: The industries under most pressure are already reinventing their business models, encouraged by governments that from Europe to India are keen on “strategic autonomy”.
- Moving towards vertical integration: The car industry is copying Elon Musk’s Tesla by moving towards vertical integration, in which you control everything from nickel mining to chip design.
- Long-term supply deals: In energy, the West is seeking long-term supply deals from allies rather than relying on spot markets dominated by rivals.
Challenges
- Protectionism: The danger is that a reasonable pursuit of security will morph into rampant protectionism, jobs schemes and hundreds of billions of dollars of industrial subsidies.
- Long-run inefficiencies: The long-run inefficiency from indiscriminately replicating supply chains would be enormous.
- Were you to duplicate a quarter of all multinational activity, the extra annual operating and financial costs involved could exceed 2% of world gdp.
Way forward
- Restraint: Because of the above challenges, restraint is crucial.
- Diversification: Governments and firms must remember that resilience comes from diversification, not concentration at home.
- Diversify in the areas controlled by autocracies: The choke-points autocracies control amount to only about a tenth of global trade, based on their exports of goods in which they have a leading market share of over 10% and for which it is hard to find substitutes.
- The answer is to require firms to diversify their suppliers in these areas, and let the market adapt.
Conclusion
Will today’s governments be up to the task? Myopia and insularity abound. But if you are a consumer of global goods and ideas—that is to say, a citizen of the world—you should hope globalisation’s next phase involves the maximum possible degree of openness.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 124
Mains level: Paper 2- Judicial reforms
Context
Following are the reforms needed in the various aspects of the higher judiciary
Removing the disparity between retirement ages of HC and SC judges
- High Court judges now retire at 62 and Supreme Court judges at 65.
- It is high time that we did away with the disparity between the retirement ages of High Court and Supreme Court judges.
- There is no good reason for this difference.
- Intense pressure and competition: The obvious negative fallout of a differential retirement age simply is intense pressure and competition to make it to the top court and thus get three more years.
- If this is done away with, several judges of mettle would prefer to be Chief Justices and senior judges in the High Courts exercising wide power of influence rather than being a junior judge on a Bench of the Supreme Court.
- There is good work to be done in the High Courts, and we need good men there.
Create a cadre of public service for retired judges
- SeveralSupreme Court judges focus on arbitrations after retirement.
- A minority of judges devote themselves to public service; sadly, this is a very small minority.
- Another lot are appointed to various constitutional posts and tribunals and commissions.
- It would be worthwhile reform to create a cadre of public service for retired judges and from this pool make appointments to the constitutional and statutory posts and special assignments.
- Such judges should receive the full pay and the facilities of a judge of the Supreme Court for life.
- We should have a culture of public service for senior judges, and those who do not fit in such culture should not be a part of senior ranks.
Reform in the process of appointment of Chief Justice of India
- No constitutional basis: It is generally assumed that the seniormost judge of the Supreme Court should be the Chief Justice of India.
- The Constitution mandates no such thing.
- Article 124 merely states that the President will appoint every judge of the Supreme Court, and this includes the Chief Justice, and each of these judges shall hold office until they attain the age of 65 years.
- The requirement about appointing the seniormost judge to be the CJI was devised in the Second Judges case (1993) and the consequent Memorandum of Procedure which is an usurpation of the President’s power.
- There is no good reason why any one particular person should have a vested interest in the top job, and we are better served by eliminating such expectation.
- Let all serve equally under the constitutional throne for the entire length of their tenure.
But who then shall be the CJI?
- As per the Constitution the judges of the High Court, senior advocates and distinguished jurists are eligible for the appointment as the judge of the Supreme Court.
- Chief Justice of HC: When a serving CJI retires, his successor should be the best reputed Chief Justice of a High Court who has proved himself worthy both in judicial office as well as administrative leadership and has those qualities of heart and head which mark a good leader.
- The same process is followed in the appointment of the Chief Justice of the United States Supreme Court.
- Security of tenure: The appointee should have a clear three-year term.
- He should not function as the primus super pares — calling the shots and having their unfettered way.
- He should instead function in a true collegiate manner, especially in regard to the roster of allotment of cases, especially the sensitive ones, and appointments to the Supreme Court and High Courts and other important matters of judicial and administrative importance.
Conclusion
Though there are several issues that need reforms in the higher judiciary, the above reforms can serve as the precursor to the other reforms to come.
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From UPSC perspective, the following things are important :
Prelims level: Exercise Talisman Sabre
Mains level: Paper 2- India-Australia relations
Context
India and Australia, which share common values and interests, must work together with resolve to shape the economic and strategic environment so that it continues to support collective security and prosperity.
India-Australia ties: A background
- The ties are a Comprehensive Strategic Partnership full of practical, tangible actions that strengthen ties and benefit the region.
- India and Australia are a small group of countries to hold annual leaders’ summits and biennial 2+2 talks involving foreign and defence ministers.
- The defence forces of both the countries are undertaking more complex activities together, such as in Exercise Malabar with the US and Japan.
- We coordinate closely on maritime domain awareness.
- This year both countries deployed P-8 surveillance aircraft to each other’s territories for joint patrols.
- Australia has also committed to a package of partnership initiatives in our update to the India Economic Strategy.
- Cooperation on climate and sustainability: India and Australia have great potential to cooperate on climate and sustainability.
Why India matters to Australia
- Securing supply chain: India’s economy, manufacturing capabilities and talent ensure it will play a key role in securing supply chains and restarting post-pandemic growth.
- Balance of power: Its military has the capacity and capability to respond to natural disasters, help stabilise an uncertain region and contribute to an effective balance of power.
- Technological and scientific capabilities: Its technological and scientific capabilities are gateways to a cleaner and more sustainable world.
- Commitment to democracy: Most of all, India’s people have the optimism, the commitment to democracy, the drive and the goodwill to make our region safer, freer and better.
Vision for open, inclusive and resilient Indo-Pacific region
- As the bilateral relationship deepens, both the countries must begin to work more together with others in the region.
- Responding to humanitarian crises and natural disasters: There is enormous potential in the Indian and Pacific oceans, where we each have vital interests in combating climate change, illegal fishing and people smuggling and responding to humanitarian crises and natural disasters.
- Australia has a vision for an open, inclusive and resilient Indo-Pacific region.
- It is a vision for a region that is more integrated rather than divided, where trade and investment flow freely based on agreed rules and treaty commitments, where disputes are resolved through dialogue in accordance with international law, and where a strategic culture that respects the rights of all states, big and small, prevails.
- It is a vision that Australia share with partners like ASEAN, and partners like India.
- Whether through joint activities with like-minded countries, or the support of regional and multilateral architecture, Australia is ensuring the region has options and balance.
Conclusion
India and Australia’s interests don’t just align, they are inextricably entwined. Expect this relationship to grow and prosper, our cooperation to deepen.
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From UPSC perspective, the following things are important :
Prelims level: Brahmaputra River
Mains level: Flood management
Disaster struck Dima Hasao, central Assam’s hill district, in mid-May after incessant heavy rainfall.
Impacts of the disaster
- The 170 km railway line connecting Lumding in the Brahmaputra Valley’s Hojai district and Badarpur in the Barak Valley’s Karimganj district was severely affected.
- The Assam government and Railway Ministry’s assessments said the district suffered a loss of more than ₹1,000 crore, but ecologists say the damage could be irreversibly higher.
How severe has the rain been in Assam?
- Assam is used to floods, sometimes even four times a year, resultant landslides and erosion.
- But the pre-monsoon showers this year have been particularly severe on Dima Hasao, one of three hill districts in the State.
- Landslips have claimed four lives and damaged roads.
- The impact has been most severe on the arterial railway, which was breached at 58 locations leaving the track hanging in several places.
- The disruption of train services, unlikely to be restored soon, has cut off the flood-hit Barak Valley, parts of Manipur, Mizoram and Tripura.
Why is the railway in focus post-disaster?
- Dima Hasao straddles the Barail, a tertiary mountain range between the Brahmaputra and Barak River basins.
- The district is on the Dauki fault (the prone-to-earthquakes geological fractures between two blocks of rocks) straddling Bangladesh and parts of the northeast.
- British engineers were said to have factored in the fragility of the hills to build the railway line over 16 years by 1899.
- The end result was an engineering marvel 221 km long over several bridges and through 37 tunnels, laid along the safer sections of the hills.
A faulty experiment
- A project to convert the metre gauge track to broad gauge was undertaken in 1996 but the work was completed only by March 2015 because of geotechnical constraints and extremist groups.
- The broad-gauge track was realigned to be straighter, but a 2009-10 audit report revealed that the project had been undertaken without proper planning and visualisation of the soil strata behaviour.
- The report gave the example of the disaster-prone Tunnel 10 on the realigned track that was pegged 8 meters below the bed of a nearby stream.
Is only the railway at fault?
- There is a general consensus that other factors have contributed to the situation Dima Hasao is in today.
- Roads in the district, specifically the four-lane Saurashtra-Silchar (largest Barak Valley town) East-West Corridor, have been realigned or deviated from the old ones that were planned around rivers and largely weathered the conditions.
- The arterial roads build over the past 20 years often cave in and get washed away by floods or blocked by landslides.
- Shortened cycles of jhum or shifting cultivation on the hill slopes and unregulated mining have accentuated the “man-made disaster”.
- Massive extraction of river stone, illegal mining of coal and smuggling of forest timbe has led to the disaster.
- These activities have increased water current besides weakening either side of riverbanks.
How vital are the rail and highway through Dima Hasao?
- Meghalaya aside, Dima Hasao is the geographical link to a vast region comprising southern Assam’s Barak Valley, parts of Manipur, Mizoram and Tripura.
- Moreover, this track is vital for India’s Look East policy that envisages shipping goods to and from Bangladesh’s Chittagong port via Tripura’s border points at Akhaura and Sabroom.
- These are the last railway station near the Feni River that serves as the India-Bangladesh border.
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From UPSC perspective, the following things are important :
Prelims level: BSF
Mains level: BSF role in securing India's frontiers
A blueprint that defines the extended jurisdiction of the Border Security Force (BSF) and its new logistical requirements in frontier States has been prepared and is soon expected to be submitted to the Union Home Ministry.
What is the news?
- While in Punjab, West Bengal and Assam, the BSF jurisdiction, from the border towards the hinterland, was enhanced from the earlier 15 km to 50 km.
- In Gujarat the same limit has been reduced from 80 km to 50 km, while in Rajasthan the limit has been kept unchanged at 50 km.
Do you know?
BSF currently stands as the world’s largest border guarding force. It has been termed as the First Line of Defence of Indian Territories.
About Border Security Force (BSF)
- The BSF is India’s border guarding organization on its border with Pakistan and Bangladesh.
- It comes under the Ministry of Home Affairs.
- It was raised in the wake of the 1965 War on 1 December 1965 for ensuring the security of the borders of India and for matters connected therewith.
- The BSF has its own cadre of officers but its head, designated as a Director-General (DG), since its raising has been an officer from the Indian Police Service (IPS).
What are the new modifications?
- The MHA has exercised the powers under the Border Security Force Act of 1968.
- It has thus outlined the area of BSF’s jurisdiction.
Powers exercised by BSF in its jurisdiction
BSFs jurisdiction has been extended only in respect of the powers it enjoys under:
- Criminal Procedure Code (CrPC)
- Passport (Entry into India) Act, 1920 and
- Passport Act, 1967
Arrest and search
- BSF currently has powers to arrest and search under these laws.
- It also has powers to arrest, search and seize under the NDPS Act, Arms Act, Customs Act and certain other laws.
Sanctions behind such powers
- Scarcely populated borders: At that time, border areas were sparsely populated and there were hardly any police stations for miles.
- Trans-border crimes: To prevent trans-border crimes, it was felt necessary that BSF is given powers to arrest.
- Manpower crunch: While police stations have now come up near the border, they continue to be short-staffed.
Various issues at Borders
- Encroachment
- Illegal incursion
- Drug and cattle smuggling
Impact on State Police jurisdiction
- Such moves are aimed to complement the efforts of the local police.
- Thus, it is an enabling provision.
- It’s not that the local police can’t act within the jurisdiction of the BSF.
- The state police have better knowledge of the ground.
- Hence BSF and local Police can act in cooperation.
Criticism of the move
- At a basic level, the states can argue that law and order is a state subject and enhancing BSF’s jurisdiction infringes upon powers of the state government.
- In 2012, then Gujarat CM and the present PM had opposed a central government moves to expand BSF’s jurisdiction.
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From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Read the attached story
A public interest litigation (PIL) seeking to invalidate Talaq-e-Hasan, the prescribed Islamic way of divorce, has been filed in the Supreme Court.
What is the PIL about?
- The petition seeks to make the prescribed Islamic way of divorce Talaq-e-Hasan unconstitutional as it is violative of Articles 14, 15, 21 and 25 of the Constitution.
- The petitioner has been unilaterally divorced through the Talaq-e-Hasan mode by her husband.
- She also prayed that Section 2 of the Muslim Personal Law (Shariat) Application Act, 1937 that permits Muslims to practise unilateral divorce be declared void.
Basis of the PIL
- The hearing comes almost five years after the five judge Bench headed by then CJI J.S. Khehar invalidated instant triple talaq in their verdict in the Shayara Bano vs the Union of India Case.
- The invalidation of instant triple talaq where the court held, “What is bad in theology is bad in law as well”, led to the enactment of the Muslim Women (Protection of Rights on Marriage) Act 2019.
What is Triple Talaq?
- In instant triple talaq a man pronounces multiple divorce in one go.
- It has no scope for reconciliation between the feuding couple, and often ends a marriage instantly.
- It is, as the judges held, not mentioned anywhere in the Quran which prescribes a code of divorce largely through Surah Baqarah, verses 226 to 237 and the opening six verses of Surah Talaq.
- Incidentally, triple talaq in this manner has been banned in many Muslim countries, including Egypt, Pakistan, Jordan, Kuwait, Iraq, Malaysia etc.
How is Talaq-e-Hasan different from instant triple talaq?
- Unlike instant triple talaq, Talaq-e-Hasan is pronounced with a gap of at least one month or one menstrual cycle.
- Only a single revocable divorce takes place through the first pronouncement of Talaq-e-Hasan.
- The husband and wife are supposed to live together after this pronouncement and have the option of rapprochement.
- If the couple is not able to mend fences in the intervening period and the husband does not annul divorce through word or by establishing intimacy, the talaq stays valid.
- At the end of this month, the husband has to pronounce divorce for the second time.
- Likewise for the third time. After the second pronouncement too, the divorce is revocable, and the couple may resume their conjugal relationship anytime they so desire.
- If, however, the third pronouncement is made after at least one menstrual cycle, then irrevocable divorce takes place.
Why such hue over menstrual cycle?
- Significantly, no divorce can be administered when the woman is undergoing her menstrual cycle.
- Even in the case of pregnancy, no divorce takes place.
- And if such a pronouncement is made, it remains in abeyance till the end of pregnancy.
Are there other options of divorce apart from the Talaq-e-Hasan?
- The third option of divorce besides Talaq-e-Hasan and the now repudiated instant triple talaq, is Talaq-e-Ahsan.
- Under this form, a single pronouncement is made.
- Following the pronouncement, a woman has to go through iddat or a waiting period of three months.
- During this period the divorce can be cancelled.
- However, failure to annul divorce during this period results in it being finalised after which a woman is independent, and free to marry another man or stay single, as she may choose.
- Both Talaq-e-Hasan and Talaq-e-Ahsan enjoy legal validity in almost all Muslim countries.
- Interestingly, women too have a right to end an unsuccessful marriage through Khula.
Legal status of Khula in India
- In April 2021, the Kerala High Court held this form of divorce valid.
- The court overruled a 49-year-old verdict in K.C. Moyin vs Nafeesa and Others (1972) that barred Muslim women from dissolving their marriage through non-judicial modes.
- There is some debate among religious scholars on the ways of Khula.
- Some hold that the man’s consent is necessary in Khula while most say that he enjoys no such privilege.
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From UPSC perspective, the following things are important :
Prelims level: Summer Solstice
Mains level: NA
Yesterday, June 21 was the day of the summer solstice in the northern hemisphere.
What is Summer Solstice?
- Solstice means “sun stands still” in Latin.
- The longest day of 2021 for those living north of the Equator is June 21.
- This day is characterized by a greater amount of energy received from the sun.
- In technical terms, this day is referred to as the summer solstice, the longest day of the summer season.
- It occurs when the sun is directly over the Tropic of Cancer, or more specifically right over 23.5-degree north latitude.
The Southern Hemisphere receives most sunlight on December 21, 22 or 23 when the northern hemisphere has its longest nights– or the winter solstice.
Why do we have summer solstice?
- Since Earth rotates on its axis, the Northern Hemisphere gets more direct sunlight between March and September over the course of a day.
- This also means people living in the Northern Hemisphere experience summer during this time.
- The rest of the year, the Southern Hemisphere gets more sunlight.
- During the solstice, the Earth’s axis — around which the planet spins, completing one turn each day — is tilted in a way that the North Pole is tipped towards the sun and the South Pole is away from it.
Answer this PYQ in the comment box:
Q.On 21st June, the Sun (CSP 2019):
(a) Does not set below the horizon at the Arctic Circle
(b) Does not set below the horizon at Antarctic Circle
(c) Shines vertically overhead at noon on the Equator
(d) Shines vertically overhead at the Tropic of Capricorn
Post your answers here.
Some interesting facts
- During the June solstice compared to any other time of the year, the North Pole is tipped more directly toward the sun, and the south pole is tipped more directly away from the sun.
- As a result, all locations north of the equator see days longer than 12 hours and all locations south see days shorter than 12 hours.
- The sun’s path across the sky is curved—NOT a straight line on the summer solstice.
- Based on Earth’s current orbit, the summer solstice date rotates between June 20, 21 and 22 and is not fixed since it depends on the physics of our solar system and not on human calendar.
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From UPSC perspective, the following things are important :
Prelims level: Strait of Hormuz
Mains level: Global strategic flashpoints
A US Navy warship fired a warning flare to wave off an Iranian speedboat coming straight at it during a tense encounter in the strategic Strait of Hormuz.
Why in news?
- The Strait of Hormuz, a narrow waterway in the Middle East marks the most sensitive transportation choke point for global oil supplies.
Strait of Hormuz
- The Strait of Hormuz is a narrow channel, approximately 30 miles wide at the narrowest point, between the Omani Musandam Peninsula and Iran.
- It connects the Persian Gulf to the Gulf of Oman.
- The Strait is deep and relatively free of maritime hazards.
- Its depth is greatest near the Musandam Peninsula and tapers as you move north toward the Iranian shore.
Why is it important?
- Oil tankers carrying crude from ports on the Persian Gulf must pass through the strait.
- Around 21 million barrels of oil a day flowed through it in 2018, equivalent to roughly a third of global seaborne oil trade and about 21% of global petroleum liquids consumption.
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From UPSC perspective, the following things are important :
Prelims level: GSAP
Mains level: Paper 3- Communication gap between MPC and RBI
Context
Communication is a critical element of monetary policy. Yet there seems to be a gap between what the MPC says and what the RBI does.
About MPC
- The Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016, to provide for a statutory and institutionalised framework for a Monetary Policy Committee, for maintaining price stability, while keeping in mind the objective of growth.
- Highest monetary policy-making body: By law, the Monetary Policy Committee is the highest monetary policy-making body in the land, tasked with deciding monetary policy changes at regular intervals.
- Composition: The MPC will have six members – the RBI Governor (Chairperson), the RBI Deputy Governor in charge of monetary policy, one official nominated by the RBI Board and the remaining three members would represent the Government of India.
- The MPC will be chaired by the Governor.
- Under the inflation targeting regime, the most important role in communication belongs to the MPC.
Communication with public
- Monetary policy changes are communicated through formal statements, with the discussions underlying these decisions also being published, so that the public can understand why the MPC decided the way that they did.
- Communication gap: Over the past few years, a communication gap seems to have opened up between what the MPC has been saying and what the RBI has been doing, thereby potentially eroding the credibility of the IT framework.
- Influencing inflation expectations: Communication is an important part of the ability of the central bank to influence inflation expectations.
Following are the ways which indicate the communication gap between the RBI and the MPC, with several implications for the credibility of the MPC.
1] Separate statements
- During the first few years of the inflation-targeting regime from 2016 to 2018, the process of communication worked quite well.
- On the days of policy announcements, the governor and his deputies would participate in a press conference.
- From 2019 onwards, however, things began to change.
- Governor’s separate statement: The RBI began to release a separate governor’s statement on the day of the monetary policy meeting, presenting an inflation outlook and even explaining the decision taken by the MPC.
- MPC statement: It has overlapped with the MPC statement; at times, it has seemed somewhat different.
- For example, following the June 8 Monetary Policy Review the MPC highlighted inflation concerns, and voted in favour of raising the policy repo rate.
- On the same day, a governor’s statement mentioned that the central bank will also remain focussed on the orderly completion of the government’s borrowing programme.
- Confusion: The issuance of two such different statements can lead to confusion, especially as lowering inflation and lowering government bond yields are contradictory policy objectives.
Why is communication so crucial? To influence inflation expectations!
- If the public believes the central bank is committed to keeping inflation under control, then it will act accordingly.
- Firms will moderate their price increases, fearing that large price rises will make them uncompetitive.
- Meanwhile, workers will accept moderate wage increases, while investors will accept low interest rates on their bond purchases.
- With everyone acting in this way, it will be easier for the central bank to ensure that inflation indeed remains low.
- Anchored inflation expectations: If inflation expectations are well anchored, then it becomes relatively easy for the central bank to ensure that inflation returns to the target level before too long.
2] Change in the Monetary Policy Corridor width during pandemic
- Deciding the repo rate: The most important task of the MPC, enshrined in the RBI Act (Amended), 2016 that introduced IT, is to decide the repo rate, since this has long been the lynchpin of India’s monetary policy framework.
- Ever since the early 2000s, policy had aimed to keep overnight money market rates in a corridor, with the lower bound established by the reverse repo rate and the upper bound by the repo rate.
- Since the width of this corridor was fixed, once the repo rate was decided, the reverse repo rate was automatically determined, and market overnight rates adjusted accordingly.
- During the Covid-19 pandemic, the RBI constantly adjusted the reverse repo rate even as the MPC kept the repo rate unchanged.
- As a result, the fixed width of the corridor was lost, and the MPC lost any role in determining interest rates.
3] Introduction of policy instruments outside the remit of MPC
- During pandemic, the RBI introduced a number of new policy instruments, again outside the remit of the MPC.
- GSAP: It brought in the GSAP programme through which it pre-commited to buying a certain amount of dated government bonds in order to control their yields.
- Variable reverse repo auctions: It then introduced variable reverse repo auctions, and more recently, replaced the reverse repo rate with the long-dormant standing deposit facility rate.
- The rationale for this was not explained in the MPC statement.
- All unconventional monetary policy announcements were kept outside the MPC statement.
- This raised the questions about the role of the committee in deciding monetary policy actions at a crucial time like the pandemic.
4] Intervention in the foreign exchange market
- The RBI has been intervening in the foreign exchange market to manage the rupee.
- Forex interventions by definition influence the domestic monetary base and inflation.
- Yet the MPC in its monetary policy statements does not discuss either the exchange rate dynamics or the forex interventions.
- Just as it does not discuss the RBI’s interventions in the bond market to lower the yields.
Way forward
- In its latest two statements, the MPC indicated that policy would now be focusing on bringing India’s inflation rate under control.
- Clear policy framework: If the RBI is going to be successful in this endeavour, the first step must be to close the communication gap, by reintroducing a simple and clear policy framework and restoring the central role of the MPC.
Conclusion
The net result of all these actions is a potential loss of both clarity and credibility. The communication gap will need to be closed in order for the RBI to become successful in bringing inflation back to its 4 per cent target level.
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Back2Basics: Monetary Policy Corridor
- The Corridor in the monetary policy of the RBI refers to the area between the reverse repo rate and the MSF rate.
- Reverse repo rate will be the lowest of the policy rates whereas Marginal Standing Facility is something like an upper ceiling with a higher rate than the repo rate.
- The MSF rate and reverse repo rate determine the corridor for the daily movement in the weighted average call money rate.
- As per the monetary policy of the RBI, ideally, the call rate should travel within the corridor showing a comfortable liquidity situation in the financial system and economy.
What is GSAP?
- The G-Sec Acquisition Programme (G-SAP) is basically an unconditional and a structured Open Market Operation (OMO), of a much larger scale and size.
- G-SAP is an OMO with a ‘distinct character’.
- The word ‘unconditional’ here connotes that RBI has committed upfront that it will buy G-Secs irrespective of the market sentiment.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-Sri Lanka relations and challenges
Context
The commonality between Sri Lanka and the southern parts of India remains a less-emphasised yet significant aspect of India-Sri Lanka relations.
Crisis in Sri Lanka and relief provided by India
- The present economic crisis in Sri Lanka has pushed it closer to India for immediate relief.
- India, as part of its ‘Neighbourhood First’ policy, has extended support to the people of Sri Lanka in the form of aid (close to $3.5 billion) to help secure Sri Lanka’s food, health and energy security by supplying it essential items such as food, medicines, fuel and kerosene.
- The latest in the series was the signing of an agreement on June 10 between the Government of Sri Lanka and the Export-Import Bank of India for a $55-million short term Line of Credit to facilitate the procurement of urea for paddy crop in the ongoing ‘Yala’ season.
- On its part, Tamil Nadu decided to provide aid of ₹123 crore, comprising 40,000 tonnes of rice, 137 types of life-saving drugs and 500 tonnes of milk powder.
Sri Lanka-India sub-regional context
- During his second term as Prime Minister, Mr. Wickremesinghe while delivering a lecture in Chennai, in August 2003, called for the development of the south India-Sri Lanka sub-region as a single market.
- Such a market would provide more opportunities for the economic growth of both countries.
- In 2016 he highlighted the fact that the five Indian southern States, with a total population of 250 million, had a combined gross state domestic product of nearly $450 billion; with the addition of Sri Lanka’s $80 billion GDP, the sub-region would have a $500 billion economy, having an aggregate population of around 270 million.
Challenges
- Possibility of greater economic collaboration: Whether this bonhomie can lead to greater economic collaboration between Sri Lanka and south India, not necessarily Tamil Nadu alone, given the historical baggage, is anybody’s guess.
- Baggage of history: Some sections of the Sinhalese still hold the view that India had been a threat to Sri Lanka and it can still be a threat to them.
- The manner in which the Rajapaksa regime unilaterally scrapped in February 2021 a tripartite agreement signed in 2019 with India and Japan for the development of Colombo’s East Container Terminal was a reflection of the historical baggage.
- This perception can be traced to history when Sri Lanka was invaded by rulers of south India who humbled the Sinhala kings.
- In the aftermath of the 1983 anti-Tamil pogrom, the support provided by the Indian government to Tamil rebels only strengthened this perception.
- Modest investment in Sri Lanka’s development: Despite India’s open willingness to take part in the development of Sri Lanka after the civil war, the scale of its involvement has been modest.
- Incomplete projects due to lack of political will: After the cancellation of the tripartite agreement, India was later provided with projects such as the West Container Terminal, the Trincomalee oil tank farm and a couple of renewable projects, there were several proposals that envisaged India’s participation but did not see the light of day.
- Another project, a collaboration between NTPC Limited and the Ceylon Electricity Board, was cancelled.
- Other projects too such as the development of the Kankesanthurai harbour and the expansion of the Palaly airport in Jaffna, both envisaging Indian participation, would have become a reality had there been show of political will from the other side.
- The project of building a sea bridge and tunnel, connecting Rameshwaram to Talaimannar, remains on paper.
Way forward
- Infrastructure development: Even now, there is enormous scope for collaboration between the two countries in the area of infrastructure development.
- Cross-border energy trade: The economic crisis has revived talk of linking Sri Lanka’s electricity grid with that of India.
- If this project takes off, the first point of interconnectivity on the Indian side will most likely be in Tamil Nadu.
- India has cross-border energy trade with Bangladesh, Nepal, Bhutan and Myanmar.
- Facilitating people-to-people interaction: The apprehension in the minds of sections of the Sinhalese majority about India being a threat can be dispelled only by facilitating greater people-to-people interaction, including pilgrimages by monks and other sections of Sri Lankan society to places of Buddhist importance not only in north India but also in the south (Andhra Pradesh).
Conclusion
Much more will have to be done but the opportunity created by the current circumstances should be utilised to bring Indian and Sri Lankan societies closer — a prerequisite to achieving an economic union between Sri Lanka and the southern States of India.
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