Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 340
Mains level: Subcategorization within OBCs
The Union Cabinet has approved of the term of the Commission constituted under Article 340 of the Constitution to examine the issue of Sub-categorization within Other Backward Classes (OBCs) in the Central List.
What is the Sub-categorization of OBCs?
- OBCs are granted 27% reservation in jobs and education under the central government.
- In September 20202, a Constitution Bench of the Supreme Court reopened the legal debate on the sub-categorization of SCs and STs for reservations.
- The debate arises out of the perception that only a few affluent communities among over 2,600 included in the Central List of OBCs have secured a major part of this 27% reservation.
Need for sub-categorization
- The argument for sub-categorization — or creating categories within OBCs for reservation — is that it would ensure “equitable distribution” of representation among all OBC communities.
- To examine this, the Rohini Commission was constituted on October 2, 2017.
- At that time, it was given 12 weeks to submit its report but has been given several extensions since, the latest one being the 10th.
- Before the Rohini Commission was set up, the Centre had granted constitutional status to the National Commission for Backward Classes (NCBC).
Why so many extensions are being given?
- In process of preparing the sub-categorized central list of OBCs, the Commission has noted several ambiguities in the list as it stands now.
- The Commission is of the opinion that these have to be clarified/rectified before the sub-categorised central list is prepared.
- A hurdle for the Commission has been the absence of data for the population of various communities to compare with their representation in jobs and admissions.
- Many groups of OBCs have been demanding enumeration of OBCs in the Census.
Back2Basics: Article 340
- Article 340 of the Indian Constitution lays down conditions for the appointment of a Commission to investigate the conditions of the backward classes.
- The President may by order appoint a Commission consisting of such persons as he thinks fit to investigate the conditions of socially and educationally backward classes within the territory of India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Gram Nyayalayas Scheme
Mains level: Not Much
The Union Cabinet has approved the continuation of the Centrally Sponsored Scheme (CSS) for the Development of Infrastructure Facilities for Judiciary. It also approved the decision to support the Gram Nyayalayas by proving recurring and non-recurring grants for a period of 5 years with a total outlay of Rs 50 crores.
About the Scheme
- A Centrally Sponsored Scheme (CSS) for Development of Infrastructure Facilities for Judiciary has been in operation since 1993-94.
- Adequacy of judicial infrastructure is critical for the reduction of pendency and backlog of cases in Courts.
- The primary responsibility of infrastructure development for the subordinate judiciary rests with the State Governments.
- The present proposal provides for additional activities like the construction of lawyer halls, toilets complexes and digital computer rooms.
- This will add to the convenience of lawyers and litigants besides reducing the digital divide.
Why such a move?
- Adequacy of judicial infrastructure is critical for the reduction of pendency and backlog of cases in Courts.
- Several courts are still functioning in rented premises with insufficient space and some in dilapidated conditions without basic amenities.
- Well-equipped judicial infrastructure facilitates the administration of justice in a manner that allows easy access and timely delivery of justice to all.
What is Gram Nyayalayas Scheme?
- Gram Nyayalayas were established for speedy and easy access to the justice system in the rural areas across the country.
- The Gram Nyayalayas Act came into force on October 2, 2009.
- In terms of Section 3(1) of the Act, it is for the State Governments to establish Gram Nyayalayas in consultation with the respective High Courts.
- The Act authorizes Gram Nyayalaya to hold a mobile court outside its headquarters.
- Some major reasons behind the non-enforcement include financial constraints, the reluctance of lawyers, police and other government officials.
Features of the Gram Nyayalayas
- Gram Nyayalaya is established generally at headquarter of every Panchayat at the intermediate level or a group of contiguous panchayat in a district where there is no panchayat at an intermediate level.
- The Gram Nyayalayas are presided over by a Nyayadhikari, who will have the same power, enjoy the same salary and benefits of a Judicial Magistrate of First Class.
- Such Nyayadhikari is to be appointed by the State Government in consultation with the respective High Court.
Jurisdiction
- A Gram Nyayalaya have jurisdiction over an area specified by a notification by the State Government in consultation with the respective High Court.
- The Court can function as a mobile court at any place within the jurisdiction of such Gram Nyayalaya, after giving wide publicity to that regard.
- The Gram Nyayalayas have both civil and criminal jurisdiction over the offences and nature of suits specified in the First, Second and Third schedule of the Act.
- The pecuniary jurisdiction of the Nyayalayas are fixed by the respective High Courts.
- Appeals in criminal matter can be made to the Sessions Court in the respective jurisdiction and in civil matters to the District Court within a period of one month from the date of judgment.
Trials
- Gram Nyayalayas can follow special procedures in civil matters, in a manner it deem just and reasonable in the interest of justice.
- Civil suits are proceeded on a day-to-day basis, with limited adjournments and are to be disposed of within a period of six months from the date of institution of the suit.
- In execution of a decree, the Court can allow special procedures following rules of natural justice.
- Gram Nyayalayas allow for conciliation of the dispute and settlement of the same in the first instance.
- They have been given the power to accept certain evidence which would otherwise not be acceptable under the Indian Evidence Act.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Purchasing Managers' Index
Mains level: Paper 3- Need for focus on supply side
Context
But the quest for sustained higher growth has been elusive for India for the last five years. The pandemic seems to make it more elusive.
The magnitude of contraction in the economy
- There is nothing encouraging in the provisional estimates of annual national income (2020-21), released by the National Statistical Office.
- The agriculture sector continued its impressive growth performance, reiterating that it still remains as the vital sector of the economy, especially at times of crisis.
- The manufacturing sector continued its subdued growth performance, failing to emerge as the growth driver.
- The contraction in trade (-18.2%), construction (-8.6%), mining (-8.5%) and manufacturing (-7.2%) is a matter of concern as these sectors account for the bulk of low-skilled jobs.
- Gross Domestic Product (GDP) at Constant (2011-12) Prices in Q4 of 2020-21 is showing a growth of 1.6%.
- The magnitude of contraction in the economy and the policy responses towards it raises an important issue of growth prospects for the next year.
Contextualising the current growth rates in terms of following three macroeconomic data would provide us a better perspective on growth recovery.
1) Rising unemployment
- The unemployment data released by the Centre for Monitoring Indian Economy (CMIE) says, that in May 2021, India’s labour participation rate at 40 per cent was the same as it was in April 2021.
- But, the unemployment rate shot up to 11.9 per cent from 8 per cent in April.
- A stable labour participation rate combined with a higher unemployment rate implies a loss of jobs and a fall in the employment rate.
- The employment rate fell to 35.3 per cent in May 2021 from 36.8 per cent in April 2021.
- According to CMIE, over 15 million jobs were lost in May 2021.
- May 2021 was therefore a particularly stressful month on the jobs front.
Takeaway
- Employment and aggregate demand in an economy are related via the channel of disposable incomes of workers.
- Aggregate demand and output growth have a positive correlation.
- Hence, the prospects of growth revival in the next year look bleak at the moment and from employment perspective.
2) Low business confidence
- It is the second important data point that needs to examined.
- Business confidence index (BCI), from the survey by the industry body FICCI, plummeted to 51.5 from 74.2 in the previous round.
- The survey also highlights the weak demand conditions in the economy.
- Compounding this is the uncertainty arising out of the imposition of localised curbs due to the second wave of infections and a muddled vaccine policy in the country.
3) Low PMI
- Manufacturing Purchasing Managers’ Index (PMI) has slipped to a 10-month low indicating that the manufacturing sector is showing signs of strain with growth projections being revised lower.
- Both BCI and PMI slipping down indicates that the overall optimism towards 2021-22 is low, which could impact investments and cause further job losses.
Why focusing on supply-side will not work
- Since last year, the policy responses have been to rely on credit easing, focusing more on supply side measures.
- This policy stance is unlikely to prop up growth for three reasons.
- First, the bulk of the policy measures, including the most recent, are supply side measures and not on the demand side.
- Second, large parts of all the stimulus packages announced till now would work only in the medium term.
- Third, the use of credit backstops as the main plank of policy has limits compared to any direct measure on the demand side as this could result in poor growth performance if private investments do not pick up.
- Further, the credit easing approach would take a longer time to multiply incomes as lending involves a lender’s discretion and borrower’s obligation.
Way forward
- Growth recovery depends on demand recovery.
- The combined increase in exports of April and May 2021 is over 12% indicating that global demand rebound is much faster than the domestic demand.
- What needs to be addressed immediately is the crisis of low domestic demand.
- A tight-fisted fiscal policy approach comes at a time when conventional fiscal stimulus packages might not be enough as supply side issues arising out of episodic lockdowns need to be addressed simultaneously.
- Focusing on short-term magnified growth rates resting on low bases might be erroneous, as income levels matter more than growth rates at this juncture.
Conclusion
India needs a sharp revival of demand for which higher per capita incomes are necessary.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Federal structure
Mains level: Paper 2- Challenges to India's federalism
Context
In 2026, there will be the challenge of addressing the conflict between the democratic principles and the federal principles, when there will be a reallocation of Lok Sabha seats. India needs to reimagine the current federal compact to address the challenges to federalism.
Population freeze for Lok Sabha seats
- Since 1976, seats in the Lok Sabha have reflected the 1971 census and have not taken into account changes in the population.
- The primary reason for this has been unequal population growth among States.
- India’s most highly developed and prosperous States have been successful at family planning, while the poorer States continue to expand.
- The freeze was thus a chance to ensure that India’s most successful States are not punished politically for their success.
- Therefore, the Indian Constitution may face an unprecedented crisis in 2026 when there will be a dramatic change in the composition of the Lok Sabha.
Challenge of balancing the principle of democracy and federalism
- As Article 1 of the Indian Constitution says, India is a Union of States.
- However, the history of the linguistic reorganisation of States in 1956, and subsequent movements for Statehood afterwards demonstrates that States are distinct associative communities, within the federal structure of the Indian Union.
- In a democratic set-up, all citizens are equal and are thus entitled to equal representation in governance.
- But this would imply that bigger States are likely to dominate the national conversation over smaller States.
- This leads us to an inherent contradiction between the principles of democracy and federalism when federal units are unequal in size, population and economics.
- The small States fear that they would get a smaller share of the pie economically, a much reduced say in national issues, and be irrelevant in the political governance of the country.
How the US Constitution addresses the concerns of small states
- When the Americans adopted their Constitution, they protected smaller States in four ways.
- First, national powers over the States were limited.
- Second, each State regardless of size had two seats in the Senate, giving smaller States an outsized role in national governance.
- Third, Presidents are elected by electoral votes, which means they must win States rather than the total national population.
- Fourth, the slave-owning states were allowed to count the slaves for purposes of representation, with each slave being counted as three-fifths of a person.
- This essential structure remains the bedrock of the American Constitution today.
How Indian Constitution deals with the issue?
- India’s quasi-federal structure has always been sui generis.
- Our founders knew that India’s diversity made federalism inevitable, but, fearing separatist tendencies among States that had never been a single political unit, they also created a strong centre.
- However, the 1956 reorganisation of States on linguistic lines was a popular recognition of federal principles and yet did not result in separatist tendencies.
- Since then, new States within the Union have been created in response to the demands of people for greater autonomy.
Way forward on addressing the challenges to federalism
- There is an urgent need to reimagine our national compact.
- Following are the components of such a new balance that need to be fine-tuned to Indian realities.
- Give more powers to States: The powers of States vis-à-vis the Centre contained in the Lists and in the provisions dealing with altering boundaries of States must be increased to assuage the fear of smaller States that they will be dominated by bigger ones.
- More localised decision-making is bound to increase national prosperity.
- Indeed, this was the entire goal of the creation of Panchayat governance through the 73rd and 74th Amendments to the Constitution.
- Expand the role of Rajya Sabha: The role and composition of the Rajya Sabha, our House of States, must be expanded.
- This would allow smaller States a kind of brake over national majoritarian politics that adversely impact them.
- Consent of all states on financial redistribution: Constitutional change and the change in financial redistribution between the States must require the consent of all or nearly all States.
- Constitutional provisions dealing with language and religion must also be inviolate.
- Break the bigger States: Serious thought must be given to breaking up the biggest States into smaller units that will not by themselves dominate the national conversation.
Conclusion
The unity of India is, of course, the fundamental premise underlying this discussion; but this unity does not depend on an overbearing Centre for its survival.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Independent director
Mains level: Paper 3- Dual approval system for independent directors
Context
While the regulators have taken giant strides to enhance board independence in India, one significant conundrum persists about appoint and removal process of the independent directors.
How appointment and removal process affects the independence of independent directors?
- Independent directors are appointed just like other directors through shareholder voting by a simple majority.
- This confers a significant power in the hands of significant shareholders to handpick the independents.
- In case of family-owned companies, it is not uncommon to appoint “friendly” independent directors.
- As for public sector undertakings, there is a demonstrable affiliation between independent directors and the ruling political parties.
Dual Approval System: Way forward
- The above trends suggest that unless independent directors owe their allegiance to the shareholder body as a whole, independence is likely to remain largely in form and not function.
- In its consultation paper, SEBI proposed a “dual approval” system.
- Under this system, the appointment of an independent director required the satisfaction of two conditions:
- First, the approval by a majority of all shareholders.
- Second, the approval of a “majority of the minority”, namely the approval of shareholders other than the promoters.
- SEBI recommended the same “dual approval” system for the removal of independent directors as well.
- SEBI drew inspiration from Israel and the premium-listed segment of the United Kingdom, which confers greater power to minority shareholders in installing or dethroning independent directors.
- SEBI has not yet made any mention of implementing the dual approval system.
Issues with Dual Approval System
- The first issue is that it militates against the majority rule principle that is intrinsic in a corporate democracy.
- While understandable, that is hardly an immutable rule as corporate law does make exceptions in cases involving oppression of minority shareholders.
- The second concern is that placing too much power in the hands of minority shareholders would be counterproductive, as it could result in a tyranny of the minority.
- However, the dual approval system instead represents the best of both worlds. It does not negate the promoter’s involvement in the process of appointing or removing independent directors.
- Only consensus candidates would end up becoming independent directors.
- The third issue is one of shareholder apathy: Will minority shareholders be motivated to exercise an informed and meaningful choice?
- Minority shareholders tend to be passive when they are unable to influence the outcome of shareholding voting.
- However, where they do have a significant say, like in the “majority of the minority” process, they are likely to be more active in exercising their franchise.
Consider the question “How far has the provision of appointing independent directors to safeguard the interest of minority shareholders succeeded in its objectives? Suggest the changes to improve the challenges faced by the independent directors.”
Conclusion
In all, the appointment and removal system continues to undermine the independence and efficacy of corporate boards. The SEBI needs to implement the dual approval system at the earliest.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Re-wilding of tigers
Mains level: Animal reintroduction
The recent attempt of Periyar Tiger Reserve (PTR) to reintroduce into the wild tiger cub named Mangala after rearing it in ‘captivity’ has once again brought the controversial concept of ‘re-wilding’ of abandoned or injured animals under the lens.
What is the intervention known as ‘re-wilding’?
- As per the Standard Operating Procedures/Guidelines laid down by the National Tiger Conservation Authority (NTCA) under the Wildlife Protection Act, 1972, there are three ways to deal with orphaned or abandoned tiger cubs.
- The first is to make an effort to reunite the abandoned cubs with their mother.
- Second, if a reunion of the cub with its mother is not possible, then shift the cub to a suitable zoo.
- Third, reintroduction of the cub into the wild after a certain time when it appears that the cub is capable of surviving in the wild independently.
- This is what is known as ‘re-wilding.
NTCA guidelines
- NTCA stresses that the tiger cub should be reared in an in situ enclosure for a minimum of two years, and during this time, each cub should have a successful record of at least 50 ‘kills’.
- Within the enclosure, the persons responsible for handling cubs must approach them by putting a tiger mask along with workday clothes of a tiger stripe pattern smeared with tiger urine and faeces.
- Various conditions must be complied with at the time of releasing the cub in the wild.
- The tiger cubs should be in prime health, and of dispersing age (three/four years).
- There should be no abnormality/incapacitation.
How have attempts at re-wilding of carnivores gone in India?
- The tiger conservationist Billy Arjan Singh was credited with the re-introduction of re-welding the Dudhwa forest area in the 1970s.
- The attempt, however, ran into controversy after several incidents of the killing of humans were reported.
- The re-wilding in Panna Tiger Reserve of two abandoned tigress cubs that were brought up at Kanha Tiger Reserve is considered to be a success in tiger conservation.
Re-wilding as a concept
- There are 50-50 chances of success and failure of re-wilding of hand-reared carnivores in the wild.
- Conservationists, however, maintain that the chances of success are far less than that — less than even 1 per cent.
- Tigers in India are already occurring at naturally attainable densities.
- Almost all translocations of captive-raised tigers have failed so far, with only rare successes such as in Panna after a tiger extinction, and some re-introductions in Russia into empty habitats with plenty of prey.
Way forward
- The real need is to protect more habitat strictly so that the prey densities rise and more tigers can thrive.
- Putting individual hand-reared tigers into the wild cannot certainly be called re-wilding says some wildlife activists.
Answer this PYQ in the comment box:
Q.Among the following Tiger Reserves, which one has the largest area under “Critical Tiger Habitat”? (CSP 2020)
(a) Corbett
(b) Ranthambore
(c) Nagarjunsagar-Srisailam
(d) Sunderbans
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: BHIM, UPI, IMPS
Mains level: Mobile banking facilities in India
Bhutan becomes the first country, in India’s immediate neighbourhood, to use the BHIM app for mobile-based payments and “to adopt UPI standards for its QR deployment”.
Bharat Interface for Money (BHIM)
- BHIM is an Indian mobile payment App developed by the National Payments Corporation of India (NPCI), based on the Unified Payments Interface (UPI).
- Named after B. R. Ambedkar and launched on 30 December 2016 it is intended to facilitate e-payments directly through banks and encourage cashless transactions.
- The application supports all Indian banks which use UPI, which is built over the Immediate Payment Service (IMPS) infrastructure and allows the user to instantly transfer money between bank accounts of any two parties.
- It can be used on all mobile devices.
Note: Bhutan has become the first country to adopt India’s Unified Payment Interface (UPI) standards for its quick response (QR) code. It is also the second country after Singapore to have BHIM-UPI acceptance at merchant locations, NPCI International Payments Ltd (NIPL).
What is UPI?
- Unified Payments Interface (UPI) is an instant real-time payment system developed by NPCI facilitating inter-bank transactions.
- The interface is regulated by the Reserve Bank of India and works by instantly transferring funds between two bank accounts on a mobile platform.
Answer this PYQ in the comment box:
Q. With reference to digital payments, consider the following statements:
- BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
- While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication.
Which of the statements given above is/ are correct? (CSP 2018)
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: UV technology for disinfection
Mains level: Not Much
The Union Ministry for Science and Technology has informed that Ultraviolet-C or UV-C Disinfection Technology will soon be installed in Parliament for the mitigation of airborne transmission of SARS-COV-2.
UV-C air duct disinfection system
- The UV-C air duct disinfection system was developed by CSIR-CSIO (Central Scientific Instruments Organisation).
- The system is designed to fit into any existing air-ducts and the virucidal dosages using UV-C intensity and residence time can be optimized according to the existing space.
- The release adds that the virus is deactivated in any aerosol particles by the calibrated levels of UV-C light. It can be used in auditoriums, malls, educational Institutions, AC buses, and railways.
What is Ultraviolet (UV)?
- Ultraviolet (UV) is a type of light or radiation naturally emitted by the Sun. It covers a wavelength range of 100-400 nm. The human visible light ranges from 380–700 nm.
- UV is divided into three bands: UV-C (100-280 nm), UV-B (280-315 nm) and UV-A (315-400 nm).
- UV-A and UV-B rays from the Sun are transmitted through our atmosphere and all UV-C is filtered by the ozone layer.
- UV-B rays can only reach the outer layer of our skin or epidermis and can cause sunburns and are also associated with skin cancer.
- UV-A rays can penetrate the middle layer of your skin or the dermis and can cause ageing of skin cells and indirect damage to cells’ DNA.
- UV-C radiation from man-made sources has been known to cause skin burns and eye injuries.
So, can UV-C kill coronavirus?
- UV-C radiation (wavelength around 254 nm) has been used for decades to disinfect the air in hospitals, laboratories, and also in water treatment.
- But these conventional germicidal treatments are done in unoccupied rooms as they can cause health problems.
- It can destroy the outer protein coating of the SARS-Coronavirus.
Is it safe for humans?
- The device is specifically developed to disinfect non-living things.
- UV-C radiation used in this device could be harmful to the skin and eyes of living beings.
Answer this PYQ in the comment box:
Q.What is the role of ultraviolet (UV) radiation in the water purification systems?
- It inactivates/kills the harmful microorganisms in water.
- It removes all the undesirable odours from the water.
- It quickens the sedimentation of solid particles, removes turbidity and improves the clarity of water.
Which of the statements given above is/are correct? (CSP 2010)
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAD
Mains level: Paper 3- Forex reserves and its significance
Context
The ascending stock of forex reserves has led to the view this will enable the sole devotion of monetary policy to domestic objectives.
Assessing the significance of forex reserves
Let’s look into the experinec of China and India in this regard.
1) Learning from China’s experience
- In 2016, China had a strong external position—current account surplus and more than $3tn forex reserves.
- However, investors’ expectations on renminbi (RMB) value began to shift due to rising concerns about its growth outlook, domestic rate cuts and eventual depreciation, and imminent tightening of US monetary policy, resulting in net capital outflows of $725 billio (bn) over the year.
- This put sustained pressure upon the RMB.
- Eventually, China resorted to capital control measures, which slowed the outflow and supported the RMB in the first half of 2017.
2) India’s own historical record
- India’s own historical record shows that, high or low, forex reserves didn’t prevent investors from reappraising positions.
- India experienced this in case of oil prices (2018) or taper fears (2013).
- The CAD was moderate, at 1.1% and 1.4% of GDP in two quarters to December 2017.
- But as oil prices climbed, current account projections were rapidly revised to 2.5-3% of GDP in less than a quarter seeing the jump in the import bill, lagging exports and continuous outflow of portfolio capital.
- Reserves totalled $424 bn then (end-March 2018); foreign currency assets were $399 billion.
- Against a mere $9 bn capital outflow, the peak-to-trough decline in reserves was $19 bn in April-June 2018, with 5% depreciation of the rupee.
- The sharper, $21 bn fall in mid-April to July 20, 2018 equalled the reserves decline in April-August 2013 taper episode when the rupee depreciated three times more or 15%!
- Forex reserves were much lower in 2013 ($255 bn range) and it had taken only a quarter for the current account gap to widen from 4.0% of GDP in April-June 2012 to 5.4% and a record 6.7% in subsequent two quarters to December 2012!
Key takeaways
- History shows that no level of reserves is a foolproof guarantee for macroeconomic stability or interest rate immunity.
- The important lesson these episodes hold is that repressive attempts do not always convince markets or prevent shifts in expectations and often compel large, abrupt adjustment.
- Investors reassess positions, including global factors, whatever the reserves’ stock.
- The crucial role of reserves is psychological, i.e. market confidence and liquidity insurance that is immediate and unconditional that allows central banks to buy time, whether for a gradual adjustment, soft landing, or as the case may be.
Distortion in bond market and RBI’s role in it
- RBI has been systematically suppressing bond yields, particularly the 10-year benchmark, the reference rate for banks.
- So effective was the repression that the bond market became irrelevant as yields altogether stopped responding to inflation or fiscal developments.
- The 207-basis-point jump in retail inflation in a month in May, which exceeded expectations, caused not even a flicker in the yield premium for example.
- This did not prevent responses elsewhere though – the overnight indexed swap (OIS), which signals future interest rate movements, increased 20-30 basis points at different tenures with fresh inflation risks.
- Clearly, the market reading was inconsistent with RBI’s, whose rigid adherence to a particular level (6% in the case of the old, 10-year bond) was disregarded outright.
- The monetary policy cue was not being accepted, failing to soothe ruffled feathers about inflation.
Risk involved in RBI’s policy
- If the global financial cycle were to suddenly turn, risk-aversion set in, or oil prices shoot up to risky levels, investors will undoubtedly look at actual differentials, not the one set in stone by RBI.
- There will be exchange rate pressures, which RBI can no doubt manage with liberal reserves.
- But the duration and degree of adjustment is not in RBI’s control, identically to the bond market one, where it has infinite capacity to keep local yields where it wants.
- There’s a limit to how much foreign currency it can sell—the $609bn reserve holding is finite.
- Currency depreciation can, therefore, worsen a bad situation as higher inflation pressurises domestic interest rates to rise.
- RBI’s issuance of the new 10-year benchmark bond at 6.10%, which came as a surprise against its previous inflexibility, indicates RBI has internalised the above risks.
- The disparate movements were undermining RBI, whose commitment to continue the accommodative monetary policy as long as necessary to revive and sustain growth has been reassuring.
Conlcusion
When the economy is open, financially integrated and subject to cross-country dynamics, it is more prudent to let market forces play out a bit than persist with a stance that could turn unsustainable despite the high reserves.
Back2Basics: What is Current Account Deficit (CAD) ?
- The current account deficit is a measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the products it exports.
- The current account includes net income, such as interest and dividends, and transfers, such as foreign aid, although these components make up only a small percentage of the total current account.
- The current account represents a country’s foreign transactions and, like the capital account, is a component of a country’s balance of payments (BOP).
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From UPSC perspective, the following things are important :
Prelims level: SCO members
Mains level: Paper 2- Afghanistan after the US withdrawal
Context
A regional conclave of foreign ministers taking place in Dushanbe this week under the banner of the Shanghai Cooperation Organisation (SCO) should give us a sense of the unfolding regional dynamic on Afghanistan.
SCO addressing challenges in Afghanistan
- Geography, membership and capabilities make the SCO an important forum to address the post-American challenges in Afghanistan.
- The SCO was launched 20 years ago by China and Russia to promote inner Asia stability.
- The current members of the SCO are China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Pakistan, and India.
- The SCO has four observer states — Iran, Afghanistan, Mongolia and Belarus.
- The idea of a regional solution to Afghanistan has always had much political appeal.
- But divergent regional strategic perspectives limit the prospects for a sustainable consensus on Afghanistan.
Implications of the US exit for the region
- The quiet satisfaction in Moscow, Beijing, Tehran and Rawalpindi at the US’s exit from Afghanistan, however, is tinged by worries about the long-term implications of Washington’s retreat
- Regional players have to cope with the consequences of the US withdrawal and the resurgence of the Taliban.
- Neither Moscow nor Beijing would want to see Afghanistan becoming the hub of international terror again under the Taliban.
- For China, potential Taliban support to the Xinjiang separatist groups is a major concern.
- Iran can’t ignore the Sunni extremism of the Taliban and its oppressive record in dealing with the Shia, and Persian-speaking minorities.
- Pakistan worries about the danger of the conflict spilling over to the east of the Durand Line, and hostile groups gaining sanctuaries in Afghanistan.
Three factors that drive India’s Afghan policy
- The US exit means a new constraint on Delhi’s ability to operate inside Afghanistan.
- There is also the danger that Afghanistan under the Taliban could also begin to nurture anti-India terror groups.
- If India remains active but patient, many opportunities could open up in the new Afghan phase.
- Three structural conditions will continue to shape India’s Afghan policy.
- One is India’s lack of direct physical access to Afghanistan.
- This underlines the importance of India having effective regional partners.
- Second, it remains to be seen if Pakistan’s partnership with China and the extension of the China Pakistan Economic Corridor into Afghanistan can address Pakistan’s inability to construct a stable and legitimate order in Afghanistan.
- Third, the contradiction between the interests of Afghanistan and Pakistan is an enduring one.
- While many in Pakistan would like to turn Afghanistan into a protectorate, Afghans deeply value their independence.
- All Afghan sovereigns, including the Taliban, will inevitably look for partners to balance Pakistan.
Way forward for India
- India must actively contribute to the SCO deliberations on Afghanistan, but must temper its hopes for a collective regional solution.
- At the same time, Delhi should focus on intensifying its engagement with various Afghan groups, including the Taliban, and finding effective regional partners to secure its interests in a changing Afghanistan.
Conclusion
India should pursue the regional solution to Afghanistan challenge after the US exit while increasing the engagement with the various players in Afghanistan including the Taliban.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Kongu Nadu
Mains level: Regionalism issue in India
A list of new Union Cabinet ministers issued has triggered a debate in political circles in Tamil Nadu, as well as on social media, by referring to ‘Kongu Nadu’, the informal name for a region in the western part of the state.
Where is Kongu Nadu?
- ‘Kongu Nadu’ is neither a place with a PIN code nor a name given formally to any region.
- It is a commonly used name for part of western Tamil Nadu.
- In Tamil literature, it was referred to as one of the five regions of ancient Tamil Nadu.
- There were mentions of ‘Kongu Nadu’ in Sangam literature as a separate territory.
- The name derives from Kongu Vellala Gounder, an OBC community with a significant presence in these districts.
- The region includes prominent businesses and industrial hubs at Namakkal, Salem, Tirupur and Coimbatore.
Is there any ground for the allegations about a planned bifurcation?
- Unlike Telangana or Uttarakhand, there has never been demand or discussions about a separate Kongu Nadu in the modern political history of Tamil Nadu.
- The debate, therefore, lacks any political or social context.
Back2Basics: Sangam Age
- The ‘Sangam’ describes a period from the sixth century BC to the third century AD encompassing today’s Tamil Nadu, Kerala, the southern parts of Karnataka and Andhra Pradesh, and northern Sri Lanka.
- The Tamil Sangams or Cankams were assemblies of Tamil scholars and poets that, according to traditional Tamil accounts, occurred in the remote past.
- It is named for scholarly congregations in and around the city of Madurai, located about 400 km southwest of Chennai.
- It generally refers to a collection of poems, composed by Tamil poets, both men and women developed in the ancient Southern state of India.
- It mostly deals with emotional and material topics such as love, war, governance, trade and bereavement.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Lightening and Thunderstorms
Mains level: Not Much
With the monsoon making a slow revival over several parts of India, except the northwest region, there is a rise in lightning-linked deaths.
What is lightning?
- Lightning is a very rapid — and massive — discharge of electricity in the atmosphere, some of which is directed towards the Earth’s surface.
- These discharges are generated in giant moisture-bearing clouds that are 10-12 km tall.
- The base of these clouds typically lies within 1-2 km of the Earth’s surface, while their top is 12-13 km away.
- Temperatures towards the top of these clouds are in the range of minus 35 to minus 45 degrees Celsius.
How does it strike?
- As water vapour moves upward in the cloud, the falling temperature causes it to condense.
- Heat is generated in the process, which pushes the molecules of water further up.
- As they move to temperatures below zero degrees Celsius, the water droplets change into small ice crystals. They continue to move up, gathering mass — until they are so heavy that they start to fall to Earth.
- This leads to a system in which, simultaneously, smaller ice crystals are moving up and bigger crystals are coming down.
- Collisions follow and trigger the release of electrons — a process that is very similar to the generation of sparks of electricity.
- As the moving free electrons cause more collisions and more electrons, a chain reaction ensues.
- This process results in a situation in which the top layer of the cloud gets positively charged, while the middle layer is negatively charged.
Making of the thunder
- The electrical potential difference between the two layers is huge — of the order of a billion to 10 billion volts.
- In very little time, a massive current, of the order of 100,000 to a million amperes, starts to flow between the layers.
- An enormous amount of heat is produced, and this leads to the heating of the air column between the two layers of the cloud.
- This heat gives the air column a reddish appearance during lightning. As the heated air column expands, it produces shock waves that result in thunder.
How does this current reach the Earth from the cloud?
- While the Earth is a good conductor of electricity, it is electrically neutral.
- However, in comparison to the middle layer of the cloud, it becomes positively charged.
- As a result, about 15%-20% of the current gets directed towards the Earth as well.
- It is this flow of current that results in damage to life and property on Earth.
- There is a greater probability of lightning striking tall objects such as trees, towers or buildings.
- Once it is about 80-100 m from the surface, lightning tends to change course towards these taller objects.
- This happens because air is a poor conductor of electricity, and electrons that are travelling through air seek both a better conductor and the shortest route to the relatively positively charged Earth’s surface.
What precautions should be taken against lightning?
- Lightning rarely hits people directly — but such strikes are almost always fatal.
- People are most commonly struck by what are called “ground currents”.
- The electrical energy, after hitting a large object (such as a tree) on Earth, spreads laterally on the ground for some distance, and people in this area receive electrical shocks.
- It becomes more dangerous if the ground is wet (which it frequently is because of the accompanying rain), or if there is metal or other conducting material on it.
- Water is a conductor, and many people are struck by lightning while standing in flooded paddy fields.
- For the reasons given above, taking shelter under a tree is dangerous. Lying flat on the ground too can increase risks.
- People should move indoors in a storm; however, even indoors, they should avoid touching electrical fittings, wires, metal, and water.
Answer this PYQ in the comment box:
Q.During a thunderstorm, the thunder in the skies is produced by the:
- meeting of cumulonimbus clouds in the sky
- lightning that separates the nimbus clouds
- violent upward movement of air and water particles
Select the correct option using the codes given below (CSP 2011):
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) None of the above
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Difference between Orbital and Suborbital Flight
Mains level: Space tourism
Virgin Group founder Richard Branson became the first billionaire to fly to the edge of space and back, riding aboard his own Virgin Galactic spacecraft in a suborbital flight.
What is Suborbital Flight?
- When an object travels at a horizontal speed of about 28,000 km/hr or more, it goes into orbit once it is above the atmosphere.
- Satellites need to reach that threshold speed in order to orbit Earth.
- Such a satellite would be accelerating towards the Earth due to gravity, but its horizontal movement is fast enough to offset the downward motion so that it moves along a circular path.
- Any object travelling slower than 28,000 km/hr must eventually return to Earth.
- These are suborbital flights, because they will not be travelling fast enough to orbit Earth once they reach there.
- Such a trip allows space travellers to experience a few minutes of “weightlessness”.
Analogical example
- For an analogy, consider a cricket ball thrown into the air.
- Given that no human hand can give it a speed of 28,000 km/hr (about 8 m/sec), the ball will fly in an arc until its entire kinetic energy is swapped with potential energy.
- At that instant, it will lose its vertical motion momentarily, before returning to Earth under the influence of gravity.
- A suborbital flight is like this cricket ball, but travelling fast enough to reach the “edge of space”, and yet without enough horizontal velocity to go into orbit.
- If an object travels as fast as 40,000 km/hr, it will achieve escape velocity, and never return to Earth.
Why the buzz?
- With Branson and Jeff Bezos kicking off private space flight, several companies are looking for customers wanting to go on suborbital or even orbital journeys.
- At Branson’s Virgin Galactic, around 600 people have already paid deposits for tickets that are priced up to $250,000 (Rs 1.86 crore).
- However, Bezos’s Blue Origin, which uses the reusable New Shepard rocket, is yet to announce commercialization plans, according to the BBC.
- There is also excitement among scientists who want to use suborbital flights for microgravity research.
- Such flights would be far less expensive than carrying experiments and people to the International Space Station.
- Suborbital flights could also be an alternative to parabolic flights in airplanes that space agencies currently use to simulate zero gravity.
Safety concerns
- The Branson flight comes seven years after his company’s first rocket, called Enterprise, crashed during a test flight, killing one of the pilots on board.
- The other survived after parachuting out.
- The current rocket is also not certified by the US Federal Aviation Administration, which is prohibited to do so by law until 2023.
- This is because the US government does not want to burden companies like Virgin Atlantic with regulations during their “learning” period, when they can innovate by trying out different designs and procedures.
- Passengers who go on such trips need to sign “informed consent” forms, similar to the ones before going for skydiving or bungee jumping.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Cryptocurrencies
Mains level: Issues with Cryptocurrencies
Last week, Twitter CEO announced his payments firm Square would soon build a hardware wallet to store bitcoin.
Bitcoin Hardware Wallet
- The wallet will be a type of plug-in device, much like a USB pen drive that stores, manages and secures a user’s crypto assets.
- Each digital asset is linked to a cryptographic password called a ‘private key’ to allow users to access it.
- This key safeguards cryptocurrencies from theft and unauthorized access.
- The asset owner, with the help of a secure hardware wallet, can access the private key to buy and sell crypto assets from anywhere.
- Most hardware wallets allow users to manage multiple accounts; some even allow users to connect to their Google or Facebook accounts.
- Popular hardware wallets include Trezor, Ledger, KeepKey and Prokey.
How is it different from a software wallet?
- Cryptocurrency keys can be stored in two kinds of wallets – software and hardware.
- Software wallets are like smartphone apps that digitally store private keys.
- Most software wallets don’t charge users to store private keys but may collect a commission for trading via the app.
- These wallets can be vulnerable to malware.
- Hardware wallets and physical devices act like cold storage for confidential keys. The passwords are protected by a PIN, making it difficult for hackers to extract private keys as the information is not exposed to the Internet.
The upsides of a hardware wallet
- Hardware wallets are said to be convenient as they can be connected to trading exchanges to complete transactions.
- Hardware wallets are often stored in a protected microcontroller and cannot be transferred out of the device, making them secure.
- Their isolation from the Internet also mitigates the risk of the assets being compromised. Moreover, it does not rely on any third-party app.
Limitations
- Since the wallet is in physical form, the device could be stolen or destroyed.
- They could be used by malicious actors to steal confidential data.
- The device can also be expensive as compared to software wallets.
- Some hardware wallets can also have complex features, making it difficult for first-timers to understand.
Answer this PYQ in the comment box:
Q.With reference to “Blockchain Technology”, consider the following statements:
- It is a public ledger that everyone can inspect but which no single user controls.
- The structure and design of block chain is such that all the data in it are about crypto currency only.
- Applications that depend on basic features of blockchain can be developed without anybody’s permission.
Which of the statement given above is/are correct?
(a) 1 only
(b) 2 only
(b) 1 and 2 only
(d) 1 and 3
Back2Basics: Cryptocurrencies
- A cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database.
- It uses strong cryptography to secure transaction records, control the creation of additional coins, and verify the transfer of coin ownership.
- It typically does not exist in physical form (like paper money) and is typically not issued by a central authority.
- Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: G-Secs
Mains level: Not Much
The RBI has announced a scheme under which retail investors will be allowed to open retail direct gilt accounts (RDG) directly with the central bank.
Retail Direct Scheme
- The scheme is a one-stop solution to facilitate investment in government securities (G-secs) by individual investors.
- Under RDG schemes, accounts can be opened through a dedicated online portal, which will provide registered users access to primary issuance of government securities and to NDS-OM.
What is a gilt account?
- A “Gilt Account” means an account opened and maintained for holding Government securities, by an entity or a person including ‘a person resident outside India’ with a “Custodian” permitted by the RBI.
About Government Securities
- These are debt instruments issued by the government to borrow money.
- The two key categories are:
- Treasury bills (T-Bills) – short-term instruments which mature in 91 days, 182 days, or 364 days, and
- Dated securities – long-term instruments, which mature anywhere between 5 years and 40 years
Note: T-Bills are issued only by the central government, and the interest on them is determined by market forces.
Why G-Secs?
- Like bank fixed deposits, g-secs are not tax-free.
- They are generally considered the safest form of investment because they are backed by the government. So, the risk of default is almost nil.
- However, they are not completely risk-free, since they are subject to fluctuations in interest rates.
- Bank fixed deposits, on the other hand, are guaranteed only to the extent of Rs 5 lakh by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Retail investors and G-Secs
- Small investors can invest indirectly in g-secs by buying mutual funds or through certain policies issued by life insurance firms.
- To encourage direct investment, the government and RBI have taken several steps in recent years.
- Retail investors are allowed to place non-competitive bids in auctions of government bonds through their Demat accounts.
- Stock exchanges act as aggregators and facilitators of retail bids.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 15(1)
Mains level: Paper 2- Need for anti-discrimination law in India
Context
“Silent segregation” on the grounds of marital status, gender, sexual orientation or eating preferences are followed in several housing societies and residents’ associations. Legal remedies are needed for its victims.
Issue of the prevalence of discrimination on various grounds
- The recent Pew Research Center Report has confirmed that a substantial number of Indians prefer not to have a person from a different religious community as their neighbour.
- The absence of a proper legal recourse for those who suffer from housing discrimination only makes matters worse.
- Social prejudice against members of the LGBTQIA+ community in the country remains strong, despite Section 377 of the Indian Penal Code was read down by the Supreme Court of India.
- In April, the Supreme Court, in Patan Jamal Vali vs State of Andhra Pradesh, recognised intersectional discrimination.
- It is discrimination on the basis of the intersection of personal characteristics, such as that faced by Dalit women as Dalits, as women and in the unique category of Dalit women.
- Discriminatory practices may also be indirect in nature, whereby policies that seem neutral and not expressly targeted at a particular group, still cause a disproportional adverse impact on disadvantaged sections of society.
Why Article 15(1) is not enough
- Article 15(1) of the Constitution of India prohibits the state from discriminating against individuals on basis of certain protected characteristics such as religion, race, caste, sex and place of birth.
- But it does not bar private individuals or institutions from doing what the state is not permitted to.
- Nor does it expressly list ethnicity, linguistic identity, nationality, marital status, sexual orientation, disability, physical appearance and other personal characteristics as prohibited grounds of discrimination.
We need a comprehensive anti-discrimination legal framework
- A comprehensive anti-discrimination legal framework is required to fill the existing legal lacunae.
- India is one of the few liberal democracies without such a framework.
- The Sachar Committee, in 2006, recognised the need for an anti-discrimination law.
- This was further reiterated by the Expert Group on Equal Opportunity Commission headed by Prof. N.R. Madhava Menon.
Way forward
- The States can lead the way, by enacting anti-discrimination laws in their respective jurisdictions.
- States have a vital role in strengthening our right to equality.
- The State legislature can use its powers under Entry 8 of List III in the Seventh Schedule to the Constitution to enact an anti-discrimination law.
- And if States take the initiative, the demand for a national anti-discrimination law to cover services and institutions under the domain of the Union government will be reignited.
- The law should have provisions that prohibit employers, landlords, traders, service providers, private persons performing public functions, and public authorities, from discriminating.
- Law should prohibit discrimination on grounds of caste, race, ethnicity, descent, sex, gender identity, gender expression, pregnancy, sexual orientation, religious identity, tribe, disability, linguistic identity, HIV-status, nationality, marital status, dietary preference, skin tone, physical appearance, place of residence, place of birth, age or analogous characteristics which are beyond the control of an individual or those that constitute a fundamental choice.
- The law should also balance the anti-discrimination mandate with other rights guaranteed by the Constitution.
- The anti-discrimination mandate can be restricted in pursuance of a legitimate objective.
- Affirmative-action provisions can be included whereby public authorities are obliged to progressively realise diversification of their workforces.
Consider the question “Article 15(1) of the Constitution of India prohibits the state from discriminating against individuals on basis of certain protected characteristics. But it does not bar private individuals or institutions from doing what the state is not permitted to. In light of this, discuss the need for anti-discrimination law in India and its provisions.”
Conclusion
We must recognise that anti-discrimination law is not a panacea for the problems of inequality and social prejudice that are deeply rooted in our society. Nevertheless, it is a necessary step — an idea whose time has come.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-Japan-Italy partnership
Context
Recently, Mr. Draghi, Italy’s Prime Minister described Chinese competitive practices as “unfair” and invited the EU to be franker and more courageous in confronting Beijing on various issues. Against this backdrop, a trilateral partnership between India-Japan-Italy could play important role in the Indo-Pacific region.
India’s growing centrality in Indo-Pacific strategic architecture
- Countries that share similar values and face similar challenges are coming together to create purpose-oriented partnerships.
- In the context of the Indo-Pacific, the challenges posed by China’s assertive initiatives clash with a region lacking multilateral organisations capable of solving problems effectively.
- But as a new pushback against China takes shape and as Indian foreign policy becomes strategically clearer, there is new momentum to initiatives such as the Quad.
India-Italy-Japan trilateral partnership
- Recently, Italy has also begun to signal its intention to enter the Indo-Pacific geography.
- It has done so by seeking to join India and Japan in a trilateral partnership.
- Italy has become more vocal on the risks emanating from China’s strategic competitive initiatives.
- On the Indian side, there is great interest in forging new partnerships with like-minded countries interested in preserving peace and stability in the Indo-Pacific.
- The responsibility of keeping the Indo-Pacific free and open, and working for the welfare of its inhabitants falls on like-minded countries within and beyond the region.
Potential of trilateral partnership
- Their compatible economic systems can contribute to the reorganisation of the global supply chains that is now being reviewed by many players as a natural result of the Chinese mismanagement of the COVID-19 pandemic.
- At the security level, the well-defined India-Japan Indo-Pacific partnership can easily be complemented by Italy.
- At the multilateral level, the three countries share the same values and the same rules-based world view.
The way forward for trilateral cooperation
- The Italian government must formulate a clear Indo-Pacific strategy that must indicate its objectives.
- But Rome must go beyond that in defining and implementing, at the margins of the EU’s common initiatives, its own policy with respect to the Indo-Pacific.
- The India, Italy and Japan trilateral initiative can be a forum to foster and consolidate a strategic relationship between these three countries, and specifically expand India-Italy bilateral relations.
- A trilateral cooperation can be the right forum for India and Italy to learn more from each other’s practices and interests and consolidate a strategic dialogue that should include the economic, the security and the political dimensions.
- To consolidate the trilateral cooperation in this field, the three countries need to define a common economic and strategic agenda.
Conclusion
A clear political will is needed from all sides, and Italy, in particular, should recognise its interests in playing a larger role towards the maintenance of a free and open Indo-Pacific. Robust India-Italy strategic ties can be the first step towards the realisation of this goal.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Arbitrations and issues with it in India
Context
Plagued by delays and rising costs, arbitration in India needs urgent attention. The pandemic has only worsened the situation.
Issues with arbitrations process in India
- Arbitrations in India suffers from rising costs and sluggish proceedings.
- Arbitration proceedings are often dragged on by lawyers on either side filing misconceived applications at various stages of the proceedings.
- Litigants, too, at times contribute to this delay with their stubbornness in not conceding a loss or defeat.
- The courts have narrowed down the scope of judicial interference under Section 34 of the Arbitration and Conciliation Act.
- The very limited recourse for setting aside an arbitral award under the Act invariably means that it will be upheld, even if it appears unfair or illogical.
- The aggrieved party may well be stuck with the award and precluded forever from challenging it.
- Arbitration hearings are generally held in camera, and decisions are usually not publicly accessible, giving rise to doubts about impartiality and fairness.
- Arbitration proceedings have become more complex with time.
- The Supreme Court, in Guru Nanak Foundation v. Rattan Singh and Sons, had expressed disappointment against the procedural delays and tardiness in the resolution of disputes through arbitration.
- Even the clauses providing for fees of the arbitrators and fixed timelines for disposal are often disregarded by the players
- The inevitable consequence of these drawbacks is a slow departure of the biggest litigant, the government, from the arbitration spectrum.
- A sector that is dominated by approvals, protocols and scrutiny, uncertainty about the budget outlay towards arbitrations and unexpected delays in disposal does not inspire confidence and detracts from the sanctity of the process.
Way forward
- Arbitrators have endeavoured to simplify the proceedings by limiting the pleadings, insisting on written arguments, reducing the number of sittings and laying down a schedule for various milestones.
- Some restraint is needed from all quarters to bring its wheels back on the tracks. These are:
- A small check on the arbitral fees and timelines.
- Careful drafting of arbitration clauses.
- Stringent procedural safeguards to curb delays.
- Expeditious disposal of the court proceedings and legislative intent towards all of the above.
Consider the question “What are the issues faced by the arbitration in India? Suggest the measures to deal with these issues.”
Conclusion
Arbitration still has the inherent potential and characteristics to outperform other modes of dispute resolution, but for that to happen, some changes are a must.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Farmer Producer Companies
Mains level: Paper 3- Cooperatives in India and challenges
Context
India now has a Ministry of Cooperation that aims to strengthen the country’s cooperative movement. This is an opportune moment to look at the movement’s history, examine the potential of cooperatives and analyse the challenges they face.
Development of Farmer Producer Companies in India
- India’s significant tryst with dairy cooperatives began in the 1950s with the success of what we know today as Amul.
- The nation took note of this initiative and the National Dairy Development Board was set up in 1965.
- However, the expansion wasn’t working the way it had been envisaged.
- The need for a new model was felt soon as cooperatives outside Anand were not holding regular and proper elections.
- Their accounts were not audited.
- As a result, a committee was set up in the Company Affairs Ministry to allow farmers to set up companies.
- The Farmer Producer Companies (FPCs) would run on the principle of “one share one vote” and the essence of cooperatives would not be diluted.
- The Parliamentary Committee looked into the Bill to give legal backing to FPCs, with this, the Companies Act (Second Amendment), 2002 became law.
Funding the FPCs
- The existing funding vehicles were designed to cater to cooperatives, not FPCs
- Around 2010, the Boston Consulting Group (BCG) had been commissioned to develop a plan for restructuring NABARD.
- As a result, the restructured NABARD had a special window for FPCs.
Community-based cooperatives
- The Cheliya community set up a chain of Hearty Mart “cooperative” supermarkets in villages in Gujrat using the franchise model.
- Just as the network of Charotar Patels that Kurien relied on in the case of Amul —Cheliya community have played a key role in the spread of the model.
- The idea of leveraging the community network was tried in some parts of the country in the context of re-imagining economic infrastructure.
- To deal with the electricity board failures, a distribution company was run on a community basis.
- This model has, in fact, worked in places like Kanpur, even Kerala.
Social cooperatives
- The concept of social cooperatives builds on the idea of communities creating infrastructure by using local material and family labour.
- These can be the village tank, paving the village road — with or without MGNREGA — finishing the last-mile construction of a canal network or even keeping watch on the contractor.
- The pandemic seems to have increased the significance of community effort.
- Reducing vaccine hesitancy, providing food to those waiting outside hospitals and, most importantly, looking after orphaned children are imperatives crying out for the cooperative model.
Way forward for new Ministry of Cooperatives
- Keeping in mind social needs while using resources is a large part of the solution to our current predicament.
- The pandemic will not follow the laws of corporate finance, cooperation has a lot to speak for itself, the new ministry should take this message.
- The new work-from-home model will create several problems as well as offer opportunities.
- The new ministry is a recognition of the needs of our times.
- But it should not be just about pumping in money.
Conclusion
This is the time to design models that help those who help themselves. We will wait expectantly to see how the new ministry works.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Population control measures
On World Population Day, Uttar Pradesh CM has released the state’s new population policy, which aims to reduce its growth rate to 2.1 per cent over the next 10 years.
Why UP needs such policy?
- Uttar Pradesh, India’s most populous state, has a population of around 220 million.
- In Uttar Pradesh, there are limited ecological and economic resources at hand.
- It was necessary that the provision of basic necessities of human life, economic/livelihood opportunities and a secure living is accessible to all citizens.
Provisions of UP Population Policy
The provision of this legislation shall apply to a married couple where the boy is not less than 21 years of age and the girl is not less than 18.
[A] Contraception and Abortion
- The state population policy will focus on efforts to increase the accessibility of contraceptive measures issued under the Family Planning Programme.
- It would provide a proper system for safe abortion
- Focus area to include reducing the newborns and maternal mortality rate.
- Care of the elderly, and better management of education, health, and nutrition of adolescents between 11 to 19 years has also been ensured in the policy, according to the state government
[B] Two-child policy
Perks
- The state government will give promotions, increments, concessions in housing schemes and others perks to employees who adhere to population control norms, and have two or less children
- “Public servants who adopt the two-child norm will get two additional increments during the entire service, maternity or as the case may be.
Paternity leaves
- There shall be paternity leave of 12 months, with full salary and allowances and three percent increase in the employer’s contribution fund under the National Pension Scheme.
- Those who aren’t government employees and still adhere to two-child policy will get benefits in rebates in taxes on water, housing, home loans etc.
- It also states that maternity centres will be set up at all primary health centres.
Incentives for sterilization
- As per the draft, several incentives have been provided to people, including public servants, if they adopt the norm by undergoing voluntary sterilization.
- The incentives include a 3% increase in the employer’s contribution fund under national pension; two additional increments during the entire service; subsidy towards purchase of plot or house site or build house etc.
- A couple living below the poverty line who have only one child and undergoes voluntary sterilisation, shall be eligible for payment of a one-time ₹80,000 if the single child is a boy and ₹1 lakh if it is a girl.
Who will not benefit from the law?
- According to the bill, people having more than two children in UP will be debarred from benefits of all government-sponsored welfare schemes, cannot contest local polls.
- They shall be ineligible to apply for government jobs under the state or receiving any kind of subsidy, cannot get a promotion in a government job and his or her ration card would be limited to four members.
How will the state implement measures?
- The UP government plans to set up a state population fund to implement the measures.
- The draft bill also asks the state government to introduce population control as a compulsory subject in all secondary schools.
Back2Basics: Fertility Rate
- Fertility rate may be defined as the number of children that would be born of a woman during her reproductive years.
- For a country’s population to remain stable, it is the total fertility rate should be 2.1.
- Studies suggest that India’s national fertility rate is 2.2 at the moment.
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