UPSC

SPECIAL COURT FOR MPS/MLAS

December 2020

CONTEXT

  • A three-judge committee of the Madras High Court has questioned the constitutional validity of setting up Special Courts to exclusively try MPs and MLAs for various crimes.

 

  • BACKGROUND
  • Supreme Court in 2017 asked the Center to frame a central scheme for setting up of special criminal courts exclusively to deal with criminal cases involving political persons.
  • Three judge bench of the apex court led by Justice N V Ramana is looking at ways to expedite these trials pending for years, in some cases , for decades.
  • Over 4400 criminal trials are pending against legislators. Of this over 2500 trials involve sitting legislators.
  • Cases against the legislators include that of corruption, money laundering, damage to public property, defamation and cheating.
  • A large number of cases for violation of Section 188 IPC for willful disobedience and obstruction of orders promulgated by public servants.
  • There are more than 400 cases in respect of offences which are punishable with imprisonment for life, out of which in 174 cases sitting MPs/MLAs are accused.
  • A large number of cases were pending at the appearance stage and even non bailable warrants issued by courts have not been issued.
  • According to report of Amicus curiae to Supreme Court, there is no uniformity in setting up Special Courts to try MPs and MLAs throughout the country.

 

NEED FOR SPECIAL COURTS

  • Good Governance – Legislators with clean background can make good laws and provide better governance in comparison to tainted laegislators.
  • End to Criminalisation of politics – Speedy trial of accused legislators can end criminalisation of politics which is one of the biggest threat to democracy and law and order.
  • Faith in Judiciary – conviction of legislators can increase public faith in judiciary which is often seen as powerless in front of powerful persons who continue to get elected despite being accused of heinous crimes.
  • Public faith in democracy – will be increased as legislators who can truly represent interests of people and work on development can be elected.
  • Cleanse the system – of corrupt and criminal elements and contribute to growth of nation
  • Decrease in corruption – Large number of legislators are accused under Prevention of Corruption Act and their conviction can reduce corruption
  • Free and Fair election – Decrease in criminalisation of politics and use of money and muscle power by tainted legislators and make elections free and fair.
  • Rule of law – will be increased as legislators who are law makers have clean background

 

CONCERNS OF HIGH COURT COMMITTEE

  • Special court can only be constituted by a statute and not by executive or judicial fiats.
  • Special Courts should be “offence-centric” and not “offender-centric”.

 

OTHER CONCERNS

  • Shortage of judges
  • Funds allotted by state govt are not enough
  • Delays due to interim orders, filing multifarious applications
  • Finding independent prosecutors can be a challenge

 

WAY FORWARD

  • Each High Court may be directed to allocate criminal courts invoving former and sitting legislators to one judicial officer in each district.
  • High courts should prepare a blueprint for expeditious disposal of cases and trials should not take more than one year.
  • Giving higher priority to cases involving sitting legislators over those against former legislators.
  • No adjurnment should be granted except in rare and exceptional ciricumstances on a written application stating the ground of adjournment
  • Speedy and timely trial of sitting and former legislators can ensure that rule of law is followed and democracy is strengthened.

 

View

PROVISIONAL PROVINCIAL STATUS TO GILGIT BALTISTAN

December 2020

Paksitan announced to elevate Gilgit Baltistan (GB) to the status of a full-fledged province
with all constitutional rights.

  • GB is the northernmost territory administered by Pakistan providing the country’s only
    territorial frontier, and thus a land route, with China, where it meets the Xinjiang
    Autonomous Region.

PRESENT STATUS
Though Pakistan, like India, links G-B’s fate
to that of Kashmir, its administrative
arrangements are different from those in
PoK.
While PoK has its own Constitution that sets
out its powers and their limits vis-à-vis
Pakistan, G-B has been ruled mostly by
executive fiat.
Until 2009, the region was simply called
Northern Areas. It got its present name only
with the Gilgit-Baltistan (Empowerment and
Self- Governance) Order, 2009, which
replaced the Northern Areas Legislative
Council with the Legislative Assembly.
 The NALC was an elected body, but had no more than an advisory role to the Minister for
Kashmir Affairs and Northern Areas, who ruled from Islamabad. The Legislative Assembly is
only a slight improvement. It has 24 directly elected members and nine nominated ones.

View Download

PROBLEMS OF NATIONAL COMMISSION FOR MINORITIES

December 2020

Context

The seven-member National Commission for Minorities (NCM) has only one member left after the retirement of its vice-chairperson while the other 5 posts have been vacant since May 2020.


OTHER PROBLEMS OF NATIONAL COMMISSION FOR MINORITIES

  • Insufficient investigative powers – There is need of strengthening investigative power of NCM to safeguards constitutional and legal rights of minority communities
    · Annual reports not tabled – National Commission for Minorities (NCM) Act, 1992 mandates that the annual report, together with the memorandum of action taken on the
    recommendations contained therein, as well as the reasons for non-acceptance of the recommendations, if any, be tabled before Parliament annually. These reports have not been tabled in Parliament since 2010.
    · Dependence on other institutions – Functioning of NCM and also the operations of state minority commissions are dependent on central and state governments. Its entire work is dependent upon the goodwill of government.
    · Overlapping jurisdiction – Growing number of commissions have overlapping mandate, thereby reducing the scope of NCM. For example, the formation of new Commission on Linguistic Minorities cut into the work of NCM, which was restricted to only religious minorities.
    · The appointment to commission lacks transparency – there’s no prescribed selection process for making appointments with arbitrarily picking up of names from a list suggested by the nodal ministry. · Limitation of power – It lack powers to inquire, suo moto, or on a representation presented to it by a member of any of the notified minority communities regarding any atrocities.

BASICS OF NATIONAL COMMISSION FOR MINORITIES

  • The Union Government set up the National Commission for Minorities (NCM) under the National Commission for Minorities Act, 1992.
  • Six religious communities, viz; Muslims, Christians, Sikhs, Buddhists, Zoroastrians (Parsis) and Jains have been notified in Gazette of India as minority communities by the Union Government all over India.
  • Composition:
    • NCM consists of a Chairperson, a Vice-Chairperson and five members and all of them shall be from amongst the minority communities.
    • Total of 7 persons to be nominated by the Central Government should be from amongst persons of eminence, ability and integrity. The Ministry
    • for Minority Affairs recommends the names to the Prime Minister’s Office.
    • Tenure: Each Member holds office for a period of three years from the date of assumption of office.

Role and function of National Commission for Minorities: It is a forum for appeal, set up to safeguard the rights and interests of India’s minority communities. The NCM Act lists 9 functions of the Commission:



CONSTITUTIONAL PROVISIONS RELATED TO MINORITIES

RIGHT TO FREEDOM OF RELIGION
· Article 25 – Freedom of Conscience and Free Profession, Practice and Propagation of Religion
· Article 26 – Freedom to Manage Religious Affairs
· Article 27 – Freedom from Taxation for Promotion of a Religion
· Article 28 – Freedom from Attending Religious Instruction
CULTURAL AND EDUCATIONAL RIGHTS
· Article 29 – Protection of Interests of Minorities. Right to conserve a distinct language, script or culture of its own
· Article 30 – Right of Minorities to Establish and Administer Educational Institutions

View

INNER LINE PERMIT (ILP)

December 2020

  • INNER LINE PERMIT (ILP)
    • CONTEXT
      • Seven Meghalaya-based Organisations have renewed their movement for the implementation of the British era inner-line permit (ILP) for entry into the State.
    • MORE ABOUT INNER LINE PERMIT
      • Inner Line Permit is a document that allows an Indian citizen to visit or stay in a state that is protected under the ILP system
      • At present, four Northeastern states are covered, namely, Arunachal Pradesh, Mizoram, Manipur and Nagaland.
      • No Indian citizen can visit any of these states unless he or she belongs to that state, nor can he or she overstay beyond the period specified in the ILP.
      • An ILP is issued by the state government concerned. It states the dates of travel and also specifies the particular areas in the state to which the ILP holder can travel.
  • HISTORICAL BACKGROUND OF ILP

    • Under the Bengal Eastern Frontier Regulation Act, 1873, the British framed regulations restricting the entry and regulating the stay of outsiders in designated areas.
    • This was to protect the Crown’s own commercial interests by preventing “British subjects” (Indians) from trading within these regions. In 1950, the Indian government replaced “British subjects” with “Citizen of India”.
    • This was to address local concerns about protecting the interests of the indigenous people from outsiders belonging to other Indian states.
View

37TH ASEAN AND RCEP

November 2020

                37TH ASEAN AND RCEP

 

WHY IN NEWS?

  • Recently, the Regional Comprehensive Economic Partnership (RCEP) has come into existence on the sidelines of the 37th ASEAN Summit.
  • It has laid down the path for restarting discussion that had failed to admit India earlier and said “new” developments would be taken into consideration if India re-applies.

 

REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP:

  • It consists of 10 Association of Southeast Asian Nations (ASEAN) members, as well as South Korea, China, Japan, Australia and New Zealand.
  • It excludes the USA, which withdrew from the Trans-Pacific Partnership (TPP) in 2017.
  • Negotiations over the RCEP deal began in 2012. India was also part of the negotiations but it pulled out in 2019 over concerns that lower tariffs could hurt local producers.
  • Members of the RCEP make up nearly a third of the world’s population and account for 29% of global gross domestic product (GDP).
  • The China-backed group will emerge as the largest free trade agreement (FTA) in the world surpassing both the US-Mexico-Canada Agreement and the European Union (EU).
  • It is expected to eliminate a range of tariffs on imports within 20 years and also includes provisions on intellectual property, telecommunications, financial services, e-commerce and professional services.
  • Under RCEP, parts from any member nation would be treated equally, which might give companies in RCEP countries an incentive to look within the trade region for suppliers.
  • Businesses with global supply chains might face tariffs even within an FTA because their products contain components that are made elsewhere.
  • The deal could increase global national income by USD 186 billion annually by 2030 and add 0.2% to the economy of its member states.
  • However, some analysts think the deal is likely to benefit China, Japan and South Korea more than other member states.
  • However, it could be some time before any country sees the benefits, because six Asean nations and three other nations have to ratify it before it takes effect.
  • Ratification will likely be tricky in national parliaments, owing to both anti-trade and anti-China sentiments among the countries.

 

SIGNIFICANCE FOR CHINA:

  • The beginning of RCEP is a major development that will help China and trade in the Asia-Pacific region in the post-Covid-19 scenario.
  • It will give China access to Japanese and South Korean markets in a big way, as the three countries have not yet agreed on their FTA.
  • While China already has a number of bilateral trade agreements, this is the first time it has signed up to a regional multilateral trade pact.

 

INDIA’S STAND:

  • While addressing the ASEAN Summit, India highlighted the necessity for peace and stability in the region but maintained silence regarding RCEP as it is not very welcoming of the China-backed grouping in the light of the ongoing military tension in eastern Ladakh along the Line of Actual Control (LAC).
  • In the meantime, India held Malabar Exercise with Japan and the USA for the Quadrilateral Security Dialogue (QUAD) which was interpreted as an anti-China move.
  • However, these moves did not influence Japanese and Australian plans regarding RCEP.
  • India ended negotiation on RCEP over terms that were perceived to be against its interests.
  • One of the major concerns for India was inadequate protection against surges in imports as its industry had fears that signing RCEP would allow cheaper products from China to flood the market in India.
  • The extended power to China could lead to actions and incidents eroding trust in the maritime region disrespecting the territorial integrity and sovereignty.
  • For example, the ongoing tensions at LAC and Chinese activities in Pakistan-occupied Kashmir.

 

RCEP on India’s Membership:

  • India, as an original negotiating participant of the RCEP, has the option of joining the agreement without having to wait 18 months as stipulated for new members in the terms of the pact.
  • RCEP signatory states plan to commence negotiations with India once it submits a request of its intention to join the pact “in writing”, and it may participate in meetings as an observer prior to its accession.

 

WAY FORWARD:

  • The mega trade bloc is a landmark trade initiative which is expected to boost commerce among the member-countries spread across the Asia-Pacific region.
  • India needs to keep its interests on the table as the road to further expansion of its exports to RCEP member nations is very much still open, given that India already has trade and investment agreements with 12 of them.
  • Utilising existing agreements better while proactively exploring new opportunities in other geographies will diversify both Indian markets as well as an export basket.

 

View

SHANGHAI COOPERATION ORGANIZATION (SCO)

November 2020

SHANGHAI COOPERATION ORGANIZATION (SCO)

 

WHY IN NEWS?

  • Recently, Russian President chaired the 20th Summit of SCO Council of Heads of State held in virtual format

 

INDIA’S COMMITTMENT IN MEETING

  • Highlighted the imperative of a reformed multilateralism to meet the expectation of a world suffering from social and financial after- effects of the pandemic
  • PM Modi retierated india’s firm belief in regional peace, security and prosperity and raising voice against terrorism smuggling of illegal weapons, drugs and money laundering.
  • Prime Minister underlined India’s strong cultural and historical connect with the SCO region and reiterated India’s firm commitment towards strengthening connectivity in the region with initiatives like International North-South Transport Corridor, Chabahar Port and Ashgabat Agreement
  • India extended full support to observing the 20th anniversary of SCO in 2021 as the “SCO Year of Culture.”
  • India announced that in 2021, the National Museum of India will hold an exhibition on the Buddhist heritage of the SCO countries.
  • India proposed to set up a Special Working Group on Innovation and Startups and a Sub Group on Traditional Medicine within SCO.

ABOUT THE SCO

  • It is a permanent intergovernmental political, economic and military organization founded in Shanghai in 2001.
  • Regional development and security issues (terrorism, ethnic separatism and religious extremism) are its main focus.
  • Russian and Mandarin are presently used as official and working languages in the SCO.
  • Working of the SCO is underpinned by the “SHANGHAI SPIRIT” which is about mutual trust, mutual benefit, equality, consultation, respect for cultural diversity and pursuit of common development.

 

RELEVANCE OF THE SCO FOR INDIA

  • Controlling regional terrorism: SCO’s defence-centric structures and activities of RATS have achieved considerable successes in curbing regional terrorism.
  • Participant in the political dynamics of Afghanistan: It is likely that after the withdrawal of US and NATO forces from Afghanistan SCO will start playing a more prominent role.The SCO-Afghanistan Contact Group which was suspended in 2009 has also resumed working since 2017. Thus SCO would provide a platform to India for engaging in the Afghanistan’s political dynamics.
  • Political: At annual summit of the SCO India gets opportunity to renew bilateral ties with regional countries.

o The forum also provides India greater visibility in the affairs of the Eurasian region.

o India can also scuttle influence of Pakistan in Central Asia.

  • SCO also makes India an active key stakeholder in shaping the dynamics of politically fragile, Central Asian Region (CAR) which is also seen as a fertile ground for terrorism and drug trafficking.
  • Economic: CAR is rich in iron-ore, coal, oil, gas, gold, lead, zinc, molybdenum, uranium, gold, gas and energy etc. India’s economic diplomacy in SCO is focused less on Russia, China and Pakistan and more on CARs.
  • Connectivity: India’s pending energy projects like the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline, IPI (Iran-Pakistan-India) pipeline, and CASA (Central Asia-South Asia)-1000 electricity transmission projects all of which are blocked due to Pakistan may get a much needed push through the SCO.

 

CHALLENGES FOR INDIA IN THE SCO

  • Dominance of China: SCO is a China dominated organisation. Barring India, the Belt and Road Initiative (BRI) has been endorsed by all the members. BRI is a concern for India as China-Pakistan Economic Corridor (CPEC) grossly violates India’s sovereignty. China may try to limit and balance India’s influence in the region by supporting Pakistan.
  • Controlling Pakistan Sponsored terrorism: China has always condoned Pakistan’s link with terrorist activities in India. SCO may not prove very effective in controlling Pakistan sponsored terrorism.
  • Trust deficit: Growing closeness of Russia and China adds to the difficulties that India faces due to China. Pakistan axis in the SCO. Other member countries are also well disposed towards Pakistan. This puts India at the risk of being isolated in the organization.
  • Lack of connectivity with Central Asia and beyond: A major impediment in connectivity with Central Asia and Eurasia remains the strategic denial of direct land connectivity between India and Afghanistan and beyond by Pakistan. India’s bilateral trade with Central Asia stands at about $2 billion against over $50 billion of China’s.

 

WAY AHEAD FOR INDIA

  • Maintain an independent voice against China’s dominance: On BRI India has articulated its view that connectivity projects must respect the sovereignty, and territorial integrity.

 

  • India-Russia diplomatic relations and India’s cultural and historical connect with the CAR could be leveraged for promoting India’s interests in the SCO.
  • Revitalise connectivity projects: The opening of Chabahar port and entry into Ashgabat agreement should be utilized for a stronger presence in Eurasia.
  • A clear focus on operationalizing International North-South Transport Corridor (INSTC) is needed. This will pave the way for enlarging economic clout in the central Asia which in turn makes India indispensable in the region.
  • Constructively engage Pakistan: Recently Russia, at the request of the Indian, has decided not to enter into an arms relationship with Pakistan. India should mobilize opinion in the SCO to ensure its connectivity projects to extended neighbours are unblocked by Pakistan.
  • Play a constructive role: India could play a role in de-radicalisation of youths in Central Asia. It should also leverage its soft power to enhance its spheres of engagements in the field of culture, cuisine, education etc. This will ensure India does not get isolated in the organization.

 

 

View

THE SHIFTING TRAJECTORY OF INDIA’S FOREIGN POLICY

November 2020

THE SHIFTING TRAJECTORY OF INDIA’S FOREIGN POLICY

 

CONTEXT

  • The Third India-U.S. 2+2 Ministerial Dialogue between the Foreign and Defence Ministers of India and the U.S. Secretaries of State and Defence took place in Delhi on October 26-27.

 

KEY OUTCOME OF THE MEETING

  • The signing of the Basic Exchange and Cooperation Agreement (BECA) for Geo-Spatial Cooperation
  • The two-day meeting also discussed steps to take existing bilateral cooperation, including ‘military to military cooperation, secure communication systems and information sharing, defence trade and industrial issues’, to a new level.
  • With the signing of BECA, India is now a signatory to all U.S.-related foundational military agreements (LEMOA signed in 2016 and COMCASA signed in 2018)
  • Welded together, the foundational military pacts effectively tie India to the wider U.S. strategic architecture in the region.

 

CRITICAL ANALYSIS OF THE MILITARY PACTS

  • Apprehensions about India’s Military Independence: Previous attempts to sign these agreements were resisted on the ground that it would compromise India’s security and independence in military matters.
  • Strategic Autonomy will henceforth sound hollow: Built into the agreements are provisions for a two-way exchange of information that is not aligned with India’s stance on maintaining strategic autonomy.
  • Pulled into wider Anti-China Coalition: The U.S. makes little secret of the fact that the primary push for getting India to sign the foundational agreements was the threat posed by China, and by appending its signature India has signed on to becoming part of the wider anti-China ‘coalition of the willing’.
  • Non-neutrality in Power Politics: India has effectively jettisoned its previous policy of neutrality, and of maintaining its equi-distance from power blocs (US and China).
  • Impacts Indo–Russia Relationship: The impact of India signing on to U.S.-related foundational military agreements, cannot but impact India-Russia relations, which has been a staple of India’s foreign policy for more than half a century.

 

ARGUMENTS IN FAVOUR OF SIGNING THESE PACTS AND DEEPENING INDIA-US TIES

  • It is argued that there are enough India-specific safeguards built into the pacts, and there is no reason for concern.
  • It may be argued that the new policy is essentially a pragmatic one, in keeping with the current state of global disorder.
  • It could even be argued that an ideologically agnostic attitude is better suited to the prevailing circumstances of today.

 

IMPACT ON CHINA – MAINTAINING PEACE A TOUGHER CHALLENGE

  • China-India relations have never been easy. Since 1988, India has pursued a policy which put a premium on an avoidance of conflicts with China.
  • Even after Doklam in 2017, India saw virtue in the Wuhan and Mamallapuram discourses, to maintain better relations. This will now become increasingly problematic as India gravitates towards the U.S. sphere of influence.
  • India’s willingness to sign foundational military agreements with the U.S., to obtain high grade intelligence and other sensitive information, would suggest that India has made its choice, which can only exacerbate already deteriorating China-India relations.
  • Several of India’s neighbours (Sri Lanka, Nepal and Bangladesh), normally perceived to be within India’s sphere of influence, currently seem to be out of step with India’s approach on many issues.
  • At the same time, both China and the U.S. separately, seem to be making inroads and enlarging their influence here.
  • The Maldives, for instance, has chosen to enter into a military pact with the U.S. to counter Chinese expansionism in the Indian Ocean region.

 

WAY AHEAD

  • West Asia: India needs to ensure, through deft diplomatic handling, that the latest UAE-Israel linkage does not adversely impact India’s interests in the region. India also needs to devote greater attention to try and restore India-Iran ties which have definitely frayed in recent years.
  • Afghanistan: India must decide how a shift in policy at this time would serve India’s objectives in Afghanistan, considering the tremendous investment it has made in recent decades to shore up democracy in that country.
  • Shanghai Cooperation Organisation (SCO): India, again, will need to try and square the circle when it comes to its membership of the SCO, considering its new relationship with the U.S.
  • Non-Aligned Movement (NAM): Likewise, even though India currently has a detached outlook, vis-à-vis the NAM, and has increasingly distanced itself from the African and Latin American group in terms of policy prescriptions, matters could get aggravated, following India’s new alliance patterns
  • Russia: India can hardly hope to count on Russia as a strategic ally at a time, when Russia-China relations have vastly expanded and a strategic congruence exists between the two countries. India will need to handle with skill and dexterity its relationship with Russia.

 

CONCLUSION

  • New Delhi’s diplomatic skills will be tested now that the country is effectively a part of the U.S.’s security architecture

 

View

TIBETAN PARLIAMENT-IN-EXILE (TPIE)

November 2020

 TIBETAN PARLIAMENT-IN-EXILE (TPIE)

 

CONTEXT:

  • Over 1.3 lakh Tibetans living in exile and settled across India and other parts of the globe shall be electing their next Parliament-in-Exile, called Central Tibetan Administration, and it’s head in May 2021

 

MORE ABOUT Tibetan Parliament-in-Exile (TPiE)

  • The Speaker and a Deputy Speaker head the Tibetan Parliament-in-exile. The 16th TPiE had 45 members.
  • The Central Tibetan Administration exists and functions on the basis of the Constitution of the Tibetan government called the ‘The Charter of the Tibetans in Exile’. In 1991, The Constitution

Redrafting Committee instituted by the Dalai Lama prepared the Charter for Tibetans in exile. The Dalai Lama approved it on June 28, 1991.

  • According to the CTA’s Election Commission, nearly 80,000 Tibetans living outside Tibet have registered for voting so far, including roughly 56,000 living in India and 24,000 in other countries.
  • TPiE is not recognised officially by any country, including India. But, a number of countries including the United States of America and European nations deal directly with the president of the Central Tibetan Administration and other Tibetan leaders through various forums.
  • The TPiE claims its democratically-elected character helps it manage Tibetan affairs and raise the Tibetan issue across the world.

 

View

G20 SUMMIT

November 2020

                 G20 SUMMIT

CONTEXT:

  • Recently, at the G20 summit held virtually India called for a “New Global Index” for the post-Corona world.

 

MORE ABOUT NEW GLOBAL INDEX

  • New Global Index will be based on 4 pillars of

o Talent,

o Technology,

o Transparency and

o Trusteeship towards the planet.

  • Talent

o The focus must shift to multi-skilling and reskilling from capital and finance to create a vast human talent pool.

o India’s New Education policy and programmes such as Pradhan Mantri Innovative Learning Program (DHRUV) are well aligned with this element.

  • Technology:

o Ensuring that technology reaches all segments of the society and the value of new technologies should be measured by their benefit to humanity.

o Digitial India and E-governance campaigns of India have increased people’s access to technology and other government services.

 

  • Transparency

o Reforms such as Right to Information and Ease of Doing Business promote transparency in governance in India.

  • Trusteeship:

o The world should deal with the environment and nature as trustees rather than owners which would inspire us towards a holistic and healthy lifestyle.

o Climate change must be fought not in silos but in an integrated, comprehensive and holistic way.

o A principle whose benchmark could be a per capita carbon footprint. A carbon footprint is the amount of greenhouse gases primarily carbon dioxide released into the atmosphere by a particular human activity.

 

CARBON FOOTPRINT

  • A carbon footprint is the amount of greenhouse gases—primarily carbon dioxide—released into the atmosphere by a particular human activity.
  • It is usually measured as tons of CO2 emitted per year, a number that can be supplemented by tons of CO2-equivalent gases, including methane, nitrous oxide, and other greenhouse gases.

 

G20 BASICS

  • The G20 (or Group of Twenty) is an international forum for the governments and central bank governors from 19 countries and the European Union (EU).
  • Founded in 1999 with the aim to discuss policy pertaining to the promotion of international financial stability, the G20 has expanded its agenda since 2008 and heads of government or heads of state, as well as finance ministers, foreign ministers and think tanks, have periodically conferred at summits ever since.
  • It seeks to address issues that go beyond the responsibilities of any one country.
  • With the G20 growing in stature after its inaugural leaders’ summit in 2008

 

View

APEC VIRTUAL MEET

November 2020

                  APEC VIRTUAL MEET

 

CONTEXT:

  • Recently, a virtual meeting of the 21-member Asia-Pacific Economic Cooperation (APEC) forum was held.
  • The meeting was hosted by Malaysia. New Zealand will also host next year’s APEC meetings virtually due to the pandemic.

 

ABOUT APEC:

  • APEC is Asia Pacific Economic Cooperation, a premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region.
  • It was established in 1989 to further enhance economic growth and prosperity for the region and to strengthen the Asia- Pacific community. It is an example of Open Regionalism and operates on the basis of non-binding commitments, open dialogue and equal respect for the views of all participants
  • In 1993, an APEC Secretariat was established in Singapore to support the activities of the forum. Since then APEC has become the premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region.
  • Presently there are 21 member of APEC
  • India is not member of APEC

 

View

PRODUCTION LINKED INCENTIVES (PLI)

November 2020

      PRODUCTION LINKED INCENTIVES (PLI)

 

WHY IN NEWS?

  • The Union Cabinet has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in 10 more sectors for enhancing India’s manufacturing capabilities and exports (Atmanirbhar Bharat).
  • Earlier, the government had announced a production linked incentive or PLI scheme for medical devices, mobile phones and specified active pharmaceutical ingredients, with a proposed outlay of Rs. 51,311 crore.

 

PLI SCHEME:

  • A scheme that aims to give companies incentives on incremental sales from products manufactured in domestic units.
  • The scheme invites foreign companies to set units in India, however, it also aims to encourage local companies to set up or expand existing manufacturing units.

 

EXPANSION OF PLI SCHEME TO 10 MORE SECTORS:

  • The ten sectors include food processing, telecom, electronics, textiles, specialty steel, automobiles and auto components, solar photo-voltaic modules and white goods such as air conditioners and LEDs.
  • The sectors had been identified on the basis of their potential to create jobs and make India self-reliant.
  • The PLI scheme for these ten sectors will be operational for five years with a total estimated outlay of Rs 1.45 lakh crore.
  • The PLI scheme will be implemented by the concerned ministries/departments.
  • Savings from one PLI scheme of an approved sector can be utilized to fund another sector.
  • The scheme for these sectors will be in addition to the PLI schemes for mobile phones and allied equipment manufacturing, pharmaceutical ingredients and medical devices.
  • Several more pharmaceutical products have been brought under the aegis of the PLI scheme, including complex generics, anti-cancer and diabetic drugs, in-vitro diagnostic devices and special empty capsules.

 

BENEFITS:

  • The PLI scheme across these 10 key specific sectors will make Indian manufacturers globally competitive, attract investment in the areas of core competency and cutting-edge technology; ensure efficiencies; create economies of scale; enhance exports and make India an integral part of the global supply chain.

 

PUSH TO DIGITAL ECONOMY:

  • India is expected to have a USD 1 trillion digital economy by 2025.
  • Additionally, the Government’s push for data localization, Internet of Things, projects such as Smart City and Digital India are expected to increase the demand for electronic products.

 

INCREASE EXPORTS:

  • The Indian pharmaceutical industry is the third largest in the world by volume and 14th largest in terms of value. It contributes 3.5% of the total drugs and medicines exported globally.
  • India is the world’s second largest steel producer in the world. It is a net exporter of finished steel. A PLI scheme in Specialty Steel will help in enhancing manufacturing capabilities for value added steel leading to increase in total exports.
  • Specialty steel is made by adding various elements to iron, to achieve various properties, such as heat resistance, hardness, and corrosion resistance.

 

  • SECURE TELECOM INFRASTRUCTURE:
  • Telecom equipment forms a critical and strategic element of building a secured telecom infrastructure and India aspires to become a major original equipment manufacturer of telecom and networking products.

 

DOUBLING FARMERS’ INCOME:

  • The growth of the processed food industry leads to better price for farmers and reduces high levels of wastage.

 

WAY FORWARD:

  • Growth in production and exports of industrial goods will greatly expose the Indian industry to foreign competition and ideas, which will help in improving its capabilities to innovate further.
  • Promotion of the manufacturing sector and creation of a conducive manufacturing ecosystem will not only enable integration with global supply chains but also establish backward linkages with the MSME sector in the country.
  • It will lead to overall growth in the economy and create huge employment opportunities.

 

View

MORATORIUM ON LAKSHMI VILAS BANK

November 2020

                    MORATORIUM ON LAKSHMI VILAS BANK

 

CONTEXT:

  • Recently, the Reserve Bank of India (RBI) has decided to impose a 30-day moratorium on Chennai-based Lakshmi Vilas Bank Ltd (LVB).

 

BACKGROUND:

  • LVB was placed under the prompt corrective action (PCA) framework in September 2019 considering the breach of PCA thresholds as on 31st March, 2019.
  • The RBI has specified certain regulatory trigger points, as a part of prompt corrective action (PCA) Framework.
  • The RBI had come to the conclusion that in the absence of a credible revival plan, with a view to protect depositors’ interest, there is no alternative but to apply to a moratorium under section 45 of the Banking Regulation Act, 1949.

CHALLENGES FACED BY LVB:

  • Domino Effect of Yes Bank Crisis: The LVB episode started unfolding after the RBI and banks led by State Bank of India bailed out fraud-hit Yes Bank in March 2020.
  • On the same lines, Punjab and Maharashtra Cooperative Bank was hit by a loan scam highlighting the riskiness of banks, especially cooperative banks.
  • Declining Net Worth: The financial position of the LVB has undergone a steady decline, with continuous losses over the last three years eroding the bank’s net worth.
  • Inadequacy to Raise Capital: LVB has not been able to raise adequate capital to address the issues and was also experiencing the continuous withdrawal of deposits and low levels of liquidity.
  • Governance Issues: Serious governance issues in recent years have led to a deterioration in the performance of the bank.
  • Lack of Promoters: The functioning of LVB, along many such banks, has been under scrutiny as most of them do not have strong promoters, making them targets for mergers.
  • Rising NPAs: Its gross non-performing assets (NPAs) stood 25.4% of its advances as of June 2020, as against 17.3% in 2019. Due to which, it was unable to raise capital to shore up its balance sheet.

 

MEASURES TAKEN BY RBI:

  • The RBI monitors the performance of private banks and large Non-Banking Financial Companies (NBFCs).
  • On LVB, it has imposed a moratorium whose cash withdrawal limit has been capped at Rs. 25,000.
  • It has also put in place a draft scheme for its amalgamation with DBS Bank India.
  • One safety net for small depositors is the Deposit Insurance and Credit Guarantee Corporation (DICGC), an RBI subsidiary, which gives insurance cover on up to Rs. 5 lakh deposits in banks.
  • RBI may ask for capital infusion by other banks and financial institutions, putting in equity capital in the reconstructed entity.
  • Budget 2019 had announced a Rs. 70,000 crore bank recapitalisation programme to help Public Sector Banks shore up their capital reserves and enhance credit flow into the economy.

 

WAY FORWARD

  • In September 2020, an expert committee headed by K V Kamath came out with recommendations on the financial parameters required for a one-time loan restructuring window for corporate borrowers.
  • The crisis provides an opportunity for the various stakeholders to review their existing frameworks and revise them accordingly suiting to timely needs.

 

View

Contact Us

Enquire Now