bharat ias - FRBM Act review

FRBM Act review

FRBM Act review   UPDATED: APRIL 18, 2017 23:03 IST The expert panel’s recommendation to review the fiscal responsibility law is timely The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 . 1.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment. In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. 2.Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to ‘limit the government’s borrowing authority’ under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was abandoned after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Act’s deficit target is now only likely to be met next year. 3. The committee’s proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the ‘extraordinary and unanticipated domestic development’ of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework. Instead of focussing purely on the fiscal and revenue deficit numbers, which should be brought down to 2.5% and 0.8% of GDP respectively by 2023, the panel has called for paring India’s cumulative public debt as a proportion to GDP to 60% by 2023 — from around 68% at present. 4. The latter, a simpler measure for solvency purposes, should inspire confidence among rating agencies. Though this has put paid to the government’s hope that a fiscal deficit range could be targeted instead of absolute numbers, the Finance Minister has committed to the 3% target for the next two years, from the 3.2% target for 2017-18. A clear fiscal policy framework in tandem with the monetary policy framework already adopted could act as a powerful signal of commitment to macroeconomic stability. The Centre must swiftly take a call on the panel’s recommendations — including for a new debt and fiscal responsibility law, and the creation of a Fiscal Council with independent experts that could sit in judgment on the need for deviations from targets. It is equally critical that States are brought on board, as the 60% debt target includes 20% on their account. Their finances are worsening again even as the clamour for Uttar Pradesh-style loan waivers grows.    ...

Publishes on : 08-May-2017 10:49 AM
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DILEMMA BETWEEN INVESTORS PROTECTION AND PROTECTION OF TRIBAL RIGHTS WHAT IS THE ISSUE ?: Recently, Ras Al Khaimah Investment Authority (RAKIA), an Emirati investor, initiated an investment treaty arbitration (ITA) claim against India under the India-UAE Bilateral Investment Treaty (BIT), seeking compensation of $44.71 million. This claim arose after a memorandum of understanding (MoU) between Andhra Pradesh and RAKIA to supply bauxite to Anrak Aluminum Limited, in which RAKIA has 13% shareholding, was cancelled, allegedly due to the concerns of the tribal population in those areas. Similarly, in 2014, Bear Creek Mining Corporation initiated an ITA against Peru under the investment chapter of the Canada-Peru Free Trade Agreement, claiming violation of the investment obligations due to the withdrawal of mining concessions, allegedly as a result of the protests by indigenous peoples. These cases present an opportunity to evaluate the impact of the obligations of the host states under BITs on the rights of the tribal people. Protection under law The United Nations Declaration on the Rights of Indigenous People (UNDRIP), adopted in 2007, for which India voted, recognises among other things indigenous peoples’ rights to self-determination, autonomy or self-governance, and their right against forcible displacement and relocation from their lands or territories without free, prior and informed consent. In addition to the UNDRIP, there is the International LabourOrganisation (ILO) Convention concerning Indigenous and Tribal Peoples, 1989 which is based on the “respect for the cultures and ways of life of indigenous peoples” and recognises their “right to land and natural resources and to define their own priorities for development.” India is not a party to this, but it is a party to the ILO Convention concerning the Protection and Integration of Indigenous and Other Tribal and Semi-Tribal Populations in Independent Countries, 1957 which is outdated and closed for ratification. At the domestic level, the Constitution provides autonomy to tribal areas in matters of governance under the Fifth and Sixth Schedules, which is further fortified by the Samatha v. State of Andhra Pradesh &Ors (1997) judgment where the Supreme Court declared that the transfer of tribal land to private parties for mining was null and void under the Fifth Schedule. The framework for protection of the rights of tribal and indigenous people is further strengthened by the Recognition of Forest Rights Act, 2006 which protects the individual and community rights of tribal people in forest areas and their right to free and prior informed consent in event of their displacement and resettlement. Investment promotion While the legislation for the protection of the rights of tribal people are in place, they are regularly flouted as has been highlighted by the Xaxa Committee report of 2014. Instead of ensuring that tribals are not ousted from the land to which they are historically and culturally connected, the state becomes more concerned about fulfilling contractual obligations towards the private investor. This means that constitutional and legal principles are discarded. This is evidenced by the increasing number of MoUs being signed by natural resources-endowed states with investors for facilitation of developmental projects. For instance, Chhattisgarh and Jharkhand have reportedly entered into 121 and 74 such MoUs, respectively, with various private players as of 2014. All this materially alters the role of the state vis-à-vis the tribal people as the state prefers economic expediency at the cost of the rights of tribal people. For economic development, states invite investments not only from domestic investors but also from foreign players whose interests are not only protected under domestic laws but also under the BITs. The purpose of BITs is to give protection to foreign investors while imposing certain obligations on the host state. For instance, if a development project involving a foreign investor in tribal areas leading to acquisition of tribal land is met with protest, there may be two possible scenarios. One, the State government due to socio-legal and political pressures may yield to the demand of the tribal people to the detriment of the foreign investor, which is what has happened in the case of RAKIA. Two, assuming that the government continues with the project, the judiciary may order the cancellation of permits given to the foreign investor, which is what happened in the case of Vedanta in 2013 (Orrisa Mining Corporation Ltd v. MoEF and Ors). In both cases, foreign investors may drag India to ITA claiming violation of obligations under the BIT, such as fair and equitable treatment or indirect expropriation. This perceived threat of ITA against the state may compel the latter to refrain from implementing tribal rights in the development project area. Conflicting interests Three main reasons for the serious impact that foreign investments have on the rights of indigenous people: 1.Failure to adequately address human rights issues of tribal people in BITs; 2.The perceived threat of ITA for enforcement of investor protection; 3 .Exclusion of indigenous people from the policymaking process. What then are the possible options available to India to tackle these issues? First, none of the 80-plus BITs signed by India contains even a single provision on the rights of tribals. Even the 2015 model Indian BIT does not contain any such provision. Thus, to avoid ITA cases by foreign investors, the government’s approach should be to include provisions relating to the protection of indigenous people in BITs. There are many examples from around the world: Canada, in many of its BITs, has several exceptions to protect the rights of indigenous people. The Trans-Pacific Partnership agreement also incorporates the rights of the Maoris from New Zealand. Since India is going to renegotiate its existing BITs, it should create a special exception for taking regulatory measures for protecting the rights of tribal people, in which case it should have a textual basis in the BITs to derogate from investment protection obligations under BITs. Second, the strengthening of BITs must go hand in hand with the implementation of domestic legislations for the protection of the rights of tribals, where the state does not consider tribals as impediments in the development process. Third, as far as possible, tribal people should be given representation even in investment policymaking.      ...

Publishes on : 08-May-2017 10:47 AM
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bharat ias - Electronic Voting Machines:

Electronic Voting Machines:

Electronic Voting Machines: Why in news: ·       The opposition parties have alleged that the EVMs have been tampered with in favour of the ruling party. ·       This allegation is not new and both political parties and experts have repeatedly questioned the
functioning of EVMs since its adoption. SALIENTFEATURESOFEVMS: ·       It is tamper proof & simple to operate. ·       Program which controls the functioning of the control unit is burnt into a micro chip on a “one time programmable basis”. Once burnt it cannot be read, copied out or altered. ·       Eliminates the possibility of invalid votes, makes the counting process faster and reduces the cost of printing. ·       An EVM can be used in areas without electricity as it runs on alkaline batteries. ·       Elections can be conducted through EVMs if the number of candidates does not exceed 64. ADVANTAGES OF EVM : ·       The EVMs reduce the time in both casting a vote and declaring the results compared to the old paper ballot system.  ·       Bogus voting and booth capturing can be greatly reduced by the use of EVMs.  ·       Illiterate people find EVMs easier than ballot paper system.  ·       They are easier to transport the EVMs compared to ballot boxes. ·       If an EVM goes out-of-order then, the Election Officer, in-charge of the polling booth, can replace the defunct EVM with a spare EVM. The votes recorded until the stage when the EVM went out of order remain safe in the memory of the Control Unit and it is not necessary to start the poll from the beginning. ·       Environmental effects of EVMs: For each national election alone it is estimated that about 10,000 tons of ballot paper (roughly 200,000 trees) would be saved.  ·       An EVM can record a maximum number of 3840 votes. ·       EVMs have a very long shelf life (approx. 15 years) ·       EVMs are very easy to install and use. ·       It is next to impossible to hack or tamper with EVMs ·       Can be used for simultaneous elections for Parliament and State Legislative Assembly.  Disadvantages ·       Software malfunction leading to inaccurate results. ·       Security problems ·       Vulnerability to hacking ·       No means for voters to verify their votes ·       The time gap between the voting and the counting of votes is a risk to possible tampering, as the ballots are physically stored after votes  Impact on Electoral Processes ·       India’s is the largest democracy in the world and has hundreds of millions of voters. Electoral frauds (multiple-voting, vote buying) have been the biggest challenge for the Election Commission of India. Among these, ‘booth-capturing’ (goons supporting a political party raiding polling stations and stuffing ballot boxes with votes) is the biggest. ·       Though the Election Commission of India, over the years, has taken measures to curb these malpractices, the traditional voting system still posed security problems. ·       However, with the introduction of Electronic Voting Machines (EVMs) in the 90s, booth-capturing was curbed. EVMs can register only 5 votes per minute, and booth-capturing would require more time than that. EVMs also made sure that the whole electoral process and results are fair, by improving efficiency of tallying the results thereby avoiding human errors, reducing manipulation or rigging and abuse of power in poll booths. ·       The introduction of EVMs also, successfully reduced the time and cost involved in the conduct of elections. Voter Verified Paper Audit Trail (VVPAT) ·       The inclusion of paper audit trails to the EVMs is costly but perhaps unavoidable ·       In the face of extreme and unreasonable complaints against Electronic Voting Machines by a number of political parties, the Election Commission perhaps had no choice but to have the working of the machines corroborated by a paper audit trail. ·       To have such a facility ready for all constituencies by the 2019 Lok Sabha election is expensive (an estimated ₹3,174 crore) and also unnecessary (paper trails are at best required in a few constituencies to corroborate results). ·       Its request to the Law Ministry to release funds for the procurement of voter-verifiable paper audit trail (VVPAT) machines for the 2019 Lok Sabha election should be interpreted in this context. ·        As many as 16 lakh VVPAT machines will be required and only an urgent release of funds will allow the machines to be ready in time for 2019. ·       It was possible for the EC to brush off the complaints from the Bahujan Samaj Party and the Aam Aadmi Party following their defeat in Uttar Pradesh and Punjab respectively, but it clearly became increasingly difficult for it to ignore the clutch of parties that joined the chorus, some demanding a return to paper ballots ·       The EC has repeatedly assured voters that there are enough procedural and technical safeguards to prevent large-scale tampering or manipulation of EVMs. ·        Since 2006, elections have witnessed the use of upgraded EVMs — Model 2 machines, with security features such as dynamic coding of key codes on ballot units and their transfer as messages to the control unit in an encrypted manner. ·       EVMs feature encoded software that is burnt one-time on to programmable chips, enabling them to be used as stand-alone machines rather than computer-connected units, thus preventing any hacking by remote devices. ·        Model 3 machines produced after 2013 have additional features such as tamper detection. The EC has laid down procedural rules of locking and storing EVMs before and after polling, besides functional checks and tests in the presence of representatives of political parties. ·       The addition of the VVPAT machine to the process is to allow for cross-checking of EVM results through a paper audit, completing another layer of accountability to the indigenously produced machines (only the microchip is manufactured outside the country with the machine language embedded on it) ·        Contrary to glib claims about tampering, studies show the introduction of EVMs has resulted in a drastic reduction in electoral fraud (rigging, stuffing of ballot boxes, etc.) and allowed for greater voter participation. ·        Since reverting to the older paper ballot system will be regressive, the only option in the face of the protests is to have a back-up in the form of a paper trail — something that will hopefully put a quietus to the controversy.  About Voter Verified Paper Audit Trail (VVPAT): ·       VVPAT is a slip generated in a printer-like a machine attached to EVM and flashes voter’s choice of candidate and party. ·       Generated slip is shown for a few seconds to the voter to cross check before it falls into a sealed drop box which can be opened during counting. ·       Under VVPATs, initially, election results are announced based on the recording of votes given by EVMs. ·        If the election results are disputed, then the votes recorded under Paper Trail System shall be counted and announced. If there is any discrepancy between the two results, then the result given by VVPAT will prevail over the EVMs.    ...

Publishes on : 08-May-2017 10:43 AM
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bharat ias - The role of states in foreign policy

The role of states in foreign policy

The role of states in foreign policy  Context While staying firm on core national interests, New Delhi needs to give the states greater freedom to pursue cross-border economic partnerships Teesta water-sharing agreement  Cooperative Federalism vs Collaborative Sub-regionalism  What is Co-operative federalism? Cooperative federalism is a concept of federalism in which national, state, and local governments interact cooperatively and collectively to solve common problems, rather than making policies separately but more or less equally The former high commissioner of Bangladesh to India, blamed India’s cooperative federalism for the lack of progress on the water-sharing issue He advocated that the principle of collaborative sub-regionalism should trump cooperative federalism A reasonable argument can indeed be made that cooperative federalism in this instance is against India’s national interest as China is courting India’s neighbours, including Bangladesh, with an open wallet And this is not the first instance of a state coming in the way of national interest Political parties in Tamil Nadu, for example, influenced the Manmohan Singh government’s policies on Sri Lanka when the island country was being offered a number of sweetheart deals by China  Paradiplomacy/Sub-national diplomacy/Constituent diplomacy John Kincaid of Lafayette College had coined the term “constituent diplomacy” in 1990 to denote the “international activities of a foreign-policy character, undertaken by the constituent governments…and local governments (mostly municipalities) of federal countries and decentralized unitary states, as well as by citizen organizations and non-governmental organizations” It is also variously referred to as “paradiplomacy” or “sub-national diplomacy” The practice of constituent diplomacy has been observed across Europe and North America but it has increasingly been adopted in the rest of the world as well. China is a good example  Examples around the world: China Chinese provinces also have their own foreign affairs offices (FAOs) and foreign trade and economic cooperation commissions (FTECCs) to deal with international partners Many Chinese cities have opened overseas offices to attract investments and promote trade Provincial governments play a big part in setting the agenda of the sub-regional initiatives that China is a part of The role played by the border province of Yunnan, for instance, has been highly instrumental in the success of the Greater Mekong Subregion (GMS), which includes Cambodia, Laos, Myanmar, Thailand and Vietnam Need for greater provincial autonomy in India Provincial autonomy is the key: It is largely due to provincial autonomy that China has been able to extract much more from its sub-regional initiatives compared to India’s takeaways from the Mekong-Ganga Cooperation, Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), and the forum on regional cooperation among Bangladesh, China, India and Myanmar (BCIM) BBIN: Present Indian government’s new sub-regional initiative involving Bangladesh, Bhutan and Nepal (BBIN) will meet the same fate if the provinces do not enjoy greater latitude in shaping the agenda of regional cooperation The geographical expanse of India mandates a role for border states greater than New Delhi in matters of sub-regional cooperation West Bengal and all the North-Eastern states become crucial in this regard Teesta Issue If, as a border state, West Bengal is given more autonomy over cross-border cooperation with Bangladesh, it is likely to generate incentives for Banerjee to make some concessions The idea is to tie West Bengal’s economy in deep and meaningful ways to Bangladesh’s; the Teesta agreement could then be sold as a quid pro quo (favor) for reciprocal benefits Conclusion While New Delhi needs to adopt a firmer stand on matters of core national interest, it also needs to give the state governments greater freedom to pursue cross-border economic partnerships It is actually possible to marry cooperative federalism to collaborative sub-regional cooperation    ...

Publishes on : 19-Apr-2017 11:09 AM
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bharat ias - Risky, ill-considered

Risky, ill-considered

Risky, ill-considered  Context Pakistan’s announcement on Kulbhushan Jadhav threatens to escalate bilateral tensions  What has happened? Pakistan’s sudden announcement that former Indian naval officer KulbhushanJadhav has been sentenced to death by a Field General Court Martial is a development fraught with danger  Why? Pakistan claims that Mr. Jadhav, who was allegedly arrested in Balochistan last year, had been plotting operations against the China-Pakistan Economic Corridor  Injustice There are glaring holes in the procedures followed by Pakistan’s government and military in the investigation and trial The Confession tape seems doctored 13 requests by the government for consular access but Pakistani govt agreed for conditional access only if India cooperated in the investigation International human rights agencies too criticized the move  What Now? New Delhi must step up its responses in the matter, as it seems to have kept it on the backburner, confining itself to fruitless, repeated representations India must also pursue the issue with Iran, where Mr. Jadhav is believed to have been based for more than a decade, and investigate how he was brought, by force or otherwise, into Pakistan The timing of the announcement of the death sentence is also being seen in a spy versus spy context, with the recent disappearance of a former Pakistan Army officer in Nepal These are matters best left to security agencies at the highest level, but the questions around Mr. Jadhav’s arrest need to be dispelled  Broken Dialogue Moreover, this escalation highlights the consequences of the breakdown in the India-Pakistan dialogue process, limiting the channels of communication between the two governments to sort out matters in a sober manner The government has stood fast on its decision to not hold bilateral talks after the Pathankot attack in January 2016, but this policy is hardly likely to bring the desired results when a man’s life hangs in the balance  Conclusion The Jadhav case requires a proactive three-pronged response from India:   Impressing on Pakistan that the death sentence must not be carried out Explaining to the international community the flawed trial process, and Sending interlocutors to open backchannels for diplomacy for Mr. Jadhav’s safe return home ...

Publishes on : 19-Apr-2017 11:07 AM
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