THE INTERNATIONAL RELATIONS

1. INDIA-ASEAN DIGITAL WORK PLAN 2022

THE CONTEXT: During the second the 2nd ASEAN Digital Ministers (ADGMIN) meeting,India-ASEAN Digital Work Plan 2022 approved by the Union Ministry for Communications.

THE EXPLANATION:

• The ADGMIN is an annual meeting of Telecom Ministers of 10 ASEAN (Association of South-East Asian Nations) countries – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam and dialogue partner countries – Australia, Canada, China, EU, India, Japan, Republic of Korea, New Zealand, Russia, UK and US.
• The meeting discussed and deliberated various matters relevant to strengthening regional digital cooperation in the spirit of digital inclusion and integration.

About the Work Plan:

• The work plan includes system for combating the use of stolen and counterfeit mobile handsets, WiFi Access network interface for nationwide public internet, the capacity building and knowledge sharing in emerging areas in the field of Information and Communication Technologies such as Internet of Things (IoT), 5G, Advanced Satellite Communication, Cyber Forensics, etc. Communication Technologies such as Internet of Things (IoT), 5G, Advanced Satellite Communication, Cyber Forensics, etc. The ongoing and proposed projects in ICTs, will strengthen collaboration between India and ASEAN by leveraging complementary strengths of each other.

THE ENVIRONMENT & ECOLOGY

2. PARASITIC FLOWERING PLANT DISCOVERED FROM NICOBAR ISLANDS

THE CONTEXT: A new genus of a parasitic flowering plant has recently been discovered from the Nicobar group of islands. The genus Septemeranthus grows on the plant species Horsfieldia glabra (Blume) Warb.

THE EXPLANATION:

• It is endemic only to the Nicobar group of islands.
• The genus Septemeranthushas a distinct vegetative morphology, inflorescence architecture and floral characters. The leaves of the plant are heart-shaped with a very long tip and the ovary,fruit and seeds are ‘urceolate’ (earthen pot-shaped).
• In addition to Septemeranthus, four other genera on non-parasitic plants, Nicobariodendron (Hippocrateaceae), Pseudodiplospora (Rubiaceae), Pubistylis (Rubiaceae),  Sphyranthera, (Euphorbiaceae) have also been discovered earlier from Nicobar group of islands, highlighting the ecological significance of the region.
• The newly discovered plant that derives nutrients from its hosts has green leaves capable of photosynthesis.

THE ECONOMIC DEVELOPMENT

3. THE DESIGN-LINKED INCENTIVE (DLI) SCHEME

THE CONTEXT: Recently, India has invited applications from 100 domestic companies, startups and small and medium enterprises to become a part of the design-linked incentive (DLI) scheme.  Along with it the IT ministry has sought proposals from academia, start-ups and MSMEs to train 85,000 qualified engineers on semiconductor design and manufacturing.

What is the DLI scheme?

• The DLI scheme aims to provide financial and infrastructural support to companies setting up fabs or semiconductor making plants in India.
• It will offer fiscal support of up to 50% of the total cost to eligible participants who can set up these fabs in the country. It will also offer fiscal support of 30% of the capital expenditure to participants for building compound semiconductors, silicon photonics and sensors fabrication plants in India, under this scheme.
• According to MeitY,an incentive of 4% to 6% on net sales will be provided for five years to companies of semiconductor design for integrated circuits, chipsets, system on chips, systems and IP cores. It is expected to facilitate the growth of at least 20 such companies which can achieve a turnover of more than ₹1500 crore in the coming five years.

GLOBAL PLAYERS:

• According to estimates by NXP semiconductors. A small number of chipmakers based largely in Taiwan and South Korea produce up to 70% of the world’s semiconductors.
• The EU has also announced a public-private semiconductor alliance with the goal of increasing Europe’s chip production share to 20% by 2030.

CHALLENGES FOR INDIA:

• Setting up fabs is capital intensive and needs investment in the range of $5 billion to $10 billion.
• Lack of investments and supportive government policies are some of the challenges in India.
• Crucial infrastructure like connectivity to airports, seaports and availability of gallons of pure water are the other challenges to set up fabs in India.

HOW THIS SCHEME BENEFITS ?

• The DLI scheme aims to attract existing and global players as it will support their expenditures related to design software, IP rights, development, testing and deployment.
• It will boost the domestic companies, start-ups, and MSMEs to develop and deploy the semiconductor design. It will also help global investors to choose India as their preferred investment destination.
• The firm reckons that this is a big step to bring India on the world map for semiconductor manufacturing.

According to experts, the Design Linked Incentive (DLI) scheme along with the recent Production-Linked Incentive (PLI) scheme have become crucial in shaping India as an efficient, equitable, and resilient design and manufacturing hub.

4. WHAT IS REVERSE REPO NORMALISATION?

THE CONTEXT: State Bank of India’s economic research team believes the stage is set for a reverse repo normalization.

THE EXPLANATION:

• The RBI’s revised liquidity management framework (February 2020) has retained the width of the liquidity management corridor at 50 basis points – the reverse repo rate being 25 basis points below the repo rate (of 4 per cent) and the Marginal Standing Facility rate 25 basis points above the repo rate.
• The purpose of the aforementioned cut in reverse repo rate was to make it relatively unattractive for banks to passively deposit funds with the Reserve Bank and use these funds for on-lending to productive sectors of the economy.

• This process of normalisation, which is aimed at curbing inflation, will not only reduce excess liquidity but also result in higher interest rates across the board in the Indian economy — thus reducing the demand for money among consumers (since it would make more sense to just keep the money in the bank) and making it costlier for businesses to borrow fresh loans.

5. INDIA-UAE VC FUND SET UP TO BOOST START-UP ECOSYSTEM

THE CONTEXT: A $150-millionIndia-UAE venture capital fund to fuel growth of start-ups in India and the UAE was launched at EXPO2020 Dubai.

THE EXPLANATION:

• The VC Fund is a first-of-its-kind to be set up in the UAE to source, invest and nurture promising start-ups through an accelerator to fuel the growth of India-UAE start-ups. It will be funded by investors across UAE, India and wider GCC countries.
• The Fund will also act as a catalyst to provide a process for developing early-stage start-ups in India and the UAE into viable global ventures and making them attain the unicorn level. It will target to invest in a minimum of 50 demonstrated and validated start-ups based in India and the UAE over a period of 5 years, turning 10 unicorns by 2025.

What is meant by Venture Capital?

• Venture Capital is a financing tool for companies and an investment vehicle for wealthy individuals and institutional investors. Wealthy investors like to invest their capital in startups with a long-term growth perspective.
• This capital is called venture capital and the investors are called venture capitalists, in other words, it is a way for companies to receive money in the short term and for investors to grow wealth in the long term.

THE SCIENCE AND TECHNOLOGY

6. THE MOLECULAR BIOLOGY OF ASAFOETIDA

THE CONTEXT: In 2020, the scientists from the Council of Scientific and Industrial Research (CSIR) — Institute of Himalayan Bioresource Technology (IHBT) based in Palampur, Himachal Pradesh, announced that they had planted 800 saplings of Ferulaasafoetida in the cold desert region of Lahaul and Spiti.

THE EXPLANATION:

• ASAFOETIDA (hing in Hindi, perungayam in Tamil): An integral part of Indian cuisine and natural medicine, asafoetida is extracted from the fleshy roots of the perennial ferula (part of the celery family) as an oleo-gum resin. It is also known colloquially as “devil’s dung” in English.
• Cold desert climatic conditions in the Lahaul–Spiti area in Himachal Pradesh are remarkably similar to those in the Iran and Afghanistan. Efforts are being done to grow it in that area.
• It has a pungent smell due to sulphide content, as reflected in its name, lending it the trivial name of “stinking gum”. The odour dissipates upon cooking; in cooked dishes.
• The chemical constituents shows that the raw herb has about 70% carbohydrates, 5% proteins, 1% fat, 7% minerals, and has compounds of calcium, phosphorus, sulphurand various aliphatic and aromatic alcohols.

What is the Need?

According to the CSIR-IHBT, Palampur, “the country imports about 1,540 tonnes of raw asafoetida annually from Afghanistan, Iran and Uzbekistan and spends approximately ₹942 crore per year on it. It is important for India to become self-sufficient in hing production”.

It has a wide range of applications in the field of medicine:

• It has been suggested to fight viruses such as influenza.
• Ayurveda suggests it for good digestion.
• To stop hiccups.

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY 31^ST JANUARY 2022

Consider the following statements about Bomb cyclone:

1. It is a kind of tropical cyclone.
2. It occurs when a storm central barometric pressure drops at least 24 millibars in 24 hours.
3. It can happen when a cold air mass collides with a warm air mass.

Which of the statements given above is/are correct?

a) 1 and 2 only

b) 2 and 3 only

c) 3 only

d) All of them

ANSWER FOR 29^TH JAN 2022

Answer: d)

Explanation:

• Statement 1 is correct: The electoral bonds will not bear the name of the donor. Thus, the political party might not be aware of the donor identity.
• Statement 2 is correct: The electoral bond will be valid only for fifteen days.
• Statement 3 is correct: A donor will get a tax deduction and the recipient, or the political party, will get tax exemption, provided returns are filed by the political party.
• Statement 4 is correct: On April 12, 2019, the Supreme Court asked all the political parties to
  submit details of donations received through electoral bonds to the ECI.

1. J S Bandukwala: Conscience keeper & courageous crusader READ MORE
2. Between Pride and Modesty READ MORE

1. India’s elephants will suffer huge setback if proposed changes to Wildlife Protection Act are passed READ MORE
2. Climate crisis in North-East India: How geography, rainfall variations define calamity course READ MORE

1. Justice Matters | What a Dalit girl’s rape trial tell us about caste READ MORE
2. Show commitment to equity in the Budget: The Government needs to stop India’s avalanching slide into a grossly divided society, made worse by the pandemic READ MORE
3. Back to school READ MORE
4. Need to revisit global health agenda right now READ MORE

1. Limits of power: SC serves a reminder that the House should work within constitutional parameters READ MORE
2. Angst over IAS transfers is missing the point READ MORE
3. Turning India into a republic of villages READ MORE
4. AIS cadre rules issue is neither complex nor controversial. Here’s what you are missing READ MORE
5. Proposed changes to IAS rules runs unintended risk of undermining administrative ability of states READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. ‘Bomb cyclone’ hits eastern U.S., triggers transport chaos, outages READ MORE
2. Pegasus issue: CPI MP submits notice to move privilege motion against Union Minister Ashwini Vaishnaw READ MORE
3. The rich history of the Chalukya dynasty READ MORE
4. India-ASEAN Digital Work Plan 2022 approved at 2nd ASEAN Digital Ministers (ADGMIN) meeting READ MORE
5. Explained: What is reverse repo normalisation? READ MORE
6. $150-million India-UAE VC Fund set up to boost start-up ecosystem READ MORE

Main Exam    

GS Paper- 1

1. India needs a new social contract READ MORE Social
2. Justice Matters | What a Dalit girl’s rape trial tell us about caste READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Limits of power: SC serves a reminder that the House should work within constitutional parameters READ MORE
2. Angst over IAS transfers is missing the point READ MORE
3. Turning India into a republic of villages READ MORE
4. AIS cadre rules issue is neither complex nor controversial. Here’s what you are missing READ MORE
5. Proposed changes to IAS rules runs unintended risk of undermining administrative ability of states READ MORE

SOCIAL ISSUES

1. Show commitment to equity in the Budget: The Government needs to stop India’s avalanching slide into a grossly divided society, made worse by the pandemic READ MORE
2. Back to school READ MORE
3. Need to revisit global health agenda right now READ MORE

INTERNATIONAL ISSUES

1.  Michael Brecher: Pioneering scholar of Indian foreign policy READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. Go-ahead for ‘bad bank’: Tackling stressed assets a formidable task READ MORE
2. Deeper correction: Geo-politics & monetary policy have increased market risks READ MORE

ENVIRONMENT AND ECOLOGY  

1. India’s elephants will suffer huge setback if proposed changes to Wildlife Protection Act are passed READ MORE
2. Climate crisis in North-East India: How geography, rainfall variations define calamity course READ MORE

SECURITY

1. Pegasus row: Govt needs to come clean on damning revelations READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. J S Bandukwala: Conscience keeper & courageous crusader READ MORE
2. Between Pride and Modesty READ MORE

Questions for the MAIN exam

1. “The Covid-19 pandemic has made the unequal in India more unequal” Critically analyse the statement in the light of the Inequality Kills report recently released by Oxfam.
2. “A combination of a distorted tax regime, declining social sector expenditure and unbridled privatisation policy have deepened inequality in India” Comment.

QUOTATIONS AND CAPTIONS

• I have often regretted my speech, never my silence.
• The Government needs to stop India’s avalanching slide into a grossly divided society, made worse by the pandemic.
• SC serves a reminder that the House should work within constitutional parameters.
• The Centre and States should work out out-of-the-box ways to bridge the learning gap in absolute and relative terms. The Budget must take the education crisis seriously.
• If India has established robust protocols when it comes to surveillance, as the government claims, stonewalling the damning revelations only adds fuel to the fire.
• Lending in the aftermath of the pandemic will be required to boost economic activities but safeguarding the capital and assets of banks, individuals and companies will also be a must for the economy to flourish without hitches.
• Lower liquidity and higher policy rates will mean a downgrade for risky assets and could lead to a deeper correction.
• Time has perhaps come to amend All India Services Cadre Rules, and make central posting mandatory for a specified period. But only through spirit of federalism.
• The simple fact is that aspiring students are looking for government jobs, but these have declined due to increased privatisation, digitisation and automation.

50-WORD TALK

• The Prime Minister’s meeting with five Central Asian leaders shows New Delhi wants to play the regional Great Game, with former imperial power Russia and big-spending China. Beijing has hit back with big aid promises. New Delhi can’t outspend the dragon, so it has to find ways to outsmart it.
• There is near unanimity that the Budget must signal a much higher level of healthcare spending to not just set right historical deficiencies but also address the glaring deficit in public healthcare that the Covid-19 pandemic has revealed. It is important to remember that India’s healthcare sector was severely deficient even before the pandemic came. Bangladesh, for example, is poorer than India but has a higher life expectancy.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and also exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

[WpProQuiz 145]

“GST has been a milestone in the economic landscape of India. It has decreased the number of taxes, compliance burden and overall tax burden on the common man while significantly increasing transparency, compliance and overall collection.”#4yearsofGST.

                                                                                                                            ———-PMNarendra Modi

THE CONTEXT: On 1st July 2021, India marked the fourth anniversary of the Goods and Services Tax (GST). The date 1st July has been designated by the Central Government as ‘GST Day’, which is celebrated every year to mark the rollout of the historic tax reform. This article will look into achievements, challenges, and expectations related to the GST regime.

MORE ON THE NEWS:

On May 28th, 2021, at the 43rd meeting of the GST Council, finance ministers of many states raised various concerns like delay in payment of GST compensation to states, unilateral decisions, and the overall distrust between central and state governments. Four years after giving up their freedom to tax goods and services in favor of the GST Council, states are of the view that they have been short-changed and their voices muzzled.

ACHIEVEMENTS OF GST

COOPERATIVE FEDERALISM: One of the biggest triumphs associated with GST is cooperative federalism, which has demonstrated successful collective decision-making through the GST Council. India has served as an example to the world by successfully implementing one of the most complex tax transformation projects for the country.

FUNCTIONING OF GST COUNCIL: The GST Council made corrections to law, issued clarifications on complex issues, rationalized GST rates, and introduced relaxations for dealing with the Covid-19 pandemic, which establishes that the GST Council structure has been very functional and agile.

WIDENED TAX BASE: India’s tax base has almost doubled from 66.25 lakhs to 1.28 crores in the last four years. GST revenue collection in India has been over the Rs 100,000 crore mark for eight consecutive months.

EASE OF DOING BUSINESS: India’s ease of doing business ranking has improved significantly in the last four years. Before GST was implemented, India’s Ease of Doing Business ranking was 130 in 2016. In 2020, India was ranked 63rd on the list.

RATE RATIONALISATION: Over four years GST rates have been reduced on 400 goods & 80 services. According to GOI combined Centre & States rates were above 31% on most items in the pre-GST regime. An RBI report of 2019 estimated that the effective weighted average GST rate declined from 14.4 percent at the time of the introduction of the GST to 11.6 percent.

LOGISTICAL EFFICIENCY, PRODUCTION COST CUT: Over 50% of logistics effort and time is saved since GST has ensured the removal of multiple checkpoints and permits at state border checkpoints. As a result, more road hours and faster delivery have been added which has enhanced the business efficiency in the country. GST has almost ended the era of the multiplicity of taxes and its cascading effect which has sufficiently reduced production costs, leading to better margins for the industry, which were passed on to the consumers in the form of better products or lower prices.

E-WAY BILL: The introduction of the E-way bill resulted in the national unification of permit bill systems, allowing logistics to experience fewer interruptions en route making delivery quick and hassle-free.

COMPETITIVENESS AND COMPLIANCE: GST has improved the competitiveness of domestic industries in the international market by removing hidden and embedded taxes. GST helped in achieving better tax compliance by subsuming multiple taxation and reduction in taxation burden in the last four years.

E-INVOICE: The E-invoicing system helped reduce fake invoicing. The use of technology with online bill generation has resulted in smoother consignment movement and much fewer disputes with officials. After the introduction of E-invoice, GST collections have risen steadily since November 2020, surpassing the Rs. 1 lakh crore mark on several occasions.

REDUCED  TRANSACTION COSTS: After the introduction of GST, there has been a significant reduction in transaction costs. While earlier, all the interstate transactions were loaded with an additional cost of 2% (Central Sales Tax), this has now been reduced to 0%. This reduction has been a huge breakthrough in the interstate movement of products, allowing the country to boast of a single national unified market for businesses.

CHALLENGES/PROBLEMS OF GST

CONCERNS  HIGHLIGHTED BY THE 15^th FINANCE COMMISSION REPORT:

• The multiplicity of tax rates
• The shortfall in GST collections vis-à-vis the forecast
• High volatility in GST collections
• Inconsistency in the filing of returns
• Dependence of States on the compensation from Centre

CONCERNS RAISED BY STATE FINANCE MINISTERS:

• Delay in payment of GST compensation to states.
• The issue of reduction in GST on Covid vaccines and essentials.
• Unilateral decisions such as the imposition of cases (whose proceeds go to only the Centre)
• Vertical split on party lines on key issues.
• Veto powers of the centreonGST Council decisions.

COMPENSATION CONUNDRUM:

• The biggest reason states agreed to give up their autonomy to tax goods and services was an assurance by the central government that it would compensate them for any revenue loss from subsuming indirect taxes such as sales tax/VAT into GST.
• The GST (Compensation to States) Act, enacted in 2017, guarantees states 14 percent annual growth in GST revenue over base year FY16 for five years between July 2017 and June 2022.
• While this worked well till FY19, problems cropped up in FY20 when the Centre started finding it tough to pay states as economic slowdown affected its revenues. The Covid-19 outbreak aggravated the problem by putting huge pressure on both countries and states.

TAX UNILATERALISM: 

• Cess revenue is not shared with states.
• Close to 18 percent of central government revenue is being raised from cess and not distributed (among states). Total control of finances is with the central government.
•  It needs to be discussed and reviewed.

EXPERTS CONCERNED OVER GST GROWTH:

• Experts believe the government has been unable to widen the tax net, which is why GST collections have not increased beyond a certain limit.
• Some experts suggest that the GST net may not widen further as many small businesses have not enrolled under the tax regime due to complex paperwork.

CONSTANT AMENDMENTS:

• Over the last few years, the GST law has seen many amendments. To date, more than 1,000 notifications/circulars/instructions/orders have been issued by the government machinery.
• All these revisions often confused the taxpayer and as well the tax administrators which created misunderstandings and misconceptions.

TECHNICAL GLITCHES:

• Continuous system failures and unexpected glitches faced by the industry have forced Government to extend due dates, waiver of late fees and interest liabilities. Late announcements of waiver in late fee have come out as dissatisfaction amongst the honest taxpayers also.
• Small and medium businesses are still grappling to adapt to the tech-enabled regime. The fundamental principles on which the GST law was built viz. The seamless flow of input credits and ease of compliance has been impaired by IT glitches.

IMPLEMENTATION DELAYS:

• The late implementation of E-invoicing, QR code, and E-way Bill blemished the original idea behind this which was contemplated as a revolutionary change in the tax system to curb tax evasion.

NON-IMPLEMENTATION OF GSTR-2:

• GSTR which was the only control for systemic reconciliation was never implemented. To prevent any bogus claim of ITC, reconciliations are required to be controlled by the system. However, since it was never implemented now taxpayers are asked to provide self-attested offline reconciliations maintained in annual return GSTR 9 or GSTR 9C.

REFUND DELAY ISSUES:

• Automatic processing of export refunds has always been an area of major concern under the GST. Since there are manual approvals involved in the existing process, there are chances of a discrepancy, human error, and delay in refund processing which goes against the expectations of the exporters from the system.

LOW REVENUE:

• Widespread non-compliance and non-filing of GST returns were considerable in the first three years of GST which led to low revenue collections.

WAY FORWARD

The GST structure needs an overhaul for the revenue-enhancing promise to be met. The union can at minimum do three things.

1. Reaffirm its commitment to cooperative, consultative principles of federalism by reforming the functioning of the GST Council.
2. Offer the FY21 compensation cess as a transfer, not a back-to-back loan with the caveat that the compensation rate will be re-negotiated.
3. Be transparent about the current macro-economic scenario through an honest appraisal that revisits revenue projections.

• The pandemic has had severe impacts on GST also and led to economic contraction. Certain structural level changes to the law may help boost the business and economy.
• The policymakers need to contemplate the inclusion of petroleum and related products within the GST
• The GST Appellate Tribunal should be constituted as all taxpayers do not have the finances or means to approach the High Court for every practical difficulty faced.
• Streamlining of anti-profiteering measures and simplification of compliance procedures also needs to be revisited to ensure that the cost efficiency and reduction in prices envisaged under GST law finally reach the common man.

THE CONCLUSION: Although the shortcomings must be swiftly resolved, it needs to be understood that it takes time to reap the benefits of such a mammoth structural change. The law is still a ‘work-in-progress’ and the process of evolution. The union government must act now to deliver on its promise of a ‘Good & Simple Tax’ in the times to come.

THE CONTEXT: The COVID-19 pandemic has not only exposed the vulnerability of the marginalized sections of society but has also seen a lack of communication and coordination between central and state governments in India. The failure on the part of the government to establish a robust communication channel, amongst themselves, has aggravated the sufferings of the poor people. This article discusses the challenges of the federal system in India during pandemic situations.

In addition to this, the article will also focus in brief on how due to its unitary nature, India is facing various challenges like

1. Implementation of big-bang reforms like GST and Farm Bills
2. Implementation of various major steps taken by the government like the abolition of Article 370, CAA and NRC.
3. Encroachment on State List by the Centre like amendments to UAPA and NIA laws, Farm Bills, etc.
4. The recent SC judgement on 97^th Amendment Act.
5. The government seems to be on the slow path to reversals of reforms due to a lack of cooperation and coordination between unions and states.

COVID 19 AND FEDERALISM

COVID-19 has shone a light on one of India’s darkest corners that we stoutly refuse to examine – the lack of coordination between the governments in India. In the following issues, there was a lack of coordination between the governments

• Vaccine procurement,*–
• Pricing and disbursal,
• Oxygen manufacturing and inter-state supply,
• GST rates for covid care resources,
• Trans-state migrating labour,
• National lockdowns,
• Elections in various states,
• Religious gatherings of multi-state relevance,

Thus the absence of planning and coordination across the governments in the country has cost lakhs, perhaps tens of lakhs of lives.

THE CONCEPT OF FEDERALISM

Federalism is a system of government in which powers have been divided between the Centre and its constituent parts such as states or provinces. It is an institutional mechanism to accommodate two sets of politics, one at the central or national level and the second at the regional or provincial level.

There are two kinds of federations

Holding Together Federation: In this type, powers are shared between various constituent parts to accommodate the diversity in the whole entity. Here, powers are generally tilted towards the central authority. Example: India, Spain, Belgium.

Coming Together Federation: In this type, independent states come together to form a larger unit. Here, states enjoy more autonomy as compared to the holding together kind of federation. Example: USA, Australia, Switzerland.

FEDERAL FEATURES OF THE INDIAN UNION

Article 1 of the Indian Constitution states, ‘India, that is Bharat, shall be a union of states. The word federation is not mentioned in the constitution.

• Governments at two levels – Centre and states
• Division of powers between the Centre and states – there are three lists given in the Seventh Schedule of the Constitution, which gives the subjects each level has jurisdiction in:

1. Union List
2. State List
3. Concurrent List

• Supremacy of the constitution – the basic structure of the constitution is indestructible as laid out by the judiciary. The constitution is the supreme law in India.
• Independent judiciary – the constitution provides for an independent and integrated judicial. The lower and district courts are at the bottom levels, the high courts are at the state levels and at the topmost position is the Supreme Court of India. All courts are subordinate to the Supreme Court.

THE RECENT FEDERAL ISSUES IN INDIA

COVID-19 and states depend on a Centre: Since March 2020, the states have faced problems of lack of support from countries like

1. Delay in 14^th transfer
2. GST loss due to transfer
3. CSR under PM CARE FUND and its transfer issues
4. The issues related to supply of Oxygen and Vaccines

Such problems are a clear reminder of the lack of robust Centre-State mechanisms for proactive cooperation.

The farm’s bills: The ongoing farm protests show that there was a lack of adequate consultation with stakeholders. The reforms deal with state subjects, but the states have not been adequately consulted.

The post scenario of the abolition of Article 370: The central government seems to have gone backwards on its J & K policy when it invited the leaders of the erstwhile state for consultation. It again reminds us that the Centre unitary approach is backfiring.

Fundamental structure: The problem, of course, goes back to the very establishment of the Union, denying states their sovereignty (unlike in the US) even as it leaned federal. Subsequent purposeful Constitutional amendments, like expanding Concurrent lists, or the GST, have vigorously engendered centralization. However, the real root of federal rot lies more with states and less with the Union.

Defunct Inter-State Council: As per Article 263 of the Indian Constitution, the Inter-State Council is composed of the Prime Minister, who is the Chairperson, Chief Ministers of States and Union Territories and several Union Cabinet Ministers, and cannot be dissolved or reconstituted. India did set up an Inter-State Council, on the recommendation of the SarkariaCommission in 1990, to recommend policy on matters of common interests across states and the Union. It met a dozen times until 2017. It is extant, but defunct, barely meeting once in three years since the establishment and not at all during a pandemic that requires intimate partnerships and collaboration.

GST Council: The GST Council has been established with only the Union Finance Minister as Chair, and the ability to call for meetings. By any measure, the GST is a multilateral matter, with separate stakeholders, the Union being one. There is no reason why Chairpersonship is not rotated or powers (like calling meetings) are not vested in any or all. In fact, Mumbai city with its mammoth pre-GST Octroi has no say in the Council, and neither does any other local government.

Finance Commission: For a Constitutional body that divides monies between states and the Union, and across states, the Union is but one stakeholder. However, the Union assumes all powers in appointment of the Commission and issuing of its Terms of Reference (ToR), an inherent bias for a federal body. That is why there was controversy o the TOR of the 15^th This is exactly what the Inter-State Council is meant to do; ensure that a ToR is negotiated and balanced.

THE CONSEQUENCES OF SUCH DEVELOPMENTS

Such developments have given rise to increasing tension and conflicts between unions and states. Too much politics and too little progress on the quality of governance and grievance Redressal of people. There is also the absence of debate on many matters and issues which reforms are long overdue like criminal justice reforms and police reforms. The issues like disaster management, health, education, etc. Remain like a work in progress. The present government gave a major boost to cooperative federalism and competitive federalism, but the latter is not possible without the former. In fact, collaborative governance has become imperative for any government in contemporary times. The governments need to collaborate and cooperate at multiple levels, but due to the unitary approach, states have less trust in the Centre.

WHAT CAN BE DONE?

Strengthening Inter-State council: State platform that brings States together in a routine dialogue on matters of fiscal federalism could be the starting point for building trust and a common agenda. In this context, the Inter-state council can be revived. Proper utilization of the institutional mechanism of the Inter-State Council must be ensured to develop political goodwill between the Centre and the states on contentious policy issues. The Punchhi Commission on Centre-State Relations had stressed granting functional independence to the Council so that it can engage vibrantly in policy development and conflict resolution.

Relaxing FRBM Norms: The relaxation of limits imposed by the FRBM Act, regarding the market borrowings by the states, is a step in the right direction. However, these borrowings can be backed by a sovereign guarantee by the Union Government. Moreover, the Union government can provide money to states so that they can take necessary action to deal with the crisis at the state level. The gradual widening of the fiscal capacity of the states has to be legally guaranteed without reducing the Centre’s share.

Horizontal federalism: Horizontal federalism is anchored on the building of a relationship between the constituent units of the federal system, with an oversight power to the federal government. Horizontal federalism needs to be viewed differently from cooperative federalism, where the Centre and the states “cooperate” in the larger public interest. However, the horizontal framework facilitates the coordination of inter-see the provinces on matters of common interest.

Political Will: Upholding federalism requires political maturity and a commitment to the federal principle. A politics of deepening federalism will need to overcome nationalist rhetoric that pits federalism against nationalism and development.

LESSON FROM INTERNATIONAL EXPERIENCES

Most large democracies like the US, Canada, Australia, etc. Have many governments – provincial ones and a Union.

Australia

• As soon as the pandemic struck, Australia was to retire its existing Council of Australian Governments, an existing inter-government coordinating body in their federal structure, and create a National Cabinet.
• It is composed of all Chief Ministers, Premiers, the Prime Minister and even representatives from local bodies.
• An empowered executive, with select and expert committees and adjunct councils, decides on federal, financial, pandemic-related health, employment, even women’s and children’s safety and security, and with a legal framework as a buttress.
• For doubters asking if Australia or any of the others in a genuine federal partnership between their in-country governments are managing the pandemic better than India, the answer is crystal clear.

In a Westminster-style democracy, India’s national and sub-national governments are elected for parties’ agendas and as of date, India and its states vest their executive powers in close to 40 distinct ruling parties. So the question before us is not if Australia or countries with federal partnerships within are doing better, but if India will now manage COVID-19, and indeed the country in general, better if its various governments with distinct agendas plan and coordinate regularly.

WAY FORWARD

• For India to leapfrog into a developed country, oft-bandied political rhetoric, the country must first be willing to shed its unitary insecurities, govern via a federal body politic, and defer to local and state governments.
• As things stand, the Union has too much power on inputs and too little stake in outcomes. The Inter-State Council must be resuscitated, reinvigorated and chartered to represent a federal India.
• Matters, not only financial but water management, labour, energy, human trafficking and much more, are cross-state matters, which require an ongoing conference between states.
• Intergovernmental cooperation and coordination, yes, but also as much autonomy and agency, given the differences in the social and economic environments across states.

CONCLUSION: ‘One Nation, Many Governments’ is the reality of India, and the Union is but one among the many. India must strive for a boring Union and vibrant states and that indeed will be the hallmark of success, replete with subsidiarity, decentralization and federalism. The ARC-II also recommended almost a decade back the principle of subsidiarity as the basis for governance. The governments have also taken steps like the minimum government and the maximum governance, but they have hardly any impact on the nature of political governance wherein the Centre with one hand cooperate and with other hand coerce states to achieve their political objective. This must change if India wants to realize its potential.

THE POLITY AND GOVERNANCE

1. THE CORRUPTION PERCEPTION INDEX (CPI)

THE CONTEXT: India’s rank improved one place to 85 among 180 countries in a corruption perception index (CPI) of 2021, according to a new report by Transparency International which, however, raised concern over the country’s democratic status.

THE EXPLANATION:

The index, which ranks 180 countries and territories by their perceived levels of public sector corruption according to experts and business people, uses a scale of 0 to 100 to rank Corruption Perception Index (CPI), where 0 is highly corrupt and 100 is very clean. Transparency International gave India a CPI score of 40.

• According to the anti-corruption watchdog, among those with weak scores are some of the world’s most populous countries such as China (45) and India (40), and other large economies such as Indonesia (38),Pakistan (28) and Bangladesh (26).
• India’s rank improved by one place to 85 in 2021 from 86th in 2020. Except Bhutan, all of India’s neighbours are ranked below it. Pakistan dropped 16 spots in the index and was ranked at 140.

Concerns:

• The country’s score has remained stagnant over the past decade, some of the mechanisms that could help reign in corruption are weakening.
• The report highlighted concerns over the risk to journalists and activists who have been “victims of attacks by the police, political militants, criminal gangs and corrupt local officials.” “Civil society organisations that speak up against the government have been targeted with security, defamation, sedition, hate speech and contempt-of-court charges, and with regulations on foreign funding”.

Value Addition:

Corruption Perceptions Index (CPI)

• The CPI is an index which ranks countries “by their perceived levels of public sector corruption, as determined by expert assessments and opinion surveys.”
• The CPI generally defines corruption as an “abuse of entrusted power for private gain”.
• The index is published annually by the non-governmental organisation Transparency International since

What kind of corruption does the CPI measure?

The data sources used to compile the CPI specifically cover the following manifestations of public sector corruption:

• Bribery.
• Diversion of public funds.
• Officials using their public office for private gain without facing consequences.
• Ability of governments to contain corruption in the public sector.
• Excessive red tape in the public sector which may increase opportunities for corruption.
• Nepotistic appointments in the civil service.
• Laws ensuring that public officials must disclose their finances and potential conflicts of interest.
• Legal protection for people who report cases of bribery and corruption.
• State capture by narrow vested interests.
• Access to information on public affairs/government activities.

The CPI does NOT cover:

• Citizens direct perceptions or experience of corruption.
• Tax fraud.
• Illicit financial flows.
• Enablers of corruption (lawyers, accountants, financial advisors etc).
• Money-laundering.
• Private sector corruption.
• Informal economies and markets.

THE INTERNATIONAL RELATIONS

2. ‘75 VILLAGES OF EXCELLENCE’

THE CONTEXT: To commemorate the 75th year of India’s independence where India and Israel decided to convert 150 villages around the Centers of Excellence into Villages of Excellence.

THE EXPLANATION:

• According to the Agricultural Ministry, it has expressed satisfaction at the functioning of 29 Centers of Excellence in 12 States which are producing more than 25 million vegetable plants, over 387 thousand quality fruit plants and can train more than 1.2 lakh farmers per year. Also the Ministry expressed happiness on the completion of 30 years of diplomatic relations between India and Israel.
• The Ministry highlighted the various schemes that have been launched by the Government of India under the Prime Minister for the welfare of farmers, including PM-Kisan, Agri-Infrastructure Fund, formation of 10 thousand FPOs, Schemes for promotion of organic farming, natural farming and soil health cards etc.
• The Israeli Ambassador appreciated the working of ICAR institutes and showed interest in further collaboration with ICAR and making available the latest technologies available with Israel. He proposed the certification of COEs to further enhance the standards and quality of services being provided to the farmers.
• Historical ties
• Israel is one of the few countries in the world that chose not to condemn Pokhran nuclear tests of India.
• Israel supplied the M – 58 mortar ammunition to India during the latter’s war against Pakistan in 1965.

VALUE ADDITION:

INDIA AND ISRAEL RELATIONSHIP

Historical ties

• Israel is one of the few countries in the world that chose not to condemn Pokhran nuclear tests of India.
• Israel supplied the M – 58 mortar ammunition to India during the latter’s war against Pakistan in 1965.

Agriculture Cooperation: India and Israel started the Indo – Israeli Agricultural Cooperation Project. It focused on micro – irrigation, farming technologies and dairy. The programme created ten centres of excellence by 2014. The centres conducted training sessions to farmers.

Indo – Israel Villages of Excellence: This programme aimed to create model agricultural ecosystem. It also worked to transform the traditional farms to modern farms. It also focused on market linkages, capacity buildings and modern agriculture infrastructure.

Defence Cooperation: India has inducted several Israeli arms and weapons into its military. The top most are Phalcom AWACS, the air borne warning and control system; Heron, Harop and Searcher drones; Spyder anti – aircraft missile system.

THE HEALTH & COVID CORNOR

3. NEW VIRAL DISEASE: NEOCOV

THE CONTEXT: Researchers from Chinese Academy of Sciences and Wuhan University noted that NeoCov is found in a population of bats in South Africa and to date spreads exclusively among these animals.

What is NeoCoV?

NeoCoV is a bat coronavirus that was first identified in 2011. It was identified in a species ofbats known asNeoromicia, which is where the name NeoCoV was derived from. Commonly known as aloe bats, this species is distributed in the Afro-Malagasy region. NeoCoV shares an 85% similarity to MERS-CoV in the genome sequence, making it the closest known relative of MERS-CoV.

Major concerns:

According to the researchers, In its current form, NeoCov does not infect humans but further mutations may make it potentially harmful.

• ACE2 is a receptor protein on cells that provides the entry point for the coronavirus to hook into and infect a wide range of cells.
• A receptor-binding domain (RBD) is a key part of a virus that allows it to dock to body receptors to gain entry into cells and lead to infection.+
• According to the researchers, Considering the extensive mutations in the RBD regions of the SARS-CoV-2 variants, especially the heavily mutated Omicron variant, these viruses may hold a latent potential to infect humans through further adaptation”.

Background:

• Corona viruses are a large family of viruses that are known to infect animals and humans. They are largely categorised into four genera — alpha, beta, gamma and delta. Broadly speaking, alpha and beta corona viruses commonly infect mammals such as bats and humans, while Gamma and Delta mainly infect birds.
• While animals, including bats, are generally considered as the reservoirs of corona viruses, rarely spillover events could occur. It is possible for viruses that infect animals to jump to humans, a process which is known as zoonotic spillover. Many major infectious diseases, including COVID-19, is widely thought to be a result of spillover.

THE MISCELLANEOUS

4. HONDURAS GETS ITS FIRST WOMAN PRESIDENT

THE CONTEXT: Xiomara Castro has been sworn in as Honduras’ first female president, amid a political crisis that threatens her plans for the impoverished nation.

THE EXPLANATION:

• Ms Castro is the candidate for the left-wing Libre (Free) Party, and has a preliminary lead of almost 20 percentage points over her rival. The 12-year reign of the right-wing National Party was accused for scandals and corruptive practices.
• She has promised to tackle powerful drug trafficking gangs and liberalise strict abortion laws.
• Castro’s election last November brought an end to 12 years of right-wing National Party (PN) rule that followed the ousting of her president husband Manuel Zelaya in a 2009 coup.
• Honduras is one of just 14 countries to recognize Taiwan.
• China, which considers Taiwan a part of its territory, has spent decades successfully encouraging its allies to switch sides.

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY 29^TH JANUARY 2022

Q. With reference to electoral bonds scheme, consider the following statements:

1. The electoral bonds will not bear the name of the donor
2. The electoral bond will be valid only for fifteen days
3. A donor will get a tax deduction
4. The political parties are required to submit details of donations received through electoral bonds to the ECI.

Which of the statements given above is/are correct?

a) 1 and 2

b) 1, 2 and 3

c) 1, 3 and 4

d) All of them

 ANSWER FOR 28^TH JAN 2022

Answer: D)

Explanation:

• Tiwa – Kargbi Anglong district of Assam
• Bodo- Bodoland Territorial Council, Assam
• Rabha – Plains of Lower Assam
• Angami – Naga tribe of Nagaland and Manipur

1. The pandemic showed us our collective power READ MORE
2. Why be reactive when you can be proactive? READ MORE
3. Acting in Uncertainty READ MORE

1. Solid waste management policy still suffers from niggles READ MORE
2. MoEFCC Must Withdraw Its Proposed Rating System for Impact Assessments READ MORE
3. Most vulnerable countries unable to access Green Climate Fund for adaptation READ MORE

1. Anganwadis should provide early childhood care and education READ MORE
2. Missing classes: There is still no clarity from any quarter on whether it’s okay to reopen schools READ MORE
3. India needs a new social contract READ MORE

1. To the poll booth, with no donor knowledge: Worries over the electoral bond scheme go beyond its patent unconstitutionality — it befouls democracy and elections READ MORE
2. A more meaningful commitment to the Indian republic READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. Honduras gets its first woman President READ MORE
2. Centre appoints Anantha Nageswaran as CEA READ MORE
3. Explained: What is reverse repo normalisation? READ MORE
4. Explained | NeoCoV — what it is and what it is not READ MORE
5. IMF urges El Salvador to scale back its Bitcoin push READ MORE
6. Grey pelicans die in droves in Srikakulam READ MORE
7. Nepal’s Population Witnesses Lowest Growth In 80 Years: Reports READ MORE

Main Exam    

GS Paper- 1

1. India needs a new social contract READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. To the poll booth, with no donor knowledge: Worries over the electoral bond scheme go beyond its patent unconstitutionality — it befouls democracy and elections READ MORE
2. A more meaningful commitment to the Indian republic READ MORE

SOCIAL ISSUES

1. Anganwadis should provide early childhood care and education READ MORE
2. Missing classes: There is still no clarity from any quarter on whether it’s okay to reopen schools READ MORE

INTERNATIONAL ISSUES

1. At the Centre: India must stay in step with the changesin the Central Asian region READ MORE
2. Central Asia: Walk the talk READ MORE
3. Central Asian outreach: India needs to do far more to match Chinese efforts READ MORE
4. How India and its South Asian Neighbours Fared During the US-China Trade War READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. How budget can generate higher growth, jobs READ MORE
2. Improving public service delivery by fixing payment systems READ MORE
3. Sovereign bond move is a welcome idea READ MORE
4. Job schemes needed to address distress in informal sector READ MORE

ENVIRONMENT AND ECOLOGY  

1. Solid waste management policy still suffers from niggles READ MORE
2. MoEFCC Must Withdraw Its Proposed Rating System for Impact Assessments READ MORE
3. Most vulnerable countries unable to access Green Climate Fund for adaptation READ MORE

GS Paper-

ETHICS EXAMPLES AND CASE STUDY

1. The pandemic showed us our collective power READ MORE
2. Why be reactive when you can be proactive? READ MORE
3. Acting in Uncertainty READ MORE

Questions for the MAIN exam

1. ‘India needs to adopt a proactive approach to further its interests and make its presence felt in the extended neighbourhood’. In the light of the statement discuss why India need to re-visit its neighbourhood first policy?
2. How India and its South Asian neighbours fared during the US-China trade war? What should be the way forward for these nations?

QUOTATIONS AND CAPTIONS

• Leadership is about vision and responsibility, not power.
• Worries over the electoral bond scheme go beyond its patent unconstitutionality — it befouls democracy and elections.
• India will need to move nimbly to ensure it stays in step with the changes, and to make certain the future of ties more closely resembles the deep ties of the distant past.
• In the near term fiscal policy can play an important role by expanding fiscal space while fiscal deficit can be stabilised in medium term.
• In the Northeast, this means committing to the ideal of ‘equal’ and ‘group-differentiated’ citizenship rights and deepening constitutionalism and democracy.
• The pandemic exposed the horrors of the existing economic and social arrangements that privilege some but treat others as expendable.
• The first India-Central Asia Summit hosted by Prime Minister Narendra Modi has provided a road map. India must now wean the five states off China’s largesse.
• India needs to adopt a proactive approach to further its interests and make its presence felt in the extended neighbourhood.
• A concession to the foreign investors while taxing the transaction in the hands of domestic investors would go against the principles of equity.
• For South Asia as a whole, one unexploited development opportunity lies in deeper regional economic integration – in the context of the current discussion.
• South Asian countries will need to do some dispassionate analysis of their trade and investment regimes.
• A common affliction in South Asia is high and rising protection, which hurts its capacity to become a core part of global value chains, even more so in a world in which reciprocity is getting to be the dominant mantra.

50-WORD TALK

• The Prime Minister’s meeting with five Central Asian leaders shows New Delhi wants to play the regional Great Game, with former imperial power Russia and big-spending China. Beijing has hit back with big aid promises. New Delhi can’t outspend the dragon, so it has to find ways to outsmart it.
• There is near unanimity that the Budget must signal a much higher level of healthcare spending to not just set right historical deficiencies but also address the glaring deficit in public healthcare that the Covid-19 pandemic has revealed. It is important to remember that India’s healthcare sector was severely deficient even before the pandemic came. Bangladesh, for example, is poorer than India but has a higher life expectancy.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and also exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

THE INTERNATIONAL RELATIONS

1. INDIA-CENTRAL ASIA VIRTUAL SUMMIT

THE CONTEXT: Indian Prime Minister hosted the first India-Central Asia Summit in virtual format which was attended by Presidents of the Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Turkmenistan and Republic of Uzbekistan.

THE EXPLANATION:

• During the summit, a comprehensive Joint Declaration was adopted by the leaders that enumerates their common vision for an enduring and comprehensive India-Central Asia partnership.
• The Prime Minister and the Central Asian Leaders discussed the next steps in taking India-Central Asia relations to new heights. Also, leaders agreed to institutionalize the Summit mechanism by deciding to hold it every 2 years on regular meetings of Foreign Ministers, Trade Ministers, Culture Ministers and Secretaries of the Security Council to prepare the groundwork for the Summit meetings. An India-Central Asia Secretariat in New Delhi would be set up to support the new mechanism.
• The Leaders discussed the cooperation in areas of trade and connectivity, development cooperation, defence, and security and, in particular, oncultural and people to people These included a Roundtable on Energy and Connectivity;Joint Working Groups at senior official level on Afghanistan and use of Chabahar Port; showcasing of Buddhist exhibitions in Central Asian countries and joint counter-terrorism exercises.
• Prime Minister also discussed the evolving situation in Afghanistan with the Central Asian leaders. The leaders reiterated their strong support for a peaceful, secure, and stable Afghanistan with a truly representative and inclusive government.

Value Addition:

India- Central Asia relations:

• India invited 5 central Asian countries leaders for 73^rd Republic Day chief guest, however the world witnessing the omicron virus disease, it has been cancelled. On the light Indian Prime Minister hoisted the first India- Central Asia virtual Summit. This summit  was part of India’s reach-out to the former Soviet States, that intensified since 2015, when Prime Minister visited all five capitals.
• India joined the Shanghai Cooperation Organisation (SCO) in 2017, which all Central Asian States other than Turkmenistan are members of.
• The India-Central Asia dialogue was launched in 2019, and in July 2021, External affairs Minister attended the Central Asia-South Asia connectivity conference.
• Maritime connectivity remains important, this summit strengthen India’s initiatives through Chabahar and through the al North South Transport Corridor.
• It is also part of the present government’s attempts to bring together immediate neighbours and “far neigh- bours” in a group format on multiple occasions. Govt. invited SAARC and BIMSTEC group leaders to his swearing in ceremonies in 2014 and 2019 respectively and invited 10 leaders of the ASEAN as Republic Day guests in 2018.

THE HEALTH AND SOCIAL ISSUES

2. FIRST HUMAN PAPILLOMA VIRUS (HPV) VACCINATION DRIVE IN DELHI

THE CONTEXT: The Human Papilloma Virus (HPV) vaccination drive in Delhi, which is aimed at preventing cervical cancer among young women, has been one of the casualties of regular classes in schools being suspended for the Covid-19 pandemic.

THE EXPLANATION:

• Delhi became the first state in the country in November 2016 to launch HPV vaccination as a public health programme. In 2017 and 2018, Punjab and Sikkim, too launched their own programmes.
• According to the officials, around 13,000 girls received the vaccines in Delhi from 2016-2020. But closed schools resulted in a steep decline.

What is Human Papilloma Virus (HPV)?

HPV infection is a viral infection that commonly causes skin or mucous membrane growths (warts). There are more than 100 varieties of human papillomavirus (HPV). Some types of HPV infection cause warts, and some can cause different types of cancer.

HPV is a group of more than 150 viruses that cause ‘papilloma’, or warts, in parts of the body, including the genital areas. It is primarily spread by skin-to-skin contact and is responsible for a number of diseases, including cancers, especially cancer of the cervix (the neck of the uterus).

India’s Status:

• India has a high caseload of cervical cancer, and it ranks second among all cancers in Indian women, after breast cancer. And HPV is believed to be associated with more than 80 per cent cervical cancer cases.
• According to government data, an estimated 1,23,907 new cervical cancer cases are detected annually in India. Every year, 77,348 deaths occur from it. At any given point of time, nearly 4,20,000 cervical cancer cases are present in the country.

Approval for inclusion in UIP awaited

According to records of the World Health Organization (WHO), over 100 countries across the world have fully or partially introduced HPV vaccines in their national healthcare schedules — they include the US, UK, Canada, Australia, South Africa, Brazil, Argentina, New Zealand, Spain, Portugal, France and Japan.

India is not one of them, according to records of the central government and the WHO.

THE ECONOMY

3. THE VIRTUAL BANKING

THE CONTEXT: According to a new paper from the Bank for International Settlements, the rise of virtual banking across the Asia region will boost financial inclusion, but regulators will need to ensure consumer data is protected.

THE EXPLANATION:

• According to the BIS paper, India and Singapore may offer a model for creating a platform under central bank supervision that facilitates the sharing of personal data with financial service providers, with customer consent. At the same time, new data — or information capital — can be used to make decisions on lending instead of relying on traditional sources of collateral, which regulators will also need to monitor.
• Also, the research noted, the access to bank accounts is increasing, the use of the financial system to save and borrow is low both for developing economies and those with high levels of income and education, a gap that can be closed by technology.
• Also, its suggested, under debt resolution regimes where both virtual and high street banks are subject to the same regulations, unsecured lending poses a higher risk of loss to lenders. Keeping losses at a minimum requires more frequent assessment and the use of tailored loans that meet repayment abilities.

About Bank for International Settlements

• It carries out its work through its meetings, programmes and through the Basel Process – hosting international groups pursuing global financial stability and facilitating their interaction.
• Established in 1930, the BIS is owned by 63 central banks, representing countries from around the world that together account for about 95% of world GDP.Its head office is in Basel, Switzerland and it has two representative offices: in Hong Kong SAR and in Mexico City, as well as Innovation Hub Centres around the world. India is a member.

What is Virtual Banking?

The Virtual Banking is the provision of accessing the banking and related services online without actually going to the bank branch/office in person. Simply, availing the banking services through an extensive use of information technology without any requirement for the physical walk-in premises is called as virtual banking.

THE INTERNAL SECURITY AFFAIRS

4. GORKHA, TIWA MILITANTS SURRENDER IN ASSAM

THE CONTEXT:With over 200 militants of the United Gorkha People’s Organisation (UGPO) and Tiwa Liberation Army (TLA) formally laying down arms in a ceremony in Guwahati.
THE EXPLANATION:

• The organisations are the Tiwa Liberation Army (TLA) and the United Gorkha People’s Organisation (UGPO).Formed in 2014 to cater to the aspirations of the Tiwa community, the TLA was active in the Morigaon, Nagaon and West Karbi Anglong districts of central Assam.
• The UGPO, formed in 2007, was mostly active in the Bodoland Territorial Region and the Biswanath district.
• During the function, the Chief Minister also distributed a financial grant of ₹1.5 lakh each to 462 members of five other extremist groups who had surrendered earlier.These disbanded groups are Rabha National Liberation Front, Adivasi Dragon Fighters, National Santhal Liberation Army, National Liberation Front of Bengalis and United People’s Revolutionary Front.
• According to the Assam Chief Minister, only two active insurgent groups now remain in the state, namely the United Liberation Front of Asom-Independent (ULFA-I) and Kamtapur Liberation Organisation (KLO).

QUICK FACTS:

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY 28^TH JANUARY 2022

Q. Which of the following tribes do not have major population in state of Assam?

a) Tiwa

b) Bodo

c) Rabha

d) Angami

ANSWER FOR 27^TH JAN 2022

Statement 1 is incorrect: National awards such as Bharat Ratna, Padma Vibhushan, Padma Bhushan and Padma Shri do not amount to titles within the meaning of Article 18(1) of the Constitution and thus are not to be used as prefixes or suffixes to the name of the recipient in any manner.

• Article 18(1) abolishes all titles. It prohibits the State to confer titles on anybody whether a citizen or a non-citizen. Military and academic distinctions are, however, exempted from the prohibition. Thus, a university can give title or honor on a man of merit.

Statement 2 is incorrect: Padma Awards were instituted in 1954 to be awarded to citizens of India in recognition of their distinguished contribution in various spheres of activity.

• The government suspended the practice of granting the Padma awards for two years in 1977. It was again suspended during mid-1992 when 2 PILs were filed in the High Courts of India
• They are given in three categories: Padma Vibhushan (for exceptional and distinguished service), Padma Bhushan (distinguished service of higher-order) and Padma Shri (distinguished service).

Statement 3 is incorrect: A maximum of 3 people can be awarded the Bharat Ratna.

The total number of Padma awards to be conferred each year is limited to 120. But the count excludes posthumous awards and any non-resident Indian or Overseas Citizen of India or foreign-based winners.

1. The pandemic showed us our collective power READ MORE
2. Why be reactive when you can be proactive? READ MORE
3. Acting in Uncertainty READ MORE

1. The state of India’s forests: Losing forests, gaining plantations READ MORE
2. India State of Forest Report 2021: Key takeaways READ MORE
3. Indigenous communities at higher risk of climate change-induced flooding, study shows READ MORE

1. Open the schools: Schools must reopen as severe cases dipand vaccination coverage increases READ MORE
2. The pandemic showed us our collective power READ MORE

1. Finding a way to share IAS officers READ MORE
2. Scaling up higher education in India READ MORE
3. Politics of freebies: ECI should curb menace, ensure level playing field READ MORE
4. Rethink on changes in All-India Services Rules READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. India-Central Asia Virtual Summit READ MORE
2. Drug-Resistant Malaria Is Emerging in Africa. Is the World Ready? READ MORE
3. DCGI grants conditional market approval for Covishield, Covaxin for use in adult population READ MORE
4. Climate change will force transboundary fish stocks to move from habitats, migration paths: Report READ MORE
5. Asia’s virtual banks need oversight to guard data, India could offer model, BIS says READ MORE
6. Delhi, 1st state to launch HPV vaccine for cervical cancer, sees numbers fall. Blame pandemic READ MORE
7. Gold imports by India fasten to decade-high as jewellery sales double READ MORE

Main Exam   

GS Paper- 1

1. The state of India’s forests: Losing forests, gaining plantations READ MORE
2. India State of Forest Report 2021: Key takeaways READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Finding a way to share IAS officers READ MORE
2. Scaling up higher education in India READ MORE
3. Politics of freebies: ECI should curb menace, ensure level playing field READ MORE
4. Rethink on changes in All-India Services Rules READ MORE

SOCIAL ISSUES

1. Open the schools: Schools must reopen as severe cases dipand vaccination coverage increases READ MORE

INTERNATIONAL ISSUES

1. Diplomatic Boycott Of Beijing Olympics May Have No Serious Implication For China READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. Understanding the formulation of the Budget READ MORE
2. India’s economy and the challenge of informality READ MORE
3. Rising unemployment: Joblessness, poverty leading to distress, societal tensions READ MORE

ENVIRONMENT AND ECOLOGY  

1. Indigenous communities at higher risk of climate change-induced flooding, study shows READ MORE

SECURITY

1. No online targeting: New EU law should become the global benchmark READ MORE

TECHNOLOGY

2. Explained: How 5G network puts airplanes at risk READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. The pandemic showed us our collective power READ MORE
2. Why be reactive when you can be proactive? READ MORE
3. Acting in Uncertainty READ MORE

Questions for the MAIN exam

1. Explain the need for the formalization of the Indian economy. Do you think the steps taken by the government in this direction are effective? Justify your opinion.
2. Distinguish between Capital Budget and Revenue Budget. Explain the components of both these Budgets. (UPSC Mains 2021, GS-3)

QUOTATIONS AND CAPTIONS

• The ignorance of one voter in a democracy impairs the security of all.
• Policy efforts to formalise the economy will have limited results as the bulk of informal units are petty producers.
• It needs to be appreciated that informality is now differentiated and multi-layered. Industries thriving without paying taxes are only the tip of the informal sector’s iceberg.
• A mere registration under numerous official portals will not ensure access to social security, considering the poor record of implementation of labour laws.
• Proposed amendment to service rules is needed to meet shortage of personnel, but Centre must dispel states’ fears about overreach.
• The role of the proposed Higher Education Commission must include both regulation and development of the sector.
• The ECI needs to frame rules that prohibit or restrict populist announcements during the last six months of a government’s tenure, and not just after the model code of conduct is enforced.
• Half-hearted measures like a diplomatic boycott of the Winter Olympic games will make no dent in China.
• A self-confident China does not need to prove its capabilities to the world, but the virus remains a major concern.

50-WORD TALK

• The violent protests in UP and Bihar over Railways recruitment are a tragic reflection of India’s, and more so the heartland’s, unemployment crisis. But this crisis cannot be resolved through more Railways, PSU banks or security forces jobs. Governments need to facilitate creation of more opportunities in manufacturing, services, business.
• The issue of the control of the AIS has been coming up repeatedly. The two recent examples are of Tamil Nadu and West Bengal. The issuance of transfer orders by the Centre to AIS officers serving in the states, without the approval of the states concerned, is rightly being seen as an infringement of the federal spirit. At the same time, the situation leading to the proposed change of rules needs attention.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and also exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

THE INTERNATIONAL RELATIONS

1. AMERICA’S NEW LEGISLATION: COMPETES ACT 2022

THE CONTEXT: The United States House of Representatives unveiled the ambitious America
Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength
Act of 2022, or the America COMPETES Act of 2022, which proposes to open up new vistas for
talented individuals from across the world with a new start-up visa.

THE EXPLANATION:

• The bill provides $52 billion to encourage more semiconductor production in the US, and
  $45 billion for grants and loans to improve supply chain resilience and manufacturing, among other programmes.
• The bill also authorize $600 million a year to construct manufacturing facilities to make the US less reliant on solar components made in Xinjiang, China.

What are some of the specific provisions in the Act?

• The Act amends the Immigration and Nationality Act to create a new classification of “W” non-immigrants for entrepreneurs with an ownership interest in a start-up entity, essential employees of a start-up entity, and their spouses and children.
• It also directs the Secretary of Homeland Security to establish procedures for foreign
  nationals with an ownership interest in a start-up entity to self-petition for classification as
  a W-1 non-immigrant, and to receive extensions of such classification for up to eight years
  if the entity meets certain growth benchmarks.
• It also provides for a limited number of W-2 visas for personnel who are essential to the
  growth and success of the start-up entity if the start-up serves as the basis for the W-1
  status of a founder.

What would the signing of this bill into law mean for Indians?

• It is expected to create more opportunities in the US for Indian talent, and for skilled
  workers.
• Every year, Indians and Indian companies corner a lion’s share of the H-1B work permits
  issued that year. With this new category, Indian professionals will likely have a better shot
  at opportunities that the Act is likely to provide.

THE ECONOMY AND ENVIRONMENT

2. HIT TO EDIBLE OIL PRICES IN THE COUNTRY

THE CONTEXT: India is set to boost its sunflower oil imports from Argentina and Russia due to
worries that shipments from Ukraine, the biggest supplier, will be disrupted if Russia invades.

THE EXPLANATION:

• Ukraine is India’s biggest supplier of sunflower oil. Any escalation in Russia-Ukraine tension
  is likely to hit edible oil prices in the country as 70% of its requirement is imported.
• The South Asian nation, also the world’s biggest importer of palm and soybean oils, bought
  about 60,000 tons of sunflower oil from Russia and Argentina for shipments.
• Ukraine and Russia account for almost 80% of the world’s sunflower oil shipments. India
  bought 1.89 million tons of the crude variety of the cooking oil in the year ended October,
  2021 with Ukraine supplying almost 74% and Argentina and Russia each accounting for
  about 12%.

THE ENVIRONMENT AND ECOLOGY

3. WHAT IS NEMATODE INFESTATION?

THE CONTEXT: According to Andhra Pradesh’s Naupada swamp forest officials, over 150 spot-billed
pelicans have succumbed to the infestation since December 2021, with 21 birds died in another
single day.]

THE EXPLANATION:

• A nematode infestation has resulted in the mortality of over 150 spot-billed pelicans at
  Telineelapuram Important Bird Area (IBA) in Naupada swamp of Srikakulam district in
  Andhra Pradesh.
• The post-mortem reports have certified parasitic (nematode) infestation as the cause of
  death.” The experts have revealed that spot-billed pelicans are vulnerable to infestation as
  it is capable of hunting huge fish from the water bodies and swamps.

About Nematodes:

• Nematodes are microscopic worms many of which are parasites consisting of roundworms,
  threadworms and eelworms.
• They have successfully adapted to nearly every ecosystem from marine (salt or brackish
  water) to fresh water, to soils, and from the tropics to the harsh polar regions, as well as
  the highest to the lowest of elevations.
• Depending on the species, a nematode may be beneficial or detrimental to plant health.
• The predatory nematodes breed by soaking a specific recipe of leaves and other detritus in
  water.
• Crop rotation of agricultural plants with nematode-resistant species or varieties is one of
  the simplest ways of managing parasitic infestations of nematodes.

About Spot-billed Pelicans

Spot-billed Pelicans are one of the most threatened (listed as Near Threatened in the IUCN Red List) of the seven species of pelicans in the world. In India, they are listed in Schedule IV of the Wildlife (Protection) Act, 1972 (WPA).

THE MISCELLANEOUS

4. PADMA AWARDS 2022

THE CONTEXT: The Union Ministry of Home Affairs announced the Padma awards on the eve of the
country’s 73rd Republic Day.

THE EXPLANATION:

BHARAT RATNA

• Bharat Ratna is the highest civilian award of the country. It is awarded in recognition of exceptional service/performance of the highest order in any field of human endeavor. It is treated on a different footing from Padma Award.
• The recommendations for Bharat Ratna are made by the Prime Minister to the President of India. No formal recommendations for Bharat Ratna are necessary. The number of Bharat Ratna Awards is restricted to a maximum of three in a particular year. Government has conferred Bharat Ratna Award on 45 persons till date.

PADMA AWARDS

The Padma Awards are one of the highest civilian honours of India announced annually on the eve of Republic Day. The award seeks to recognize achievements in all fields of activities or disciplines where an element of public service is involved.
The Padma Awards are conferred on the recommendations made by the Padma Awards Committee, which is constituted by the Prime Minister every year. The nomination process is open to the public. Even self-nomination can be made.
The PADMA Awards were instituted in 1954 along with Bharat Ratna. At that time only Padma Vibhushan existed with three sub-categories – Pahela Varg, Dusra Varg and Tisra Varg. These were subsequently renamed as Padma Vibhushan, Padma Bhushan and Padma Shri vide Presidential Notification issued on January 8, 1955. During the years 1978 and 1979 and 1993 to 1997, Padma awards were not announced. The awards are given in three categories:

• Padma Vibhushan (for exceptional and distinguished service),
• Padma Bhushan (distinguished service of higher order)
• Padma Shri (distinguished service).

All persons without distinction of race, occupation, position or sex are eligible for these awards.
However, Government servants including those working with PSUs, except doctors and scientists,
are not eligible for these Awards. A Padma awardee can be given a higher award only after five
years of the conferment of the earlier award.
The award does not amount to a title and cannot be used as a suffix or prefix to the awardees’
name.

Padma Vibhushan (4)

     S.no     Name                                                              Field                            State

1.        Ms. Prabha Are                                                    Art                               Maharastra
2.        RadheyshyamKhemka (Posthumous)            Lit & Edn                    UP
3.        General Bipin Rawat (Posthumous)               Civil Service               Uttarakhand
4.        Kalyan Singh (Posthumous)                             Public Affairs            UP

5. GALLANTRY AWARDS

THE CONTEXT: On the eve of 73 rd Republic Day 2022 , the Olympics gold medal list Subedar Neeraj
Chopra was named for the Param Vishisht Seva Medal (PVSM) on the eve of Republic Day, while six
Army personnel, five of them posthumously, have been selected for the Shaurya Chakra, the third
highest peacetime gallantry award, by the President.

THE EXPLANATION:

Gallantry Awards are classified into two Categories:

a) Gallantry in the Face of Enemy:
1. Param Vir Chakra (PVC)
2. Mahavir Chakra (MVC)
3. Vir Chakra

b) Gallantry Other than in the Face of Enemy:
1. Ashok Chakra
2. Kirti Chakra
3. Shaurya Chakra

• Post-independence, first three gallantry awards namely Param Vir Chakra, Maha Vir
  Chakra and Vir Chakra were instituted by the Government of India on 26th January, 1950
  which were deemed to have effect from the 15th August, 1947.
• Thereafter, other three gallantry awards i.e. Ashoka Chakra Class-I, Ashoka Chakra Class-II
  and Ashoka Chakra Class-III were instituted by the Government of India on 4th January,
  1952, which were deemed to have effect from the 15th August, 1947. These awards were renamed as Ashoka Chakra, Kirti Chakra and Shaurya Chakra respectively in January, 1967.
• These gallantry awards are announced twice in a year – first on the occasion of the Republic Day and then on the occasion of the Independence Day.
• Order of precedence of these awards is the Param Vir Chakra, the Ashoka Chakra, the Mahavir Chakra, the Kirti Chakra, the Vir Chakra and the Shaurya Chakra.
• All the gallantry awards may be awarded posthumously.

6. INTERNATIONAL HOLOCAUST REMEMBRANCE DAY

THE CONTEXT: The United Nations marks the International Holocaust Remembrance Day on 27
January in honour of six million Jews killed in the Holocaust, and millions of other victims of
Nazism. Also, the UN urges every member state to develop educational programs to help prevent
future genocides.

THE EXPLANATION:

• The theme of this year’s Holocaust remembrance and education is “Memory, Dignity and Justice”. The theme encompasses safeguarding the historical record, remembering the victims, and challenging the distortion of history often expressed in contemporary antisemitism. It encourages action to challenge hatred, strengthen solidarity and champion compassion.

Background:

• Adolf Hitler’s Nazi regime and its collaborators led to the extermination of around six million
  Jews through a systematic, bureaucratic and state-sponsored persecution during World War
  II.
• In November 2005, the United Nations General Assembly officially proclaimed January 27 as
  International Holocaust Remembrance Day.
• The observance of this day also reaffirms a commitment to counter racism, anti-semitism,
  and other forms of intolerance that may lead to violence against a particular group based
  on race, ethnicity or religion.

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY 27 TH JANUARY 2022

Q. Consider the following statements in respect of Bharat Ratna and Padma Awards:

1. Bharat Ratna and Padma Awards are titles under the Article 18(1) of the Constitution of
   India.
2. Padma Awards, which were instituted in the year 1954, were suspended only once.
3. The number of Bharat Ratna Awards is restricted to a maximum of five in a particular year.

Which of the above statements are not correct?
a) 1 and 2 Only
b) 2 and 3 Only
c) 1 and 3 Only
d) 1, 2 and 3

ANSWER FOR 25 TH JAN 2022

Answer: a)
Explanation:
Statement 1 is correct: Pradhan Mantri Rashtriya Bal Puraskar is administered by the Ministry of
Women and Child Development.
Statement 2 is incorrect: It is conferred by the President of India in the week preceding Republic
Day, 26 January, in the Durbar Hall of Rashtrapati Bhavan in New Delhi.

THE CONTEXT: As of Apr 15, 2021, 67279 cases are pending in the Supreme Court while in High Courts the number is a whopping57. 53 lakh. The restricted functioning of the courts during the Covid pandemic has added to the pendency. A NITI Aayog study in 2017, notes that India takes as much as 1,420 days and 39.6% of the claim value for dispute resolution. The above statistics reiterate the need for reforms not only in speeding up dispute resolution but also in having a strong in-country mechanism for out-of-court dispute resolution. Legally, this process is known and is practiced in the forms of arbitration; negotiation conciliation, and mediation. This write up examines the need for institutionalizing an important ADR mechanism in India: Arbitration

UNDERSTANDING ARBITRATION

• Arbitration is a form of Alternative Dispute Resolution (ADR). Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute.
• In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.
• Unlike litigation, arbitration proceeding takes place out of the court and the arbitrator’s decision is final and the courts rarely reexamine it.
• Usually, all the disputes in which the civil rights of a citizen are infringed and the disputes falling within the jurisdiction of the civil court can be referred to arbitration. But, the disputes which are related to morality, public policy, status, and religious rights are not arbitrable in India.
• Under the Constitution of India, Article 51, India is obliged to encourage the settlement of international disputes by arbitration.

 PRINCIPAL CHARACTERISTICS OF ARBITRATION

Arbitration is consensual: An arbitrator proceeding can only take place if both the parties to the disputes have agreed to it.

Parties choose the Arbitrators: Under the Indian Arbitration Act parties are allowed to select their arbitrator and they can also select a sole arbitrator together who will act as an umpire.

Arbitration is neutral: Apart from selecting neutral persons as arbitrators, the parties can choose other important elements of proceeding, such as the law applicable, language in which the proceedings should be conducted, the venue for arbitration proceedings.

The decision of the Arbitral Tribunal is final and easy to enforce: The decision or award given by the arbitral tribunal is final and binding on the parties and persons can appeal only after the expiry of a specified time limit.

HISTORICAL BACKGROUND OF ARBITRATION IN INDIA

PERIOD: ANCIENT

PREVALENT MEASURES: The settlement of differences by tribunals chosen by the parties themselves was well known in ancient India. There were different grades of arbitrators with provisions for appeals in certain cases from the award. The ancient texts of Yajnavalka and Narada refer to three types of popular courts (Puga, Sreni, and Kula).

PERIOD: MEDIEVAL

PREVALENT MEASURES: During the Mughal Dynasty, most villagers resolved their cases in the village courts themselves and appeal to the caste courts or the arbitration of an impartial umpire (“Salis”). In Maratha Empire, It was up to the Panchayat to study the case and pass its judgment impartially or without any bias to any party.

PERIOD: BRITISH

PREVALENT MEASURES: In the British era, the Bengal Regulation of 1772, 1780, 1781 and the Cornwallis Regulation of 1787 recognized and encouraged arbitration. The Indian Arbitration Act of 1899 dealt with arbitration by agreement without the intervention of the court. However, it was in 1940, the first Arbitration Act of the country was enacted.

PERIOD: POST-INDEPENDENCE

PREVALENT MEASURES: In 1977, the Law Commission of India suggested amendments in the Act on grounds of delay, hardship, and other factors that affect smooth arbitral proceedings. Consequently, the Arbitration and Conciliation Act, 1996, was enacted. Various Committee reports like Justice B.P. Saraf Committee (2004) and the 246th report of the Law Commission (2014) highlighted the challenges associated with the arbitration legal regime. Ultimately, the Arbitration and Conciliation (Amendment) Act, 2015, 2019, and 2021 brought in crucial changes to the 1996 statute to overcome the shortcomings.

LEGAL AND INSTITUTIONAL FRAMEWORK OF ARBITRATION IN INDIA

• Section 89 of the Civil Procedure Code, 1908 provides that opportunity to the people, if it appears to court there exist elements of settlement outside the court then the court formulate the terms of the possible settlement and refer the same to Arbitration, Conciliation, Mediation or Lok Adalat.
• The Legal Services Authority Act, 1987 is the basis for Lok Adalat and free legal aid.
• The Arbitration and Conciliation Act, 1996 applies to arbitrations inside and outside India.
• The Arbitration Act was also recently amended in 2019 and 2021.
• There have been a series of judicial decisions and legislative amendments in recent years that apply partly prospectively and partly retrospectively.
• An Arbitration clause is a section of the contract that defines the rights of the parties in the case any dispute arises over the contractual obligation
• Arbitration Tribunalmeans a sole arbitrator or a panel of arbitrators.
• An arbitration award is an award granted by the arbitrator in the proceeding before it. This award can be a monetary award and it can also be a non-financial award.

SALIENT FEATURES OF The Arbitration and Conciliation (Amendment) ACT, 2019&2021

• Arbitration Council of India: The Act seeks to establish an independent body called the Arbitration Council of India (ACI) for the promotion of arbitration, mediation, conciliation, and other alternative dispute Redressal mechanisms.
• Appointment of arbitrators: Under the Act, the Supreme Court (for International) and High Courts (for domestic) may now designate arbitral institutions, which parties can approach for the appointment of arbitrators.
• Completion of written submissions: Currently, there is no time limit to file written submissions before an arbitral tribunal.  The act mandates that the written claim and the defense to the claim in an arbitration proceeding should be completed within six months of the appointment of the arbitrators.
• Confidentiality of proceedings: The act provides that all details of arbitration proceedings will be kept confidential except for the details of the arbitration award in certain circumstances
• The amendment in 2021 did away with the qualifications prescribed for the arbitrators in the 1996 Act and the same will be prescribed by the Arbitration Council. The Act also provided for an unconditional stay by the courts on the enforcement of arbitration awards based on ‘fraud or corruption” in the contract.

AD HOC ARBITRATION AND INSTITUTIONAL ARBITRATION

• There are two types of arbitration – institutional arbitration and ad hoc
• Institutional arbitration refers to the administration of arbitration by an institution under its rules of procedure.
• The institution provides support for the conduct of the arbitration in the form of appointment of arbitrators, case management services including oversight of the arbitral process, etc.
• Ad hoc arbitration is a form of arbitration where the parties and the arbitrators independently determine the procedure, without the involvement of an arbitral institution.
• Institutional arbitration differs from ad hoc arbitration in that several aspects of the arbitral proceedings, such as the appointment of arbitrators, the conduct of the arbitral proceedings, scrutiny of awards, etc. May be determined by the arbitral institution.

The advantages of institutional arbitration over ad hoc arbitration

• Institutional arbitration offers the advantages of providing a clear set of arbitration rules and timelines for the conduct of the arbitration.
• Support from trained staff who administers various stages of the arbitration proceedings, a panel of arbitrators to choose from to decide the dispute are also available.
• Ad hoc arbitration is vulnerable to the risk of dilatory tactics, which increases delays and costs.
• Moreover, where parties are not sophisticated and do not have sufficient knowledge regarding arbitral proceedings, institutional arbitration is highly preferable.
• In India, ad hoc arbitrations tend to be protracted and costly in some cases in the absence of monitoring.
• One of the reasons for these delays and costs is that the fees of arbitrators are charged on a sitting-by-sitting basis without any regulation.

BENEFITS OF ARBITRATION IN INDIA

AREA: ENFORCEMENT

EXPLANATION: Ease of enforcement is often an important deciding factor in favor of arbitration. India is a signatory to the New York Convention. If a party receives a binding award from a country that is a signatory to the New York Convention and the award is made in a territory that has been notified as a ‘convention country’ by India, the award would then be enforceable in India.

AREA: LENGTH OF PROCEEDINGS

EXPLANATION: Indian courts are infamous for endemic delays in resolving commercial disputes.  Arbitration can be substantially quicker as all India seated arbitrations must be completed within 12 months of the constitution of the tribunal.

AREA: NEUTRALITY AND EXPERTISE

EXPLANATION: In arbitration, parties can refer their disputes to a neutral forum.  This is particularly attractive in the context of cross-border transactions.

AREA: PROCEDURAL FLEXIBILITY

EXPLANATION: Arbitration allows parties to tailor procedures to the needs of a particular dispute. In practice, parties often choose institutional arbitration and simply adopt the standard rules and procedures of their chosen institution.

AREA: CONFIDENTIALITY

EXPLANATION: Arbitration hearings are usually held in private and a party is involved in arbitration proceedings is also confidential. By contrast, Indian court proceedings, with some exceptions, are almost always open to the public.

AREA: MAKING INDIA A GLOBAL HUB

EXPLANATION: To develop India as a global hub for international arbitration, we must open ourselves to the outside world and incorporate best practices for creating word class Institutional and legal procedures.

AREA: EASE OF DOING BUSINESS

EXPLANATION: As per the EoDB Ranking by World Bank, India’s position is 163 in the Enforcement of Contract indicator. Thus, foreign investors are increasingly doubtful about the timely delivery of justice, which affects the success of programs like ‘Make in India’.Having a streamlined arbitration regime encourages foreign investments in a country.

WHAT ARE THE PROBLEMS OF ARBITRATION IN INDIA?

LACK OF CREDIBLE ARBITRAL INSTITUTIONS: Arbitral institutions in India lack access to quality legal expertise and lack exposure to international best practices. Thus the rules and practices followed by these arbitral institutions are often outdated and inadequate.

MISCONCEPTIONS RELATING TO INSTITUTIONAL ARBITRATION: Parties consider institutional arbitration to be substantially more expensive than ad hoc arbitration. This assessment is largely misconceived because numerous arbitral institutions charge very reasonable fees.

FAILURE BY THE GOVERNMENT AND ITS AGENCIES TO USE INSTITUTIONAL ARBITRATION: The general conditions of contract used by the Government and PSUs often contain arbitration clauses, but these clauses usually do not expressly provide for institutional arbitration. For instance, if the government, were to adopt institutional arbitration as a regular practice, the volume of cases moving to arbitral institutions would provide a powerful impetus to institutional arbitration.

JUDICIAL ATTITUDES TOWARDS ARBITRATION: Delays in Indian courts and excessive judicial involvement in arbitral proceedings have resulted in India not being favored as a seat of arbitration. It has contributed to discouraging foreign parties to arbitrate in India. The high pendency of litigation before Indian courts means that arbitration-related court proceedings take a long time to be disposed of.

HIGH COSTS AND INEFFICIENCY: 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.

ISSUE OF TRANSPARENCY: Arbitration hearings are generally held on camera, and decisions are usually not publicly accessible, giving rise to doubts about impartiality and fairness. The aggrieved party may well be stuck with the award and precluded forever from challenging it. In 1984, in Tarapore and Company v. Cochin Shipyard Ltd, the Supreme Court had remarked that an honest man dreads arbitration more than lawsuits. The same fear persists today.

HOW TO INSTITUTIONALISE ARBITRATION IN INDIA?

JUSTICE BN SRIKRISHNA COMMITTEE RECOMMENDATIONS: 

1. Arbitration Promotion Council of India – An autonomous body called the Arbitration Promotion Council of India (“APCI”) and having representation from various stakeholders may be set up by amendment to the ACA for grading arbitral institutions in India.  (The ACA Amendment 2019 provides for an Arbitration Council of India, which is yet to be constituted)
2. Accreditation of arbitrators – The APCI may recognize professional institutes that provide for accreditation of arbitrators. Accreditation may be made a condition for acting as an arbitrator in disputes arising out of commercial contracts entered into by the government and its agencies.
3. Creation of a specialist arbitration bar – Measures may be taken to facilitate the creation of an arbitration bar by providing for the admission of advocates on the rolls of the APCI as arbitration lawyers, encouraging the establishment of fora of young arbitration practitioners, and providing courses in arbitration law and practice in law schools and universities in India.
4. Creation of a specialist arbitration bench – Judges hearing, arbitration matters should be provided with periodic refresher courses in arbitration law and practice.
5. Role of the government and the legislature in promoting institutional arbitration – Measures to promote institutional arbitration, such as facilitating the construction of integrated infrastructure for arbitration in major commercial hubs, adopting arbitration policies providing for institutional arbitration in commercial disputes involving the government, maybe adopted.
6. Changes in ADR culture – Measures may be taken to promote the use of ADR mechanisms, including requiring the provision of mediation facilities by arbitral institutions.
7. Bilateral investment arbitrations involving the Union of India –This assumes relevance in the case of Cairn Energy where the company has accused India of not honoring the Arbitration Award in its favor and also in the context of the revised framework of BIT from India. A few recommendations for effective dispute management and resolution, and dispute prevention include: (a) appointing the Department of Economic Affairs as the Designated Representative of the Government in existing BITs; (b) creating the post of an International Law Adviser, who shall advise the Government and coordinate dispute resolution strategy for the Government in disputes arising out of its international law obligations,

NEW DELHI INTERNATIONAL ARBITRATION CENTRE (NDIAC) ACT, 2019:

1. The Act provides for the setting up of an independent and autonomous body, for institutional arbitration.
2. NDIAC will conduct arbitration, mediation, and conciliation proceedings (Yet to be constituted)
3. NDIAC will establish a Chamber of Arbitration which will maintain a permanent panel of arbitrators.
4. Further, the NDIAC may also establish an Arbitration Academy for training arbitrators and researching the area of alternative dispute resolution.
5. It will facilitate the conduct of arbitration and conciliation in a professional, timely, and cost-effective manner and assist in the conduct of ADRs.

INTERNATIONAL EXPERIENCe: SINGAPORE MODEL

• The SIAC (Singapore International Arbitration Centre) has benefited significantly from the support they enjoyed from their government.
• The SIAC was established as a part of the Singapore government’s effort to create an arbitration industry in Singapore.
• It was set up by the government with two governmental agencies, the Economic Development Board and the Trade Development Board as its shareholders, and operated for many years under their aegis.
• The government also played a role in promoting the SIAC at an international level, getting international arbitration practitioners to be associated with the institution.
• The SIAC received financial assistance and/or infrastructural support from the government.
• The Indian government, like the Singapore government, could consider assisting arbitral institutions in India by building suitable infrastructures such as integrated dispute resolution facilities in major commercial centers such as Mumbai and Delhi.

WAY FORWARD

• Effective use of Technology such as e-filing, creating a database of cases, big data analytics, Online Dispute Resolution, video conferencing, etc. needs to be scaled up and be put to extensive use in the process of arbitration
• The Law Commission of India has in its 246^thReport has noted the problems in ad hoc arbitrations and therefore recommends that India needs to promote institutional arbitration where a specialized institution with a permanent character aids and administers the arbitral process.
• Fast-tracking of disputes in case of government contracts requires an independent settlement committee, which could be approached by the stakeholders at any stage of proceedings for the resolution of disputes.
• Judicial cooperation is vital to give effect to the law of arbitration. Therefore, an effort is to be made to identify those steps which would make a good balance between judicial and arbitration, at pre, during, and post arbitral proceedings.

CONCLUSION: Apart from legal reforms, arbitration promotion also needs further support on a few other fronts like the need to decentralize dispute resolution mechanisms. It would also need an administrative mechanism to ensure that arbitration matters have been handled separately and efficiently. For this, the government needs to create an enabling framework for institutional arbitration. The proposed ACI be set up expeditiously for providing leadership in the arbitration landscape of the country. These measures are a must to “resolve in India” which will create a conducive environment for attracting investment and facilitating economic development.