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THE INDIAN POLITY AND GOVERNANCE

1. SUPREME COURT’S THREE-QUESTION TEST FOR VALIDITY OF 10% EWS QUOTA

THE CONTEXT: The Supreme Court will examine whether The Constitution (103rd Amendment) Act, which introduced a 10 per cent quota for Economically Weaker Sections (EWS) in government jobs and admissions, violates the basic structure of the Constitution.
THE EXPLANATION:
The issues fixed by the Supreme Court
The court decided to take up three of them:
• Whether the 103rd Constitution Amendment can be said to breach the basic structure of the Constitution by permitting the state to make special provisions, including reservation, based on economic criteria
• Whether it can be said to breach the basic structure…by permitting the state to make special provisions in relation to admission to private unaided institutions
• Whether the basic structure is violated by excluding the SEBCs (Socially and Educationally Backward Classes)/ OBCs (Other Backward Classes)/ SCs (Scheduled Castes)/ STs (Scheduled Tribes) from the scope of EWS reservation

The 103rd Amendment
• The 103rd Amendment inserted Articles 15(6) and 16(6) in the Constitution to provide up to 10 per cent reservation to EWS other than backward classes, SCs, and STs in higher educational institutions and initial recruitment in government jobs.
• The amendment empowered state governments to provide reservation on the basis of economic backwardness.
• Article 15 prohibits discrimination on grounds of religion, race, caste, sex, or place of birth.
• Article 16 guarantees equal opportunity in matters of public employment.
• The additional clauses gave Parliament the power to make special laws for EWS like it does for SCs, STs, and OBCs.
• The EWS reservation was granted based on the recommendations of a commission headed by Major General (retd) S R Sinho.
• The Sinho Commission recommended that all below-poverty-line (BPL) families within the general category as notified from time to time, and also all families whose annual family income from all sources is below the taxable limit, should be identified as EBCs (economically backward classes).

How is EWS status determined under the law?
• Under the 2019 notification, a person who was not covered under the scheme of reservation for SCs, STs, and OBCs, and whose family had a gross annual income below Rs 8 lakh, was to be identified as EWS for the benefit of reservation.
• The notification specified what constituted income, and excluded some persons from the EWS category if their families possessed certain specified assets.

Challenges to the amendment
• When a law is challenged, the burden of proving it is unconstitutional lies on the petitioners.
• The primary argument in this case is that the amendment violates the basic structure of the Constitution.
• Although there is no clear definition of basic structure, any law that violates it is understood to be unconstitutional.
• It stems from the view that the special protections guaranteed to socially disadvantaged groups is part of the basic structure, and that the 103rd Amendment departs from this by promising special protections on the sole basis of economic status.
• The petitioners have also challenged the amendment on the ground that it violates the Supreme Court’s 1992 ruling in Indra Sawhney & Ors v Union of India, which upheld the Mandal report and capped reservations at 50 per cent.
• The court had held that economic backwardness cannot be the sole criterion for identifying a backward class.
• Another challenge is on behalf of private, unaided educational institutions.
• They have argued that their fundamental right to practise a trade/ profession is violated when the state compels them to implement its reservation policy and admit students on any criteria other than merit.

Government’s stand
• The government argued that under Article 46 of the Constitution, part of Directive Principles of State Policy, the state has a duty to protect the interests of economically weaker sections
• Against the argument of violation of the basic structure, the government said that to sustain a challenge against a constitutional amendment, it must be shown that the very identity of the Constitution has been altered.
• On the Indra Sawhney principle, the government has relied on the SC’s 2008 ruling in Ashoka Kumar Thakur v Union of India, in which the court upheld the 27 per cent quota for OBCs.
• The argument is that the court accepted that the definition of OBCs was not made on the sole criterion of caste but a mix of caste and economic factors; thus, there need not be a sole criterion for according reservation.

How will Bangladesh use the water?
• The water of Kushiyara will be channelled through the Rahimpur Canal project in Sylhet.
• The eight km long canal is the only supplier of water from the Kushiyara to the region and Bangladesh has built a pump house and other facilities for withdrawal of water that can now be utilised.
• The water of the Kushiyara has been used for centuries in Sylhet.
• But Bangladesh has witnessed that the flow and volume of water in the canal has reduced during the lean season.
• The utility of the river and the canal during the lean/winter season had gone down, affecting cultivation of rice as well as a wide variety of vegetables for which Sylhet is famous.
• The additional water of Kushiyara through the Rahimpur Canal therefore is the only way to ensure steady supply of water for irrigation of agriculture fields and orchards of the subdivisions of Sylhet.

Link with climate change
• The Kushiyara agreement is relatively smaller in scale in comparison to Teesta that involves West Bengal, which has problems with the proposal.
• The Kushiyara agreement did not require a nod from any of the States like Assam from which the Barak emerges and branches into Kushiyara and Surma.
• The reduced water flow of the Kushiyara during winter and Teesta too, however, raise important questions about the impact of climate change on South Asian rivers that can affect communities and trigger migration.
• Bangladesh has cited low water flow in its rivers during the winter months as a matter of concern as it affects its agriculture sector.
• The coming decades will throw up similar challenging issues involving river water sharing as the impact of the climate crisis becomes more visible with water levels going down in several cross-border rivers.

THE ECONOMIC DEVELOPMENTS

2. NITI AAYOG: APPROVAL OF BENEFICIARIES UNDER PLI SCHEME

THE CONTEXT: The Empowered Committee headed by NITI Aayog CEO recently approved the first distribution of incentives for mobile manufacturing.
THE EXPLANATION:
• This production-linked incentive scheme will give India a competitive position in the field of electronics manufacturing.
• The plan includes manufacturing of mobile phones and manufacturing of specialized electronic components.
• This initiative will also promote the vision of a self-reliant India. Under this, 10 companies will be given the benefit of the scheme for mobile manufacturing. This includes five domestic and five foreign companies.
• Under this initiative, a domestic company, Paget Electronics Pvt Ltd, is the first beneficiary company to receive incentives under mobile manufacturing.
• This is the first time that a mobile manufacturing unit has been selected under the PLI scheme.
• This scheme extends an incentive of 4% to 6% on net incremental sale of manufactured goods, to boost electronics manufacturing and attract large scale investments.
• The scheme is expected to generate additional generation of Rs 10,69,432 crore and employment for 700,000 people.

What is PLI Scheme?
PLI scheme aims to provide incentives to the companies on the basis of incremental sales from products manufactured in domestic units. It invites foreign companies to set up their units in India as well as encourage local companies to expand or set up manufacturing units.

3. INDIA’S RETAIL INFLATION IN AUGUST 2022

THE CONTEXT: India’s retail inflation has reached 7 per cent in August 2022 – well above the RBI’s comfort level of 6 per cent.
THE EXPLANATION:
• India’s Consumer Price Index (CPI)-based inflation has returned to 7% in August 2022.
• In July 2022, the retail inflation had reduced to a five-month low of 6.71%, after spending the three months above 7%.
• The retail inflation stayed above 6% for eight consecutive months.
• It had spent the 35 consecutive months above the RBI’s medium-term target of 4 per cent.
• With average retail inflation at 6.3 per cent in January-March and 7.3 per cent in April-June, the retail inflation must reduce to at least 4.1 per cent in September for July-September average to come under 6 per cent.
• According to the RBI, the inflation is expected to average at 7.1 per cent in July-September.
• The return to the 7% level in August is mainly because of the surge in food prices.
• Inflation in food basket has spiked to 7.62% in August – a significant increase from 3.11% in August 2021.
• Food inflation accounts for nearly 50 per cent of the CPI basket.
• The surge is largely because of increase in prices of essential crops such as wheat, rice and pulses caused by a record heatwave.
• There is a 10% increase in the inflation rate of vegetables, spices, footwear and fuel and light on annual basis.
• However, the prices of eggs have reduced and inflation in protein-rich meat and fish have flattened in the August.

What is retail inflation?
Retail inflation or the CPI-based inflation is the increase in prices of goods and services purchased by households for daily consumption. It is measured in Consumer Price Index (CPI), which is the weighted average of prices of a basket of goods and services that are sold in retail prices. The CPI measures changes in the retail prices of essential goods like food, fuel etc., as well services such as healthcare, transportation and others.

4. IFSCA FINTECH INCENTIVE SCHEME, 2022

THE CONTEXT: The International Financial Services Centres Authority (IFSCA) launched the IFSCA (FinTech Incentive) Scheme for providing financial support to FinTech activities in the form of specific grant(s).
THE EXPLANATION:
This scheme shall be open to –
• Domestic FinTechs seeking access to overseas markets;
• Domestic FinTechs seeking listing on IFSCA recognised stock exchanges;
• Foreign FinTechs seeking market access to IFSCs in India and work within the Authority’s regulatory framework;
• Foreign FinTechs seeking access to domestic market under Inter-Operable Regulatory Sandbox (IORS) framework;
• Domestic FinTechs extending business to the IFSCs either by way of authorisation or registration or through the regulatory sandbox.
• The types of incentives for eligible applicants are:
o FinTech Start-up grant: This grant shall be utilized for developing a product or a service and related ‘go-to market’ initiatives for a start-up with a novel FinTech idea or solution.
o Proof of Concept (PoC) grant: This grant shall be utilized for the purpose of conducting a PoC by an early or mature FinTech Entity (FE) in domestic market or overseas.
o Sandbox grant: This grant shall be utilized by FEs to experiment with innovative products or services in a sandbox.
o Green FinTech Grant: This grant shall be utilized towards developing solutions facilitating sustainable finance and sustainability linked finance, including ‘Environmental, Social and Governance (ESG)’ investments.
o Accelerator Grant: This grant shall be utilized for supporting accelerators at the IFSC for capacity building, build capabilities around mentors, bringing investors, bringing more projects or PoC, tie ups, etc.
o Listing Support Grant: The grant shall be utilized for supporting Domestic FE aspiring to go for listing on stock exchanges recognised by the Authority.

About IFSCA
• The International Financial Services Centres Authority (IFSCA) has been established in 2020 under the International Financial Services Centres Authority Act, 2019.
• It is headquartered at GIFT City, Gandhinagar in Gujarat.
• It is an authority to develop and regulate:
o financial services,
o financial products
o financial institutions
• Before the IFSCA was established, the financial services and institutions were regulated by the SEBI, RBI, IRDAI, PFRDA, etc.

THE ENVIRONMENT, ECOLOGY AND CLIMATE CHANGE

5. SEA TURTLES TRAFFICKING

THE CONTEXT: According to a new study More than 1.1 million sea turtles have been illegally killed and in some cases trafficked from 1990 to 2020.
THE EXPLANATION:
• The reptiles faced exploitation in 65 countries/territories and 44 out of the 58 marine turtle regional management units (RMU) in the world despite laws protecting the creatures.
• The sea turtle family includes the hawksbill, loggerhead, leatherback, green and olive ridley turtle.
• The species that faced the most exploitation in the 30-year-period were green (56 per cent) and hawksbill sea turtles (39 per cent).
• Southeast Asia and Madagascar were major hotspots for illegal sea turtle trade, particularly for the critically endangered hawksbills.
• The hawksbill turtles are prized in the illicit wildlife trade for their beautiful shells.
• Vietnam was the most common country of origin for illegal sea turtle trafficking, while China and Japan served as destinations for nearly all trafficked sea turtle products.
• Vietnam-China was the most common trade route across all three decades.
• There was a 28 per cent decrease in the reported exploitation of marine turtles from the 2000s to the 2010s.
• The decline over the past decade could be due to increased protective legislation and enhanced conservation efforts, coupled with an increase in awareness of the problem or changing local norms and traditions.

Reason for their decline
• Sea turtles are slaughtered for their eggs, meat, skin, and shell
• They also face habitat destruction and accidental capture or bycatch in fishing gear.
• Climate change has an impact on turtle nesting sites as it alters sand temperatures, which affects the sex of hatchlings.

About Sea turtles
• Sea turtles, sometimes called marine turtles, are reptiles of the order Testudines and of the suborder Cryptodira.
• The seven existing species of sea turtles are:
1. the flatback sea turtles,
2. green sea turtles,
3. hawksbill sea turtles,
4. leatherback sea turtles,
5. loggerhead sea turtles,
6. Kemp’s ridley sea turtles,
7. olive ridley sea turtles.
• Sea turtles can be separated into the categories of hard-shelled (cheloniid) and leathery-shelled (dermochelyidae).
• There is only one dermochelyidae species which is the leatherback sea turtle.

Distribution
• Sea turtles can be found in all oceans except for the polar regions.
• The flatback sea turtle is found solely on the northern coast of Australia.
• The Kemp’s ridley sea turtle is found solely in the Gulf of Mexico and along the East Coast of the United States.
• Sea turtles are generally found in the waters over continental shelves.

Conservation status
• The IUCN Red List classifies three species of sea turtle as either “endangered” or “critically endangered”.
• An additional three species are classified as “vulnerable”.
• The flatback sea turtle is considered as “data deficient”, meaning that its conservation status is unclear due to lack of data.
• All species of sea turtle are listed in CITES Appendix I, restricting international trade of sea turtles and sea turtle products.

THE SECURITY AFFAIRS

6. INDIAN ARMY EXERCISE PARVAT PRAHAR

THE CONTEXT: Army Chief recently visited the Ladakh sector to review Exercise Parvat Prahar and was briefed about the operational preparedness on the ground by the commanders. The exercise saw the deployment of an all new major induction of the Army.
THE EXPLANATION:
• This exercise named ParvatPrahar is being conducted by the One Strike Corps of the Indian Army. ‘
• The strike corps means that if China or Pakistan act anywhere, they will first enter and eliminate it.
• Parvat Prahar is a 20-day long exercise of the Indian Army.
• The exercise comes as India and China are separating from the Gogra-Hot Springs (PP-15) in eastern Ladakh.
• It is believed that from the above place the Indian Army may withdraw its forces towards Karam Singh Hill, while the Chinese Army may return to Chinese territory in the north.
• The exercise involved high altitude infantry personnel, T-90S and T-72 tanks, mechanized infantry, K-9 Vajra, Bofors and M-777 howitzers, helicopters and aircraft.
• Chinook heavy lift helicopters and all-terrain vehicles carried by K9-Vajra howitzers were used in the exercise.