Context

• Indian Prime Minister recently visited UAE fourth time, having earlier visits in August 2015, in February 2018 and again in August 2019.
• Juxtaposed against the fact that no Indian PM had visited the UAE for 34 years since the visit of Indira Gandhi in 1981, the transformation in India’s engagement with this Gulf state has been extraordinary.

Reasons behind the visit

• Not necessitated: Viewed from the perspective of traditional diplomatic protocol, the visit was not necessary.
• Demise and new rule: The reason for the latest sojourn is to offer condolences on the demise of Sheikh Khalifa bin Zayed al Nahyan and to congratulate Sheikh Mohamed bin Zayed al Nahyan on his elevation to the position of the ruler of Abu Dhabi and President of the UAE.
• Earlier visits by officials: Vice President Venkaiah Naidu had gone to Abu Dhabi in May 2022 to offer the Government of India’s condolences to the UAE leadership.
• In an unusual gesture, External Affairs Minister S Jaishankar had visited the UAE embassy in New Delhi to sign the condolence book.

Beyond protocols

• No diplomatic purpose: The relationship with UAE has moved well beyond the confines of diplomatic protocols.
• Personal rapport: The warmth and personal chemistry between the Prime Minister and Sheikh Mohamed is genuine and palpable.
• UAE recognition: It has been almost three years since their last meeting in Abu Dhabi when PM Modi was bestowed the Order of Zayed, the UAE’s highest civilian award.
• Recent stop-off: The current stopover on the way back from the G7 summit in Germany was an opportunity to renew that relationship through a one-on-one meeting with Sheikh Mohamed and an engagement with key members of the royal family including the National Security Advisor and foreign minister.

Recent agreements signed

• Agreement: India and UAE has signed a Comprehensive Economic Partnership Agreement (CEPA) on the bilateral front in a virtual summit with Sheikh Mohamed in February 2022.
• Significance: CEPA is a significant milestone that was negotiated and finalised in just 88 days.
• Trade target: It promises to increase bilateral trade from $60 billion to $ 100 billion in five years.
• Market access: It came into force on 1^st May, 2022 and has already ushered in preferential market access for 97 per cent of tariff lines accounting for 99 per cent of Indian exports to the UAE.
• Segments: CEPA is expected to help Indian exports in areas ranging from gems and jewellery and textiles to footwear and pharmaceuticals, apart from enhanced access for Indian service providers to 11 specific sectors.
• Boosting enterprise and opportunities: A high-level business delegation from the UAE visited India to identify trade and investment opportunities, brief Indian business leaders about the key features of the agreement and advise small and medium enterprises on leveraging its provisions.
• Vision statement: The two leaders also issued an ambitious, forward-looking Joint Vision Statement titled, “Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestones”.
• Skill development: Dubai and India’s National Skills Development Council signed an agreement to set up a Skill India Centre in Varanasi to train local youth in logistics, port operations and allied areas so that they can pursue overseas employment.

Multilateral cooperation

• On the regional front, the rapid normalisation of ties between the UAE and Israel following the Abraham Accord of August 2020 has also opened new avenues of trilateral and multilateral cooperation.
• The Israeli tech companies are also establishing a base in Dubai and seeking to diversify niche technologies with Emirati capital and Indian scale.
• New groupings: The US has announced that President Joe Biden’s forthcoming visit to West Asia will see a virtual summit of
• About I2U2: It is a new grouping that brings together India, Israel, the US and UAE.
• The foreign ministers of the four countries had held their first virtual meeting in October 2021, articulating a focus on joint trade, technology, transport and infrastructure projects.

Significance of Gulf countries

• Description: The Gulf countries border the Persian Gulf namely Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates
• Gulf Cooperation Council: Also, these countries except Iraq are part of the Gulf Cooperation Council (GCC).
• Economic interests: The Gulf is India’s third-largest trading partner, principal source of hydrocarbons, a major source of foreign investment and home to some 8 million Indians who send in over $50 billion annually in remittances.
• Concerns: India’s image has been dented in the hearts and minds of the average Emiratis in the backdrop of the turbulence caused by the comments on Prophet Mohammed by Nupur Sharma and Naveen Kumar Jindal.
• Critical support: These unwanted comments reveal an utter ignorance of the crucial support that countries like the UAE have given to India in the Islamic world, for instance first by inviting our late External Affairs Minister Sushma Swaraj as a guest of honour at an OIC foreign ministers meeting in Abu Dhabi and later by standing with us on Jammu and Kashmir following the abrogation of Article 370.

Conclusion

Visuals from the Prime Minister’s visit and his very evident personal rapport with the leadership of UAE have sent out a positive message but it will take a sustained public diplomacy effort to undo the damage caused to public sentiment at large in Gulf and strengthen ties even more.

In News:

• Recently, the Indian rupee fell to a new low against the US dollar, as domestic stock markets fell and foreign investors continued to sell Indian equities.
• The Indian rupee breached for the first time the Rs 79/$ level in post-market trade. 

What’s in today’s article:

• Exchange rate (About, how is it determined, fluctuation in exchange rate, RBI’s role, what does falling rate signify)
• News Summary 

Exchange rate:

• The exchange rate of the rupee against the US dollar tells us how many rupees are needed to purchase one US dollar.
• To purchase (import) a product or service from the United States, Indians must first purchase dollars and then use those dollars to purchase the product.
  • The same is true when Americans purchase something from India.
• If the rupee's exchange rate falls (depreciation), purchasing American goods will become more expensive.
• Simultaneously, Indian exporters may benefit because their goods are now more appealing to American customers.

How is it determined?

• In a free-market economy, the exchange rate is decided by the supply and demand for rupees and dollars.
• In case, Indians demand more dollars in comparison to Americans demanding the rupee, the exchange rate will “fall” or “weaken” for rupee and “rise” or “strengthen” for dollar.
• However, in India, the market does not fully determine the exchange rate.
  • The Reserve Bank of India (RBI) occasionally intervenes in the foreign exchange (forex) market to ensure that the rupee's price does not fluctuate too much or rises or falls too dramatically all at once.
• Fluctuation in rupee’s exchange rate: For simplicity, consider two scenarios -
  • Crude oil prices rise dramatically: The ramifications for India, which imports 80% of its oil, would be that it would require more dollars to purchase crude oil in the international market.
    • This would weaken the rupee because India's demand for dollars would have increased while global demand for the rupee remained unchanged.
  • The US central bank raises its interest rates: Global investors who had been putting money in India (for which they demanded rupees) might consider withdrawing it and investing in the US (for which they would demand dollars instead). Again, the rupee would weaken.

The RBI’s role in this:

• To slow down the rupee's fall, the RBI would sell some of the dollars from its forex reserves in the market.
• This will absorb a large number of rupees from the market, narrowing the demand-supply gap between the rupee and the dollar.
• This is why the RBI's forex reserves have plummeted since the start of the Ukrainian conflict.

Significance of exchange rate

• The exchange rate is frequently used to gauge an economy's relative strength.
• The majority of developing economies run trade and current account deficits.
• The ultimate impact of a fall is determined by a number of factors.
  • A fall in the rupee, for example, can benefit India's exporters - unless they import raw materials, which would become more expensive.

News Summary:

• 
• Among Asian currencies, the rupee has outperformed during the current year.
• However, the recent decline (domestic currency has lost almost 6% during the current year) has caused it to underperform in comparison to the currencies of Singapore, Indonesia, Thailand, China and Malaysia.
• India is the only major emerging market with a large current account deficit and unlike other emerging markets, does not benefit significantly from currency depreciation.
• Multinational banks purchased dollars on behalf of foreign institutional investors, while public sector banks purchased dollars for importers such as oil companies.
• By selling billions of dollars from its reserves, the RBI has ensured that there are no wild swings in the exchange rate.
• Oil prices and overall dollar strength will determine whether the rupee remains above 79 or recovers.
  • There is no reason for the rupee to reverse its course unless oil prices fall significantly.

In News:

• The North Atlantic Treaty Organization (Nato) invited Sweden and Finland to join the military alliance in one of the biggest shifts in European security in decades.

What’s in Today’s Article:

• NATO – About, functions, should India join NATO
• News Summary

In Focus: NATO

• Formed in 1949 with the signing of the Washington Treaty, NATO is a security alliance of 30 countries from North America and Europe.
• NATO’s fundamental goal is to safeguard the Allies’ freedom and security by political and military means.
• It is a system of collective defence where independent member states agree for mutual defence in case of any attack by external party.
  • Article 5 of the Washington Treaty states that an attack against one Ally is an attack against all.
  • This article forms the core of the Alliance, a promise of collective defense.
• Headquarter - Brussels, Belgium.

Functions

• Political
  • NATO promotes democratic values and enables members to consult and cooperate on defence and security-related issues to solve problems, build trust and, in the long run, prevent conflict.
• Military
  • NATO is committed to the peaceful resolution of disputes.
  • If diplomatic efforts fail, it has the military power to undertake crisis-management operations.

Should India join NATO?

Arguments in favour of joining

• End of Cold War era
  • During the Cold War, India’s refusal was premised on its non-alignment.
  • This argument has little justification once the Cold War ended during 1989-91.
  • NATO has regular consultations with both Russia and China, despite the gathering tensions with them in recent years.
  • This presents a case for India to join the alliance.
• To combat terrorism
  • India has seen many terrorist attacks – 26/11 Mumbai terror attack, Pulwama, Uri attack etc.
  • Hence, security analysts suggest that India should join NATO to combat terrorism on a long-term basis.
• Members of NATO are well-established partners of India
  • Indian membership would simply mean having regular contact with a military alliance, most of whose members are well-established partners of India.
  • India has military exchanges with many members of NATO — including the US, Britain, and France — in bilateral and minilateral formats.
  • Hence, collective engagement with NATO should not be problematic.
• To contain China
  • NATO is increasing its footprints in Indian Ocean Region where China is aggressive.
  • NATO membership would help India in containing China.

Arguments against joining the alliance

• Fear of antagonising Russia
  • Russia has been a long-term ally for India. Even, during the current Ukraine war, India has not openly criticised Russia.
  • India still is heavily dependent on the Russian military equipment. Hence, joining NATO will lead to the deterioration of the relationship.
• It would hurl India headlong into the Global War on Terror
  • Joining NATO on full-term basis could become problematic for India as it would drag India into various conflicts around the globe.
    • Collective self-defence article would force India to contribute its troops to support NATO.
• Sovereignty and Principle of Non-Alignment
  • Joining the alliance would lead to the establishment of NATO bases on India’s territory which may be considered an infringement of our sovereignty.
  • So far, India has not joined any military bloc and remained true to the principle of non-alignment which forms the core of India’s foreign policy.

India needs to open a strategic dialogue with NATO and work towards areas of common security concern on a case-by-case basis. In this context, a pragmatic engagement with NATO countries must be an important part of India’s foreign policy. However, it must refrain from becoming a formal member of NATO.

News Summary

• At a recently held summit in Madrid, NATO has formally invited Finland and Sweden to join the alliance.
• This is seen as one of the biggest shifts in European security in decades after Russia’s invasion of Ukraine pushed both the countries to drop their tradition of neutrality.
  • Until now, Finland and Sweden followed the policy of strict neutrality between Moscow and the West.
    • They took neutral positions on matters on which the Soviet Union and the West disagreed.
  • However, recent invasion of Russia in Ukraine forced these countries to drop their tradition of neutrality.

Key Highlights of the summit:

• Calls Russia direct threat
  • A NATO communique, released after the summit, called Russia the most significant and direct threat to the allies’ security and stability.
    • This highlights NATO’s deterioration in relations with Russia, which was earlier classified as a strategic partner.
  • It also agreed a package of support aimed at modernising Ukraine’s largely Soviet-era military.
• Lays out challenges from China
  • NATO, for the first time in its guiding blueprint, said China might challenges the alliance.
  • It further said that Beijing’s closer ties to Moscow went against Western interests.
  • It said that China strives to subvert the rules-based international order, including in the space, cyber and maritime domains.
• Invitation to Sweden and Finland to join NATO
  • NATO’s 30 allies formally invited Sweden and Finland to join the military alliance at their summit in Madrid.
  • The move came after Turkey dropped weeks of resistance to their membership bids.
    • Turkey, which has been a member of NATO since 1952, had repeatedly opposed Finland and Sweden’s entry.
    • It accused the two Nordic countries of supporting Kurdish militant groups which it deems to be terrorist organizations.
    • Turkey dropped weeks of resistance after securing a 10-point agreement.
    • Under this agreement, the two countries vowed to join Turkey’s fight against banned Kurdish militants and to swiftly extradite suspects.

In News:

• Twitter has indicated to the government that it is willing to comply with Indian IT laws.

What’s in Today’s Article:

• New IT Rules 2021 – About, Key highlights
• News Summary

New IT Rules

• India’s new IT rules, also known as The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, came into force in May 2021.
• It seeks to regulate social media platforms, OTT players & digital media.

Key highlights of the rule:

• Removal of content from social media
  • The new guidelines will make it mandatory for platforms such as WhatsApp to aid in identifying the “originator” of “unlawful” messages.
  • It stipulates that upon receipt of information about the platform hosting prohibited content from a court or the appropriate government agency, it should remove the said content within 36 hours.
• Categorisation of social media
  • The rules also made a distinction between a significant social media intermediary and a regular social media intermediary.
• Related to Safe Harbour Mechanism
  • Section 79 of the Information Technology Act provides a “safe harbour” to intermediaries that host user-generated content.
    • Section 79 says that any intermediary shall not be held legally or otherwise liable for any third-party information, data, or communication link made available or hosted on its platform.
    • In other words, as long as a platform acts just as the messenger, it will be safe from any legal prosecution brought upon due to the message being transmitted.
  • As a result, these platforms are exempted from liability for the actions of users if they adhere to government-prescribed guidelines.
  • The new guidelines prescribe an element of due diligence to be followed by the intermediary, failing which the safe harbour provisions would cease to apply to these platforms.
• A Grievance Redressal Mechanism
  • The guidelines mandates that the social media platforms should establish a mechanism for receiving and resolving complaints from users.
  • These platforms will need to appoint a grievance officer to deal with such complaints.
• Ensuring Compliance
  • The social media platforms will be required to appoint a chief compliance officer resident in India, responsible for ensuring compliance with the rules.
  • These platforms will also be required to appoint a nodal contact person for 24×7 coordination with law enforcement agencies.
  • The platforms will need to publish a monthly compliance report mentioning the details of complaints received and action taken on the complaints etc.
• Penalties
  • In case an intermediary fails to observe the rules, it would lose the safe harbour.
  • It will be liable for punishment under any law for the time being in force including the provisions of the IT Act and the Indian Penal Code.
• Rules for OTT (Over-the-Top) Services
  • The new IT Rules has called for a grievance redressal system for OTT platforms.
    • OTT services refer to any type of video or streaming media that provides a viewer access to movies or TV shows by sending the media directly through the internet.
    • Some of the most popular OTT providers include Netflix, Amazon Prime Video, and Hulu.
  • The government is also asking OTT platforms to self-regulate.
  • While films have a censor board, OTT platforms such as YouTube, Netflix, etc. will require to self-classify their movies and content based on age.
  • For this, the government has prescribed self-classification of content into five categories based on age suitability.
    • These categories include U, “U/A 7+”, “U/A 13+”, “U/A 16+” and “A”.
• Rules for Digital News Portals
  • The rule promotes self-regulation for these portals.
  • It also wants a three-level grievance redressal mechanism.
    • This will include self-regulation by the publishers; self-regulation by the self-regulating bodies of the publishers and oversight mechanism.

News Summary

• American micro-blogging giant Twitter has indicated to the government that it is willing to comply with Indian IT laws.
• This was after Twitter was served with an ultimatum to comply by July 4 or be ready to face consequences, including losing the immunity shield over user content.

What is the issue?

• The Ministry of Electronics and IT (MeitY) had issued various directions for blocking certain pieces of content and accounts under Section 69(A) of the Information Technology (IT) Act.
  • Section 69(A) of the IT Act empowers the government to issue blocking orders to social media companies.
• However, twitter failed to comply with the directions on multiple occasions.
• As a result, the MeitY has given Twitter until July 4 to comply with all its blocking orders.

What happens if Twitter fails to comply?

• As per the new IT rule 2021, if an intermediary fails to observe the rules, it would lose the safe harbour.
  • If Twitter loses its intermediary/safe harbour status, it will make the website legally liable for content posted by users on its platform.
• It will also be liable for punishment under any law for the time being in force including the provisions of the IT Act and the Indian Penal Code.

Previous instance of run in with the government

• Twitter had run into trouble with the government last year as well after a new set of intermediary rules came into effect in May 2021.
• The issue then was over Twitter appointing an external person as its India-based grievance officer.
  • The rules require that the grievance officer be an employee of the company.

In News:

• Recently, the Cabinet Committee on Economic Affairs chaired by the Prime Minister has approved Computerization of Primary Agricultural Credit Societies (PACS).
• This project proposes computerization of about 63,000 functional PACS over a period of 5 years with a total budget outlay of Rs. 2516 crore.

What’s in today’s article:

• Overview of co-operative credit system in India
• Primary Agricultural Credit Societies (PACS)
• News Summary 

Overview of co-operative credit system in India:

• 
• The rural co-operative credit system in India is primarily mandated to ensure flow of credit to the agriculture sector.
• It comprises short-term and long-term co-operative credit structures.
• The short-term co-operative credit structure operates with a three-tier system -
  • Primary Agricultural Credit Societies (PACS) at the village level.
  • Central Cooperative Banks (CCBs) at the district level and
  • State Cooperative Banks (StCBs) at the State level.
    • StCBs/DCCBs are registered under the provisions of State Cooperative Societies Act of the State concerned and are regulated by the RBI.

Primary Agricultural Credit Societies (PACS):

• The PACS constitute the lowest tier of the three-tier Short-term cooperative credit in the country comprising 13 cr. farmers as its members, which is crucial for the development of the rural economy.
• PACS account for 41 % (3.01 cr. farmers) of the Kisan Credit Card (KCC) loans.
  • 95 % of these KCC loans (2.95 Cr. farmers) are to the Small and Marginal farmers.
• PACS are outside the purview of the Banking Regulation Act, 1949 and hence not regulated by the RBI.

Objectives

• To provide short and medium-term loans only to its members, the repayment schedule of which can be decided on the basis of the purpose and tenure for which the members take the loan.

Role:

• Its main role is to deal with agricultural borrowers of the village by giving agricultural, short-term and medium-term purpose loans to the borrowers then collecting the repayments against those loans.
• They act as a link between the country’s higher financial agencies and the ultimate borrowers.

Features:

• PACS are the association of farmers, which confers an equal level of rights on all members of society without considering their holding of share and their social standing.
• Share of the societies is of small value so that poor farmers can also become its members.
• Its area of operation is limited to the village (to which it belongs) and its membership should be given only to those located at the village where the credit society is established.

Functions:

• Borrowing an adequate amount of funds from central financial agencies in order to help its members in a timely manner.
• To make the arrangement of supplying the agricultural inputs including seeds, fertilizers, insecticides, etc.
• Maintaining the supply of the light machinery for the agricultural purpose.
• It helps its members by providing marketing facilities that could enhance the sale of their agricultural products in the market at the proper prices.

Advantages:

• It helps the farmers to get credit for agricultural purpose and government-related funds distribution to eligible farmers at their place.
• It helps in promoting savings habits among its members.
• It helps in implementing any government schemes which are related to farmers at their level and also to observe whether these schemes are attaining their intended purpose or not.

Challenges:

• Organizational weakness: Though PACS covers the major portion of the villages, still villages in the northeastern states are not covered.
• Over dues: The larger overdues come from landowners rather than small cultivators, implying that a few farmers who are relatively stronger in the village took unfair advantage of these PACS.
• Lack of resources: The PACS's resources are far too limited in relation to the rural economy's short- and medium-term credit needs. This is largely due to insufficient funds provided by higher-level funding agencies.

News Summary:

• The Cabinet Committee on Economic Affairs (CCEA) has approved computerization of 63,000 functional Primary Agricultural Credit Societies (PACS) over 5 years.

Benefits

• Efficiency in working and building trust
  • The majority of PACS have so far been not computerized and still functioning manually resulting in inefficiency and trust deficit.
  • In some of the states, stand-alone and partial computerization of PACS has been done.
  • Hence, this step will increase the efficiency of PACS, bringing transparency and accountability in their operations.
  • It will facilitate PACS to diversify their business and undertake multiple activities or services.
• Bringing uniformity and developing inter-connections
  • There is no uniformity in the software being used by them and they are not interconnected with the DCCBs and StCBs.
  • Hence, it has been proposed by the Ministry of Cooperation:
    • To computerize all the PACS throughout the Country and bring them on a common platform at National level and
    • Have a Common Accounting System (CAS) for their day-to-day business.
• Financial inclusion & strengthening of service delivery to farmers
  • Computerization of PACS will serve the purpose of financial inclusion especially of Small & Marginal Farmers (SMFs).
  • It will also lead to strengthening of service delivery to farmers.
    • With computerization, PACS shall become nodal service delivery point for various services and provision of inputs like fertilizers, seeds etc.

Context

• The Supreme Court (SC) recently granted interim relief to rebel MLAs of the Shiv Sena amid Maharashtra political crises and has sought a counter-affidavit from the Maharashtra Deputy Speaker.
• This crucial but unusual judicial intervention by SC raises questions on the powers of the Speaker under the Tenth Schedule of the Constitution.
• The question of when a floor test will be held in the Maharashtra Assembly, meanwhile, remains unclear.
• During the hearing on the Maharashtra situation, senior advocate, appearing for the rebel Shiv Sena MLAs, referred to the 2016 Nabam Rebia ruling to argue that the Deputy Speaker of an Assembly cannot decide on disqualification of MLAs while a motion for his or her removal is pending.
• The issue of considering the removal of the Deputy Speaker himself is more complex and raises questions on the sanctity of the Tenth Schedule.

Background

• In February 2021, the post of the Assembly Speaker fell vacant after the Speaker Nana Patole, a Congress legislator, resigned from his position and became the state Congress president.
• Thereafter, as per Rule 9 of the Maharashtra Legislative Assembly Rules, 1960, Deputy Speaker, Narhari Zirwal started discharging the duties of the Speaker in the House.
• The Maharashtra government had since been proposing to hold the elections to the post of the Speaker, which has however not taken place so far.
• This has made Deputy Speaker, Zirwal a key player in the political drama playing out in the state. As he issued disqualification notices to 16 rebel Sena MLAs including Shinde, on the Thackeray-led Sena’s request.

About SC interim order

• Extended time: The interim order grants more time to the rebel MLAs, (until July 11) to reply to the disqualification notice served on them by the Sena government.
• Documents: It seeks affidavits from the rebel MLAs and also a counter-affidavit from the Deputy Speaker on his removal as demanded by the rebels.
• Significance: In granting more time, the Supreme Court has essentially delayed the disqualification proceedings, which would have a direct impact on a trust vote in the Assembly, whenever it takes place.

Earlier rulings

• The Speaker’s powers under the Tenth Schedule have been previously upheld by the Supreme Court itself.
• The court has allowed judicial review only once the Speaker has made a decision, and has ruled out interference with the process.

About Tenth Schedule

• Description: The Tenth Schedule or the anti-defection law, introduced in 1985, gives the Speaker of the House the power to disqualify legislators who ‘defect’ from the party.
• Judgement: In the landmark case Kihoto Hollohan versus Zachillhu in 1992, the Supreme Court upheld the power vested in the Speaker and said that only the final order of the Speaker will be subject to judicial review. Hence, Courts have refrained from interfering with the process itself.
• Ruling to limit Speaker’s powers : However, a 2016 ruling of a Constitution Bench of the Supreme Court has shifted the balance on the powers of the Speaker. In the landmark Nabam Rebia v Bamang Felix case, concerning a constitutional crisis in Arunachal Pradesh then, a five-judge Bench of the SC limited the Speaker’s powers.

About Nabam Rebia ruling

• Governor meeting for floor test: The Constitution Bench judgment of the Supreme Court in Nabam Rebia versus Deputy Speaker in July, 2016, held that a Governor is bound to convene a meeting of the Assembly for a floor test on the recommendation of the Cabinet.
• Speaker limitation : On the issue of anti-defection, the Supreme Court held that it is “constitutionally impermissible” for a speaker to proceed with disqualification proceedings, if a no-confidence motion against him is pending.
• Unwarranted action: The action of the Speaker in continuing, with one or more disqualification petitions under the Tenth Schedule, whilst a notice of resolution for his own removal, from the office of Speaker is pending, would ‘appear’ to be unfair.
• Significance: This ruling gave a window to defecting legislators to stall or circumvent the Tenth Schedule by seeking removal of the Speaker when disqualification proceedings are anticipated, thus effectively tying the hands of the Speaker.

Reasons for Supreme Court’s 2016 decision

• Confidence of Assembly: The Supreme Court’s reasoning in barring the Speaker from acting under the Tenth Schedule when a notice for his own removal is pending is to ensure that the Speaker who disqualifies legislators must enjoy the confidence of the Assembly.
• Quick decision: The disposal of the motion under Article 179(c), takes no time at all. As soon as the motion is moved, on the floor of the House, the decision thereon will emerge, forthwith.
• Firm decision: After his position of Speaker is reaffirmed, he would assuredly and with conviction, deal with the disqualification petitions, under the Tenth Schedule.
• Elucidation: This interpretation would mean defection is followed by an immediate floor test and not proceedings of the Tenth Schedule.
• Criticism: A floor test is the ultimate step in ascertaining majority in the House, but legal experts have criticised that 2016 interpretation saying it would not lead to ascertain “real majority” that is determined after punishing defecting MLAs.

Have legislators used this legal route?

• Yes, since 2016, this legal route has a been a familiar playbook for legislators cutting across states and political affiliations.
• Uttarakhand: In 2016, rebel MLAs of the Congress sought removal of Uttarakhand Assembly Speaker Govind Singh Kunjwal after shifting ranks to the BJP to stall anti-defection proceedings.
• Tamil Nadu: In 2018, AIADMK legislator S Karunas sent a notice to the Tamil Nadu Legislative Assembly Secretary, seeking removal of Speaker P Dhanapal at a time when the AIADMK leadership was mulling action against Karunas and three other MLAs for having pledged their support to T T V Dhinakaran.
• Manipur: In June 2020, the Congress in Manipur served a notice for the removal of Speaker Y Khemchand as nine of its MLAs defected to the BJP.

Procedure for removal of Speaker

• Constitution provisions: Under Article 179 of the Constitution, a Speaker or Deputy Speaker can be removed by a resolution of the Assembly passed by a majority of “all the then members of the Assembly”. The process begins with notice of at least 14 days.
• Interpretation: In the 2016 Nabam Rebia ruling, the Supreme Court interpreted Article 179, specifically the term “all the then members of the Assembly”, to mean the composition of the house at the date/time of giving the notice for the removal of the Speaker.
• No change in composition of Assembly: This interpretation would mean that the composition of the Assembly cannot be changed from the date of issuing of a notice of the removal of the Speaker, and therefore the Speaker cannot make any decisions under the Tenth Schedule to change the composition of the House until the question of his removal is settled.

Way forward

• In Keisham Meghachandra Singh vs. the Hon’ble Speaker Manipur Legislative Assembly & Ors., the court recommended the Parliament to amend the Constitution regarding the role of Speaker as a quasi-judicial authority while dealing with disqualification petitions under the anti-defection law, when such a Speaker continues to belong to a particular political party.
• The Supreme Court suggested that an independent tribunal could be appointed which would substitute the Speaker of the Lok Sabha and Legislative Assemblies to deal with matters of disqualification under the Tenth Schedule.
• Such a tribunal will be headed by a retired Supreme Court judge or a retired Chief Justice of a High Court.
• The court also suggested that some other outside independent mechanism can adjudicate on such matters. This will ensure that such disputes are decided both swiftly and impartially.

In News:

• 48^th G7 Summit - held at Elmau, Germany, from 26-28 June 2022 – came to an end with participating members issuing a joint statement.
• The summit was joined by the Leaders of Argentina, India, Indonesia, Senegal and South Africa, as well as Ukraine.

What’s in Today’s Article:

• G7 Leaders’ Communiqué
• India at G7 summit

G7 Leaders’ Communiqué: Key Highlights

• Russia’s war of aggression against Ukraine
  • The statement condemned Russia’s illegal and unjustifiable war of aggression against Ukraine.
  • It resolved to stand with Ukraine for as long as it takes, providing the needed financial, humanitarian, military, and diplomatic support in its courageous defence of its sovereignty and territorial integrity.
• Severe and enduring costs on Russia
  • G7 members will continue to impose severe and enduring costs on Russia to help bring an end to this war.
  • In this regard, official communique endorsed the ambitious and untried concept that seeks price caps on Russian oil.
    • Actually, higher crude oil and fuel prices allowed Russian revenues to climb in May despite its export volumes slipping due to sanctions.
    • Hence, the United States is pushing for a mechanism that would cap the price other countries pay for Russian oil.
    • It seeks to leverage the West’s financial and shipping influence over Russian oil exports.
    • The idea is to tie financial services, insurance and shipping of oil cargoes to a cap on Russian oil price.
      • So, if a shipper or importer wanted these services they would have to commit to the Russian oil being sold for a set maximum price.
    • Leaders also agreed on a ban on imports of Russian gold.
• Ensuring food security around the globe
• The participating leaders pledged to spend $4. 5 billion this year to help ensure food security around the globe.
• To protect people from hunger and malnutrition, and in response to Russia’s weaponisation of grain, G7 leaders decided to increase global food and nutrition security through the Global Alliance on Food Security
• Hits out at China over ‘market-distorting’ practices
  • G7 leaders condemned China’s non-transparent and market-distorting international trade practices.
  • The G7 leaders signalled that they would seek to extricate themselves from economic dependence on China.
• Partnership for Global Infrastructure and Investment
  • Through its Partnership for Global Infrastructure and Investment, G7 countries aim to mobilise USD 600 billion over the next five years to narrow the global investment gap.
  • G7 members decided to step up their cooperation globally, including through working towards new Just Energy Transition Partnerships with Indonesia, India, Senegal and Vietnam, building on the existing partnership with South Africa.
• COVID-19
  • To overcome the current COVID-19 pandemic, G7 will build on its provision of over 1.175 billion vaccine doses since last meet in 2021.
  • G7 countries also decided to prevent, prepare, and respond to future pandemics and health challenges including through the G7 Pact for Pandemic Readiness.

India at G7 Summit

• Participation:
  • India was represented by PM Modi at the summit. Although, India is not a member of G7, but it was called as a guest to attend the summit.
  • At the G-7 summit in Germany, PM Modi participated in two sessions on:
    • Investing in a better Future: Climate, Energy, Health and
    • Food security
• Resilient Democracies document signed
  • India, along with other countries at G7 summit, signed the 2022 Resilient Democracies Statement.
  • Through this statement, the participating countries expressed their commitment to
    • guard the freedom, independence and diversity of civil society actors and
    • protect the freedom of expression and opinion online and offline.
• No direct reference on Ukraine
• Indian PM in his speech made no direct reference on Ukraine and he did not criticise Russia for its invasion.
• He said that G7 meeting is being held amid the atmosphere of global tension and urged to use the path of dialogue and diplomacy to resolve the crisis.
• Urged G7 to use Indian agricultural talent in its member countries
  • India has immense agricultural manpower compared to the countries of the G7.
  • Indian agricultural skills have helped give new life to traditional agricultural products like cheese and olive in some of the countries of the G7.
  • With the help of traditional talent of India’s farmers, food security will be ensured to G7 countries.
• Stops short of endorsing Partnership for Global Infrastructure and Investment
  • India stopped short of endorsing another initiative by the US and its allies, the $600 billion Partnership for Global Infrastructure and Investment (PGII).
    • PGII is aimed at countering China’s Belt and Road Initiative (BRI) in low and middle-income countries.
  • The US has already announced investment worth $30 million for a fund promoting food security in India under the PGII.
  • India endorsed only two outcome documents pertaining to the G7 and the outreach countries together. These are:
    • Resilient democracy (statement) and
    • The chair’s summary on the Just Energy Transition Partnership.
• Gift Diplomacy
  • Continuing with his efforts to highlight India’s soft power on the global stage, PM Modi gifted a variety of products to heads of governments at the G7 meet.
  • Distinct artistic products identified with different UP regions featured heavily in the PM’s gift choices.
    • a gulabi meenakari brooch and cufflink set to US President Joe Biden
      • Gulabi Meenakari is a GI-tagged art form of Varanasi in Uttar Pradesh.
      • A piece of pure silver is moulded into a base form, and the chosen design is embossed in the metal.
    • Pieces of black pottery from Nizamabad were gifted to Japanese PM.
    • A Nandi-themed dokra art piece sourced from Chhattisgarh was presented to Argentina President.
    • A hand-painted tea set from Uttar Pradesh’s Bulandshahr was meant for British Prime Minister Boris Johnson.
    • To celebrate the shared Ramayana links between India and Indonesia, the PM gifted a lacquerware Ram Darbar to Indonesian President.
      • The GI-tagged lacquerware art-form has its roots in the temple town of Varanasi in UP.
    • Senegal President Macky Sall was presented a range of moonj baskets and cotton durries that were sourced from Prayagraj, Amethi and Sultanpur in UP.

In News:

• Recently, the Drug Controller General of India (DCGI) has approved the two-dose mRNA vaccine - country’s first homegrown mRNA Covid-19 vaccine, for emergency use for the age group 18 and above.
• The vaccine - GEMCOVAC-19, developed at Pune’s Gennova Biopharmaceuticals, is stable for storage at 2-8 degree C.

What’s in today’s article:

• What are mRNA vaccines and how do they work?
• Drug Regulation in India (The Drugs and Cosmetics Act, 1940 and Rules 1945, CDSCO, DCGI)
• News Summary

What are mRNA vaccines and how do they work?

About vaccines:

• Vaccines help prevent infection by preparing the body to fight foreign invaders (such as bacteria, viruses, or other pathogens).
• All vaccines introduce into the body a harmless piece of a particular bacteria or virus, triggering an immune response.
• Most vaccines contain a weakened or dead bacteria or virus.
• However, scientists have developed a new type of vaccine that uses a molecule called messenger ribonucleic acid (mRNA) rather than part of an actual bacteria or virus.

Messenger RNA (mRNA)

• It is a type of RNA that is necessary for protein production.
• In cells, mRNA uses the information in genes to create a blueprint for making proteins.
• Once cells finish making a protein, they quickly break down the mRNA. mRNA from vaccines does not enter the nucleus and does not alter DNA.

Significance of mRNA vaccine:

• Individuals who get an mRNA vaccine are not exposed to the virus, nor can they become infected by the vaccine.

Drug Regulation in India:

• The Drugs and Cosmetics Act, 1940 and Rules 1945: These have entrusted various responsibilities to central and state regulators for regulation of drugs and cosmetics.
• National Regulatory Authority (NRA):
  • The Central Drugs Standard Control Organisation (CDSCO) under the Ministry of Health & Family Welfare is the National Regulatory Authority (NRA) of India.
  • Under the Drugs and Cosmetics Act, CDSCO is responsible for -
    • Approval of Drugs.
    • Conduct of Clinical Trials.
    • Laying down the standards for Drugs.
    • Control over the quality of imported Drugs in the country.
    • Coordination of the activities of State Drug Control Organizations.
    • Further CDSCO along with state regulators, is jointly responsible for grant of licences of certain specialised categories of critical Drugs such as vaccine and sera, etc.
• Drugs Controller General of India (DCGI):
  • DCGI is the head of department of the CDSCO. It is responsible for approval of licences of specified categories of drugs such as blood and blood products, IV fluids, vaccines and sera in India.
  • DCGI also sets standards for manufacturing, sales, import, and distribution of drugs in India.

News Summary:

• Gennova already has a CDSCO licence to manufacture and sell the vaccine and has produced 70 lakh doses at risk, but now that it has received the Emergency Use Authorization (EUA), it can ship the material as soon as all formalities are completed.
• mRNA-based vaccines must be stored and distributed at extremely low temperatures.
• Because India already has a cold supply chain infrastructure capable of handling refrigeration conditions, the novel mRNA vaccine candidate, GEMCOVAC-19, which is stable at 2-8°C, can be distributed across the country using the existing refrigeration supply chain.
• The vaccine will be available to adults over the age of 18 and the two doses will be administered intramuscularly 28 days apart.

In News:

• The 47th Goods and Services Tax (GST) Council meeting is currently underway to discuss rate rationalisation measures, exemption reviews, system reforms and other topics.
• The Council approved bringing pre-packaged and labelled food items such as wheat flour, puffed rice, curd/lassi/buttermilk and paneer under the GST net on the first day of its 47th meeting.
• The contentious issue of extending compensation for states beyond June 2022, as well as the 28% GST rate on casinos, online gaming, and horse racing, will be debated on the second day.

What’s in today’s article:

• About the GST council
• News Summary
  • What has changed this time?
  • What’s on the table at the 47th meeting?
  • Decisions approved on the first day of the meeting

About the Goods and Services Tax (GST) Council:

• The GST regime came into force with the enactment of the Constitutional (101st Amendment) Act, 2017.
• The GST Council - a joint forum of the Centre and the states, was set up by the President of India as per Article 279A (1) of the amended Indian Constitution. It consists of the -
  • Union Finance Minister - Chairperson
  • The Union Minister of State, in-charge of Revenue of finance - Member
  • The Minister in-charge of finance or taxation or any other Minister nominated by each State Government - Members
• The GST Council is an apex committee to modify, reconcile or to make recommendations to the Union and the States on GST, like the goods and services that may be subjected or exempted from GST, model GST laws, etc.
• The GST Council meets to discuss and lay GST laws. Decisions in the GST Council are taken by a majority of not less than three-fourth of weighted votes cast.
  • Centre has one-third weightage of the total votes cast and all the states taken together have two-third of weightage of the total votes cast.
  • All decisions taken by the GST Council have been arrived at through consensus.

News Summary:

What has changed this time?

• The current (47th) meeting is the first since the Supreme Court of India (SC) ruled that GST Council recommendations are not binding.
• According to the court, Article 246A of the Constitution grants both Parliament and state legislatures simultaneous power to legislate on GST, and the Council's recommendations are the result of a collaborative dialogue involving the Union and States.
• Some states, such as Kerala and Tamil Nadu, applauded this, believing that states can be more flexible in accepting recommendations that are tailored to their needs.
• The council meeting is also expected to address the issue of extending the GST compensation regime beyond June 2022.
  • Previously, the Council agreed to extend the compensation cess levy until 2026, but only for repayment of borrowings made in the aftermath of the pandemic to compensate states.

What’s on the table at the 47th meeting?

• Demand of states:
  • States (especially Opposition-ruled) are expected to raise demand for an extension of the compensation regime to bridge revenue shortfall beyond June 2022.
  • Some states have also suggested tweaking the revenue sharing formula between the Centre and states under the indirect tax regime.
    • For example, the Finance Minister of Chhattisgarh stated that if the protective revenue provision is not maintained, the 50:50 formula for central GST (CGST) and state GST (SGST) should be tweaked, with the share of states at 70-80% and CGST at 20-30%.
• Ministerial panels’ recommendations:
  • The Council is also expected to discuss:
    • interim recommendations of a ministerial panel on rate rationalisation including levying a tax of 12% on hotel rooms costing below Rs 1,000/day which are presently exempt;
    • bringing in pre-packaged food items (including rice, atta, curd, lassi, puffed rice) at par with branded food items with a tax rate of 5%, etc.
  • Another ministerial panel’s recommendation is to levy 28% GST on online gaming, casinos and horse racing.
  • Additionally, it will discuss the Fitment Committee’s proposal to levy tax on the margins made by tour operators at a suitable rate, etc.
• Decisions approved on the first day of the meeting:

In News:

• The US and its allies — Australia, New Zealand, Japan and the United Kingdom — have launched a new initiative called ‘Partners in the Blue Pacific’.
• This has been launched for effective and efficient cooperation with the Pacific Island Nations.

What’s in Today’s Article:

• Pacific Island Nations
• Partners in the Blue Pacific

Pacific Island Nations

• 
• Islands of the Pacific Ocean are commonly named as Pacific Island Nations.
• As shown in the map, Pacific Island Nations consist of three major groups of islands named as Polynesia, Micronesia and Melanesia.
  • North of the Equator and east of the Philippines are the islands of Micronesia.
  • The great arc of islands located north and east of Australia and south of the Equator is called Melanesia.
  • In the eastern Pacific, largely enclosed within a huge triangle formed by the Hawaiian Islands to the north, New Zealand to the southwest, and Easter Island (Rapa Nui) far to the east, are the islands of Polynesia.

Partners in the Blue Pacific (PBP)

• The PBP is a five-nation “informal mechanism” to support Pacific islands and to boost diplomatic, economic ties in the region.
• The initiative speaks of enhancing “prosperity, resilience, and security” in the Pacific through closer cooperation.
• It simply means that through the PBP, these countries — together and individually — will direct more resources here to counter China’s aggressive outreach.
• The members of this initiative have also declared that they will elevate Pacific regionalism, and forge stronger ties with the Pacific Islands Forum.

Areas of cooperation

• The areas where PBP aims to enhance cooperation include –
  • climate crisis;
  • connectivity and transportation;
  • maritime security and protection;
  • health, prosperity; and

Rationale behind this initiative

• Intensified geostrategic competition in the region
  • China is aggressively pushing to increase its Pacific sphere of influence.
  • Recently, China made the projected scope of its growing footprint clear by pushing for a sweeping, common cooperation agreement with 10 Pacific nations.
    • In May 2022, China pushed for a sweeping agreement with 10 Pacific nations covering everything from security to fisheries.
  • Western countries are fearful that China could be laying the groundwork for an eventual military presence in the region.
• China, Solomon Islands sign landmark security agreement
  • In April 2022, China and Solomon Islands signed an inter-governmental framework agreement on security cooperation.
  • It was a first-of-its-kind arrangement that could pave the way for further Chinese security deals overseas.
  • The deal flagged serious concerns about the Chinese military getting a base in the southern Pacific, close to the US island territory of Guam, and right next to Australia and New Zealand.
  • This deal was seen as Beijing’s quest to dominate crucial shipping lanes criss-crossing the region.
• Strategic importance of Pacific region
  • In its 2019 strategy report, the US Department of Defence called the Indo-Pacific the single most consequential region for America’s future.
  • Spanning a vast stretch of the globe from the west coast of the United States to the western shores of India, the region is home to:
    • the world’s most populous state (China),
    • most populous democracy (India), and
    • largest Muslim-majority state (Indonesia), and
    • includes over half of the earth’s population.
  • Among the 10 largest standing armies in the world, 7 reside in the Indo-Pacific; and 6 countries in the region possess nuclear weapons.
  • Nine of the world’s 10 busiest seaports are in the region, and 60 percent of global maritime trade transits through Asia.
    • Roughly one-third of global shipping passing through the South China Sea alone.

Steps taken by US and its allies to counter China

• Launch of Indo-Pacific Economic Framework for Prosperity (IPEF)
  • Before launching the PBP this month, the US and its partners started the Indo-Pacific Economic Framework for Prosperity (IPEF).
  • IPEF is a trade-boosting play in the region with 13 nations as partners.
  • These 13 nations are: Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, Fiji and Vietnam.
• Partnership for Global Infrastructure and Investment (PGII)
  • 48^th G7 summit at Germany announced a plan —PGII — to rival China’s Belt and Road Initiative.
  • It promises to raise $600 billion to fund development projects in low and middle-income countries.
• Maintained a balance of power in the region with its hub-and-spoke system
  • The US has long maintained a balance of power in the region with its hub-and-spoke system.
  • In this system, America is the hub and its allies are spokes whose security is guaranteed by the US military power.

Context

• The rise in the debt of Indian states, the fast-approaching June 30 deadline – after which the central government will not compensate them for any shortfall in Goods and Services Tax (GST) collections and pre-state election freebie promises made by political parties fuelled reports this year that bureaucrats were concerned, some states could go the Sri Lankan way if they didn't get a handle on their finances.
• Recently, the Centre has urged chief secretaries of all states to keep a check on the increasing debt burden and fiscal deficit.

RBI findings

• Debt-to-GSDP ratio: RBI also highlighted that the debt-to-GSDP ratio for 18 states and UTs has grown to 2%
• Definition: Debt-to-GSDP (Gross State Domestic Product) ratio signifies how healthy a state is in terms of funding its expenditure without accumulating future debt.
• Data: The states with the highest debt-to-GSDP ratio in 2021-22 include Punjab with 53.3%, Rajasthan with 39.8%, West Bengal with 38.8%, and Kerala with 38.3% and Andhra Pradesh with 32.4%.
• Market borrowing : According to the RBI report, market borrowing has reached 6% of the GDP of states by March 2022, which is a loan that governments raise by issuing market securities such as bonds.
• Largest share: Market borrowing forms the largest component of the total outstanding debt of states and union territories.
• Fiscal Responsibility and Budget Management (FRBM) Act: FRBM Act recommended a debt-to-GDP ratio of 20% for state governments (40% for the Centre) by the financial year 2022-23.

Reasons for fiscal folly

• Market borrowings: Most States increased their market borrowing during the pandemic as their fiscal deficits expanded.
• Electoral gains: The obvious motivation for States in expanding freebies is to use the exchequer to build vote banks. For instance, in campaign ahead of the Punjab Assembly election, the Aam Aadmi Party (AAP) promised a sum of ₹1,000 per month to every woman in the State.
• Discretionary expenditure: The transfer payments to provide safety nets to the most vulnerable segments of the population has become the main plank of discretionary expenditure where the spending is financed by debt, and the debt is concealed to circumvent the FRBM targets.
• Pandemic: The Covid-19 pandemic generated a long lockdown is seen as the primary reason for a surge in debt levels of Indian states.
• Subsidies: A large proportion of committed expenditure and subsidies are not matched by their revenues as majority of the States’ spending went into populist schemes with slow growth in revenues.
• Absence of strong revenue sources: States like Gujarat and Maharashtra managed to maintain their debt below 20 percent of their GSDPs, mainly due to their strong industrialised economies resulting in strong revenue streams while other states couldn’t do so.
• Longer maturity debts: States have been taking longer maturity debt unlike the norm of 10 years followed around five years back. This in turn keeps their debt levels higher for an extended period of time as they will be redeemed later.
• Losses of DISCOMs: Discoms’ revenues have significantly dropped in FY21 with demand from high-paying industrial and commercial consumer segments getting disrupted amid the lockdowns.
• Schemes: Moreover, Centre’s Ujwal DISCOM Assurance Yojana (UDAY) scheme, allowed the state governments that own power distribution companies to take over 75 percent of these companies’ debt till September 2015 and pay back the lenders by selling bonds. This also burdened the state exchequer.

Consequences of freebie culture

• No fresh revenue generation: If governments spend the loan money on populist giveaways that generate no additional revenue, the growing debt burden will eventually implode and end in tears.
• No new assets creation: The more States spend on transfer payments, the less they have for spending on physical infrastructure such as, for example, power and roads, and on social infrastructure such as education and health, which can potentially improve growth and generate jobs.
• Unsustainable practices: The electoral calculations tempt political parties to place short-term gains ahead of long-term sustainability.

Ideal scenario

• Ideally, governments should use borrowed money to invest in physical and social infrastructure that will generate higher growth, and thereby higher revenues in the future so that the debt pays for itself.

Significance of State’s financial health in economy

• Macroeconomic stability: The amount States borrow collectively every year is comparable in size to the Centre’s borrowing which implies that their fiscal stance has as much impact on our macroeconomic stability as does that of the Centre. Hence, the costs of fiscal profligacy at the State level can be huge.
• Capital expenditure: About two-thirds of India’s public CAPEX comes from states.
• Employment: States employ five times more people than Centre.
• No new asset creation: Rising debt could start a vicious cycle wherein states end up paying more and more towards interest payments instead of spending their revenues on creating new assets.
• Financial health: Huge bearing on Nation’s economy as some states’ economies are as big as India’s neighbours like Pakistan and Sri Lanka.

Ambiguous portrayal

• Healthy economic state: By observing the State Budget analysis by the Reserve Bank of India, the inference that is drawn is that State finances are in good, if indeed robust, health, and that all of them are scrupulously conforming to the Fiscal Responsibility and Budget Management (FRBM) targets.
• No FRBM tracking: However this is a misleading picture. Much of the borrowing that funds these freebies happens off budget, beyond the pale of FRBM tracking.
• Modus operandi: The States borrow on the books of their public enterprises, by pledging future revenues of the State as guarantee. Effectively, the burden of debt is on the State exchequer, albeit well concealed.
• CAG finding: The Comptroller and Auditor General of India (CAG) had pointed out that in respect of some States ‘if extra-budgetary borrowings are taken into account, the liabilities of the government are way above what is acknowledged in the official books.

Institutional checks, balances

• House check: The first line of defence has to be the legislature, in particular the Opposition, whose responsibility is to keep the Government in line. But the Opposition does not speak up for fear of forfeiting vote banks that are at the end of these freebies.
• Auditing: Another constitutional check is the CAG audit which should enforce transparency and accountability. But since audit reports necessarily come with a lag , by when political interest has typically shifted to other hot button issues.
• Market scenario: The market is another potential check that can signal the health of State finances by pricing the loans floated by different State governments differently, reflecting their debt sustainability. However, this too fails since the market perceives all State borrowing as implicitly guaranteed by the Centre even if there is no such guarantee in reality.

Way forward

• Amend FRBM Act: The FRBM Acts of the Centre as well as States need to be amended to enforce a more complete disclosure of the liabilities on their exchequers.
• The current FRBM provisions, governments are mandated to disclose their contingent liabilities, but that disclosure is restricted to liabilities for which they have extended an explicit guarantee.
• The provision should be expanded to cover all liabilities whose servicing obligation falls on the Budget, or could potentially fall on the Budget, regardless of any guarantee.
• Set pre conditions: Under the Constitution, States are required to take the Centre’s permission when they borrow. The Centre should not hesitate to impose conditionalities on wayward States when it accords such permission in accordance with well-defined, objective and contestable criteria.
• Invoke Emergency provisions: The draconian provision in the Constitution of India allows the President to declare financial emergency in any State if s/he is satisfied that financial stability is threatened.
• This provision though has never been invoked so far for fear that this will turn into a political weapon of mass destruction. But the root cause of fiscal irresponsibility is the lure of electoral profits. It will stop only if the political leadership fears punishment.
• It is therefore important to ensure that the prospect of a financial emergency in case of gross and continuing fiscal irresponsibility is not just an abstract threat but a realistic one.

In News:

• In a major setback for Maharashtra's Maha Vikas Aghadi (MVA) government, the Supreme Court of India (SC) recently protected rebel Shiv Sena MLAs from disqualification proceedings until July 12.
• The apex court also denied the Shiv Sena-NCP-Congress coalition's request to halt the rebels from demanding a floor test in the assembly.

What’s in today’s article:

• About the SC verdict
• What is a floor test?
• Disqualification of MPs/MLAs under the anti-defection law (10th Schedule)

About the SC verdict:

• Background:
  • The political crisis in Maharashtra erupted when some of the legislators (MLAs) of Shiv Sena - the largest political party in the MVA coalition ruling the state, have aligned themselves with the party’s rebel leader.
  • Deputy Speaker of the Maharashtra Assembly has served disqualification notices to 16 of the rebel camp MLAs, under the 10th Schedule of the Indian Constitution.
  • This political battle reached the SC in response to the Deputy Speaker's disqualification notice.
• The petitioner’s key arguments before the SC:
  • Deputy Speaker has acted in a biased manner:
    • Ordinarily, a member who has been elected as Speaker or Deputy Speaker resigns from the membership of his/her political party, but that has not happened in this case.
      • The post of the Assembly speaker fell vacant after Nana Patole of the Congress resigned from the post and became president of the Maharashtra Congress.
    • Since the Deputy Speaker’s party (NCP) is supporting the “minority faction” of the Shiv Sena, his actions are biased.
  • The disqualification notice in violation of the SC ruling:
    • The notice to move a resolution for removal of Deputy Speaker, under Article 179 (c) of the Indian Constitution (removal of Speaker and Deputy Speaker of the Assembly), was submitted on June 21.
    • In the Nabam Rebia case (2016), the apex court had ruled that it would be “constitutionally impermissible” for a Speaker to adjudicate upon disqualification petitions under the 10th Schedule, while a motion of resolution for his/her own removal from the office is pending.
    • The petitioner has claimed that the petition for disqualification of 16 MLAs was submitted to the Deputy Speaker after the notice for moving a resolution for his own removal was given.
• The SC’s verdict:
  • The SC order extended till July 12, the time granted by the Deputy Speaker of the Maharashtra Assembly to rebel MLAs to reply to disqualification notices.
  • This paves the way for a floor test to prove the confidence of the Assembly.
    • The SC allows Maharashtra state to knock on its doors if the 'rebel' MLAs seek a no-confidence motion in order to verify the MVA's numbers in the legislature.
    • This means, the Maharashtra governor can legally promulgate a Session of the House and direct a floor test be held. 

What is a floor test?

• A floor test is done to ensure whether the government in position enjoys the support of the majority legislature.
• When a single party secures the majority of the seats in the house, the Governor appoints the leader of the party as the Chief Minister (CM).
• In case the majority is questioned, the leader of the party (CM) which claims majority has to move a vote of confidence and prove majority among those present and voting.
  • In case more than one person is claiming to form the government and the majority is not clear, the Governor may call for a special session to see who has the majority.
  • In case of a tie, the Speaker casts his vote.
• The CM has to resign if they fail to prove the majority in the house.
• Hence, a floor test is a Constitutional mechanism (Article 164) under which a CM appointed by the Governor can be asked to prove majority on the floor of the Legislative Assembly of the state.
• When the House is in session, the Speaker has the authority to call a floor test. When the Assembly is not in session, the Governor may call for a floor test under Article 163.
• The SC, in the SR Bommai Case (1994), laid down certain guidelines so as to prevent the misuse of Article 356 of the Indian Constitution.
  • One such guideline is - The majority enjoyed by the Council of Ministers shall be tested on the floor of the House. 

Disqualification of MPs/MLAs under the anti-defection law (10th Schedule):

• About the anti-defection law:
  • It punishes individual MPs/MLAs for leaving one party for another.
  • It allows a group of MP/MLAs to join (i.e., merge with) another political party without inviting the penalty for defection.
  • The Parliament of India added it to the Constitution as the Tenth Schedule in 1985.
  • Its purpose was to bring stability to governments by discouraging legislators from changing parties.
• What constitutes defection?
  • The law covers three kinds of scenarios.
    • When legislators elected on the ticket of one political party “voluntarily give up” membership of that party or vote in the legislature against the party’s wishes.
    • When an MP/MLA who has been elected as an independent join a party later.
    • The third scenario relates to nominated legislators. They can join a political party within six months of being appointed to the House and not after such time.
  • Violation of the law in any of these scenarios can lead to a legislator being penalised for defection.
• The deciding authority:
  • The Presiding Officers of the Legislature (Speaker, Chairman) are the deciding authorities in such cases.
  • The SC has held that legislators can challenge their decisions before the higher judiciary.
• Time taken for deciding cases of defection:
  • The law does not provide a time-frame within which the presiding officer has to decide a defection case.
  • Last year, the SC dismissed a minister in Manipur when the Speaker did not decide the defection petition against him even after three years.
    • The court held that ideally, Speakers should take a decision on a defection petition within three months.

In News:

• Niti Aayog, the Government of India's think tank, recently released a report titled "India's Booming Gig and Platform Economy."
• In an effort to increase women's participation in the gig economy, the report proposed fiscal incentives such as tax breaks or startup grants for companies with about one-third of their workforce made up of women and people with disabilities. 

What’s in today’s article:

• About Gig and Platform economy
• About the ‘India’s Booming Gig and Platform Economy’ report

About Gig and Platform economy:

• Gig economy:
  • Temporary, flexible jobs are common in a gig economy and companies prefer to hire independent contractors and freelancers over full-time employees.
  • A gig economy results in cheaper, more efficient services for those willing to use them, such as Uber or Airbnb.
  • A gig economy undermines the traditional economy of full-time workers, who frequently prioritise career advancement.
  • People who do not use technological services like the internet may miss out on the benefits of the gig economy.
• Platform economy:
  • The platform economy refers to the trend of commerce increasingly attracted toward and favouring digital platform business models.
  • Platforms are underlying computer systems that can host services that connect consumers, entrepreneurs, businesses and the general public by sharing resources or selling products.
  • Business analysts use this term to describe the competitive nature of digital innovation. 

Key Observations of The ‘India’s Booming Gig and Platform Economy’ report:

• Structural barriers like access to education and lack of skilling have hindered participation of the two demographic groups (women and divyangjan) in the country’s labour force.
  • The female labour force participation in India has remained low, oscillating between 16 - 23% in the last few years.
    • Women are more likely to take up platform jobs after their education and marriage.
  • Similarly, persons with disabilities (PwDs), who make up for 2.11% of India’s population, have a labour force participation rate of 36%.
• Gig workers are typically hired by companies on a contractual basis and are not considered employees. They do not receive some of the benefits that a regular staff does.
  • Gig workers can be broadly classified into platform and non-platform workers.
    • Platform workers are those whose work is based on online software apps or digital platforms, while non-platform gig workers are generally casual wage workers, working part-time or full- time.
• Niti Aayog estimates that more than 7.5 million workers were engaged in the gig economy in 2020-21.
• This could grow to 23.5 million workers in the next eight years, making up for 4.1% of total workforce in India.
• At present, about 47% of the gig work is in medium skilled jobs, about 22% in high skilled and about 31% in low skilled jobs.

Niti Aayog’s recommendations for the gig economy:

• Fiscal incentives such as tax-breaks or startup grants may be provided for businesses that provide livelihood opportunities where women constitute a substantial portion (30%) of their workers.
• Similarly, a platform with high accessibility or high degree of participation of PwDs too may be rewarded with fiscal incentives.
• Businesses should have a higher share of women managers and supervisors in the organisation to ensure that communication to workers does not perpetuate gender stereotypes.
• Firms should adopt policies that offer old age or retirement plans and benefits and other insurance cover for contingencies such as injury arising from work that may lead to loss of employment and income.
  • Such plans and policies could be designed and offered in collaboration with the government, as envisaged under the Code on Social Security, 2020.

Concluding remarks by Niti Aayog:

• While gig and platform companies have created employment opportunities, they are frequently marred by low wages, unequal gender participation and a lack of opportunities for advancement within an organisation.
• This has triggered protests from workers of companies like Swiggy, Zomato, Ola, Uber, Urban Company, etc.

In News:

• The Department of School Education and Literacy, has released the Performance Grading Index for Districts (PGI-D) for 2019-20.

What’s in Today’s Article:

• Performance Grading Index for Districts – About, methodology, necessity of such report
• Key Highlights of the report

In Focus: Performance Grading Index for Districts (PGI-D)

• The Performance Grading Index is a tool to provide insights on the status of school education in States and UTs.
• It also provides ideas about key levers that drive their performance and critical areas for improvement.
• Grading will allow all States and UTs to occupy the highest levele Grade I, at the same time which is a sign of fully developed nation.
• The Department of School Education and Literacy (DoSE and L), Ministry of Education (MoE) is responsible for publishing the report.

Methodology

• 
• The PGI-D structure comprises of total weightage of 600 points across 83 indicators, which are grouped under 6 categories, which are:
  • Outcomes, Effective Classroom Transaction, Infrastructure Facilities & Student’s Entitlements, School Safety & Child Protection, Digital Learning and Governance Process.
• The States and UTs are assessed on the basis of their performance against the benchmark for each indicator.

Classification into various grades

• In PGI-D, based on overall scores, districts are classified into various grades.
  • Highest achievable Grade in PGI-D is Daksha for Districts scoring more than 90% of the total points in that category or overall.
  • Utkarsh – for PGI score of 81% to 90% and so on
• Position of a district in different grading categories is relative and can change depending upon its performance in each year.

Necessity of this report

• The Indian Education System is one of the largest in the world with more than 1.5 million schools, 8.5 million teachers and 250 million children from varied socio-economic backgrounds.
• Hence, there is need to maintain standards and uniformity across the country while giving ample scope for the country’s diverse culture and heritage to grow and flourish.
• The Index will propel the States and UTs towards undertaking multi-pronged interventions that will bring about the much-desired optimal education outcomes.

Key highlights of the report

• 
• Exposure to digital learning
  • As India entered the pandemic year, students in around 61 per cent districts of the country had very little exposure to digital learning.
  • This is due to limited availability of computers, Internet facilities and teachers trained to handle technological tools in schools.
  • The report shows that schools across India performed poorly under the category of digital learning.
    • As many as 180 districts scored less than 10 per cent on digital learning, 146 districts scored 11 to 20 per cent, while 125 districts had scores between 21 and 30 per cent.
• Rural-urban divide in the area of digital learning
• The report also underlines the clear rural-urban divide in the area of digital learning.
• For instance, while districts in cities like Chandigarh and Delhi scored between 25 and 35 out of 50, places like Bihar’s Araria and Kishanganj scored as low as 2.
• Learning outcomes
  • In terms of learning outcomes, no district scored below 10 per cent, 12 scored between 11 and 20 per cent, while as many as 309 scored between 51 and 60 per cent.
• Best performers in the index
  • Chandigarh and the states of Punjab, Tamil Nadu and Kerala were the best performers in the index.
• Considerable inter-state difference
  • On a maximum possible of 1000 points, the range between the States and UTs with the highest and the lowest score is almost 300.
    • This is 30% of the maximum points.
  • Thus, there exists a considerable difference between the States and UTs as far as their performance in the arena of School Education is concerned.

In News:

• India, along with G7 countries and four invited countries, signed the G7 joint statement on ‘Resilient Democracies’.
• This statement called for protecting the freedom of expression and opinion, both online and offline.

What’s in Today’s Article:

• 2022 Resilient Democracies Statement – Principles, commitment
• Key takeaways from PM Modi’s Speech at G7

2022 Resilient Democracies Statement

• India, along with other countries at G7 summit, signed the 2022 Resilient Democracies Statement.
• Through this statement, the participating countries expressed their commitment to
  • guard the freedom, independence and diversity of civil society actors and
  • protect the freedom of expression and opinion online and offline.

Principles propounded by the document

• Through this document the signatories resolved:
  • Protecting the freedom of expression and opinion online and offline and ensuring a free and independent media landscape.
  • Ensuring an open, free, global, interoperable, reliable and secure internet.
  • Increasing the cyber resilience of digital infrastructure.
  • Countering hybrid threats, in particular information manipulation and interference, including disinformation.
  • Enhancing transparency about the actions of online platforms to combat violent, extremist and inciting content online.

Commitments expressed by the document

• Guarding the freedom, independence and diversity of civil society actors and respecting freedom of association and peaceful assembly.
• Building resilience against malign foreign interference and acts of transnational repression that seek to undermine trust in government, society and media.
• Advancing programmes for the protection of human rights defenders and all those exposing corruption.
• Protecting freedom of thought, conscience, religion or belief and promoting inter-faith dialogue
• Promoting social cohesion, solidarity and the inclusion of all members of society online and offline, while denouncing all forms of discrimination and violence.

Key highlights of PM Modi’s speech at G7 summit

• At the G-7 summit in Germany, PM Modi participated in two sessions on:
  • Investing in a better Future: Climate, Energy, Health and
  • Food security

Session on Investing in a better Future: Climate, Energy, Health

• Invoked the need for the poor to be able to access energy
  • PM Modi invoked the need for the poor to be able to access energy — as much as the rich.
  • He said that today when energy costs are sky-high due to geopolitical tensions, it is more important to remember this thing.
  • PM comments were in sync with India’s position that it is buying oil from Russia to meet its domestic energy demand and control inflation, which affects the poor the most.
• India’s efforts to ensure energy for the poor
  • PM Modi highlighted India’s efforts to ensure energy for the poor.
  • India has delivered LED bulbs and clean cooking gas door-to-door.
  • It has shown the world that millions of tons of carbon emissions can be saved while ensuring energy for the poor.
• Promote green energy technologies
  • PM Modi asked the G-7 countries to invest in research and manufacturing in green energy technologies.
  • The scale that India can provide for every new technology can make that technology affordable for the whole world.
  • He said that they can help India to take innovations in digital technology in the health sector to other developing countries.
• India’s developmental path is environment friendly
  • He said that 17 per cent of the world’s population resides in India. But its contribution to global carbon emissions is only five per cent.
  • The main reason behind this is our lifestyle, which is based on the theory of coexistence with nature

Session on Food Security

• Indirectly referred to Ukraine crisis
  • While addressing a session on food security, PM Modi referred indirectly to the Ukraine crisis.
  • He said that G7 meeting is being held amid the atmosphere of global tension.
  • India has always been in favour of peace. Even in the present situation, India has constantly urged for the path of dialogue and diplomacy.
• Impact of current crisis is not limited to Europe
  • The impact of this geopolitical tension is not just limited to Europe.
  • The rising prices of energy and food grains are affecting all the countries.
  • The energy and security of developing countries is particularly at risk.
  • In this challenging time, India has supplied food grains to many countries in need.
    • India dispatched about 35,000 tonnes of wheat as humanitarian aid to Afghanistan in the last few months.
    • India is also helping Sri Lanka to ensure food security.
• Suggestions provided by PM Modi
  • Ensure availability of fertilizers
    • We must focus on the availability of fertilizers, and keep the value chains of fertilizers smooth at a global scale.
  • Create a system so as to use Indian agricultural talent in G7 countries
    • India has immense agricultural manpower compared to the countries of the G7.
    • Indian agricultural skills have helped give new life to traditional agricultural products like cheese and olive in some of the countries of the G7.
    • Can the G7 create a structured system for the widespread use of Indian agricultural talent in its member countries?
    • With the help of traditional talent of India’s farmers, food security will be ensured to G7 countries.

Context

• The U.S. Supreme Court has reversed the landmark 1973 Roe v. Wade ruling that legalized abortion nationwide.
• Hence, while the West is curtailing abortion rights, the Indian legislations like Medical Termination of Pregnancy (Amendment) Act, Surrogacy Regulation Act and Prohibition of Child Marriage (Amendment) Bill, 2021, collectively give new meaning to women empowerment (Nari Shakti) in India.

Signification of abortion

• Unwanted pregnancies unexpectedly curtail the life choices of parents, especially mothers, and may limit their mental well-being and personal growth. Further, children born unwanted may suffer reduced opportunities.
• Illustratively, the WHO links the likelihood of children being born “wanted” to greater parental investments in their education.

Status of reproductive autonomy in India

• Constitutional grants: India’s constitutional ethos commits to the protection of personal liberty through Article 21. Thus, abortion or termination of pregnancy is a woman’s prerogative.
• Banning commercial surrogacy: The Surrogacy (Regulation) Act, 2021 bans commercial surrogacy, which is punishable with a jail term of 10 years and a fine of up to Rs 10 lakhs.
  • The Act also prohibits couples who are not of Indian origin from availing surrogacy in the country and allows only locals with certified, medical reasons necessitating gestational surrogacy to avail of it.
  • Circumstances: Given global inequalities, India became a lucrative “biomarket” for surrogate mothers. The bodies of poor Indian women became “bioavailable” to the residents of the Global North, spurring commercialisation of motherhood, the commodification of women and their reduction to their reproductive capacity.
  • Against cultural ethos: In a country with a long-standing cultural lineage of revering mothers, careless commercial surrogacy appeared to be in stark contrast with the cultural ethos. Responding to this dissonance, the Surrogacy (Regulation) Act, 2021, replaced commercial surrogacy with ethical, altruistic surrogacy.
• Medical Termination of Pregnancy (Amendment) Act, 2021: Under the Act, a pregnancy may be terminated up to 20 weeks by a married woman in the case of failure of contraceptive method or device. It allows unmarried women to also terminate a pregnancy for this reason.
  • Special consideration: MTP Amendment Act, 2021 also increases the upper gestation limit from 20 to 24 weeks for special categories of women, including survivors of rape, victims of incest and other vulnerable women (differently abled women, minors, among others).
  • Self-determination: The MTP (Amendment) Act, 2021, is a step in the right direction. It ensures that expectant mothers exercise self-determination in welcoming new life to their homes.
• Raising marriageable age: The Prohibition of Child Marriage (Amendment) Bill, 2021 seeks to push the marriage age for women from 18 years to 21 years. Since fertility, child-bearing and child-rearing are unmistakably associated with marriage, by proposing to raise the legal marriageable age for women, policymakers are heralding welcome changes that delay pregnancy.
  • Influences: The PCM (Amendment) Bill, 2021 is well-founded in the face of evidence cited by the World Health Organization (WHO), which holds that adolescent mothers aged 10 to 19 years are prone to higher risks of eclampsia, puerperal endometritis, and systemic infections in comparison to women aged 20 to 24 years. Moreover, children born to such mothers additionally face higher risks of low birth weight, preterm delivery and severe neonatal conditions.
• Ayushman Bharat- Jan Arogya Yojana (PM-JAY): Under this, a health cover of Rs 5 lakh per family per annum is provided and a wide range of packages pertaining to obstetrics and gynaecology are offered.
• Other legislations: Plethora of other legislations also give special care to women health as follows:
• Pradhan Mantri Matru Vandana Yojana (PMMVY) partially compensates her wage loss before and after pregnancy.
• Pradhan Mantri Surakshit Matritva Abhiyaan (PMSMA) provides free antenatal care to pregnant women on every 9th day of the month, easing the financial burden of pregnant women.
• Janani Suraksha Yojana: It is a safe motherhood intervention under the National Rural Health Mission (NHM) which integrates cash assistance with delivery and post-delivery care.
• LaQshya program: Under the aegis of Ministry of Health and Family Welfare, LAQshya aims at improving quality of care in labour room and maternity Operation Theatre (OT).

Outcomes of legislation

The above mentioned concerted efforts have resulted in significant favourable outcomes as follows:

• Enhanced institutional deliveries: It culminated in a manifold increase in institutional deliveries from 79 per cent in National Family Health Survey, NFHS-4 to nearly 89 per cent in NFHS-5.
• Reduced MMR: The declining Maternal Mortality Ratio (MMR) from 167 per lakh live births in 2011-13 to 103 per lakh live births as of 2019 is heartwarming.
• Family planning: It is noteworthy that the unmet need for family planning in terms of limiting or spacing child-bearing decreased from 12.9 per cent to 9.4 per cent between NFHS-4 (2014-15) to NFHS-5 (2019-21).
• Adolescence pregnancy: However, on a standalone basis, nearly 7 per cent of females aged 15-19 years were already mothers or pregnant at the time of NFHS-5, a marginal decline over NFHS-4’s 7.8 per cent.
• Such young mothers are poorly aware of feeding practices and baby care, making them more likely to have stunted or wasted children.
• Hence, together the MTP Act, 2021 and the PCMA Bill, 2021, if enacted can axe the vicious cycle of early marriages, consequent early pregnancies and poor maternal and child health outcomes.

Comparison with the West

• Liberal politico-legal apparatus : India’s legislation as MTP (Amendment) Act is a liberal achievement over countries where abortions are disallowed since conception, even in the most traumatizing circumstances of sexual abuse or incest.
• Unbiased standards: Moreover, while the West is curtailing abortion rights, India is extending the ceiling of permissible abortions by PCM (Amendment) Bill, 2021. By proposing to revise the permissible marriageable age, the government has held men and women to the same, unbiased standards.
• Menstrual hygiene: Also, while menstrual hygiene remains a conversation hushed in whispered tones in parts of the world, India’s PM addressed the issue from the ramparts of the Red Fort with 1.3 billion Indians listening intently.

Conclusion

• The present government has instilled conscientiousness into the calculus of policy-making with changing times. For instance, The MTP (Amendment) Act navigates the 20 weeks challenge posed by the MTP Act, 1971 and is a nod to advances in the field of health and reproductive science.
• Thus, Coupled with the moratorium on commercial surrogacy and the proposal to equalise men’s and women’s ages at marriage, India is positioned securely in the highest echelons of countries that safeguard reproductive autonomy.
• Incumbent law and policy-makers have skillfully given reproductive choice a life-cycle twist. Even as the West retrogresses, India shows the path to a progressive society

In News:

• Every year on June 27, World MSME Day provides us with the opportunity to appreciate their valuable contribution to job creation and sustainable development across the world.
• The growth and achievements of large businesses in India have received a lot of attention.
• This is despite the fact that micro, small, and medium enterprises (MSME) account for more than 99% of all businesses.

What’s in today’s article:

• MSME sector in India (Overview, definition, significance, problems, government initiatives, way forward) 

MSME sector in India:

• Overview
  • MSMEs are the largest employer in India outside of agriculture, employing over 11.1 crore (45% of all workers) people.
  • Over 63 million MSMEs (51% in rural India) provide services and produce goods ranging from machine parts to bread and shopping bags in India.
  • A significant number of MSMEs are suppliers of intermediate products to large companies.
  • The sector accounts for roughly 30% of India’s gross domestic product (GDP) and about 40% of India’s exports.
  • As India approaches the $5 trillion mark, the MSME ministry has set a goal of increasing its contribution to GDP to 50% by 2025.
• Definition

• MSMEs are defined formally in terms of investment in plant and machinery.
  • However, this criterion was long criticised because authorities did not have easy access to credible and precise details of investments.
• As a result, it was decided (in 2018) to change the criterion to annual turnover, which was more in line with the imposition of GST.
• It was further revised under the Aatmanirbhar Bharat plan and a composite criteria was developed which included Investment and Annual Turnover.
  • The new criterion is non-discriminatory, transparent and objective because it eliminates the need for frequent inspections, which were previously required to check the investment in plant and machinery.
• Significance of MSMEs for Indian economy
  • Labour intensive sector.
  • Promotes inclusive growth by providing employment opportunities in rural areas especially to people belonging to vulnerable sections of the society.
  • Financial inclusion by creating opportunities for people to use banking services and products.
  • Promote innovation by providing opportunity for budding entrepreneurs to build creative products boosting business competition and fuels growth.
• Problems faced by MSMEs
  • 
  • Problem of dwarfism: According to the Economic Survey 2019-20, while dwarfs (small firms that continued to remain small despite ageing) consume vital resources (that could possibly be given to infant firms), they contribute less to creation of jobs and economic growth as compared to infant firms.
  • Lack of financing: Most (90%) of the MSME funding comes from informal sources.
  • Poor integration of digital technologies: Integration of technologies such as big data, artificial intelligence and virtual reality (Industry 4.0) into manufacturing operations in the sector is still in its infancy.
  • Environmental impact: The sector lacks cleantech innovation and entrepreneurship, which produce environment friendly products, promotes energy efficiency and has the potential to accelerate the transition to a circular and low carbon economy.
• Government’s Initiatives to boost MSME sector
  • 
  • The Government of India has correctly identified MSME ecosystem development as a top priority for achieving Aatmanirbhar Bharat (self-reliant India).
  • The ambitious ‘Make in India’ campaign in India aims to propel the country up the manufacturing value chain and position it as a global manufacturing hub.
  • Production linked incentives (PLI) schemes and the recently launched zero effect zero defect (ZED) certification are assisting in the promotion and growth of the sector.
  • The Prime Minister's Employment Generation Programme (PMEGP) is also creating opportunities for self-employment and microenterprises, with over 7 lakh microenterprises being helped to become economically viable.
  • Digital Saksham initiatives, as well as the interlinking of the Udyam, e-Shram, National Career Service (NCS) and Aatmanirbhar Skilled Employee-Employer Mapping (ASEEM) portals, demonstrate the promise of targeted digitalisation schemes.
  • UNIDO is providing energy efficiency advisory services to 695 MSMEs in 23 clusters covering the brass, ceramic, dairy, foundry and hand tool sectors in collaboration with the Bureau of Energy Efficiency (BEE).
• Way forward
  • According to the ‘India MSME Report 2018,’ there is the need for an entitlement approach that demands the identification and analysis of major security threats to the MSMEs.
  • According to the UK Sinha Committee (2019):
    • A Rs 5,000 crore stressed asset fund for the MSME sector to help small businesses affected by demonetisation, GST and the ongoing liquidity crisis.
    • Doubling the cap on collateral-free loans to Rs 20 lakh from the current Rs 10 lakh extended to borrowers falling under the Mudra scheme, self-help groups and MSMEs.
  • A forward-thinking mindset among policymakers and society will help to fully unlock emerging opportunities in the rapidly changing global value chain ecosystem, thereby realising the critical socioeconomic role that MSMEs play in India.

In News:

• Recently, India’s cybersecurity watchdog Indian Computer Emergency Response Team (CERT-In) issued new rules for companies offering virtual private networks (VPNs).
• The new rules require VPN providers to keep a wide range of data on their customers, including contact numbers, email addresses and IP addresses, for five years. 

What’s in today’s article:

• About VPN and implications of new VPN rules
  • What is a VPN?
  • About the new rules
  • Rationale behind issuing these rules
  • Implications of new rules for VPN providers and their customers
  • Government’s response 

About VPN and implications of new VPN rules:

• What is a VPN?
  • A VPN is a service that protects users online by preventing their IP address from being tracked by websites, law enforcement agencies, cybercriminals and others.
  • Corporate employees are the most frequent VPN users, mainly for securely accessing company networks.
  • A VPN's primary benefit is that it ensures privacy and creates a safe and secure connection while using a public network such as the internet.
  • Simply put, they mask online id, making it difficult for third parties to track, steal and store data.
• About the new rules:
  • These are drafted by the Ministry of Electronics and Information Technology (MeitY), Government of India.
  • It mandates VPN companies to record personal information of their users including names, email id, phone number and IP address for a period of five years and to record and keep their customers’ logs for 180 days.
  • The VPN providers also have to record usage patterns, purpose of hiring services and various other information.
  • Apart from VPN companies, the new norms are also applicable to data centres, virtual private server (VPS) providers, cloud service providers, Government organisations, etc. However, the corporate entities are not under the scanner.
    • A virtual server is a simulated server environment built on an actual physical server.
    • It recreates the functionality of a dedicated physical server, but offers higher security than the latter.
    • Service providers who do not have a physical presence in India but offer services to the users in the country, have to designate a point of contact to liaise with CERT-In.
  • It further mandated that any cybercrime recorded must be reported to the CERT-In within 6 hours of the crime.
  • The directives will take effect at the end of June (2022) and if the data is not handed over to the government by then, the entities would face punitive action.
• Rationale behind issuing these rules:
  • The CERT-In, which acts as a safeguard against cyber-attacks, has identified "gaps" in the way it analyses online threats.
    • For example, non-availability of data hampers analysis and investigation.
  • In a report (2021) to the Rajya Sabha, a Parliamentary Standing Committee requested the MeitY to block VPNs with the assistance of internet service providers.
  • Hence, the new rules will enhance overall cyber security posture and ensure safe and trusted internet in the country.
• Implications of new rules for VPN providers and their customers:
  • With the new rules, the government will have access to customers' personal information, violating privacy and rendering VPN use obsolete.
    • Customers will be required to go through a rigorous KYC process when signing up to use a VPN and will be required to state the reason for using the services.
  • In response to CERT-In rules, several VPN providers (like NordVPN), have said that they will either move their servers out of the country or will shut down their physical servers in India and cater to users in India through virtual servers located abroad.
• Government’s response:
  • According to the CERT-In, various stakeholders were consulted before notifying the new rules.
  • According to the MeitY, the new rules are the need of the hour to ensure stability and resilience of cyber space and there will be no changes to the rules despite pushback from various stakeholders.

In News:

• Prime Minister Modi held a bilateral meeting with Argentinian President Alberto Fernandez here on the sidelines of the G7 Summit.
• This was the first bilateral meeting between the two leaders. They reviewed progress in implementing the bilateral Strategic Partnership established in 2019.

What’s in Today’s Article:

• India – Argentina Bilateral relation

India – Argentina Relation

Political Relations

• India-Argentina relations were elevated to the level of Strategic Partnership during the State Visit to India of President of Argentina in February 2019.
• India opened a Trade Commission in Buenos Aires in 1943, which was later converted into one of the first Embassies of India in South America in 1949.
• Argentina had established a Consulate in Calcutta in the 1920s, which was transferred to Delhi as an Embassy in 1950.

Economic and Commercial Relations

• Bilateral Trade
  • The India-Argentina bilateral trade registered a historic peak of USD 5.7 billion in the year 2021, with a growth rate of 72% over 2020.
    • USD 1.4 billion worth of exports from India to Argentina and USD 4.3 billion worth of imports by India from Argentina.
  • India became 4th largest trading partner of Argentina in 2021.
• Investments and Joint Ventures
  • Several Indian companies have established operations in Argentina with a total investment of over USD 1 billion.
  • Argentina’s investment in India stands at approximately USD 120 million.
  • A new assembly line of Royal Enfield was inaugurated by President Alberto Fernandez in September 2020 in Buenos Aires Province.
    • This marked the first time in the 119 years’ history of Royal Enfield that their bikes would be manufactured outside their own plants.
• India-Argentina Business Council
  • A bilateral business chamber, ‘India-Argentina Business Council (IABC)’ was formally launched in October 2020.

Technical and Development Co-operation

• India extends between 40 and 45 Indian Technical and Economic Cooperation (ITEC) scholarships to working professionals from Argentina every year.
• A MoU has been signed on setting up of an India-Argentina Center of Excellence in IT in Buenos Aires, and work is underway for its establishment.

Cultural Relations and People-to-People Contact

• Foreign Minister Felipe Solá participated in the conclusion of the Gandi@150 celebrations in Buenos Aires on 02 October 2020
• Earlier, on 2 October 2019, the then Vice President Ms. Gabriela Michetti, was the Chief Guest at main function held at the Embassy of India in Buenos Aires to celebrate Gandhi@150.
• The Indian Embassy has been organizing cultural programmes, including ‘India Weeks’ and ‘India Days’ in prominent cities and provinces of Argentina.
• As part of celebrations of 160th birth anniversary of Gurudev Rabindranath Tagore, the Mission published a book titled “Rabindranath Tagore: Visiones desde America Latina”.
  • It was published in collaboration with CARI (Argentine Council for International Relations), the largest Argentine think tank.
  • Gurudev Tagore had visited Argentina in 1924 and stayed for two months as the guest of Ms Victoria Ocampo, a well-known literary personality, writer and feminist.
  • A joint production feature film, Pensando en el (Thinking of Him) on his visit was the closing film at the International Film Festival of India, Goa in November 2017.

Indian Community

• There are around 2600 NRIs / PIOs in Argentina.
• In the absence of Vande Bharat Mission (VBM) flights from the region during the unexpected pandemic situation, the Mission improvised and managed to repatriate over 130 Indians accommodating them in several special flights.

In News:

• US President Joe Biden and other G7 leaders formally launched in Germany the Partnership for Global Infrastructure (PGII).
• The 48^th G7 summit is being held in Germany.

What’s in Today’s Article:

• Partnership for Global Infrastructure (PGII)- Background, About, Four priority pillars, India & PGII, PGII and China
• China’s Belt and Road Initiative (BRI)
• News Summary

Partnership for Global Infrastructure (PGII)

• At the 2021 G7 Summit, G7 leaders had announced their intent to develop a values-driven, high-impact, and transparent infrastructure partnership.
• It was to meet the enormous infrastructure needs of low- and middle-income countries and support the US’ and its allies’ economic and national security interests.
• At the 2022 G7 summit, the participating leaders formally launched the Partnership for Global Infrastructure (PGII).
• Under this, G7 leaders pledged to raise $600 billion in private and public funds over five years to finance needed infrastructure in the developing countries.

Aim

• To deliver quality, sustainable infrastructure that makes a difference in people’s lives around the world;
• To build infrastructure that strengthens and diversifies supply chains, creates new opportunities, and advances national security of member countries.

Four priority pillars

• Climate and energy security
  • Tackling the climate crisis and bolstering global energy security through investments in climate resilient infrastructure, transformational energy technologies.
• Digital connectivity
  • Developing, expanding, and deploying secure ICT networks and infrastructure to power economic growth and facilitate open digital societies.
• Gender equality and equity
  • Advancing gender equality and equity by investing in
    • care infrastructure that increases opportunities for economic participation by women,
    • improved water and sanitation infrastructure that addresses gender gaps in unpaid work and time use.
• Health and health security
  • Developing and upgrading the infrastructure of health systems and contributing to global health security.

India and PGII

• The US announced several flagship projects under the PGII. One of these projects will back Indian infrastructural initiatives.
• Under this, the US International Development Finance Corporation (DFC) will be investing up to $30 million in Omnivore Agritech and Climate Sustainability Fund.
  • This is an impact venture capital fund that invests in entrepreneurs building the future of agriculture, food systems, climate and the rural economy in India.
  • The Fund seeks to invest in companies that increase food security and promote both climate resilience and climate adaptation in India.
  • It also seeks to improve the profitability and agricultural productivity of smallholder farms.

PGII and China

• The PGII is seen as an attempt to check China’s influence in the developing world by delivering game-changing projects to close the infrastructure gap in these countries.
• It is aimed at countering China’s multitrillion-dollar Belt and Road project.

China’s Belt and Road Initiative (BRI)

• 
• China’s Belt and Road Initiative (also known as One Belt, One Road (OBOR)) envisages the construction of a maze of road, rail and port projects through a number of countries.
• It aims to strengthen Beijing’s economic leadership through a vast program of infrastructure building throughout China’s neighbouring regions.
• This initiative is called “21st century silk road,” and is made up of
  • a belt of overland corridors (also known as silk road economic belt)
  • a maritime road of shipping lanes.

News Summary

• The G7 group has unveiled Partnership for Global Infrastructure and Investment (PGII) to counter China’s flagship trade-and-infrastructure initiative.

Key Highlights of the summit:

• Partnership for Global Infrastructure and Investment (PGII) launched
  • PGII aims to fill a huge gap left as communist China uses its economic clout to stretch diplomatic tentacles into the furthest reaches of the world.
  • This partnership plans to raise $600 billion for global infrastructure programmes in poor countries by 2027.
    • The target for the U.S. is to bring $200 billion to the table, with the rest of the G7 another $400 billion by 2027.
  • The funding for this initiative would depend largely on private companies being willing to commit to massive investments.
• Decided to ban gold imports from Russia
  • The US and other G7 countries banned imports of gold from Russia, seeking to undercut a key source of revenue for Moscow as it wages war in Ukraine.
    • Russian gold is a major export that rakes in tens of billions of dollars for Russia.
  • It would help to further isolate Russia from the international financial system.

In News:

• Following the restrictions imposed on non-bank buy now pay later (BNPL) companies, the Reserve Bank of India (RBI) is expected to issue guidelines for the BNPL segment.
• These BNPL companies were using pre-paid instruments (PPIs) to extend short-term, interest-free loans to customers for online purchases.

What’s in today’s article:

• What is BNPL? (About, prevalence in India, how do they operate, difference between credit card payment and BNPL, advantages, challenges)
• News Summary

Buy Now, Pay Later (BNPL)

• BNPL is a financing option (or simply a short-term loan product) which allows one to buy a product or avail a service without having to worry about paying for it immediately.

Prevalence in India:

• The market for BNPL is booming in India.
• This is due to the rise of e-commerce and digital payments, low credit card penetration and rapid increase in the number of fintechs who are disrupting the traditional methods of accessing credit.
  • According to RazorPay’s ‘The Covid Era of Rising Fintech’ report, the India BNPL market grew more than 637% in 2021 (569% in 2020).
  • According to estimates, the BNPL market will grow from current $3-3.5 billion to $45-50 billion by 2026.
• The ease of access to credit has made BNPL the most preferred product among young millennials, new credit borrowers, who were often overlooked by traditional banks.

BNPL players in India

• There are around a dozen BNPL players in India including ZestMoney, LazyPay, MobiKwik, Paytm Postpaid, Amazon Pay Later, Flipkart Pay Later, etc.
• Even traditional banks (HDFC Bank’s FlexiPay and ICICI Bank’s ICICI PayLater) are jumping into the BNPL bandwagon.

How do they operate?

• Customers with BNPL cards or accounts can use the 'Buy now, pay later' option when making a purchase at a participating retailer.
• Following the purchase, the customer can repay the BNPL firm in a series of interest-free EMIs spread over three months or as a lump sum amount.
• If it is not paid by the due date, interest will be charged.
• The BNPL company will immediately pay the merchant.
• However, for a purchase of Rs 500, instead of paying the full Rs 500 for a purchase, they would pay something like Rs 450/470 and pocket the difference.

Difference between personal loan and BNPL

Difference between credit card payment and BNPL:

• Both credit cards and BNPL are similar in a sense that both offer deferred repayment options to the borrower.
• However, there are certain key differences between these two credit products.
  • Ease of access: While availing a credit card requires a good credit history and involves stringent verification process, BNPL provides hassle-free access to credit.
  • Interest-free credit: Credit cards typically offer interest free credit periods up to 45 days while BNPL often comes with interest-free loans with a shorter credit period (say 15 days to one month).
  • Charges included: Credit cards come with charges like joining fee, recurring annual fee etc., which can be higher for premium cards. On the other hand, BNPL comes with no such charges.

Advantages of BNPL:

• Increases affordability, instant access to credit, safe and secure transaction, can choose repayment tenure, no cost EMI, simple and transparent process.

Challenges:

• Regulatory issues:
  • Regulators around the world are cracking down on the BNPL industry, citing excessive, unregulated and illegal lending; a lack of credit history; data privacy; etc.
  • In India, the RBI is keeping a close tab on the digital lenders.
    • A working group (focused on making the digital lending ecosystem safe) constituted by the RBI (last year) found that 600 out of 1,100 lending apps on Indian app stores were illegal.
    • Some of the key suggestions of the working group report include -
      • Subjecting the digital lending apps to a verification process by a nodal agency and setting up of a Self-Regulatory Organisation (SRO).
      • Treating BNPL arrangements as balance sheet lending, mandating knowing your customer (KYC) and credit score checks before extending BNPL options to borrowers.
    • Recently, RBI has unveiled the Payments Vision 2025
    • The vision document recommended that the BNPL method be examined and that appropriate guidelines on BNPL payments be developed.
• Debt trap: Such easy access to credit, which are mainly for discretionary purchases, may lead borrowers to a debt trap.
• Affects the credit culture: Though small in size, availing multiple loans from different lenders at the same time will impact the borrower’s repayment ability, affecting the credit culture.
• Risk of higher non-performing assets (NPAs): Since BNPL primarily focused on first time borrowers with no credit history, the lenders also run the risk of higher non-performing assets (NPAs) if the borrowers default.
• Insecure reporting mechanism: It is still early days of BNPL and the reporting mechanism is not as structured and fool-proof as in case of credit cards. 

News Summary:

• The RBI had recently communicated to BNPL companies to stop issuing cards where the funds are loaded through a credit line from NBFCs, sending tremors in the segment.
• According to banking observers, the RBI is not happy with fintech companies using PPIs as a credit instrument, circumventing the regulatory oversight.
• While BNPL services have developed into a new payment mode alongside the existing payment modes (like cards, UPI and net banking), it has remained outside the direct RBI regulation.
• BNPL channel uses an existing nodal account (escrow account after authorization) to route payments between a BNPL customer and a merchant.
• Another major source of concern for the RBI is the high level of delinquency (defaulters) in the BNPL segment.
  • According to data, delinquencies in the BNPL segment are 9%, while delinquencies in the non-BNPL segment are 10.1%.
• The banking regulator is in discussion with fintech players to find a way out and bring the segment under a regulatory framework so that PPIs are used as a payment instrument and not as a credit avenue.
• This will bring more transparency in the fintech lending space.

In News:

• Ahead of the Goods and Services Tax (GST) Council meeting, the Finance Ministry has notified the Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022.
• This has extended the period for levy and collection of GST compensation cess (levied on items in the 28% slab) under the Goods and Services Tax (Compensation to States) Act, 2017, till March, 2026. 

What’s in today’s article:

• Goods and Services Tax (About, types, GST council)
• Compensation cess in GST (About, goods covered and where the compensation cess is collected)
• News Summary 

Goods and Services Tax (GST):

• About:
  • It is an indirect tax (not directly paid by customers to the government), that came into effect from 1 July 2017 through the implementation of the 101st Amendment to the Constitution of India by the Indian government.
    • It has actually replaced various indirect taxes such as - service taxes, VAT, excise and others in the country.
  • It is levied on the manufacturer or seller of goods and the providers of services.
  • The sellers usually add the tax expense into their costs and the price the customers pay is inclusive of GST. Thus, one ends up paying a tax even if s/he is not an income taxpayer.
  • It is divided into five different tax slabs for collection of tax - 0%, 5%, 12%, 18% and 28%.
• Types of GST:
  • State Goods and Services Tax (SGST): It is charged by the state government for intrastate services and goods transactions and this revenue is generally given to the state.
  • Central Goods and Services Tax (CGST): It is also charged for any kind of intrastate transaction of services and goods and it is collected by the central government.
  • Integrated Goods and Services Tax (IGST): It is generally charged on some of the inter-state transactions of services and goods and is applied on exports and imports and both the State and Centre governments share this revenue.
  • 
• GST Council:
  • Article 279A of the Indian Constitution gives power to the President of India to constitute a joint forum of the Centre and States called the GST Council, consisting of the -
    • Union Finance Minister - Chairperson
    • The Union Minister of State, in-charge of Revenue of finance - Member
    • The Minister in-charge of finance or taxation or any other Minister nominated by each State Government - Members
  • The GST Council is an apex committee to modify, reconcile or to make recommendations to the Union and the States on GST, like the goods and services that may be subjected or exempted from GST, model GST laws, etc.
  • Decisions in the GST Council are taken by a majority of not less than three-fourth of weighted votes cast.
    • Centre has one-third weightage of the total votes cast and all the states taken together have two-third of weightage of the total votes cast.
    • All decisions taken by the GST Council have been arrived at through 

Compensation cess in GST:

• About:
  • Compensation cess was introduced as relief for States for the loss of revenues arising from the implementation of GST on 1st July 2017 for a period of five years or such period as recommended by the GST Council.
    • States were guaranteed a 14% tax revenue growth in the first five years in exchange for giving up their powers to collect taxes on goods and services after local levies were subsumed under the GST.
    • The Fiscal Year 2016 (FY 16 - Base year) tax revenue of the states is used to calculate the 14% growth.
    • Any shortfall is supposed to be compensated for by the Centre using funds collected specifically as compensation cess.
  • It is levied under the Goods and Services Tax (Compensation to States) Act 2017.
• Goods covered and where the compensation cess is collected:
  • Compensation cess is levied on five products considered to be ‘sin’ or luxury goods.
  • For example, SUV vehicles (more than 4m) are charged 50% GST, of which the GST tax rate is 28% and the compensation cess is 22%.
  • The collected compensation cess flows into the Consolidated Fund of India and then transferred to the Public Account of India, where a GST compensation cess account has been created.
  • States are compensated bi-monthly from the accumulated funds in this account.

 News Summary:

• The notification extending the levy of GST compensation cess for four more years comes amid demands from several states to extend the compensation period.
  • States have argued that the requirements for higher spending and lower revenue during the Covid-19 have damaged their finances and compensation is required to help them overcome the stress.
  • According to a recent RBI study, 10 states are facing extreme financial stress, with Punjab, Rajasthan, Kerala, Bengal and Bihar being the most vulnerable.
• The extension is in line with the GST Council decision (last year) to continue compensation cess levy only for repayment of borrowed amounts beyond June 2022.
  • The Centre has maintained that the pandemic has resulted in a 4-year extension of the cess and that providing additional compensation is not currently feasible.
  • The question of whether states will be compensated after 5 years may be decided at the upcoming GST Council meeting.
• Although expected, the extension will continue to impose a burden on the impacted businesses, particularly in sectors such as automotive, which should be encouraged because it is one of the sectors with a multiplier effect on GDP and employment.

In News:

• Maharashtra is in the throes of a constitutional crisis. All indications are that there is a planned mass defection underway.

What’s in Today’s Article:

• Anti-Defection Law – About, key features, exemptions, disputes, weakening of law, Different SC rulings

Anti-Defection Law

• The Tenth Schedule of the Constitution is commonly known as the anti-defection law.
• It was introduced in 1985 with a view to curb the tendency among legislators to switch loyalties from one party to another and facilitate the toppling of regimes and formation of new ones.
• The law provides for the Presiding Officer of the legislature to disqualify any defector on a petition by another member.

Key features of the law

• The law contemplates two kinds of defection:
  • by a member voluntarily giving up membership of the party on whose symbol he got elected
  • by a member violating a direction (whip) issued by his party to vote in a particular way or to abstain from voting.
• On both the instances, the legislator shall be disqualified as per the law.

Exemptions

• As per the law, a member of a House shall not be disqualified if “his original political party merges with another political party.
• This merger, in turn, only holds if, and only if, not less than two-thirds of the members of the legislature party concerned have agreed to such merger.
  • Hence, if two-thirds of the MLAs/MPs agree to defy the party leadership, they legally can. The Anti-Defection Law will not apply to them.

Defection law: source of dispute and litigation

• While voting contrary to the party’s whip is quite a straightforward instance of defection, the other mode of defection has proved to be a source of dispute and litigation.
• A member voluntarily giving up membership does not refer to a simple resignation letter and formally joining another party.
• It is often an inference drawn by the party that loses a member to another based on the legislator’s conduct.
• The Supreme Court has also ruled that ‘voluntarily giving up membership’ can be inferred from the conduct of a person.
  • g., an MLA or MP attending public rallies for a rival party could be held to have “voluntarily given up his membership” and be charged with defection.

Weakening of the law

• Defection through resignation
  • Politicians have found ways to circumvent the law.
  • In one ingenious solution, MLAs have started resigning their seats in order to bring down the total strength of the House.
  • As the half-way mark of the House falls, the party that is aiming to replace the government has a better shot of forming the majority.
    • In 2019, the Congress-Janata Dal (Secular) coalition government headed by Chief Minister HD Kumaraswamy was brought down using this strategy.
    • Later, the Supreme Court endorsed this strategy as legal, further weakening the already weak Anti-Defection Law.
    • The SC ultimately ruled that the Speaker has the authority to verify if a resignation is voluntary and genuine.
    • But it is constitutionally impermissible for the Speaker to take into account extraneous factors while considering the resignation.
    • In other words, once it is clear that a member is resigning out of free will, the Speaker is bound to accept it.
• Dubious role of speaker
  • Speakers also delay a decision on disqualifying a member under the law.
  • While the Anti-Defection Law is clear that a member should be disqualified on defection, it has no mention of a timeline.
    • In 2020, however, the SC prescribed a maximum of three months for a presiding officer to decide on an anti-defection law petition.
  • Speakers have utilised these lacunae to award themselves a pocket veto on the process.

SC rulings on this law

• Anti-defection law proceedings under judicial review
  • In 1992, a five-judge constitutional bench of the Supreme Court said that the anti-defection law proceedings before the speaker are akin to a tribunal.
  • Hence, it can be placed under judicial review.
• Ravi Naik vs. UoI case (1994)
  • The Supreme Court, in Ravi Naik vs. UoI case (1994), has interpreted the phrase ‘voluntarily gives up his membership'. It says: “The words ‘voluntarily gives up his membership' are not synonymous with ‘resignation' and have a wider connotation.
  • Even in absence of a formal resignation from membership, an inference can be drawn from the conduct of a member that he has voluntarily given up his membership of the political party to which he belongs.
  • The act of giving a letter requesting the Governor to call upon the leader of the other side to form a Government itself would amount to an act of voluntarily giving up membership of the party on whose ticket the said members had got elected. This was again reiterated by Supreme Court in Rajendra Singh Rana vs. Swami Prasad Maurya case of 2007.
  • Even after expulsion from the party, an MP must abide by the party whip to prevent disqualification from the house.
• Balchandra L. Jarkiholi Vs. B.S. Yeddyurappa 2010
  • The Supreme Court in 2010 Karnataka case made it clear that independent MLAs joining the Ministry in a coalition govt., without joining the ruling party, will not sacrifice their independent identity. Hence joining Council of Ministers doesn’t point to such eventuality.
• SC highlights taking away disqualification power from Speakers
  • In January 2020, the Supreme Court asked Parliament to amend the Constitution to strip Legislative Assembly Speakers of their exclusive power to decide whether legislators should be disqualified or not under the anti-defection law.
  • This was the second time the court has highlighted the issue of taking away the disqualification power under the Tenth Schedule from Speakers.
• SC removed Manipur minister
  • In March 2020, the Supreme Court removed Manipur minister Thounaojam Shyamkumar Singh from the state cabinet and restrained him from entering the legislative assembly till further orders.
  • Disqualification petitions against the said minister were pending before the speaker since 2017.

In News:

• Prime Minister Modi left for Germany to attend the G7 Summit. This year’s G7 Summit will be held under the German Presidency on 26-27 June 2022.

What’s in Today’s Article:

• G7 – Origin, members, purpose, significance, power, G7 & G8, India’s participation
• News Summary

In Focus: G7

Origin

• The origin of G7 lies in the oil shocks of 1973 and the corresponding financial crisis.
• In order to address the situation after oil shock, the heads of the world's six leading industrial nations decided to hold a meeting in 1975.
• These six nations were - the US, UK, France, Germany (West), Japan and Italy.
• These countries were joined by Canada in 1976 and G7 came into existence.

Current Members

• US, UK, Canada, France, Germany, Italy and Japan are the current members of this group.
• It can be said that the members of this group are the most developed and the advanced economies of the world.
• The European Union is also represented within the G7.
• 

Purpose of G7

• To determine the course of multilateral discourse
• To shape political responses to global challenges.
• Basically, G7 provides a platform to discuss and coordinate solutions to major global issues, especially in the areas of trade, security, economics, and climate change.

Significance:

• Economic Significance
  • As of 2018, the G7 nations account for:
    • close to 60 percent of global net wealth ($317 trillion),
    • 46 percent of global gross domestic product, and
    • about 770 million people or 10 percent of the world's population.
• Political Significance
• Political heavyweights are capable of shaping the response of Multilateral challenges.
• In 1999, it created the Financial Stability Forum in order to manage the international monetary system
• G7 & COVID-19 Pandemic
  • 47th G7 summit (held in June 2021) focused on the recovery from ongoing COVID-19 pandemic.
  • It promised to distribute 1 billion vaccines to poorer countries
  • Its theme was Global Action to Build Back Better.
• Developmental Significance
  • G-7 provided $300 million in 1997 to help build the containment of the reactor meltdown at Chernobyl.
  • G7 played crucial role in setting up a global fund to fight malaria and Aids in 2002.
  • In October 2020, G7 finance ministers backed an extension of a G20 bilateral debt relief initiative for the world's poorest countries.
    • It is also known as Debt Service Suspension Initiative (DSSI).
    • It means that bilateral official creditors are, during a limited period, suspending debt service payments from the poorest countries that request the suspension.

Power of G7

• The G7 is not based on a treaty and has no permanent secretariat or office. The agenda of G7 is set by the presiding nation.
• It cannot pass any laws because it is made up of separate nations with their own democratic processes.
• However, decisions taken by G7 have global effects as the member countries are political and economic heavyweights.

G7 & G8

• In 1998, Russia was formally inducted in the group, which transformed G7 into G8.
• However, Russia annexed Crimea in 2014. As a result, it was suspended from the grouping.
• Hence, the group became G7 again in 2014.

India’s Participation in G-7 so far

• Since 2014, this is the third time the Prime Minister will be participating in a G7 meeting.
  • India had been invited by the G7 French presidency in 2019 to the Biarritz Summit as a “Goodwill Partner”.
  • India was also invited at the 47^th G7 Summit held under the presidency of UK.
  • The US under President Donald Trump had extended an invitation to India in May 2020.
    • However, due to the pandemic and the US election outcome, that did not happen.
• During Prime Minister Manmohan Singh’s tenure, India attended the G8 Summit five times.
  • In March 2014, Russia was indefinitely suspended following the annexation of Crimea, reducing G8 to G7.

News Summary

• PM Modi will be visiting Schloss Elmau, Germany for the 48^th G7 Summit under the German Presidency.

Key Highlights:

• Theme
  • Theme of this year’s G7 summit is - Progress towards an equitable world
• Five major goals of current G 7 Summit
  • Strong alliances for a sustainable planet
  • Setting the course for economic stability and transformation
  • Enhanced preparedness for healthy lives
  • Sustainable investments in better future
  • Stronger together
• Other countries invited
  • Besides India, Germany has also invited other democracies such as Argentina, Indonesia, Senegal and South Africa to the G7 Summit.
  • This is to strengthen international collaboration on important global issues impacting humanity.