📰 Amid contrasting claims, J&K Governor dissolves Assembly
Move follows PDP and PC wanting to form the government in the State
•Jammu and Kashmir Governor Satya Pal Malik on Wednesday dissolved the State Assembly, as Peoples Democratic Party (PDP) and Peoples Conference (PC) separately staked claim to form a government after day-long political drama.
•“Governor Malik has passed an order in exercise of the powers conferred upon him by clause (b) of subsection (2) of Section 53 of the Constitution of Jammu and Kashmir to dissolve the Legislative Assembly,” read a Raj Bhavan communique.
•Earlier, two parties, the PDP and the PC, after daylong political wrangling, wrote to the Raj Bhavan on email and WhatsApp to stake claim to form the government, as the Governor’s official fax failed to respond.
•Former Chief Minister and PDP president Mehbooba Mufti, in the letter, claimed that she had the support of 15 MLAs from National Conference and 12 MLAs of the Congress, in addition to her 29 MLAs, putting the total number at 56.
•The Assembly has 87 members and any party would require 44 MLAs’ support to form a government.
•On the other hand, PC chief Sajad Lone, who has two MLAs, claimed the support of 25 MLAs of the BJP and 18 more MLAs.
•National Conference leader and former Chief Minister Omar Abdullah cried foul over the Governor’s decision. “The NC has been pressing for Assembly dissolution for five months now. It can’t be a coincidence that within minutes of Mehbooba Mufti Sahiba’s letter staking claim the order to dissolve the Assembly suddenly appears,” said Mr. Abdullah.
•Senior PDP leader Naeem Akhtar said the BJP-backed PC claim only hinted at “illegitimate means the two parties were planning to employ in J&K to cobble together the required numbers.”
•“Initially, the BJP claimed an alliance of the NC, PDP and Congress was on the directions of Pakistan. It was bizarre. The BJP’s bid to project the head of a two-MLA party as new chief minister only showed the party’s desperation and illegal design to break parties here. Unfortunately, the BJP was supporting a leader who started his political career with a gun in his hand against the state of India and whose family still preaches separatism. And they call it nationalism,” said Mr. Akhtar.
Undemocratic, says Soz
•Senior Congress leader Saifuddin Soz termed the Governor's decision “unconstitutional and undemocratic.”
•“Ms. Mufti should approach the court as the Governor dissolved the Assembly at the behest of the Centre,” said Mr. Soz.
•Earlier, in an eventful day, arch rivals, the National Conference and the PDP, decided to join hands to form a unity government, with the Congress openly offering its support.
•“The move was made with the sole aim of safeguarding the special status of J&K, which is under threat,” said PDP leader Altaf Bukhari.
•Ms. Mufti said the move was also necessitated because “the Governor’s administration randomly was amending the laws concerning the special status of the State and the BJP had started engineering defections in other parties for furtherance of its political motives.”
•“Governor Malik’s [earlier] decision not to dissolve the Assembly till 2020 kept the options of horse trading open. It was a serious situation,” said Congress president G.A. Mir.
•The sudden decision to form the government came just a day after a senior PDP leader and MP Muzaffar Hussain Baigh publicly supported Mr. Lone and the BJP-backed third front, triggering hectic political parleys among the three parties.
•“The BJP had started engineering defections in other parties for furtherance of its political motives. The three parties came together to stop horse trading too,” said Ms. Mufti.
•PDP’s Bukhari is emerging as a consensus candidate to lead the alliance as of now.
•Senior BJP leader Kavinder Gupta said these parties were worried because their ground was slipping in the State, as reflected in the recent elections.
•“This alliance is coming together on the directions of Pakistan. Meetings were happening in Dubai too. Even the Hurriyat is onboard for this,” said Mr. Gupta.
📰 Navy makes formal request for multi-role U.S. copters
The deal is estimated to be worth $2 billion
•India made a formal request to the U.S. for the purchase of 24 MH-60R Multi-Role Helicopters (MRH) for the Navy in a deal estimated at $2bn. This is among a series of defence procurements and inductions from the U.S. and Russia in the last two months.
•“The Government issued the Letter of Request (LoR) on November 15 for procurement of 24 MRH from the U.S. government under the Foreign Military Sales (FMS) route,” a defence official said.
•The Navy is presently facing a critical shortage of helicopters and several frontline warships are plying with empty helicopter decks. These helicopters are being procured as replacement for 15 Sea King ASW helicopters de-inducted from service in 1991 and one Sea King 42B MRH lost in accident. The current MRHs in service, Sea King 42Bs, were inducted in the 1980s.
•In August, ahead of the inaugural India-US 2+2 dialogue, the Defence Acquisition Council (DAC) accorded the Acceptance of Necessity (AoN) for the procurement.
•The LoR was signed and sent after the Navy received the pricing and availability details from the U.S. Now the U.S. will get back with the price quote, following which contract negotiations would begin to conclude the final deal. As the deal is through the FMS route, the process is expected to be completed in a short time-frame.
•Given the urgency for helicopters, the U.S. is likely to take some MH-60R helicopters off the flight deck of their newest aircraft carrier USS Gerald Ford. In July, the USS Gerald Ford went for year-long upgrades and fixes. “We will likely get about 4-5 MH-60s from the Gerald Ford immediately once the deal is signed,” the official said. All the helicopters would be delivered in a phased manner from 2020-24.
📰 A fatal entry into no-entry zone
Fishermen saw a body being buried on the shore, it looked like Chau’s: police
•John Allen Chau, the American national allegedly killed by people belonging to the protected Sentinelese tribe in the North Sentinel Island, had hired a fishing dinghy from the Chidiyatapu area and reached close to the island on November 16, from where he travelled in his own canoe.
•According to a report published in a newspaper in Port Blair, Mr. Chau had made a failed attempt on November 14 as well.
•While his body had been spotted by fishermen, it has not been retrieved yet, sources said.
•Till recently, the North Sentinel Island was out of bounds for visitors. In a major step earlier this year, the government excluded this island and 28 others in the Union Territory from the Restricted Area Permit (RAP) regime till December 31, 2022. The lifting of RAP meant that foreigners could be allowed to visit these islands without permission from the government.
•In an interview to the blog “'The Outbound Collective”' in November 2015, Mr. Chau, when asked about his top destinations for adventure travel, said South Africa and India were on the top of the list, though the North Cascades in the U.S. were also close. To another question on the top item on his must-do adventure list, he said, “Going back to the Andaman and Nicobar Islands in India is on the top - there’s so much to see and do there!”
•Survival International, a global movement for tribal peoples’ rights, has expressed concern over the incident.
Authorities blamed
•In a statement on Wednesday, Survival International’s director Stephen Corry said, “this tragedy should never have been allowed to happen.” The Indian authorities should have been enforcing the protection of the Sentinelese and their island for the safety of both the tribe and outsiders, he said.
•“Instead, a few months ago the authorities lifted one of the restrictions that had been protecting the Sentinelese tribe’s island from foreign tourists, which sent the wrong message, and may have contributed to this terrible event. It’s not impossible that the Sentinelese have just been infected by deadly pathogens to which they have no immunity, with the potential to wipe out the entire tribe,” Mr. Corry said.
•The Sentinelese have shown again and again that they want to be left alone, and their wishes should be respected. The British occupation of the Islands decimated the tribes, wiping out thousands of tribespeople, and only a fraction of the original population now survives. So the Sentinelese’s fear of outsiders is very understandable, he said.
📰 The post and the person: on strengthening the EC
Safeguards are needed to ensure that institutions like the Election Commission are headed by capable people
•The Constitution Bench of the Supreme Court is examining a public interest litigation (PIL) that could be critical for Indian democracy. The PIL, which seeks the strengthening of the Election Commission of India (ECI), includes a proposal to create an independent mechanism to appoint the Chief Election Commissioner (CEC) and Election Commissioners (ECs) who are, at present, simply appointed by the government of the day, without any defined criteria or processes.
Three critical decisions
•That electoral democracy became a reality in India owes a great deal to the foresight of the Constituent Assembly. However, the Assembly could not have anticipated the extent to which the very political class that framed the Constitution would later attempt to subvert it. As this political dynamic unfolded, at certain crucial junctures, the judiciary and the leadership of the ECI saved democracy.
•When the Constituent Assembly debated how free and fair elections should be ensured, three important questions arose. The first was whether free and fair elections should be made a part of fundamental rights or an independent institution, outside the executive, should be established to conduct the elections. The Assembly opted for the latter and created the ECI. With legal back up and the resources to develop and enforce a transparent electoral system, the ECI made free and fair elections a reality.
•The second critical decision was to have a single, centralised body for elections to the Lok Sabha and State legislatures. One proposal was that the ECI be confined to federal elections, and separate institutions be set up to conduct elections to State legislatures. However, with increasing tension among communities, the Assembly feared partisan action in the States and opted for a single national institution, the ECI. The implications of this decision were complex. On the one hand, Central institutions have generally been more robust than State institutions. For example, State Election Commissions lack autonomy, are short on manpower and funds, and are frequently subject to attempts by State governments to manipulate elections. On the other, this decision could have led to an autocratic institution being established and possibly manipulated by powerful national actors. But this possibility was contained because elections became subject to judicial review. Originally, the Constitution had provided for tribunals set up by the ECI to hear election petitions. But aggrieved parties approached the courts, and the courts decided to hear election petitions. Then the ECI itself recommended that election petitions be heard by the judiciary, and in 1966, the law was changed accordingly.
•The third question concerned ensuring the independence of the ECI. As the manner of appointment of the CEC and ECs was debated, Shibban Lal Saxena presciently argued that while the then Prime Minister was a man of independence, this may not always be the case, and proposed ratification of the CEC’s appointment by the legislature. But the Assembly disagreed, and provided simply for the CEC to be appointed by the President, leaving it to the legislature to enact a suitable law, which never happened. The Constituent Assembly did provide, though, that the CEC could only be removed through impeachment. For the ECs, even this safeguard was not provided, which is also a subject of the above-mentioned PIL.
A major shortcoming
•The history of elections shows that this remains a major shortcoming of the ECI. From 1967 to 1991, the election process deteriorated as the Congress lost its dominance, political competition intensified, and political actors stepped up violence and electoral malpractices. The ECI could not arrest this deterioration. Several State governments made large-scale transfers on the eve of elections and posted pliable officials in key positions, who sometimes flouted the ECI’s orders. This deterioration could have continued. Instead, during the 1996 general election, the ECI restored the credibility of the election process. The CEC, T.N. Seshan, reinterpreted the ECI’s role and powers, and provided combative, forceful leadership. He publicly reprimanded politicians for violating the Model Code of Conduct, postponed/ cancelled elections if their credibility was compromised, intensified supervision of elections, and insisted on action against errant officials. Because of constitutional safeguards, he could not be removed. But the ECI got the right leadership accidentally, not by design. Though the ECI has since become an institution of some authority, there have been controversies over appointments of ECs, allegations of partisanship, and new problems such as of voter bribery and paid news, which the ECI has not been able to address so far.
•As history shows, inadequate leadership is the bane of our public institutions. Safeguards to ensure that ethical and capable people head them are crucial.
📰 Limits of CBI jurisdiction
A provision that allows States to show their strength
•Can States bar the Central Bureau of Investigation (CBI) from functioning in their territory?
•Yes. The CBI is a national agency with police powers. Its primary jurisdiction is confined to Delhi and Union Territories. As policing (detecting crime and maintaining law and order) is a State subject, the law allows the agency to function outside only with the consent of the States. Andhra Pradesh and West Bengal have withdrawn their general consent to the CBI to operate within their territories.
Has it happened before? And why?
•There are several instances of State governments withdrawing their consent. There was even an instance in Sikkim, when the State withdrew its consent after the CBI registered a case against former Chief Minister Nar Bahadur Bhandari, and before it could file a charge sheet. The most common reason for withdrawal of consent is a strain in Centre-State relations, and the oft-repeated allegation that the agency is being misused against Opposition parties. The decision by Andhra Pradesh and West Bengal has come amid concerns being voiced by Opposition parties that Central agencies such as the CBI, Enforcement Directorate and Income Tax Department are being used against them.
Under what law is it done?
•The CBI draws its power from the Delhi Special Police Establishment (DSPE) Act. The Home Ministry, through a resolution, set up the agency in April 1963. Under Section 5 of the Act, the Central government can extend its powers and jurisdiction to the States, for investigation of specified offences. However, this power is restricted by Section 6, which says its powers and jurisdiction cannot be extended to any State without the consent of the government of that State.
What is the impact of States taking back their consent?
•The withdrawal of general consent restricts the CBI from instituting new cases in the State concerned. However, as decided by the Supreme Court in Kazi Lhendup Dorji (1994), the withdrawal of consent applies prospectively and therefore, existing cases will be allowed to reach their logical conclusion. The CBI can also seek or get specific consent in individual cases from the State government.
How has the consent issue played out?
•In most cases, States have given consent for a CBI probe against only Central government employees. The agency can also investigate a Member of Parliament. Apart from Mizoram, West Bengal and Andhra Pradesh, the agency has consent in one form or the other for carrying out investigations across the country.
What happens to cases in which there is a demand for a CBI probe?
•The Supreme Court has made it clear that when it or a High Court directs that a particular investigation be handed over to the CBI, there is no need for any consent under the DSPE Act. A landmark judgment in this regard was the 2010 Supreme Court decision by which the killing of 11 Trinamool Congress workers in West Bengal in 2001 was handed over to the CBI.
📰 The RBI concedes a vital principle
Its openness to the board discussing all policy decisions may well be a paradigm shift
•The angel was in the detail of the terse press note that the Reserve Bank of India (RBI) issued after the meeting of its board of directors on November 19. Every one of the four decisions taken, including three decisions related to regulation, was ascribed to the board. The note also mentions that the constitution of a committee to examine the economic capital framework of the RBI, which was one of the decisions taken, will be jointly determined by the RBI and the Government of India.
•These announcements constitute a significant departure from what has appeared to be the position of the RBI thus far: policy decisions, especially those relating to regulation, are the exclusive province of RBI management. Any departure from this position amounts to an infringement of the RBI’s autonomy.
•The government and some of the current nominee directors on the RBI board have contended that all policy decisions must be deliberated by the board. The outcomes of the November 19 meeting suggest that the RBI has conceded this vital principle. This augurs well for the relationship between the government and the RBI management hereafter. Indeed, it may well constitute a paradigm shift in the functioning of the RBI.
A grey area
•The precise relationship between the RBI board and the RBI management is something of a grey area. Various experts have made the point that the RBI Act vests all powers in the board and, concurrently, it vests those very powers in the RBI Governor. Whether the board can issue directions to the RBI Governor in the event of a difference of opinion between the two is not clear; some experts reject the suggestion outright.
•Many contend that the RBI board has played an advisory role in the past and should continue to do so. Well, corporate boards too play an advisory role for the most part even though they enjoy full powers in the running of the corporation. They tend to leave most decisions to management. However, corporate boards do step in and play a more active role where management is found wanting.
•Surely, this applies to the RBI board as well? It can be nobody’s case that the statute has conferred powers on the RBI board that were never meant to be exercised. Let us accept that these powers should be exercised rarely. Let us grant that the RBI board must play a largely advisory role. Even so, it is legitimate to expect that all policy matters would be deliberated by the board. The RBI management may or may not accept the inputs of the board. But the board must have its say. This is elementary corporate governance. In accepting this principle, the November 19 meeting of the RBI board marks a big step forward.
Raiding the reserves?
•Let us turn now to the decisions taken at the meeting. How much capital the RBI needs has been hotly contested in recent years. The government’s position is that the RBI’s reserves are in excess of reserves typically held by central banks elsewhere. Some commentators have described the government’s position as an attempt to ‘raid the reserves’ of the RBI to fund its fiscal deficit. The suggestion seems to be that the RBI has cash which the government wants to steal for its own purposes.
•This is a crude mis-characterisation of the position. The RBI’s reserves fall into two categories: revaluation reserves (which have mostly to do with the change in the rupee value of the RBI’s holdings of gold and foreign currencies) and contingent reserves (which represent plough back of a portion of the surplus earned by the RBI every year, the remaining portion being transferred to government as dividend).
•Contingent reserves are intended for risks related to the RBI’s balance sheet. Let us suppose that these should not be touched. Revaluation reserves are an accounting entry. The RBI can reduce some of the revaluation reserves on the liability side and extinguish an equivalent value of government securities on the asset side. The latter step would lower the stock of debt owed by the government. This would provide headroom for the government to raise debt for meeting its future expenditure (including recapitalisation of public sector banks).
•So, yes, reducing reserves enables the government to spend — but not by stealing the RBI’s cash! It’s an idea that merits consideration. Whether reducing reserves from their current level via the accounting entries indicated above is appropriate for the RBI is for the proposed committee to judge.
Flow of bank credit
•The other outcomes at the RBI board meeting have to do with increasing the flow of bank credit and easing the problems of borrowers, especially small and medium enterprises (SMEs).
•Banks are subject to capital adequacy requirements — that is, they have to hold a minimum of capital against every rupee of loans they make. The RBI’s requirement of capital adequacy is one percentage point higher than that of the internationally accepted Basel norms laid down by the Bank for International Settlements. The government would like to align Indian banks’ requirements with the Basel norms as that would reduce the demands for capital made on it by public sector banks (PSBs).
•The RBI did not yield on this point at the recent meeting. However, it has agreed to defer an increase in the capital requirement of banks of 0.625% under another head by one year. This does give the government some breathing space in respect of additional infusion of capital into PSBs.
•The RBI has also agreed to consider the government’s suggestion for easing the norms for Prompt Corrective Action (PCA) for banks. The PCA imposes restrictions of various kinds on banks, including restrictions on lending for the weakest banks. The idea is that banks that are very weak should not create problems for themselves by making more loans. They should focus on getting their balance sheet right by reducing costs, selling some of their non-core assets and the like.
•This is fine in principle. However, if many banks face lending restrictions for a prolonged period, it could create serious problems for the economy. Large corporates could get into distress because of their linkages with distressed SMEs. So can the healthier banks that are exposed to these corporates. To use the jargon, a PCA regime has significant negative externalities. A relaxation in PCA norms, by translating into higher credit flows, could relieve stress in the broader economy. This also applies to the decision, approved at the meeting, to allow restructuring of SME assets of up to ₹25 crore.
•The strident demand to enhance flows to non-banking financial companies (NBFCs), which was heard ahead of the meeting, finds no mention in the press note. It appears that the difficulties in rolling over NBFC debt that followed the collapse of Infrastructure Leasing and Financial Services (IL&FS), a leading NBFC, have abated somewhat. Evidently, the RBI was able to make a persuasive case on this point at the meeting.
•It is the broader message of the November 19 meeting that is reassuring. As a public institution whose actions have enormous welfare implications, the RBI management cannot rule by fiat. Its actions must flow from a consultative process. It must explain and justify its actions. It must be seen to be accountable. The RBI board could be an important mechanism for ensuring that these conditions are met.
📰 A virtual climate summit to cut carbon footprint
The event will be the first global political meeting to be held online
•World leaders will participate in an innovative climate change summit on Thursday that will take place entirely online so it is carbon neutral.
•The eco-friendly event stands in stark contrast to many other international political summits, which involve thousands of delegates jetting across the world to a venue where they stay in air-conditioned comfort.
•The Virtual Climate Summit is the brainchild of Marshall Islands President Hilda Heine, whose low-lying Pacific island nation will drown beneath rising seas if global warming continues unabated.
•Ms. Heine said the event — with participants including French President Emmanuel Macron, UN Secretary-General Antonio Guterres and Canadian Prime Minister Justin Trudeau — will be the first global political meeting to be held online.
•It will consist of a rolling, 24-hour livestream that will begin in the Marshalls’ capital Majuro, then include addresses from leaders and panel discussions before delivering a declaration.
•Ms. Heine said the cutting-edge setup was designed to show that even small nations such as the Marshalls could make a big difference on the world stage using creative, climate-friendly solutions.
•“If we can act, so can any nation,” she said in a statement ahead of the summit, which is being held by the 48-nation Climate Vulnerable Forum, headed by Ms. Heine.
•The virtual summit’s main aim is to encourage the international community to keep global warming to 1.5 degrees Celsius above pre-industrial levels.
•A UN report warned last month that threshold could be reached as early as 2030 unless there was unprecedented global action to rein in emissions.
•The latest round of UN climate talks, COP24, will open in the southern Polish city of Katowice on December 2 with the aim of reinvigorating the Paris agreement reached three years ago.
•Ms. Heine said the virtual summit was a chance for those on the front line of climate change to make their voices heard.
•“We don’t stand alone, people everywhere have awoken to climate perils,” she said. “Everyone’s way of life is under threat.”
•By contrast, organisers of the UN’s COP21 talks in Paris in 2015 estimated it generated 43,000 tonnes of carbon dioxide, although much of this was later offset through carbon-credit schemes.
