Author: Dr V

This is an issue that affects almost every citizen. Perhaps every Indian has had arguments on this which often end in acrimony. This is also an immensely political issue which crops up just before every major election. No doubt then, battles have been fought in courts, legislatures as well as on streets. At one point it took a very ugly and vicious turn and threatened to tear apart entire fabric of society.

Yes, we are talking about issue of reservation in jobs and educational institutions. We will limit our arguments to legal and constitutional angles and some politics (can’t help it) without going into philosophical and practical desirability or otherwise of such provisions.

Before we analyse Parliament and Supreme Court back and forth on the issue of reservation, let’s have a look at relevant constitutional provisions as they existed before amendments.

Article 15

Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth

• (1) The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them
• (3) Nothing in this article shall prevent the State from making any special provision for women and children

Article 16

Equality of opportunity in matters of public employment
(1) There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State
(2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect or, any employment or office under the State
(4) Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favor of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State

Article 29

Protection of interests of minorities

(2) No citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.

Article 46, a DPSP

• Promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections
• The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation

Article 335

• Efficiency in administration
• The claims of the members of the Scheduled Castes and the Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration.

Article 340

Appointment of a Commission to investigate the conditions of backward classes.

Note that I have highlighted the word “only” every time. “Only” here implies that state can not discriminate on religion, race, caste etc only but can discriminate on other grounds.

Now let’s come back to the courts

#1. Champakam dorairajan v/s state of madras

She challenged madras govt orders of caste quotas in medical colleges-

1. Discrimination based only on caste not allowed under Article 15
2. Discrimination in admission to public funded institutions not allowed (Art. 29)

• Government claimed it was following instructions given under Art. 46
• But court concluded that Fundamental Rights trump DPSP and quashed the unconstitutional order related to reservation

Predictably parliament passed 1st CAA (Constitutional amendment)

Along came art 15 (4)

Nothing in this Article or in Clause 2 of Article 29 shall prevent the state from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes.

Public sort of accepted the reservation but governments can take people for a ride, right! Mysore increased reservation to 68%.

#2. Balaji vs State of Mysore

Argument was that extravagant quota was a fraud on constitutional policy of reservation.

Supreme court concurred and balanced the competing interests of rewarding merit and uplifting weaker sections by prescribing 50% limit.

Court also held that whole caste was an important criteria it could not be the only criteria to ascertain backwardness since other religions did not have caste.

#3. In comes the Mandal commission

• In pursuant of art 340, president set up 1st backward class commission known as Kaka Kalelkar commission in 1953
• It identified more than 2000 castes as backward on the basis of education, employment, trade and occupation and most importantly position in traditional Hindu caste system
• Obviously recommendations were consigned to respective dustbins and states were left free to frame their own criteria
• Janata party had promised to constitute 2nd backward class commission and Morarji desai appointed a Commission under B.P. Mandal. It applied 11 relative indicators under 3 broad groupings, social, educational, and economic and came to conclusion that more than 3700 Castes were backward.

Following points are to be noted:

1. 1st commission had identified about 2000 castes as backward
2. Last caste census was conducted in 1931. Basically we were data which was 50 years old
3. It inferred 52% of the population as OBC which nobody took seriously

To not breach 50% ceiling it recommended 27% reservation in jobs including govt aided pvt. firms as well as educational institutions.

By the time recommendations came, Janata govt had already fallen. Indira Gandhi consigned it to the same fate as earlier recommendations.

Now some politics

In 1990 when V.P. Singh’s corruption crusade was going nowhere, he played the master card of Mandal. Well if one govt order can get 52% of population voting for you, who would need support of kisan leaders like Charan Singh.

He released 2 office memorandums:

1. 27% reservation for OBCs in govt. jobs
2. 10% for economically weaker among general. It was to blunt the criticism from upper castes.

These announcements provoked unprecedented violence, protests and rioting in northern India. Rajiv Gandhi had shown the younger generation the dreams of 21st century but India seemed to be in drift. Corruption scandals had left them disillusioned. Now their whole career was at stake. They boycotted classes, torched vehicles etc. It took an ugly turn when in a tragic incident, Rajiv Goswami, student of Hindu college, DU immolated himself in public in front of live cameras. This sparked off a series of over 100 immolation. Whole nation was horrified. Unsure of whether to support or oppose reservation, Advani started his rath yatra. Shah Bano case had already polarized the communal atmosphere. Rest is a very tragic story which will be told some other day.

Rest continues in the next post of this series. Want to read more?

• Part 5 | Supreme court of Hinduism?
• Part 4 | Whose law is it anyway?
• Part 3 | Where Procedure is Due
• Part 2 | Evolution of Indian constitution
• Part 1 | Interpreting our constitution

https://www.youtube.com/watch?v=tx2rVJ-8Q0M

Context: PM K.P. Oli’s 6 days B/L visit to India

Q. What is the significance of this visit?

• 1. This will be his first B/L visit since assuming office, immense symbolic value in the sense that Nepal values relationship with India.
• 2. The visit comes in the backdrop of Madhesis ending their crippling protests and blockade that had soured the bilateral ties. It would be thus aimed at bringing ties back on track.

Q. What was the reason for blockade?

Madhesis living in plains area adjoining open border with India felt the constitution of Nepal gave them a raw deal.

Some important points of contention were-

• 1. Most important is demarcation of federal provinces. MAdhesi demand is for 1 Madhesh 1 pradesh but what they got in return was gerrymandering of provinces.
• 2. Madhesis sought representation on the basis of population but in interim constitution population weightage was diluted in favour of area.
• 3. They demanded more seats on the basis of proportional representation but got lesser seats under it.
• 4. only citizens by descent will be entitled to hold the posts of President, Vice-President, Prime Minister and other top posts. It will discriminate against Madhesis who have acquired citizenship by birth or naturalisation.
• 5.Foreign woman married to Nepali citizen will not acquire automatic citizenship.  Again against the interest of Madhesis.

In effect hitherto marginalized Madhesi community was not given its due under the democratic set up. to pressurize the ruling elite, they blockaded the trade routes.

Q. In this internal political battle, why was India blamed?

• Nepali nationalism is based on anti Indianism and ruling elites have used it to hide their own inadequacies.
• Nepal charges that India is tacitly supporting Madhesis in blockade while we have always maintained that it is an internal issue which has to be politically resolved.
• we have conveyed our concerns which were needed to be conveyed for any conflict in tarai spills over into India across the open border.

Q. So why has protest been called off now? Have Madhesis achieved their aims?

Sustaining protest for such a long time is very difficult. So a combination of factors led to withdrawal of blockade

• 1. Passing of  2 constitution amendment bills which addresses two key demands of the Madhesis – proportionate representation and seat allocation in the Parliament on the basis of population.
• 2. Fatigue
• 3. Internal divisions in Madhesi morcha
• 4. Willingness of govt to concede more demands

But it’s only a temporary lull. Key demand of demarcation of federal provinces has to be met, otherwise movement will resurrect.

Whole Madhesh is radically politicized like never before.

Q. In this whole episode, India Nepal ties have taken a beating. What did India do wrong?

As earlier stated, Nepali nationalism is based on anti Indianism.

With the advantage of  hindsight it can be said that, sending of foreign secretary just before promulgation of constitution was a wrong move. It gave lever to Nepal to tell the world that India is behaving like a big brother, interfering in internal affairs while on the Indian side critics claimed New Delhi was sleeping till then.

Overall India did not do much wrong. It conveyed its concerns which were needed to be conveyed.

Q. What’s the way forward? How can India respond without being seen as intrusive? What about China card that Nepal plays?

India needs to stay course. Any trouble in Tarai is not in our long term interest, we need to convince Nepal with back channel diplomacy that it’s in their own interest.

China card is past its expiry date. Nepal can not fight geography. At the same time we need to be mindful of  Nepali sensitivities.

Q. Finally what is expected from the visit?

1. 2 MOUs operationalising 1b$ of credit already announced and 1b$ for earthquake assistance.

2. Hopefully genuine honest stock taking exercise will be done and relationship will be put on even keel.

Hello friends,

Written result of civil services mains examination has been declared by UPSC

Congratulations to all the successful candidates and best wishes for the personality test.

Those who have not been able to make the cut, this is not the time to get disheartened. Go out and enjoy for a few days and come back refreshed and raring to go. Take your best shot at this year’s examination. All the best for all your future endeavours.

All the aspirants who appeared in the written exam are requested to share their result with the optional and past performance  if they had appeared in the exam before as well.

Best wishes

Context: Make in India week was organised in Mumbai.

Q. What’s the significance of such events?

• 1.  Such events are very important as they put together under one roof major investors and entrepreneurs from developed and developing world with Indian investors and policymakers.
• 2. It provides opportunity for collaboration between Indian and foreign investors.
• 3. Policymakers can directly address their concerns and present India as a prime investment destination

Q. Capital goods policy was announced in the event. Tell us it’s salient features.

Copy Pasting from our news card

If you want to know how it wall started, go back here.

Having analysed a very sensitive issue of uniform civil code, we now move to discuss even more fundamental and more nuanced issue of intervention by the state and its courts in our religious affairs.

Being a deeply religious society, questions pertaining to religious freedom such as  whether or not freedom of propagation of religion implied freedom to convert, constitutionality of religious shrines excluding women from sanctum sanctorum etc have constantly come up in courts. When courts sit in judgement over these issues, question arise on appropriateness or otherwise of secular courts interpreting religious scriptures and deciding what’s essential religious practice and what’s not.

These are not irrelevant questions. They hit back to the fundamental values on which our Republic was founded upon. They involve conflict among various rights and hence are interesting (and important) to follow up.

Before we analyse these issues, let us have a look at some appropriate constitutional provisions.

Article 25

Freedom of conscience and free profession, practice and propagation of religion

Article 26

Freedom to manage religious affairs

Subject to public order, morality and health every religious denomination or any section thereof shall have the right

From above it’s very clear that freedom of religion is not absolute freedom but – 

1. Subject to public order, morality and health
2. State can regulate secular activities associated with religion
3. State can intervene for social welfare
4. State can throw open Hindu temples of public character
5. Administration of property has to be in according with law

Note here that only Hindu (not Muslim or Christian) institutions and public (not private) institutions can be thrown open to public.

Now question arises as to why so many restrictions on religious freedom in a liberal democracy. Answer was provided by Dr. Ambedkar

The religious conceptions in this country are so vast that they cover every aspect of life, from birth to death. There is nothing which is not religion and if personal law is to be saved, I am sure about it that in social matters we will come to a standstill.

In other words, a strict separation between religion and state would have prevented the Constitution from carrying out social revolution.

Now let’s come back to the courts

#1. Ram Prasad Seth v/s state of UP (1957)

UP Government regulations prohibited bigamous marriages to those in public employment and they were challenged on the grounds of Article 25.

What was the argument?

Some senseless argument essentially stating there are some rites which could be performed only by sons and if 1st wife could not deliver son, marrying for the 2nd time was essential to live according to Hinduism.

No gifts for guessing, Allahabad high court quashed the petition but in the process it invented a doctrine called essential religious practice.

Note here that court could easily quash the petition on social reform ground but nevertheless it chose to invent a doctrine.

#2. Queshi v/s state of Bihar (1958)

The doctrine was lapped up by the supreme court. It held that the sacrifice of a cow on the occasion of Id was not an essential religious practice for Muslims. There was no social reform agenda here.

Since than doctrine has spelt out the outer limits of what could be called the sole domain of religion. It has been applied countless times, most recently by Rajasthan high court in Santhara judgement. Again there was no question of an intended social reform for state to intervene in religious matters.

In other jurisdictions, the Court only asks whether a particular practice is “sincerely held” by its adherent, a question that requires it to go into the adherent’s past behaviour and conduct, but not into the substantive nature of the practice itself.

Now let’s come to the question of entry of women into temples – that is under consideration of supreme court

Argument for goes something like this –

1. Violates right to equality (art 15)
2. Violates right to freedom of worship of women devotees (art 25). But the right to worship does not extend to worshiping in any and every place
3. State responsibility to throw open hindu temples
4. Excluding women is not an essential religious practice. Well, it’s customary practice going on for hundreds of years

But it’s available only against public temples.

In 1993, the Kerala High Court held that the management of the temple could restrict access to women who were in the 10-50 age group. This is what they opined – 

“restriction imposed on women aged above 10 and below 50 from trekking the holy hills of Sabarimala and offering worship at Sabarimala Shrine is in accordance with the usage prevalent from time immemorial,” and that as such not violative of Articles 15, 25 and 26 of the Constitution of India.

Clearly there is conflict between art 15  and art 25 and 26. Which one should prevail?

If you recall article art. 25, it is subject to other provisions of part 3 of constitution. Article 15 is part of part 3. Let’s wait for supreme court judgement.

Similarly issue is going on with regard to entry of women in Shani Shingnapur temple and Haji Ali mosque. There argument is that women were allowed to go to every part until few years back. Clearly, some clerics don’t want equal rights for women. Matter remains subjudice.

#3. Ghar vapasi and conversion

Religious conversion is a very sensitive issue in India and different communities have accused each other of conversion under duress or by allurement. Mass conversions sometimes create law and order problem.

In this context M.P and Odisha passed anti conversion laws under which –

1. Intimate the District Magistrate every time a conversion takes place
2. Prohibit — and impose criminal liability on — conversion or attempt to conversion by the use of force or by inducement or by any other fraudulent means.

#4. Rev. Stainislaus v. State of Madhya Pradesh

On the ground that freedom of propagation implied freedom to convert.

Court interpretations –

1. “propagate,” mean transmitting or spreading one’s religion by an exposition of its tenets,” but it does not include the right to convert another person to one’s own religion
2. There is no fundamental right to convert another person to one’s own religion because if a person purposely undertakes the conversion of another person to his religion, as distinguished from his effort to transmit or spread the tenets of his religion, that would impinge on the ‘freedom of conscience’ guaranteed to all the citizens of the country alike.”

Of course there’s criticism that governments targets minorities through these laws.

Similarly question of state interference in religious affairs arise when government subsidizes haj pilgrimage or kailash mansarovar Yatra.

Supreme court has held such subsidy as constitutional though it directed govt to abolish haj subsidy. it again cited from Quran.

Now, it’s time for some thought questions

1. Religious traditions often respond to external interventions by growing more conservative and resisting reform. To what extent then is state intervention desirable in religious affairs?
2. India might be the only republic where the judiciary can pronounce on matters not only relating to law, but also those concerning theology. To what extent is it appropriate for secular courts to interpret religious scripture?
3. The Constitution does not mention the term “essential religious practice”: it grants protection to the right to practice, profess and propagate one’s religion, not just to engage in the “essential practices” of religion. To what extent is it right to restrict religious practices to essential practices as defined by supreme court?
4. What’s the best way to reconcile right to freedom of religion with right to non discrimination?
5. In what respects Indian secularism different from western concept of secularism?

Context: In a historic decision Telecom Regulatory Authority of India (TRAI) barred differential pricing for data over internet a few days back.

Q. What was the main issue before TRAI?

Whether or not differential or discriminatory data pricing is permissible or not. For instance, in Airtel Zero package, for a few sites and applications data charge would be borne by app maker and no consumer. In Free Basics Platform, only certain sites were provided for free.

Q. What’s the problem with that? To me, it looks like such a great idea. Something is better than nothing, right?

It’s not such a great idea because

1. It compartmentalizes internet into walled gardens, where some people will have access to whole internet, while others only to certain sites vetted by corporations.

2. Eventually those people might come to think that Facebook is internet, it will hamper growth of internet and it’s open architecture.

3. Internet is based on network economy and it will benefit only those few websites in walled garden.

4. There are no free lunches in this world. This whole free thing is ultimately based on the data economy and people who sign up for these free things may not even be aware of what data and meta data they may be parting with.

5. In the context of huge information asymmetry between ISPs and consumers, it’s absolutely essential for Govt to protect consumer interest.

Add to these run of the mill points such as

Internet giants could easily afford to participate in such programs, putting new players at a disadvantage.

Q. What do supporters of such free programmes have to say about all this?

1. Poor unconnected were getting to access some sites, they will lose access to those.

2. Broadband penetration is abysmally low in India (ranking 141/165). It will help improve internet penetration.

3. There are studies that confirm that giving access to a few sites make people make a move towards whole internet.

4. Zero Ratings is a legitimate business practice. Even FCC (US version of TRAI) has not banned it but said it will review zero rating platforms on case by case basis.

Rebuttal– There are no independent studies. All such studies are done by academics paid for by corporate. Founder of WWW Tim Lee opposes such practices.

Q. So what’s the way forward? How can broadband penetration be increased in India?

1. Use Universal Service Obligation Fund (USOF) to give certain amount of free data to every consumer.

2. ISPs can give free data say 250MB one time free without creating walled gardens to get people on board.

3. Timely roll out of optical fibre and connection of all gram panchayats using Bharat Net project.

Q. So is this all about net neutrality?

1. No, discriminatory pricing is only a small but very important part of net neutrality.

2. Other aspects include no blocking, no throttling, no filtering, no slowing down, no fast lanes.

Net neutrality is a concept that says a public network should treat allcontent, sites, and platforms equally.

Q. What’s government doing about those aspects of net neutrality?

1. Govt. has promised on the floor of house to bring a comprehensive legislation covering all aspects of net neutrality.

2. In this regard govt needs to protect interest of teeming millions who are yet to connect to internet. Success of digital India mission will depend on this.

Remember ,The idea behind net neutrality is simple – treat all sites equally to give everyone a fair chance at growth, and reject the idea of monopolies.

PS– I would strongly suggest everyone to read the explainer and story on net neutrality from the links given below. After that, you don’t need to read anything extra on net neutrality for exam purpose.

https://www.civilsdaily.com/free-basics-is-it-digital-divide-among-people/

Net Neutrality & The Debate Around It

Context:  Trans Pacific Partnership (TPP ) was signed in NZ last week.

Q. Give us a broad overview of TPP. ( names imp for prelims)

1. The Trans-Pacific Partnership (TPP) is a trade agreement among twelve Pacific Rim countries which include

4 ASEAN memebrs Malaysia, Singapore, Brunei ,Vietnam

7 RCEP members  4 ASEAN above + Australia, New Zealand, Japan

5 American countries Canada, Mexico, United States, Chile, Peru (3 from North and central America + 2 from South America)

2. They represent 40% of world economy and 26% of global trade

Q. What are the objectives of this deal?

1. Stated objective is dismantling of tariff and non tariff barriers and thus boosting trade and prosperity.

2. Unstated objective is to liberalize capital movement and make the world safe for transnational capital.

3, Even more importantly it is sought to be projected as a model for future trade deal.

Q. What are the geo strategic calculations behind this deal?

1. US wants to retain its domination of global economy and Asia pacific.

2. It’s part of US pivot to Asia or rebalancing as it was later called.

Q. What is China’s response?

1. Promoting its own trade deals like RCEP, regional comprehensive economic partnership and  FTAAP, free trade area in Asia Pacific, both of which seems to be going nowhere.

2. On strategic side One Belt One road, OBOR

Problem for Chian is that xinxiang is pivotal to overland project while south china sea and malacca strait are pivotal to marine project and china has major weaknesses at both places.

Q. What are points of concern with regard to TPP?

1. Short answer is investment ,ipr, labour and environmental standard which are much more stringent than WTO.

2. They are in effect technical barriers to trade, so called non tariff barriers.

3. IPR which are TRIPS plus will make ever greening of branded drugs possible and would lead to higher cost of medicines.

4. Data exclusivity clause will make it even more difficult for generics to come into market.

Q. You also talked about investment protection. What is this issue about investor state dispute settlement?

Under this rule private sector can prosecute states for loss of profit because of govt policies. Very limited exemptions are available on grounds of public health, environment and public order.

Similar provision is being negotiated in TTIP, Transatlantic Trade and investment Partnership and German judges have already issue declaration that this kind of arbitration is unacceptable.

Q. What should be India’s response now?

If we join TPP national treatment would help our pharma companies and ITES companies due to freedom of travel. visa issues will be sorted out.

Theoretically it is easy to say we should have been there, watering things down, build greater relationships, be part of global value chains, extend our act east policy but the fact remains that we have not been able to digest WTO. We need deep reform in so many areas. We are not at all even at stage of thinking of joining.
Reforms internally, build consensus around WTO, sign RCEP and Free trade deal with EU.

Context : A report in Indian Express that banks have written off  many zeros ( lesser than 2G scam though) of debt in last 2 years.

Q. What is the state of banks in India at present?

1. Situation is very alarming with mounting bad loans.

2. Bad loans haven’t bottomed out. They are only going up and expected to reach up to 6.5% from more than 5% right now in a year.

3. Bad loansn are putting strain on return on asset, profitability.

4. Substantial erosion in the valuation of banks. Valuation of all PSBs is half of private banks. It will put problems in bank recapitalization.

Q. Why are NPAs rising?

1. General economic downturn. Sectors such as steel, commodities even infrastructure are feling the pinch.

2. Policy paralysis leading to stalled projects.

3. Improper management of loans by the banks leading to assets remaininh underutilized.

4. Crony capitalism.

5. Judicial system which take years and years to resolve cases and in the process all the value of asset is lost.

Q. But why the pace has increased in last few quarters?

1. RBI governor has asked banks to clean up the balance sheets by march 2017. Earlier loans were not being shown as NPAs, now same loans are being shown as NPAs.

2. General economic downturn esp commodity collapse

Q. Why is situation of public sector banks so alarming compared to private sector banks?

1. Social banking distorts public sector culture.

2. Loans under various political compulsion.

3. Crony capitalism, political interference. They have to back up govt policies.

4. Do not have autonomy. They have to act counter cyclically i.e. lend more at the time of general economic downturn to turn the economy around.

Q. But why the write off ? Will any good come out of it?

1. Balance sheets will be cleaned up. Actual state of NPAs will be out in public domain.

2. At present banks linger on with bad loans, do not classify that as NPA, keep on lending to repay the loan, eventually promoters lose interest. So called ever greening the loans and extend and pretend policy.

3. Beside write off, must include infusion of promoter equity and appropriate govt policy to resolve sector wise problems like debt of state electricity board.

Q. What is the way forward now?

to recover existing loan

1. Pass the bankruptcy code.

2. Create Asset Restructuring company (ARC) backed by govt and RBI and let it be handled by professionals.

3. Though standing committee reports that Corporate Debt Restructuring(CDR) has failed, where CDR is done, throw the old management out and run those companies by professionals.

On long term basis

1. Let PSBs run on commercial lines, give them autonomy and ensure day to day functioning is handed over to professionals without govt interference.

2. Provide subsidies via budgetary provision, don’t ask banks to subsidize.

3. Delink banks from deptt of banking to avoid political interference.

Now it’s mandatory to pass all the credit information to Credit Information Bureau of India Ltd. (CIBIL) and find out standing of promoters, company before sanctioning any new loan. make this institution even more effective. It will bring transparency and sunlight is the best disinfectant.

Video discussion is in Hindi. Because the issue is very important, it has been translated and discussed here in English.

Context: 10 Indian soldiers martyred in an avalanche on Siachen glacier a few days back.

Q. Tell us a few things about Siachen?

1. It’s world’s highest battlefield.

2. Outside of polar region, it is world’s longest glacier(76km)

3. It is a disputed region being a part of Kashmir.

4. It was considered so inhabitable that its coordinates were not even demarcated during Karachi agreement (1949) and shimla agreement.

5. The Glacier region is not just the glacier per se but includes the Saltoro Ridge, a crucial mountainous stretch which acts as a watershed.

Q. What’s the dispute over this region?

Dispute is as to which side (India or Pakistan) this glacier belongs to.

1. The origin of Siachen dispute lies in the fact that both the Karachi Agreement of 1949 and the Shimla Agreement of 1972 have left the status of Indo-Pak boundary vague North of Pt NJ 9842.
2. While the Karachi Agreement says, “From Pt NJ 9842, the ceasefire line will run Northwards to the Glaciers”, Shimla Agreement does not even make a mention of it.’
3. Pakistan, on the other hand, believes that the alignment of the boundary runs in a north-easterly direction to the Karakoram Pass.

This conflicting interpretation is the source of conflict.

Q. When so many soldiers die due to extreme weather, why don’t we come to an understanding and vacate the post?

It’s true that it costs us 5 crore daily and  more than 1000 soldiers have martyred due to avalanche and extreme conditions, we can’t even think of vacating the posts due to its strategic significance.

1. The Saltoro Ridge overlooks the area of Gilgit–Baltistan of Pakistan Occupied Kashmir (POK).

2.  It guards the routes leading to Leh, the principal town and capital of Ladakh.

3.  it overlooks and dominates the Shaksgam Valley, which was illegally ceded to China by Pakistan

4. it is close to the Karakoram Pass through which the Karakoram Highway passes connecting Gilgit-Baltistan to Xinjiang Province of China.

Before thinking of vacating the posts, we should question ourselves whether the reasons for which we went there in the 1st place, for which 1000s of soldiers have lost their lives, still exist or they have disappeared. Short answer is situation is even more complex now with the unwarranted entry of the PLA in the garb of road builders, and the administration in the Northern Areas and the POK.

Q. So why did we go there in the 1st place?

1. Pakistan had been sending expeditions there and giving passes to foreign expeditions in effect trying to establish it’s sovereignty there.

2.  Pakistan was buying high altitude equipment to occupy the heights. Fortunately, same company which supplied equipment to India also supplied them to Pakistan and India came to know about it.

3.  To thwart the Pakistani designs to occupy the undemarcated region, India troops had to occupy the heights and passes in 1984 (Operation Meghdoot)

Fact remains if we vacate the posts, Pakistan will occupy them the next week and it will be next to impossible for us to dislodge them from there.

Q. So what’s the solution? I thought, it was considered a low hanging fruitt.

1. Alternative is demilitarisation with a bilateral agreement not to reoccupy the heights at any cost and eventual delimitation or demarcation.

2. Pakistan demands demilitraisation 1st followed by demarcation while India wouldn’t demilitarize without delineating teh actual ground position line (AGPL) first. Who can trus pakis!

3. Ultimate solution is solution of Kashmir issue. siachen is part of kashmir. We need holistic solution, piecemeal solutions won’t do.

The basic issue is of lack of trust which will not be addressed by withdrawal and may not lead to delimitation.

Context: MGNREGA scheme just turned 10 years old.

Q. What are some of the salient features of this scheme which made it different from other government schemes?

1. It’s a ground up, not a top down scheme. Even the law was passed on demand of people.
2. This is a demand driven scheme not supply driven i.e. if people demand work, govt can not deny them work.
3. Self selecting, no apl/bpl funda. Rich would not be willing to do hard manual labour.
4. Inbuilt provision of social audit

Q. How successful the scheme has been?

1. It has made a fundamental difference in the lives of poeple, it could have made more with more govt support.
2. Generated employment in the countryside and prevented distress migration.
3. It has created assets in the villages, improving agriculture productivity.
4. Raised rural wages.

Fact is where it runs well, it has achieved great things, where it doesn’t run well, it has given people bargaining power, dignity, a sort of marketing mechanism.

Q. What are the concerns articulated by critics?

1. Money is being allotted for earth work (temporary work), not for creation of permanent assets. Dig the pits, fill the pits.
2. Work design is very poor. For instance, wells are dug on impermeable surface. Project completion rate is poor.
3. Huge corruption in implementation, fake job cards etc.

We need to link this scheme to skill development and focus on creation of permanent assets which increase productivity.

Q. What are the concerns raised by the proponents regarding implementation of scheme?

1. A demand driven scheme can not run without money. Govt is killing the scheme by benign neglect.
2. Lag in issuance of work is dissuading people from seeking work. Demand is being artificially suppressed.
3. Linking of adhar to bank accounts will be a disaster. Biometric do not work in Indian conditions for manual labourers.
4. Person-day employment has come down.

Q. What’s the way forward?

1. Let us identify the problems that exist, let us overcome them.
2. There should be more participation. People should own the project. Empower the people.
3. Use social audit mechanism to weed out corruption.
4. There should be more frequent evaluation along with social impact assessment of the projects undertaken.
5. Prepare a proper plan according to which the work would be done. Work has to be prioritized.

Context: Government just released the list of 1st batch of 20 cities selected for the smart city project.

Q. What is a smart city?

1. Smart city is one that “enables a decent life to the citizens, and green and sustainable environment, besides enabling adoption of smart solutions”.

2. Smart cities would create virtually new business districts in several cities, marking a departure from the disaggregated urban development witnessed in the past.

Q. How was selection of these 20 cities done?

1. Selection was based on city challenge competition.

2. Selection process has been very transparent and competitive.

3.  It was a very rigorous process with detailed criteria and marking on 41 questions on template.

Q. Now that cities have been chosen, what are the issues on which further clarity is needed?

Smart cities will be developed by by a special purpose vehicle (SPV). Clarity is needed on –

1. How will SPVs function?

2. How much of freedom of action will they get?

3. Where will they get funds from?

4. Interaction b/w civil services and elected municipal representatives?

5. Role of SPV and role of elected representatives need some clarity.

Q. What’s the concern with regard to role of SPV?

1. We seem to be handing over entire governance responsibility to SPV against the whole democratic framework.

2. Smart cities have to be led by mayors not bureaucrats and consultants. There is a democratic deficit.

3. There’s a provision that an officer from the central govt. will be appointed as executive in SPV who can only be removed from the permission of centre. In such circumstances what would elected representatives do.

Q. Then why is such model chosen and how does govt intend to hold SPVs accountable?

1. Municipalities don’t have the type of capacity to implement such projects.

2. Project selection itself will be in the domain of elected bodies. They will make the policies while SPVs which have the capacity will execute it.

3. SPVs are created precisely for the purpose that generation of resources is possible, there is accountability, results are delivered rather than process lingering on.

4. Will have to build a working system, SPV will have to be accountable to municipalities.

5. SPVs will be held accountable for generating resources, executing projects, deliver smart solutions.

Q. Where will funding come from?

1. For every city 500cr by centre, equal amount by state and roughly 1500cr by outside sources.

2. It is here that functioning of SPVs would be imp. Do they freedom to go out and generate resources?

3. But there are concerns that only way funding is gonna come from is real estate and prime land will be given to builders.

Q. There’s is also concern that already better off cities are selected which would result in even more regional disparity?

Yes. It’s true.

1. There’s too much focus on limited no. of cities, earlier programmes were open to all.

2. Northern belt and eastern belt is virtually empty.

3. Selection criteria itself favour better off cities.

State is supposed to help cities which are not up to the mark, have the potential are gonna grow but whole philosophy is reversed here.

Moreover they are planning to develop only a part of city in effect creating gated colonies. There will be only 1 pan city programme.

Counter argument is that whole city could not be turned smart overnight and one had to start from somewhere.

Q. What about consultation? Were citizens consulted in choosing area to be developed or amenities they would want in smart city?

Yes, consultation with citizens was imp. Citizens were involved in every process.

Counterargument- Consultation was a sham. Citizen were asked to give their opinions on FB, twitter and via email. In a country like India, this is no consultation.

Context: Chinese economy grew by 6.9% in 2015, slowest in a quarter century. IMF expects the Chinese economy to slow down to 6.3% in 2016.

Q. Why is China slowing down?

1. It was only expected for no economy can continue to grow at 10% forever. China is still among one of the fastest growing economy.

2.  As incomes rise, most economies encounter what is called a middle income trap. To come out of it, china will have to innovate.

3. Slow down in exports as world demand has slowed down.

4. Rebalancing away from exports and investment towards domsetic consumption.

5. Ageing demography

6. Moving away from GDP growth rate obsession to sustainable development.

Q. If slowdown was expected, why is China devaluing its currency?

1. Chinese policymakers want China to still grow at a faster clip hence further devaluation to boost exports.

2. Chinese currency being pegged to US$ had appreciated with appreciation of US$.

Q. Is Chinese restructuring proving to be painful? How deep a trouble China is in? What about its debt level?

2 aspects of restructuring

1. From investment towards consumption

2. From manufacturing towards services

Percentage of GDP coming from consumption has increased. Also in 2015, services sector grew faster than manufacturing at 8% and now accounts for 50% of GDP.

Restructuring will certainly be painful. Worst aspect is nobody believes Chineses numbers and many analyst believes China is growing at 4% not 7%.

Debt Crisis – China invested huge amounts after 2008 financial crisis and its growth since than has been on a credit boom. Debt to GDP ratio increased many times in such a short span and there are no historic parallel of such a huge rise in debt in such a short span of time.

Good news is most of the debt is internally owned. Bad news is nobody knows the scale of debt and who owes to whom.

Q. why is their sudden capital flight from China?

1. 700b$ have been withdrawn from China in last 1 year and prime reason being policy uncertainty. Nobody knows what might be coming.

2. Stock market is volatile, bank returns are very low, real estate market is no longer suitable for investment (ghost cities you know), Chinese are parking their funds abroad.

3. Yuan devaluation will make it even more attractive to park funds outside as purchasing power of Yuan goes down.

Q. How does Chinese slowdown affect world economy?

1. With a major source of demand going down, world economy is heading towards recession.

2. It majorly affects commodity exporting countries of Africa and latin America. China was after all buying about 50% of incremental commodity output.

3. With China moving towards competitive devaluation, bad bad news for world economy.

Q. What about India? Rajan says not good for India while Jaitley says opportunity for India?

Jaitley’s / Pangariya’s view point

1. China slow down # commodity prices down # india major importer # good for India as forex outgo decreases plus input costs come down

2. Investment going towards China shift to India

3. We anyway don’t export much to China so our exports to china can’t go down any further.

4. We don’t compete with China in very many markets.

If we can put our house in order, put in place right policies, predictable tax structure and leverage competitive advantage of low cost labour, we can become global manufacturing hub and provide jobs to 1m people entering workforce every month.

Rajan’s view point-

1. In a globally connected world, Chinese slowdown can not be an unmitigated blessing.

2. Crude prices down but it affects economies of gulf whom we export, our exports down,

3. Expats will lose jobs there, remittances will come down plus social tension of rehabilitating them back.

4. South East Asian nations who export to China will slow, they will not buy from us.

5. Global currency war will be a disaster.

In a globally connected world, we can not grow because others are slowing, we will have to growing by improving our productivity. World demand will only help our growth story.

Today onwards, we will try to discuss one RSTV or DD NEWS video everyday. We shall not restrict ourselves to issues discussed in video but take a more holistic look at all the issues involved in a very simple yet comprehensive manner. Doubts if any can be asked in the comment box below.

Please note that this is on best effort basis. An alarming lack of participation will see me packing my bags and going of to himalayas for nirvana or a frostbite (whichever comes first!)

Today we discuss causes and impact of falling oil prices.

Context : Crude oil price has been in free fall and Brent crude price has declined from 110$ a barrel in mid 2014 to 30$ a barrel.

Q. What are the reasons behind this sudden decline?

1. Glut in the market (increased supply)-

US shale oil, Rising production in post war Iraq

2.  Slowdown in demand for oil

Global slowdown, Chinese slowdown, climate change concerns

3. Tactic by S. Arabia to price out US shale producers

4. Geopolitical conspiracy theory– to punish Russia and Iran, both being heavily dependent on oil revenues

Q. Earlier OPEC used to cut supplies to stabilize the prices, why has it not done so this time?

1. S. Arabia is the swing producer. It can produce oil at 10$ a barrel. It declined to cut production to maintain market share.

2. After shale bonanza, US seemed to be withdrawing from middle east oil market, thus effectively from middle east geopolitics,  backing Saudis got from US will no longer be forthcoming in such a scenario. Saudi seems to want to suck US back into the equation.

Q. Will prices remain at such low level?

1. At very broad macro level, such prices reflect very weak global economy. Global demand is very muted. In fact almost all commodities are down. Global demand is unlikely to pick anytime soon. Prices are likely to hover around at 20 to 40$ a barrel.

2. After sanctions relief, Iranian crude will enter the market, Iraq is increasing its supply leading to further glut in the market and putting downward pressure on prices.

Q. What will be the impact of falling crude prices on Major oil producing nations?

They are in for a very tough time.

1. Russia is already into recession due to sanctions and falling prices.

2. S. Arabia is likely to run 20% budget deficit, yes 20%. IMF has warned that, at this rate, huge war chest of 1t$ of forex reserves will exhaust within 5 years.

3. Dubai has already started raising user charges.

Effect of all this would be breakdown of compact b/w state and citizen where citizens have sort of parted with their democratic rights in lieu of cheap services which would no longer be forthcoming.

Q. What will be its impact on emerging economies?

1. Most of them are oil importers. To the extent low prices bring down input costs, it will benefit them.

2. But low oil prices also reflect weakening of global demand and that harms emerging market exports.

3. World financial system is very petrodollar dependent. Pull out of sovereign wealth funds from markets would bring down stock market, that may have negative effect on demand through wealth effect.

Q. What would be its impact on India? How should India best utilize this opportunity?

1. Massive forex savings- 10$ decline in crude price improve our net trade or current account balance by 9.4b$.

2. Decreases our subsidy bill, this fiscal deficit.

3. Brings down input cost, increasing competitiveness and reducing inflation.

4. Govt. mop up revenue by increasing indirect taxes on petrol and diesel.

To take full benefit of falling oil prices, govt. need to use the money to boost public investment in infrastructure. It would generate demand in the short term while improving productivity growth in the long term.

Today onward, we shall discuss one RSTV or DDNEWS video everyday. We shall not restrict ourselves to issues discussed in video but take a more holistic look at all the issues involved in a very simple yet comprehensive manner. Doubts if any can be asked in the comment box below.

Today we discuss causes and impact of falling oil prices.

Context : Crude oil prices have been in free fall and Brent crude prices have declined from 110$ a barrel in mid 2014 to 30$ a barrel.

Q. What are the reasons behind this sudden decline?

1. Glut in the market (increased supply)-

US shale oil, Rising production in post war Iraq

2.  Slowdown in demand for oil

Global slowdown, Chinese slowdown, climate change concerns

3. Tactic by S. Arabia to price out US shale producers

4. Geopolitical conspiracy theory– to punish Russia and Iran, both being heavily dependent on oil revenues

Q. Earlier OPEC used to cut supplies to stabilize the prices, why has it not done so this time?

1. S. Arabia is the swing producer. It can produce oil at 10$ a barrel. It declined to cut production to maintain market share.

2. After shale bonanza, US seemed to be withdrawing from middle east oil market, thus effectively from middle east geopolitics,  backing Saudis got from US will no longer be forthcoming in such a scenario. Saudi seems to want to suck US back into the equation.

Q. Will prices remain at such low level?

1. At very broad macro level, such prices reflect very weak global economy. Global demand is very muted. In fact almost all commodities are down. Global demand is unlikely to pick anytime soon. Prices are likely to hover around at 20 to 40$ a barrel.

2. After sanctions relief, Iranian crude will enter the market, Iraq is increasing its supply leading to further glut in the market and putting downward pressure on prices.

Q. What will be the impact of falling crude prices on Major oil producing nations?

They are in for a very tough time.

1. Russia is already into recession due to sanctions and falling prices.

2. S. Arabia is likely to run 20% budget deficit, yes 20%. IMF has warned that, at this rate, huge war chest of 1t$ of forex reserves will exhaust within 5 years.

3. Dubai has already started raising user charges.

Effect of all this would be breakdown of compact b/w state and citizen where citizens have sort of parted with their democratic rights in lieu of cheap services which would no longer be forthcoming.

Q. What will be its impact on emerging economies?

1. Most of them are oil importers. To the extent low prices bring down input costs, it will benefit them.

2. But low oil prices also reflect weakening of global demand and that harms emerging market exports.

3. World financial system is very petrodollar dependent. Pull out of sovereign wealth funds from markets would bring down stock market, that may have negative effect on demand through wealth effect.

Q. What would be its impact on India? How should India best utilize this opportunity?

1. Massive forex savings- 10$ decline in crude price improve our net trade or current account balance by 9.4b$.

2. Decreases our subsidy bill, this fiscal deficit.

3. Brings down input cost, increasing competitiveness and reducing inflation.

4. Govt. mop up revenue by increasing indirect taxes on petrol and diesel.

To take full benefit of falling oil prices, govt. need to use the money to boost public investment in infrastructure. It would generate demand in the short term while improving productivity growth in the long term.

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For queries related to other subjects, use this thread for the time being.

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