14 Feb 2022: UPSC Exam Comprehensive News Analysis

A. GS 1 Related

Nothing here for today!!!

B. GS 2 Related

Category: POLITY AND GOVERNANCE

1. India non-committal on funding curbs on U.K. NGOs

Syllabus: Development processes and the development industry — the role of NGOs

Prelims: Foreign Contribution Regulation Act 2020

Mains: Critical evaluation of Foreign Contribution Regulation and its impact on the working of NGO.

Context:

U.K. officials requested India to reconsider its decision to deny Oxfam India’s registration renewal application under the Foreign Contribution Regulation Act (FCRA).

Foreign Contribution Regulation Act (Amendment), Act, 2020: –

• Foreign Contribution Regulation Act (Amendment), Act, 2020 has amended the FCRA 2010, which regulates the use and acceptance of foreign contribution by individuals and organizations.
• The Act prohibits foreign contribution for any activities that pose a danger to national interest.
• Know more about FCRA Act, 2020

Arguments Against the FCRA Amendment Act 2020: –

• The FCRA 2020 amendments have placed steep obstacles for Non-Governmental Organizations (NGOs) to receive foreign funding.
• It has been argued that these restrictions will hamper the functioning of NGOs and add difficulties in receiving foreign funds.
• The Amendment was challenged under Articles 14, 19 and 21 as the blanket requirement to open an account at one specific SBI branch serves no rational purpose, violating the right to equality.
• Further, they argue that the Amendment lacks a legitimate objective and has a disproportionate impact on NGOs.
• FCRA 2020 amendments will overload the NGOs with new bureaucratic tasks, and open the floodgates for arbitrary, vindictive action by the authorities.

C. GS 3 Related

Category: ECONOMY

1. Center readies for LIC listing, to offload 5% stake in insurer

Syllabus: issues relating to mobilization of resources, growth, and development.

Prelims: Initial public offering (IPO);  Life Insurance Corporation (LIC)

Mains: Significance and challenges with LIC IPO and its impact on Economy

Context: The government is planning to sell 5 percent of its stake in Life Insurance Corporation (LIC), through an initial public offering (IPO).

What is the Issue?

• LIC Initial public offer comprises the net offer, the employee reservation portion and the policyholder reservation portion.
• The IPO works out to five per cent of the total capital shares with the government retaining the remaining 95 per cent.
• The IPO is an 100% OFS [offer for sale] by the Government of India and entails no fresh issue of shares by LIC.
  

What does it mean for the government and LIC?

• Benefits For Government:
  • The government will be entitled to the entire proceeds of the offer after deducting the offer expenses and relevant taxes thereon. LIC will not receive any proceeds from the offer.
  • It will be a big boost to the government’s revenues and aid in bringing down the deficit.
• Benefits For LIC:
  • The listing of the shares means higher visibility and profile.Investors will be able to actively trade in its shares on the stock exchanges.
  • It also means more transparency from the LIC side which was hitherto answerable only to the government.
  • LIC will be accountable to the investors and meet their expectations.
  • Investors are expected to demand a high level of corporate governance from the corporation.

LIC IPO: Impact on Economy

• The LIC IPO is an “excellent development” not only for India’s capital markets, but also for the country’s economic growth.
• A good listing could help LIC raise as much as $10 billion from the IPO, with a minimum dilution of 5 per cent.
• In such a scenario, it would be the third biggest IPO globally involving an insurer.
• It will help the government substantially reduce its disinvestment target deficit for the ongoing fiscal year.
• The massive listing could result in an expanded market capitalisation of the Indian market with greater liquidity.

What are the challenges to the issue?

• Inflation has been a growing concern worldwide and the central banks around the world are looking to raise the interest rates.
• The equity markets are likely to remain under pressure in the near future.
• A rise in interest rates in the US and in other developed markets would mean that Foreign portfolio investment(FPIs) will pull out money from emerging markets especially from the equity markets and move them into US treasury bonds.
• It will put pressure on the secondary market but even reduce the liquidity availability for investments into primary market issuances.
• A decline in equity markets in the near term would also reduce the government’s ability to command a higher premium for the issue.
• In order to help a large issue sail through, the government may have to settle down to a lower price in order to make it attractive for the investors.
• Investors will have to carefully look at the pricing of the issue and do their due diligence on valuation.

D. GS 4 Related

Nothing here for today!!!

E. Editorials

Category: POLITY

1. The era of combative federalism

Syllabus: Issues and challenges pertaining to the federal structure

Mains: Threats to the federal principles of the Constitution in India.

Context

The proposed amendments to the Indian Administrative Service (Cadre) Rules of 1954 have brought the debate on cooperative federalism into the limelight.

Background

• The amendments proposed by the Department of Personnel and Training, are said to be against the federal structure of the constitution as they take away certain powers from the state governments.
• States like Tamil Nadu, Kerala, West Bengal, Jharkhand, Rajasthan, Chhattisgarh and Telangana have objected to the amendments.
• The proposed changes are said to be examples of the evolution of the combative nature of federalism in India.

Read about the Proposed amendments to the IAS (Cadre) Rules-1954.

Cooperative Federalism

• Cooperative Federalism in India reflects an ideology of a stable relationship between the centre and other units.
• Cooperative federalism means cooperation and interdependence between the Centre and the States to ensure smooth governance of the country.
• It guides all the governing bodies to come forward and cooperate to resolve common social, political, economic and civic problems.

To read more about Cooperative Federalism in India

Shift from Cooperative to Combative federalism

• The term ‘combative federalism’ was used by a former Uttarakhand Chief Minister after his government was dismissed under Article 356.
• The shift of Indian federalism from cooperative to combative has been one of the major changes in Indian polity recently.

Combative federalism – Instances of control by the Centre over states

Recently, the centre has often seen wielding its power over the states through,

• The office of Governor
  • In 2016, the Governor of Arunachal Pradesh decided to advance the Assembly elections, leading to political turmoil in the State and then President’s Rule was sanctioned.
    • The Supreme Court intervened and held that the Governor’s discretion did not extend to the powers conferred under Article 174.
  • In Goa, Karnataka and Maharashtra, the Governor acted beyond his constitutional directions by inviting parties that did not have the adequate majority to form the governments.
  • In Rajasthan, the Governor refused to summon a session as desired by the Council of Ministers.
  • Dispute between the centre and the Delhi government over who should have control of the National Capital Territory of Delhi.
• All-India Services
  • The conflict was seen in West Bengal when the Chief Secretary was summoned to Delhi immediately after the Prime Minister’s to visit West Bengal following Cyclone Yaas. West Bengal Chief Minister was reluctant to accede to the Centre’s demand.
• Deployment of central investigative agencies
  • The deployment of central investigative agencies has also caused trouble to the federal principles.
  • The investigations by the Customs, the National Investigation Agency (NIA) and the Enforcement Directorate (ED) in issues arising from a gold-smuggling case in Kerala saw a major tussle between State and the Centre
  • Registration of an FIR by the CBI for alleged infractions of the Foreign Contribution (Regulation) Act that said that the Kerala government had received foreign contributions from the United Arab Emirates for a housing project also resulted in a face-off between Centre and State.
  • Recent events in West Bengal and Maharashtra also have impacted the federal structure.
  • Various States have withdrawn the general consent for the functioning of the CBI in their respective jurisdictions.

Court’s View

• The Supreme Court in Government of NCT of Delhi v. Union of India (2018) held that the idea behind the concept of collaborative federalism is negotiation and coordination so that differences that may arise between the Centre and the State can be resolved.
• The Court said that the Union and the State governments should attempt to address the common problems with the intention to arrive at a solution by showing statesmanship, combined action and sincere cooperation.
• The Supreme Court in Ajit Mohan v. Legislative Assembly, National Capital Territory of Delhi & Ors (2021) suggested that “for the system to work well, the Central Government and the State Government have to walk hand in hand or at least walk side by side for better governance.”

Conclusion

The framers of the Constitution incorporated federal principles to establish a sense of cooperation between the Central and the State governments. Encroachment by either of the units is strictly against the Constitution. Hence both the Centre and the States have to strive to work in coordination in the best interests of the people.

F. Prelims Facts

1. Chandernagore’s French heritage awaits facelift

Syllabus: GS1: Indian culture: Salient aspects of Architecture

Prelims: Chandernagore Heritage

Context: The Registry Building has been awaiting restoration for a long time.

Chandernagore Heritage:

• Registry Building is a two-storey structure at Chandernagore built in 1875.
• It is a symbol of the French settlement of the colonial town.
• The building is located on the strand opposite the Rani Ghat jetty on the banks of the Hooghly.

Chandernagore: –

• Chandernagore was also called Chandannagar,set up by the French in 1696.
• It was the first trading post on the eastern bank of the Hooghly.

G. Tidbits

Nothing here for today!!!

H. UPSC Prelims Practice Questions

Q1. Consider the following statements:

1. The fort at Masulipatnam was built by the French
2. Chandannagar was the first trading post on the eastern bank of the Hooghly, set up by the Dutch
3. During the British Raj, Darjeeling’s temperate climate led to its development as a hill station for British residents

Which of the above statements is/are correct?

1. 1 only
2. 2 and 3 only
3. 3 only
4. 1, 2 and 3

Q2. Consider the following pairs:

                Bird Sanctuary                           State

1. Ranganathittu Bird Sanctuary         Karnataka
2. Kolleru Bird Sanctuary                  Andhra Pradesh
3. Karnala Bird Sanctuary                   Maharashtra

Which of the above pairs is/are correctly matched?

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Q3. Which amongst the following statements is the best description of The Egmont Group?

1. The primary purpose of the group is to help countries develop their national anti money laundering systems.
2. It is a group that promotes and protects intellectual property
3. It seeks to protect and conserve the world’s oceans and marine wildlife
4. It is a group of nuclear supplier countries that seeks to contribute to the nonproliferation of nuclear weapons

Q4. ModifiedElephant recently seen in news is a/an

1. Advanced Persistent Threat (APT) group that has been targeting activists, journalists, lawyers and others in India
2. Adult-size humanoid that is reportedly capable of face and object detection, speech recognition and generation
3. GPS collar that help scientists track the animal movements in real time once they are released into their new habitat
4. Remote Access Trojan (RAT) focused on password stealing, keylogging and remote control capabilities.

Q5. Consider the following statements:

The effect of devaluation of a currency is that it necessarily

1. Improves the competitiveness of the domestic exports in the foreign markets
2. Increase the foreign value of domestic currency
3. Improves the trade balance

Which of the above statements is/are correct?

1. 1 only
2. 1 and 2
3. 3 only
4. 2 and 3

I. UPSC Mains Practice Questions

1. There is a need for a comprehensive review of labor inspection and the labor statistical system in India. Examine. (10 Marks, 150 Words)[GS-3, Economy]
2. Has the Indian polity seen a considerable shift of Indian federalism from cooperative to combative? Critically Analyze. (15 Marks, 250 Words)[GS-2, Polity and Governance]