26 Sep 2020: UPSC Exam Comprehensive News Analysis

B. GS 2 Related

Category: INTERNATIONAL RELATIONS

1. One-third of funding by AIIB has gone to India

Context:

Out of the $20 billion in loans issued by the Asian Infrastructure Investment Bank (AIIB), about $6 billion has gone to India.

Asian Infrastructure Investment Bank (AIIB):

• The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank headquartered in Beijing, China.
• It was established with a mission to improve the economic and social outcomes in Asia.
• India is AIIB’s second-largest shareholder after China.
• The bank will complete 5 years in January 2021.

Read more about AIIB.

Details:

• India is one of the largest beneficiaries of AIIB financing for infrastructure projects.
• AIIB has supported around $5billion worth of projects in India.
• It is supporting unique projects, including:
  • The Chennai Metro Corridors 4 and 5.
  • Chennai Peripheral Ring Road.
  • The Grand Anaicut scheme to modernise the canal system in the Cauvery delta region which is being prepared with the government of Tamil Nadu. It would help save almost 20% of water leakages.
  • The Delhi-Meerut Regional Rapid Transit is being co-financed with the Asian Development Bank.

E. Editorials

Category: POLITY AND GOVERNANCE

1. Parliamentary scrutiny on the back burner

The Editorial analyses the Parliamentary Committee System in India.

Parliamentary Committee System in India:

• Over the years, the Indian Parliament has increasingly resorted to the committee system.
• The system is followed for various reasons such as
  • To enhance the efficacy of the House to cope with the technical issues confronting it
  • To keep the parliament abreast to exercise accountability on the government.
• Some committees such as the Estimates Committee and Public Accounts Committee (dating back to the colonial period) have a commendable record in this regard.
• Besides the standing committees, the Houses of Parliament set up, from time to time, ad hoc committees to enquire and report on specific subjects which include Select Committees of a House or Joint Select Committees of both the Houses that are assigned the task of studying a Bill closely and reporting back to the House.

Issue:

• The executive in independent India was not very inclined to committees of scrutiny and oversight, on the plea that they seized the powers of Parliament.

Importance of the Committee System:

• The committees were guardians of the autonomy of the House.
• The committees of scrutiny and oversight as the case with other committees of the House
  • Are not divided on party lines
  • Work away from the public glare
  • Remain informal compared to the codes that govern parliamentary proceedings.
• These committees are great training schools for new and young members of the House.
• In the discharge of their mandate, they can get expert advice and obtain public opinion.

Fault lines:

• The parliamentary committee system in India has not been creative or imaginative.
• The presiding officers of the Houses who had to give up leadership in this regard have tended to imitate changes and innovations done elsewhere (such as in Britain).
• The chairman of the Rajya Sabha, being the Vice-President of India, cannot probably distance himself much from the stance of the Cabinet.
• Very few Speakers, with exceptions, have gone against their party leaders to uphold the autonomy of the House.

Departmentally-related Standing Committees (DRSCs):

• To address the issue in 1993, 17 Departmentally-related Standing Committees (DRSCs) (later increased to 24) were set up drawing members from both Houses roughly in proportion to the strength of the political parties in the Houses.
• They were expected to be the face of Parliament in a set of inter-related departments and ministries.
• They were assigned the task of looking into the demands for grants of the ministries/departments concerned, to examine Bills pertaining to them, to consider their annual reports, and to look into their long-term plans and report to Parliament.

Concerns – A gradual marginalisation:

• Committees of scrutiny and advice, both standing and ad hoc, have been confined to the margins in the last few years.
• Data by PRS India states that while 60% of the Bills in the 14th Lok Sabha and 71% in the 15th Lok Sabha were wetted by the DRSCs concerned, this proportion came down to 27% in the 16th Lok Sabha.
• Apart from the DRSCs, the government has shown extreme reluctance to refer Bills to Select Committees of the Houses or Joint Parliamentary Committees.
  • The last Bill referred to a Joint Parliamentary Committee was the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, in 2015.
  • Some of the most momentous acts of Parliament in recent years such as the radical overhaul of Article 370 that revoked the special status of Jammu and Kashmir and divided the State into two Union Territories were not processed by any House committee.

Way forward:

• Given their large-scale implications and the popular protests against them, the three Bills related to agricultural produce and the three labour Bills were cases that deserved to be scrutinised by Select Committees of the Houses.
• Plenty of evidence suggests that the committee system has greatly enhanced the capacity of Parliament to carry out its mandate.
• Strengthening the committee system can go a long way in improving the quality of laws drafted and minimise potential implementation challenges.
• The need of the hour is a greater and effective utilisation of Parliamentary Committees to strengthen Parliament as a deliberative body which can ensure effective oversight.

Category: INTERNATIONAL RELATIONS

1. The Doha-Kabul journey as a road to nowhere

Intra-Afghan talks between the Taliban and the Afghan High Council for National Reconciliation – has been covered in the 19^th September 2020 Comprehensive News Analysis.

Category: ECONOMY

1. Code debate

Context:

• The parliament has passed three codes aimed at consolidating diverse labour laws.
• They are the Industrial Relations Code, the Social Security Code and the Occupational Safety, Health and Working Conditions Code, 2020.

This topic has been covered in the 20^th September 2020 Comprehensive News analysis.

Details:

• The June 2002 report of the Second National Commission on Labour is the root of the idea of consolidated labour codes.
• The broad vision has been to give an impetus to economic activity without adversely affecting the interests of workers.
• They were drafted with the basic objective of amalgamating, simplifying and rationalising labour laws.
• A positive feature is that the Social Security Code promises the establishment of social security funds for unorganised workers, as well as gig and platform workers, and their welfare would be addressed by the National Social Security Board.
• The threshold for considering any premises as a factory has also been raised from 10 to 20 workers without the use of power, and from 20 to 40 with power.

Criticisms:

• It is argued that the laws of paramount importance, having far too much impact on the people were passed in haste or without sufficient deliberation.
  • The three codes are an updated version of the respective Codes of 2019, which were scrutinised by a Standing Committee.
  • Therefore, it is widely opined that they should have been sent back to the panel for an assessment.
• The most contentious feature is the increase in the threshold for an establishment to seek government permission before closure, lay-off or retrenchment from units that employ 100 workers to 300.
  • This gives establishments greater freedom in their termination and exit decisions.
  • This was not found in the 2019 draft.
• It is argued that, with these codes involving a voluminous body of legislation, the final version should have been widely discussed with the stakeholders.
• Another contentious section allows the appropriate government to exempt any new factory from all provisions of the Code on occupational health, safety and working conditions.
  • There is a fear that expansive powers of exemption have been conferred on the respective governments and there has been an excessive delegation of rule-making powers.

2. Cess pool

Issue:

The latest audit of the Union Government’s accounts tabled in Parliament reveals that the Finance Ministry retained over 40% of all cess collections in 2018-19 in the Consolidated Fund of India (CFI).

• As many as 35 different cesses, levies and charges yielded ₹2.75-lakh crore in the year, but only about₹1.64-lakh crore was remitted to the specific reserve funds for which these cesses were levied.
• The purposes for which Parliament approved such cesses were not met.

What is Cess?

• Cess is a form of tax charged/levied over and above the base tax liability of a taxpayer.
• A cess is usually imposed additionally when the state or the central government looks to raise funds for specific purposes.
  • Example: the government levies an education cess to generate additional revenue for funding primary, secondary, and higher education.
• Cess is not a permanent source of revenue for the government, and it is discontinued when the purpose levying it is fulfilled.

Concerns:

• Funds collected by the Centre as cesses for specific purposes, such as the mineral trust, oil industry development and infrastructure, have not been fully transferred to dedicated funds.
  • Cess collected on crude oil has not been transferred to an oil industry development body it was meant to finance, for over 10 years.
  • Part of the hefty cess collected as additional excise duties on petrol and diesel, to finance roads and infrastructure, was retained in the CFI.
  • About ₹47,272 crore GST Compensation Cess was not remitted to its rightful account over the first two years of GST.
• Also, a major concern is that the compensation cess transfers to States were accounted as Grants-in-aid to States, distorting the Centre-States fiscal math.
• A new 4% Health and Education Cess on income tax was partly deployed towards education, but no fund was created for health, similarly, Social Welfare surcharge levied on customs.
• The Centre’s reliance on cesses and surcharges to raise revenue has increased significantly since the States’ share of the divisible pool of taxes was raised to 42% in line with the 14th Finance Commission’s suggestions.
  • Cess receipts are not part of this pool.
  • But, their intended use to fund specific public spending needs serves as an acceptable rationale, provided it is adhered to.

Way forward:

• The Comptroller and Auditor General of India (CAG) of India has on multiple occasions, urged the Finance Ministry to take immediate corrective actions.
• With a climate of distrust hovering over India’s federal polity (Eg. GST compensation dispute) it is critical for the Centre to rebuild confidence.
• Cesses need to be rationalised. A good start would be with the excise duties on petrol and diesel.
• Absolute transparency is the need of the hour in the management of cess receipts and transfer.

Q1. Consider the following statements:

Q2. Consider the following statements with respect to Asian Infrastructure Investment 
Bank (AIIB):

Q3. Consider the following statements with respect to the Gulf of Mannar:

Q4. Consider the following statements with respect to “JIMEX”:

I. UPSC Mains Practice Questions

1. Examine the concerns associated with the three codes introduced by the government as part of the Labour law Reforms. (GS 3- Economy) (15 Marks, 250 Words).
2. While the Standing Committees have improved the Parliament’s ability to examine policies better, there are several challenges that need further attention. Comment. (GS 2 Polity and Governance) (15 Marks, 250 Words)

Read the previous CNA here.