9 PM Daily Current Affairs Brief – March 24, 2021

Good evening dear reader

Here is our 9pm current affairs brief for you today

The Issue of Cross Border Electricity Trade in South Asia

Source; The Hindu

Gs2:  India and its Neighborhood- Relations.

Synopsis: India should plan a stable institutional model for governing electricity trade across borders. It should avoid imposing restrictive rules which is against the free market economy.

Background

• Currently, Guidelines for Import/Export (Cross Border) of Electricity-2018 govern the trade of electricity across its borders.
• In 2014, India through the South Asian Association for Regional Cooperation (SAARC) framework, liberalized its electricity trade.
• China entered the market in the south Asian region to take advantage of it.
• India countered by taking back the free market advantages. Further, it imposed strong restrictions that prevented regional Private entities and joint ventures from participating.
• After long years of protest by Nepal and Bhutan, new guidelines in 2018 (Guidelines for Import/Export (Cross Border) of Electricity-2018) were formulated.
• The new rules allow private sector participation but exclude Chinese investments. Through the new electricity rules, India attempts to balance China’s growing influence in the region.
• The new rules have clear limits on who can buy from and sell into India.
• However, it has the potential to disturb the electricity markets of Bangladesh, Bhutan, and Nepal.

What are the important provisions?

• First, According to the new rules, Power plants owned by a company based in the country, not having a bilateral agreement with India on power sector cooperation, cannot participate.
• Second, the rules place the same security restrictions on tripartite trade.
• Third, the rules establish a surveillance procedure to detect changes in the ownership patterns of entities trading with India.

What are the issues involved?

• First, the institutional structure that governs the trade of electricity across its borders is India-centric.
  • India is in a Geographical advantage as it is placed in the middle of south Asian countries. Moreover, India at present is the fourth-largest global energy consumer. It puts India in a dominant position.
  • However, India’s monopolistic tendency in power will attract displeasure from its neighbours as their economic growth will hurt.
  • Also, the prospect of an independent regional body governing electricity trade is unlikely in the near future.
• Second, lack of impartial institutions for planning, investments, and conflict resolution regarding electricity trade will impact india’s vision of One Sun One World One Grid (OSOWOG).
  • The OSOWOG aims to connect West Asia, Southeast Asia, and Africa. An impartial institution is important for making it functional.
  • However, the South Asian lesson, contained in these latest rules tells us that political realities will hamper the vision of borderless trade.

India should plan for an attractive institutional model by setting standards that profit investors and utilities. India needs to create a rule-based regional institution that can counter Chinese offerings in other theatres. It will also set free South Asian power m

Significance of Supreme Court Guidelines on Gender Stereotypes

Source: The Hindu

Syllabus: GS – 2 – mechanisms, laws, institutions and Bodies constituted for the protection and betterment of vulnerable sections

Synopsis: The Supreme Court advocated certain important steps to avoid gender stereotypes while setting aside the Madhya Pradesh High Court order. Now it is time for us to work towards its implementation.

Introduction:

The Supreme Court set aside the controversial rakhi-for-bail order of Madhya Pradesh High Court. Further, the top court issued a set of guidelines for dealing with sexual assault cases. The Courts in the country have to follow the guidelines in entertaining such cases. Further, the SC also mention a few important things about gender stereotypes in India.

The Supreme Court mentioned the quote of a famous Norwegian play writer Henrik Ibsen to explain the gender stereotypes in India. (His playwright uses feisty women characters who break free of traditions of familial confines). The Court mentioned that the Woman ‘cannot be herself’ in an ‘exclusively masculine society, with laws framed by men’. 

Avoidable gender stereotypes:

The SC listed a host of avoidable gender stereotypes. Such as,

1. Women are physically weak.
2. Men are the head of the household and must make all the decisions related to family
3. Women should be submissive and obedient.

Level of gender stereotypes in India:

The SC observed certain important observations about gender stereotypes in India. Such as,

1. Gender violence in India is often covered by the culture of silence.
2. The court also observed that there is an unequal power equation between men and women. This includes cultural and social norms, financial dependence, and poverty
3.  The actual data of cases may not reflect the actual incidence of violence against women.

Other judicial interventions on gender equality:

The SC expressed gender equity through its judgments. Few important cases in this regard are,

1. Secretary Ministry of Defence vs. Babita Puniya case: In this case, the court held that men and women working in the Army are equal. The court held that they work as “equal citizens” in a common mission.
2. Anuj Garg vs Hotel Association of India case: In this case, the court mentioned that the “notion of romantic paternalism” is used to put women “in a cage”.
   Note: Romantic Paternaliam: It is a belief based on the “romantic” notion that women are the weaker sex than Men.

In conclusion, Women are battling societal prejudices. To achieve that,  everyone must take responsibility, especially institutions and those in important positions.

MTP Bill 2021 is not progressive enough

Source: The Indian Express

Syllabus: GS-2: mechanisms, laws, institutions and Bodies constituted for the protection and betterment of vulnerable sections

Synopsis: The Medical Termination of Pregnancy (Amendment) Bill, 2021(MTP Bill) aims to improve women’s reproductive rights. But it will restrict women’s bodily autonomy if implemented.

Introduction:

The Lok Sabha passed the Medical Termination of Pregnancy (Amendment) Bill, 2021. Now the bill is in the Rajya Sabha. The Rajya Sabha has to maintain caution in passing the Bill as it enforces societal prejudices against women.

Important Provisions of the MTP Bill:

The bill is hailed as a much-needed departure from the existing MTP Act, 1971 for two reasons.

1. The MTP bill replaces “any married woman or her husband” with “any woman or her partner”. This step will facilitate the termination of pregnancy due to contraception failures and destigmatize the pregnancies outside marriage.
2. The MTP Bill increased the time limit. The Bill increase the pregnancy termination time from the current 20 weeks to 24 weeks. There are two categories for that.
   1.  Termination of Pregnancy from 12 weeks to 20 weeks: Women can terminate the pregnancy after consulting one RMP (registered medical practitioner).
   2. Termination of Pregnancy from 20 weeks to 24 weeks: Women can terminate the pregnancy after consulting two RMPs.

Challenges with the MTP Bill:

There are a few significant challenges with the MTP bill. They are,

1. The problem with the upper limit: The government increased the upper age to 24 weeks(Category 2). But, that does have certain conditions like
   1. the life of the pregnant woman or pregnancy can cause grave injury to her mental or physical health.
   2. If the child were born it would suffer from any serious physical or mental abnormality.
      But these limitations are not useful when the opinion of the medical board is necessary. So, the medical board can certify any pregnant woman as not having ‘substantial foetal abnormalities’ and force her not to terminate the pregnancy.
2. Restricting the bodily autonomy of women: The Bill still enforces the Patriarchal setup. As the woman alone cannot terminate her pregnancy. She always needs the opinion of one or two RMPs.
3. The scientific necessity of the 24-week ceiling: There might be abortions is essential after the 24 weeks also. For the reasons like,
   1. Development of foetal abnormalities after 24-week
   2.  A sudden change in circumstances (due to separation from or death of a partner), etc.
      But the MTP Bill does not cover these points into consideration.
4. Reduced access to termination facilities: Pregnant women will also fail to approach termination facilities for having a fear of judgment from medical practitioners.
5. Against the Supreme Court judgment: The SC in KS Puttaswamy v Union of India case upheld the women’s constitutional right to make reproductive choices. But the MTP Bill is a clear violation of women’s Fundamental Right to make choices individually.

So, the government has to reconsider the MTP Bill in a holistic manner of women’s development.

NCT of Delhi (Amendment) Bill, 2021 is against the Principle of Federalism

Source: The Hindu

Gs2: Issues and Challenges Pertaining to the Federal Structure, Devolution of Powers

Synopsis: Lok Sabha passed the Government of NCT of Delhi (Amendment) Bill, 2021. It is against constitutional morality and needs to be declared unconstitutional.

Background

• Article 239AA of the Constitution of India granted Special Status to Delhi in 1991 through the 69th constitutional amendment (CAA).
• The 69th CAA provided Delhi with a Legislative Assembly and a Council of Ministers (CoM). CoM was made responsible to the legislative Assembly and empowered to deal with matters of concern to the common man.
• The recently introduced Government of NCT of Delhi (Amendment) Bill, 2021 is against Article 239AA.

What are the changes made in the National Capital Territory of Delhi (Amendment) Bill, 2021?

• First, the Bill says the expression “Government” referred to in any law to be made by the Legislative Assembly in Delhi shall mean the “Lieutenant Governor”.

READ MORE ABOUT THE GNCT OF DELHI BILL, 2021

What is the related court’s ruling on this issue?

• First, Govt. of NCT of Delhi v. Union of India (2018) case: The court stated that the Council of Ministers should keep the LG (Lieutenant Governor) informed of its decisions. The rationale of this decision was to resolve the difference of opinion between the LG and the Delhi government by referring it to the President.
  • • Further, the court said the LG should be guided by the concept of constitutional morality. And the exercise of power to refer to the President should be an exception.
• Second, in Samsher Singh v. State of Punjab (1974) the court warned against giving excessive powers to an individual like the Lieutenant Governor. The reasons stated by the court are,
  • • One, elections will not have any meaningful value.
    • Two, the voice of the Citizens will go unrecognized. Because elected representatives chosen by the citizens are not given appropriate power to perform their functions
    • Three, it is against the concepts of pragmatic federalism and collaborative federalism.

Read more – NCT of Delhi Bill Critically Explained 

What are the issues in the recent amendments?

• First, the Lieutenant Governor has been made synonymous with the Government. The government that is a collective voice of millions of citizens is replaced by one individual.
• Second, the bill provides the LG with enormous powers to refer all matters to the President.
• Third, it provides for a mandate to take the opinion of the lieutenant governor before taking executive actions.
• The above two provisions are against the Supreme Court ruling in Govt. of NCT of Delhi v. Union of India (2018) case and doctrine of Pith and substance.
  • The doctrine of Pith and Substance states that within their respective spheres the state and the union legislatures are made supreme. They should not encroach upon the sphere demarcated for the other.

The bill Is violative of the principles of participative democracy, cooperative federalism, collective responsibility to the House and, constitutional morality, and needs to be aborted

Bad Bank for strengthening the banking sector

Source: Indian Express 

Syllabus: GS 3 – Issues related to banking sector

Synopsis: The Indian banks have started to recover post the pandemic phase. Further, strengthening will be witnessed after the creation of a bad bank as promised in the budget.

Background:

• During pandemic, NPA(Non-Performing Assets) was expected to rise. Thus, Indian banks written off their balance sheets.
  • A write-off is an accounting term, through which the book value of an asset is declared to be zero.
  • An NPA is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full.
• However, Later at the end of the year, a positive recovery  was observed. Restructuring requests were reduced and Provision Coverage Ratios (PCR) improved.
  • PCR is the ratio of provisioning to Gross Non-Performing Assets. 
  • It indicates the extent of funds a bank has kept aside to cover loan losses.
• In the recent budget 2021, the government announced a dedicated bad bank.

Reasons behind improvement in the banking system at the year-end

Before pandemic, banks held substantial capital and built a sizable buffer for dealing with NPAs. This prevented major degradation of their balance sheets during the pandemic. Further many other reasons were behind this performance.

1. Before the pandemic, the RBI instilled a prudent degree of financial discipline in the market. This included decreasing exposure in riskier assets and devising a system of ratings for the borrowers.
2. A surge in disposable income and spending capacity of middle-class people will be witnessed. This would cause the valuation of personal financial assets in Asia to reach $69 trillion by 2025. Therefore, bringing more business to India as well.
3. Further, the robust monetary management skills of RBI and budget announcements created a sense of positivity in the sector.  

Budget Announcements:

• A bad bank will be created under an Asset Reconstruction Company (ARC)-Asset Management Company (AMC) structure.
• National Asset Reconstruction Company (NARC) will acquire stressed assets in an aggregated manner from lenders. National Asset Management Company (NAMC) will act as a resolution manager for the acquired assets.

Benefits of Bad Bank:

• Banks will get the recovered value of the stressed asset and their balance sheet will not appear stressful. This will improve their valuations.
• Banks will get more lending leverage as:
  • Less provisioning is done for stressed assets if a robust bad bank exits 
  • Bad Banks generally pay 85% in sovereign receipts and remaining in cash. This can be used for giving more loans.
• It will drive the consolidation of stressed assets and help in faster decision-making.
• Banks will get more management space as recovery work will be undertaken by bad banks. This would allow them to focus more on credit growth. 
• As per some experts, transferring Rs. 400 assets to bad banks work out to around Rs 526 for the economy (a multiplier of around 1.3). Further, benefits worth Rs 2.2 lakh can be witnessed at just a 20% recovery rate.

Way Ahead:

• The Banks have realized the growth potential of the sector. They are constantly developing new business models, rationalizing costs, and providing superior services to attract more customers.
• Along with this, the focus should on creating a favorable environment for the development of Bad banks that includes:
  • Keeping majority ownership in the private sector
  • Putting together a strong and independent board
  • Linking AMC compensation to their performance

India’s potential as a Global investment hub

Source: The Hindu

Gs3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Synopsis: India has the potential to become a Global Investment Hub. India’s unique advantages attract global companies to invest in India.

Background

• In 2020, despite sharp economic contraction, India witnessed the fastest growth in Foreign Direct Investment (FDI) inflows among all the major economies. (>60 billion)
• Big firms like Google, Facebook, Walmart, Samsung, Foxconn, and Silver Lake made FDI contributions in India.
• However, India’s latest FDI totals still lag behind other market economies such as China and Brazil.

Why India still lags behind China and Brazil in attracting FDI?

Even after three decades of liberalization (1991), India remains a complex and challenging place to do business because,

1. One, frequent shifts in the policy landscape. For example, Retrospective taxation. India lost the Vodafone case and cairn energy case at the Permanent Court of Arbitration.
2. Two, Persistent market access barriers. For example, anti-dumping duty, negative list, mandatory localized procurement, etc.,
3. Three, Government’s push towards “self-reliant” India also created distrust among the investors.

Then, why multinational companies are investing in India?

• First, India’s huge market with growing purchasing power makes India an attractive destination for investments. For example, India has a market of 1.4 billion people and a rising middle class of 600 million.
• Second, shift in contemporary geopolitics due to rising U.S.-China competition. It has forced multinationals to reimagine their supply chain and production hubs. For example, Samsung has invested billions in the Indian market.
  • Additionally, manufacturers such as Cisco, Nokia, Ericsson, and Flex are planning to invest in India to take advantage of India’s incentives in the manufacturing sector.
• Third, the rise of the ‘next-gen netizens’ is one of the key reasons why leading global tech companies are investing in India. For example, India has 700 million Internet users.
• Fourth, a showcase of India’s resilience during adversities. For example, India has managed the pandemic better than many of its western peers and restored economic activity.

What is the way forward?

Increasing FDI investment should not result in a drain of wealth from India. MNC’s should be made to demonstrate their commitment towards India. It can be done through,

• • Placing shared value creation at the heart of their business strategy.
  • Tying corporate success to India’s growth and development.
  • Increasing Investments in Indian talent.
  • Aligning products with Indian tastes.
  • Helping to tackle the problems faced by society at large.

Thus, to make India a Global Investment Hub, all the issues in the way of FDI shall be removed.

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