Answers: Mains Marathon – UPSC Mains Current Affairs Questions – December 26

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Q.1) India has recently become a party to a group called “Quad or Quadrilateral grouping.  In this context discuss what is Quadrilateral grouping and its significance for India? What could be its possible negative impacts on India. (GS-2)

India has recently become a party to a group called “Quad or Quadrilateral”, composing Australia, India, Japan and U.S.A.

Quadrilateral Security Dialogue (QSD) is the strategic dialogue between four countries viz. India, United States, Japan and Australia. It was originally initiated in 2007 but later disbanded with withdrawal of Australia. It has been recently revived and is being viewed as response to increased Chinese economic and military power.

The recent meeting between Quad countries held in Philippine on the Sidelines of the ASEAN Summit. The purpose of the meeting was to achieve prosperity, peace keeping and promotion of stability in South Asia.

Significance for India:

• India has taken a significant turn in its policy for the subcontinent by joining quad grouping.
• It provides New Delhi a powerful platform to advance its interests in East Asia.
• It will deepen India’s ties with US, Australia and Japan with benefits in diplomatic leverage and sharing of burden in defense.
• It will also provide India significant chance in shaping US policies in Afghanistan-Pakistan to the benefit of India.
• It will provide a powerful platform to advance Indian interest in region and strengthen Act East policy.
• Foster economic growth with better market adaptation, so it will lead to more employment opportunity in India.
• It helps India and other three Nations to counter China’s OBOR. As India is refused to join OBOR it helps India to connect with other markets like Central Asian and South East Asian markets.

Impact on India and its neighbours:

• It will not be able to realize trade potential for long term economic development especially for North East region.
• Domestic strategic requirements will be sidelined.
• The grouping will surely strengthen India’s global image but negligence of neighbours in its wake can be hazardous.
• It will develop clash of interest with developing neighbours.

Q.2)Poor manpower and crumbling infrastructure, coupled with a boom in litigation, made the judiciary underperform. Discuss (GS-2)

India’s courts are well known for huge pendency of cases.

For 1.7 billion people in India, there are 31 judges in the SC and 1,079 in high courts. There are never more than 600 judges appointed at any point. As of April 2017, there were 430 posts of judges and additional judges lying vacant in high courts, and 5,000 posts vacant at the district level and lower. For 2017-18, the Union budget allocated a meagre Rs 1,744 crore to the judiciary — about 0.4 per cent of the total budget.

Reasons for underperformance of Judiciary:

• Strength of judges in courts is lower than required to fill up the seats. This shortage leads to delay in judgment
• Frequent transfers of judges take the interest out of them to hear the cases that their successor may give judgment to, after the transfer. Such arrears mustn’t exist.
• Vacancies of judiciary aren’t filled up due to unavailability of good judges
• Fast-track special courts for commercial disputes are established, thus disregarding the poor entirely.
• Appellate courts are falling short in dealing with the cases hence passing the burden to civil and criminal justice system.
• Higher number of hoildays, lack of time management is the problem which lies to the base of judiciary.
• Poor dispute resolution mechanism.
• Poor manpower and crumbling infrastructure, coupled with a boom in litigation, made the judiciary underperform.
• Filing of the frequent government litigation keeps the courts busy instead of serving justice to the people speedily.
• New laws were enacted by Parliament without a commensurate increase in judicial officers or courts. For example, dishonour of cheques was made a criminal offence in 1988.
• Frequent adjournments and indiscriminate use of writ jurisdiction.

Q.3) What are the key features of the Financial Resolution and Deposit Insurance Bill, 2017? Why is its “bail-in” clause controversial? Examine.  (GS-2)

The Financial Resolution and Deposit Insurance Bill (FRDI), 2017, which was tabled in Parliament in the last monsoon session is expected to come up for discussion during the current winter session. The Bill was referred to a joint parliamentary committee this August after cabinet approval.

Key features:

• The FRDI Bill seeks to decrease the time and costs involved in resolving distressed financial entities.
• The FRDI will provide a comprehensive resolution framework to deal with bankruptcy situations in financial sector entities such as banks and insurance companies.
• The Bill seeks to protect customers of financial service providers in times of financial distress.
• It also aims to inculcate discipline among financial service providers in the event of financial crisis, by limiting the use of public money to bail out distressed entities.
• The Bill would help in maintaining financial stability in the economy by ensuring adequate preventive measures.
• The Bill aims to strengthen and streamline the current framework of deposit insurance for the benefit of retail depositors.
• The bill seeks to provide for the resolution of certain categories of financial service providers in distress, and the deposit insurance to consumers of certain categories of financial services.
• The bill will pave the way for setting up of the Resolution Corporation for protection of consumers of specified service providers.
• The proposed legislation together with the Insolvency and Bankruptcy Code, 2016 is expected to provide a comprehensive resolution mechanism for the economy.

Controversy related to ‘Bail-in clause’

• The “bail-in” clause of the Financial Resolution and Deposit Insurance Bill (FRDI) has led to worries about the safety of bank deposits.
• It is different from a traditional bailout in which government’s money helps bank tide over the crisis. In case of a bail-in, it is the bank’s own deposits that are used to rescue the bank or reduce its liabilities.
• According to Section 52 of the proposed Bill, depositors will lose their rightful claim to retrieve their savings in case of liquidation of banks and insurance companies.
• This option will be frequently exploited by the depositors as it will soon be the only option of getting sudden cash since economy is moving towards cash-less.
• Deposit withdrawal will become an option to escape from taxes and government confiscation.
• Banks would be in constant risk of cash crisis which will hamper their credit generation goal in a cash-less society.