Insights Into Editorial Nov

INSIGHTS into EDITORIAL
NOVEMBER
2016
INSIGHTS into EDITORIAL | NOVEMBER 2016
01/12 : How to judge the judges ______________________________________________________________________ 2

02/12 : Delhi pollution bonanza isn’t due to crackers alone ________________________________________________ 4
03/12 : Agribusiness: Making up for lost time ___________________________________________________________ 7
04/12 : Is Indian pharma breeding superbugs? __________________________________________________________ 9
05/12 : ICANN57 – A Backgrounder __________________________________________________________________ 11
07/12 : The Unmaking of the Forest Rights Act _________________________________________________________ 13
08/12 : After calls to uphold press freedom, one-day ban on NDTV India put on hold _________________________ 16
09/12 : Rs. 500, Rs. 1,000 notes no longer legal tender ___________________________________________________ 18
10/12 : November thunderbolt ______________________________________________________________________ 21
11/12 : Is NDA bringing the income of farmers under tax scrutiny?_________________________________________ 24
12/12 : Blacklisting Policy on the Anvil ________________________________________________________________ 26
14/12 : The big deal with Japan ______________________________________________________________________ 28
15/12 : Impolitic musings ___________________________________________________________________________ 30
16/12 : International Solar Alliance could be the climate change game-changer ______________________________ 33
17/12 : Russia withdraws backing for International Criminal Court treaty ___________________________________ 36
18/12 : Time to move towards a new litigation policy ___________________________________________________ 39
19/12 : Does black money boost economic growth? _____________________________________________________ 41
21/12 : Getting real on climate ______________________________________________________________________ 43
22/12 : Demonetisation and Beyond: Addressing the Finance of Terrorism __________________________________ 46
23/12 : US exit from TPP to impact security architecture in Asia-Pacific _____________________________________ 48
24/12 : Benefitting from China’s Belt and Road Initiative _________________________________________________ 50
25/12 : Restore the ceasefire________________________________________________________________________ 53
26/12 : A change called NeHA _______________________________________________________________________ 56
28/12 : RBI shows interest in no-interest banking. What does it mean? _____________________________________ 59
29/12 : For Modi’s smart-city vision to become a reality, India needs smart villages first _______________________ 62
30/12 : Long road to gender equality in India __________________________________________________________ 64
Insights into Issues _______________________________________________________________ 67

I. Mihir Shah Committee Analysis ____________________________________________________________________ 67
II. FRBM Act – Need for a paradigm shift ______________________________________________________________ 70
III. Internet Governance ____________________________________________________________________________ 73
IV. WTO Dispute – Domestic Content Requirement _____________________________________________________ 76
V. Minority Educational Institutions and Minority Status _________________________________________________ 78
VI : Pradhan Mantri Fasal Bima Yojana – How Different is it from Earlier Agri Insurance Schemes? _______________ 81
VII. India Africa Relations ___________________________________________________________________________ 84
VIII. Basic Income Guarantee Scheme _________________________________________________________________ 88
IX. 4D Printing ____________________________________________________________________________________ 91
X. Autonomous Vehicle Technology __________________________________________________________________ 94
XI. Copyright Case verdict __________________________________________________________________________ 97
www.insightsonindia.com 1 ©Insights IAS

INSIGHTS into EDITORIAL
01/12 : How to judge the judges

Summary:
After failing to improve their performances even after regular warnings, 17 judges in Gujarat have
been asked to vacate their offices. In this regard, the law department in Gujarat, on the
recommendation of the Gujarat High Court, recently cracked the whip on these 17 judges from various
cadres in lower courts, ordering their retirement for unsatisfactory performance.
What’s the concern now?
While this action of the State

government suggests that
holding judges to performance
standards is gaining
momentum, the existing system
of performance evaluation for the lower judiciary is plagued with various problems. More worryingly,
the higher judiciary in India is not subject to any sort of evaluation.
How are Judges assessed in India?
Lower court judges in India are evaluated through a system of Annual Confidential Reports (ACRs).
These are completed by the senior-most judges of the lower court, and reviewed by the State High
Court. But, ACRs are neither filled up regularly nor is the evaluation process transparent.
How is it done in other countries?
In the US, retention elections are used to retain the judges. Sitting judges are evaluated to inform
voters about a judge’s performance record for ‘retention elections’. Retention elections allow the
public to vote for or against the continuing tenure of judges.
In the European Union, the European Commission for the Efficiency of Justice conducts a periodic
performance review of court systems of different member states. This country-wise study collects
data on various parameters, including the efficiency of courts in justice disposal, the costs per case,
and the budget of courts. The outcome of this exercise is the “EU Justice Scoreboard”, published
annually, rating the working of justice systems across member states.
What reforms are needed in India?
 There should be a system of performance appraisal of judges, particularly of the higher judiciary.
Such appraisal would lead to greater accountability, transparency and better and efficient
functioning of judges.
 Suitable parameters to evaluate their performance should be put in place. Parameters for
evaluating judicial performance may be qualitative as well as quantitative. These include the rate
of disposal of cases by a judge, the quality of judgments and legal reasoning, knowledge of the
law, behaviour towards lawyers in court proceedings, independence and transparency.

 A regular review of judicial performance should be conducted. This ensures that once appointed,
judges are mindful of their accountability to the institution of the judiciary.
 Developing codes of judicial conduct can also provide an important means of fostering judicial
accountability, since they serve as both a guide to and a measure of judicial conduct.
 Strong and independent judges associations, meanwhile, can provide a safe point of reference
for judges, allowing them to interact with the state in an accountable, yet robustly independent
manner.
Need For Judicial Accountability:
Power and position in a democracy is depicted as attendant with responsibility, and every incumbent
of a public office must remain constantly accountable to the people, who are the repository of political
sovereignty.
 In a ‘democratic republic’ power with accountability of the individual enjoying it, is essential to
avert disaster for any democratic system.
 The judicial system deals with the administration of justice through the agency of courts. Judges
are the human stuff which presides over the courts. They are not merely visible symbols of courts;
they are actually their representatives in flesh and blood.
 The manners in which judges discharge their duties determine the image of courts and the
creditability of judicial system itself.
 Therefore, a need definitely is there to make judiciary accountable, as derogation of values in
judiciary is far more dangerous than in any other wing of the government as judiciary has to act
as the guardian of our constitution.
Way ahead:
The regular evaluation of judicial performance is a springboard for ensuring greater judicial
accountability, but unfortunately we do not have any institutional mechanism yet to do this. Neither
the executive nor the earlier collegium system has attached much significance to judicial performance
when considering judges’ elevation to the apex court. Similarly, no performance evaluation is done
for Supreme Court judges.
 The idea for amending and improving existing methods for evaluating judges’ performance was
floated in 2013, when the Law Ministry acknowledged the need for a more scientific method of
performance appraisal of judges. The Ministry also admitted that there was a lack of uniformity
of judicial performance appraisal across States. But there have been no significant changes since
these observations were made.
 This is an opportune moment to revise existing mechanisms and deliberate on the performance
evaluation of judges at all levels of the judiciary.
Conclusion:
The first step towards such evaluation should be the objectives of such evaluation, such as improving
quality of justice, pendency rates, and so on. A joint consultation could be held with stakeholders,
including judges, lawyers, academics and members of civil society to understand how best to initiate
such a system in India. Any codified system that emerges from these discussions, say, in the form of
guidelines or regulations, must be reviewed to ensure minimum bias and maximum transparency. All

these steps would help India work towards higher standards and greater accountability in judicial
functioning.
02/12 : Delhi pollution bonanza isn’t due to crackers alone

Summary:
The air in several places in the country becomes laden with toxic matter around Diwali, almost as a
ritual associated with the festival. The toxic cocktail of particulate matter (PM) from car tailpipes and
cracker burning casts a dirty haze that is at its most noxious in Delhi.
 Data from the central pollution monitoring agency showed that concentrations of Particulate
Matter or PM 10 (coarser pollutants) was over 1,600 micrograms per cubic metre compared to a
safe level of 100 at around 2 am. PM 2.5, a standard measure of air quality, was as much as 14
times the safe limit.
Why worry about this?
 The density of some harmful particles and droplets in the air spikes for days after Diwali and can
reach up to 42 times the safe limit. These particles can cause respiratory diseases if one is
subjected to prolonged exposure to unsafe levels.
 5 particles and droplets are considered to be the most harmful kind of air pollution because they
are fine enough to evade the body’s natural filters, penetrate the lungs and enter the
bloodstream.
 Short-term exposure can trigger coughing and eye and throat irritation, while longer term
exposure is strongly associated with reduced lung function, heart disease and lung cancer.
Background:
India has the world’s highest rate of death from respiratory disease, according to the World Health
Organisation, with 159 deaths per 100,000 people in 2012, about five times that of the UK and twice
that of China.
 Air quality in the Indian capital is one of the world’s most polluted cities. A 2015 study found
about half of Delhi’s 4.4 million schoolchildren had compromised lung capacity and would never
completely recover.
 Bad air has also become a permanent winter fixture in Delhi. Last year, the National Air Quality
Index ranked the city’s air as “severe” on 20 days in November. Immediately after it was ranked
poorly by the air quality index, Delhi received another admonition with the Supreme Court
describing the city as a “gas chamber”.
 The rebuke led the Delhi government to ration road space in January and April. For 15 days in
these two months, cars and two-wheelers with odd/even numbers ran on alternate days.
What else is to be blamed for Delhi’s worst air quality?
 Air pollution in Delhi’s National Capital Region (NCR) is comprised of a complex mix of pollution
from human activities (vehicle emissions, industry, construction and residential fuel burning) as
well as natural sources like dust and sea salt.

 The main culprits are rampant and often unregulated construction, the burning of crop stubble
in Punjab and Haryana, and the movement of heavy trucks through the city.
 Emissions from pollutants in the Yamuna and the presence of an industrial belt around the city
add to the problem.
 The heavy concentration of particulate matter is greatly affected by meteorological conditions –
in the winter, cool air causes “inversions” that stagnant the air and trap pollution close to the
ground. Air flow patterns from Afghanistan and Pakistan pick up emissions as they move over the
densely urbanized regions of Punjab and Haryana where farmers burn the straw in their fields
and pull this pollution into Delhi.
 Pre-monsoon dust storms also contribute to air pollution in the region.
 City activities also contribute to the air pollution. The NCR generates 10,000 tons per day of
municipal solid waste, much of which is eventually burned, adding particulate pollution to the air
and galloping urbanization brings massive construction projects to the area.
 In adddition, Delhi has more than 7.4 million vehicles on it’s roads, with an additional 1,200 added
each day and the result is a pollution “hotspot.”
What needs to be done to improve the air quality in Delhi?
 A robust public transport system is one of the bare essentials. Several studies have shown that
public transport provides more than 65% of Delhi’s commuting needs but occupies less than five
per cent of road space.
 Public transport in itself, however, might not be enough. Economists believe that the middle
classes are likely to remain enamoured with cars unless there are strong disincentives to using

personal transport. They advocate a combination of pollution taxes, car free days/areas, robust
public transport and better urban planning.
 Congestion tax can also be considered. London, Milan, Oslo, Stockholm and Singapore have
introduced congestion taxes to curb cars.
 The government, in the spirit of experimentation in which it initially announced the scheme along
with a series of other measures, must continue to try to see what improves Delhi’s air quality.
 An odd-even trial in the summer months might be more useful to isolate its impact.
 The government’s proposal to vacuum-clean roads in April is promising, given that the IIT Kanpur
study attributed 38% of pollution to road dust.
 The government could also resort on other measures including temporary controls on industry
and construction, and banning the use of fireworks.
 In the long run, an essential step would be to draft a new transportation policy, without
emphasising only economic aspects as was done earlier.
 Consulting urban planners, logisticians, sociologists, environmentalists, civil society groups
including doctors, teachers and lawyers, the police and the military, apart from economists would
be essential.
 CSIR’s proposal- mid-week work-from-home– can be a game changer too. According to this
formula, instead of commuting to work and school, employees and students could work and
study from home for a day.
 Delhi government implemented the Odd-even formula in the National Capital Region on a trial
basis. But, there has not been any credible data to support the Delhi government’s claim that the
odd-even trial has reduced pollution or improved air quality.
What is expected from governments, both at the central and state?
 The government, in partnership with non-governmental organisations, technical specialists and

research organisations, needs to initiate a clean air campaign. This needs to take the form of
legislation as well as behaviour-changing approaches.
 Governments, both at the Central and state level, need to reassess their production and
consumption of energy and work with partners for a low-carbon future — one that is more
efficient, has more natural gas and a growing share of renewable energy, such as solar and bio-
gas.
 Public policy must address the various factors that contribute to toxic air, without damaging the
core activities that are crucial to economic growth, which requires coordination across sectors,
from industry and power to transport and cooking.
 Governments at the Centre and local levels must also demonstrate the political will to tackle
what is a catastrophic public health problem. Local governments must clamp down on the specific
pollutants that are pushing their respective cities into the danger zone.
Conclusion:
By all accounts, the Delhi government is hoping the pollution will dissipate on its own after the
festivities recede. But if past years are anything to go by, matters may not improve much. Removing
the dirty haze from Delhi’s air requires much more than such sporadic efforts.

03/12 : Agribusiness: Making up for lost time

Summary:
The agricultural sector in India has entered a new low. Trends in agriculture are distressing. These
distressing trends highlight the enormity of the challenges lying ahead for the Indian agricultural
industry.
Main concerns:
 Based on the sector’s current trajectory, the demand-

supply mismatch in crops is likely to hit more than 15%
by 2020, with the gap worsening to 20-25% by 2025 if
unaddressed.
 Agricultural productivity levels have been stagnant for
the past 10 to 15 years, with our crops requiring around two to four times the average global
water intensity.
 Wastage levels in our agricultural supply chain hover between 30% and 40%.
 More than a third of farmer households today live below the poverty line.
 The NITI Aayog recently highlighted that the sector is 28 years behind its time.
For Indian agriculture to make up for lost time, changes will be needed across four main dimensions:
1. Productivity:
There is significant room for improvement for India’s agricultural productivity. Indian farmers produce
an average 2.9 tonnes of rice per hectare, whereas the global mean is 4 tonnes per hectare. To fix this
gap, a range of improvements will be needed on inputs, resource availability and farming methods.
However, adopting best practices to boost productivity will call for a significant investment in farmer
awareness programmes. If our farmers have access to the best seeds, can leverage state-of-the-art
treatment practices and cultivate the right crop portfolio, productivity can be enhanced by 15-20%
over a 10-year period.
2. Farmer income:
Several surveys and studies have highlighted the plight of the Indian farmer. Some studies have shown
that 40% of farmers would quit if they had alternative employment choices. This calls for a two-
pronged approach.
 The first is to fundamentally change the economics of a farm, by not only improving productivity,
but also ensuring farmer financing issues are well addressed. Subsidized rural credit, creation of
innovative agri-financial instruments like sale option contracts and rural insurance are key
elements that can help in this regard.
 Second, as farmer financial well-being is highly correlated to a robust rural ecosystem, there
should be special focus on the development of supply chain-related infrastructure (warehousing),
the food processing sector and logistics.

 Ownership models:
Most farm holdings in India are small. Many farm owners are ageing and their next generation is
migrating to urban India for jobs. The challenges of effective land utilization will, therefore, be under
further pressure in the years to come.
 Also, agricultural rental restrictions have not been revisited to reflect the realities of a very
different India today. Many land owners keep their land fallow or underutilized. Even where
informal rental agreements exist, land owners remain hesitant of long-term leases for fear of
losing their land. At the same time, tenants feeling the duration of tenancies being too short and
unpredictable, do not invest in productivity enhancing improvements.
 The recent draft on the law to formalize leasing of agricultural land is a step in the right direction.
More than just regularizing rentals, the Draft Model Act makes it possible for all the estimated
25 million farmers renting agricultural land to qualify for bank finance, insurance and other
government benefits.
 Technology:
Adoption of new business models and technologies in the agricultural sector can also boost India’s
agricultural productivity.
 Sensors, such as those that monitor soil, weather and crop conditions, or animal biometric
collars, help agriculture by enabling real-time traceability and diagnosis.
 Automation solutions including technologies like agricultural robots that can simplify farm work
in a variety of ways, e.g., plough a field in just an hour, compared to the full day taken by a human.
 Engineering solutions such as vertical farms optimize resource consumption and effectiveness.
What should the government do?
Build national awareness of agri best practices: This requires driving an integrated national
programme involving research institutions, state administrations as well as the private sector.
Drive land aggregation: The government must take steps to encourage contract farming and producer
companies. However, this requires facilitating lease-based models of land aggregation while
protecting the land-ownership rights of farmers. Additionally, wasteland development should be used
to pilot commercial farming.
Revamp policies related to procurement and movement of agri commodities: Three changes are
critical here. Firstly, to provide remunerative incomes to farmers, procurement at minimum support
price should only be done when prices go below that level. This should apply even to procurement for
buffer stock and any social schemes. Secondly, the government needs to drive the implementation of
a standardized Agricultural Produce Market Committees Act. Finally, to enable free inter-state
movement of agri commodities, the Essential Commodities Act should be scrapped.
Streamline subsidies to encourage sustainable use of inputs: The current subsidy policy encourages
over-use of inputs like power, water and fertilizers. These incentives can be redesigned without
compromising end-goals of productivity or costs.

Conclusion:
As the country with the largest arable land acreage, India can not only ensure its own food security, it
can also become a source of food for the entire planet. The potential of the sector to become a growth
engine for India and food provider to the world can definitely be achieved. Hence, the government
should not only respond to the immediate challenges facing the farmer and the agricultural sector but
also reboot the agricultural policy to create an ecosystem for the future of Indian agriculture.
04/12 : Is Indian pharma breeding superbugs?

Summary:
In India’s neonatal hospital wards they struggle for life – sick infants battling untreatable “superbugs”.
Tens of thousands of them lose their lives every year. This is the frontline in the fight against antibiotic-
resistant bacteria, one of the most serious threats to global health of our time, according to the World
Health Organization. Various studies show that India is becoming a hotbed for superbugs.
What are superbugs?
Superbugs are bacteria that can no longer be killed by the current spectrum of antibiotics known to
humans. A superbug is a bacterium that carries several resistance genes. These are resistant to
multiple antibiotics and are able to survive even after exposure to one or more antibiotics.
What’s the main concern now?
Antibiotic-resistance is passed relatively easily from one bacteria to the next, since it is transmitted by
way of loose genetic material that most bacteria have in common. The World Health Organization
(WHO) is afraid of a post-antibiotic world, where loads of bacteria are superbugs. Already, infections
like tuberculosis, gonorrhoea, and pneumonia are becoming harder to treat with typical antibiotics.
Why India is more vulnerable?
 Bacteria spread easily in India because half of Indians defecate outdoors, and much of the sewage
generated by those who do use toilets is untreated. As a result, Indians have among the highest
rates of bacterial infections in the world and collectively take more antibiotics, which are sold
over the counter here, than any other nationality.
 A study found that Indian children living in places where people are less likely to use a toilet tend
to get diarrhoea and be given antibiotics more often than those in places with more toilet use.
 All those drugs that create resistance to antibiotics find their way into hospital sewage, which is
mostly dumped untreated into rivers, canals and pits in the surrounding community where
pregnant women can become infected.
 Equally worrisome has been the rapid growth of India’s industrialised animal husbandry, where
antibiotics are widespread. Most large chicken farms here use feed laced with antibiotics banned
for use in animals in the United States.
 Also, antibiotics are still readily available over the counter, and people still self-medicate. The
Indian government has notably failed to institute and implement real regulations to stop
chemists from handing out antibiotics like cheap candy.

What has the Indian government done in this regard?
For a while it looked like the Indian government was taking the matter seriously. A commission was
set up in 2011 which duly produced a report on how to contain the growth of anti-microbial resistance.
Yet too little has changed since.
Recently, to tackle the threat faced by India from resistance to antimicrobial drugs, the Department
of Biotechnology (DBT) — through the Biotechnology Industry Research Assistance Council (BIRAC) —
has launched a fund. This is an India-focussed seed fund. DBT has invested an initial $1,00,000 in this
fund. This fund is also expected to encourage biotechnology start-ups in the country.
What needs to be done?
First step would be to limit antibiotic use. If a patient has a virus, for instance, an antibiotic won’t work,
so doctors shouldn’t prescribe antibiotics even if the patient insists. And when patients do need
antibiotics, it’s important to make sure they take the full course to kill off every last infection-causing
germ. Otherwise the strong survive, mutate, and spread. As a society, curbing antibiotic use in healthy
animals used in human food production is another important step.

Conclusion:
Antibiotic resistance is a crisis on the level of climate change. It’s already killing tens, perhaps hundreds
of thousands a year. The world needs to be looking more closely at drugmakers and the governments
that choose to protect them. Also, the global community needs to urgently address the indiscriminate
use of antibiotics in an actionable manner and fast-track research on the next generation of drugs.
05/12 : ICANN57 – A Backgrounder

Summary:
Configured as a private US based multistakeholder association, the ICANN has become an exceedingly
important pivot in the ongoing debate regarding governmental control, multistakeholderism and the
transnational approach to Cyberspace. ICANN forms a part of the foundation of a peaceful
Cybersecurity architecture.
 In September, the US relinquished its control of the Internet Assigned Numbers Authority (IANA)
and transferred it to the ICANN, in what appears to be an ‘unprecedented surrender of
government control’.
What is the ICANN?
The Internet Corporation of Assigned Names and

Numbers (ICANN) is a non profit organization
that was set up in 1998 to oversee the
administration of domain names.
 ICANN coordinates and ensures the smooth

and secure functioning of the cybernetic
framework.
What it does?
The global nature of the Web today means that there are constantly increasing numbers of Domain
Names, Host Names, IP addresses and web sites that are emerging on a daily basis. ICANN oversees
this interconnected network and ensures that computers across the internet can find one another
through defined unique pathways and identifiers.
Key facts:
 It is responsible for coordinating the maintenance and methodologies of several databases, with
unique identifiers, related to the namespaces of the Internet – and thereby, ensuring the
network’s stable and secure operation.
 ICANN is governed by an internationally diverse Board of Directors overseeing the policy
development process.
 ICANN’s President directs an international staff, working from three continents, who ensure that
ICANN meets its operational commitment to the Internet community.
 ICANN doesn’t control content on the Internet. It cannot stop spam and it doesn’t deal with
access to the Internet.

ICANN performs four major functions namely:
 Approval of companies that can become accredited registrars for domain names.
 Decision making regarding the addition of new Top Level Domains (TLDs) to the Root system.
 Coordinating technical parameters to maintain universal connectivity.
 Creating a Uniform Domain Name Dispute Resolution Policy (UDRP) for competing domain
names.
Issues and limitations of the ICANN:
 The ICANN functions as a non profit group with a license from the US Department of Commerce.
Given the inescapable conundrum of its hierarchical structure, the ICANN has frequently been
criticised for an alleged lack of accountability and opaque decision making.
 The ICANN claims that it aims to share control between a wide range of interests including
technical experts, academics, representatives of civil society and governments without giving
control to any of them”. However this claim is yet to be fulfilled given the nascent state of the
transfer and the unpredictability of the outcome.
 The lack of diversity in its theorising body is also a major cause for concern. As a body aiming to
represent individual stakeholders across the world or the “Global internet consumer”, the
predominance of North American representation and first world academic rhetoric within the
policy making body is suspicious to say the least.
 The bureaucratic structure of the body is another major cause for concern among theorists. As
the Economist states, “ICANN’s “multi-stakeholderism”, which means that everybody has some
say, sounds like a bureaucratic nightmare. Yet it may be the best hope for finding common
solutions to the global problems created by the internet.”
Why should India be interested in this issue?
As an emerging global power with an ever increasing populace, the database of internet users in India
is constantly on the rise.
 Therefore, India has a larger role to play in global governance of the Internet and this is evinced
by its inclusion in the United Nations Group of Governmental Experts (UN GGE) as well as the
decision to host the upcoming 58th meeting of the ICANN in Hyderabad.
 This meeting will be the first meeting post the IANA transition and needs to be watched with
interest. The discussion will examine the immediate effects of the transition, and possible hurdles
that might emerge in the future.
 The meeting in Hyderabad provides a tremendous platform for raising issues and concerns as
well as seeking partnerships across borders to create an inclusive and access equal Cyberspace.
Way ahead:
Despite being an American invention, the Internet has now become a global architecture that forms
an integral part of daily functioning world over. The need of the hour is a globalized diverse peaceful
cybernetic architecture built on transnational collaboration. The internet of today needs to be a
diverse space inclusive of race gender, ethnicity, and class.

 Despite the various limitations of the ICANN and the issues with its hierarchical structure,
currently it remains a key multistakeholder private body in internet governance. The meeting in
Hyderabad is the perfect platform to increase India’s role in global internet governance.
 Given the changing demographic of internet usage and the proliferation of technology, it is
essential to reconfigure the internet into a more inclusive mould reflective of the globalized
world order we inhabit today. Creating an accessible Cybernetic discourse is the first step
towards building a secure and smooth functioning Internet architecture.
 There is still hope since the ICANN “is largely independent of national governments.” The board
is elected by outside organizations composed of businesses, non-profits, and Internet users from
around the world. And those organizations can recall individual board members, or the entire
board. While the ICANN has addressed some of these claims and issues, the path ahead remains
convoluted.
Conclusion:
Technological advancement is not merely an individual asset, but a double edged sword that serves
as a threat to as well as a weapon of State Functioning. As Information and Communication
Technology (ICT) frameworks are increasingly integrated with daily life, examining the fundamental
blocks that ensure the smooth functioning of this virtual simulacrum is the need of the hour.
07/12 : The Unmaking of the Forest Rights Act

Summary:
Aimed at protecting the rights of forest dwelling tribal communities the Scheduled Tribes and Other
Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 promised much. However, over
the years its implementation has been tardy and there have been concerted efforts to dilute it.
About Forest Rights Act (FRA):
The legislation, which was passed in December 2006, concerns the rights of forest-dwelling
communities to land and other resources, denied to them over decades as a result of the continuance
of colonial forest laws in India.
 The Act grants legal recognition to the rights of traditional forest dwelling communities, partially
correcting the injustice caused by the forest laws.
Rights under the Act:
 Title rights –e. ownership

to land that is being
farmed by tribals or forest
dwellers subject to a
maximum of 4 hectares;
ownership is only for land that is actually being cultivated by the concerned family, meaning that
no new lands are granted.
 Use rights – to minor forest produce (also including ownership), to grazing areas, to pastoralist
routes, etc.

 Relief and development rights – to rehabilitation in case of illegal eviction or forced

displacement; and to basic amenities, subject to restrictions for forest protection.
 Forest management rights – to protect forests and wildlife.
Eligibility:
Eligibility to get rights under the Act is confined to those who “primarily reside in forests” and who
depend on forests and forest land for a livelihood. Further, either the claimant must be a member of
the Scheduled Tribes scheduled in that area or must have been residing in the forest for 75 years.
Process of recognition of rights:
The Act provides that the gram sabha, or village assembly, will initially pass a resolution
recommending whose rights to which resources should be recognised. This resolution is then screened
and approved at the level of the sub-division (or taluka) and subsequently at the district level. The
screening committees consist of three government officials (Forest, Revenue and Tribal Welfare
departments) and three elected members of the local body at that level. These committees also hear
appeals.
Why this law was necessary?
What are called “forests” in Indian law often have nothing to do with actual forests. Under the Indian
Forest Act, areas were often declared to be “government forests” without recording who lived in these
areas, what land they were using, what uses they made of the forest and so on. 82% of Madhya forest
blocks and 40% of Orissa’s reserved forests were never surveyed; similarly 60% of India’s national
parks have till today not completed their process of enquiry and settlement of rights. As the Tiger Task
Force of the Government of India put it, “in the name of conservation, what has been carried out is a
completely illegal and unconstitutional land acquisition programme.” Hence, this was law necessary.
Various factors that have prevented the proper implementation of the FRA since its passage in 2006
include:
1. Process of documenting communities’ claims:
The process of documenting communities’ claims under the FRA is intensive — rough maps of
community and individual claims are prepared democratically by Gram Sabhas. These are then verified
on the ground with annotated evidence, before being submitted to relevant authorities.
The Gram Sabha is treated as a public authority under the FRA, and if the higher authorities under the
law reject its claims, substantive reasons have to be provided for doing so. This exhaustive process is
why the official diktat to implement the FRA so quickly lacks any understanding about the extent of
the task and labour involved.
2. Reluctance of the forest bureaucracy to give up control:
Another main factor inhibiting the FRA’s full implementation is the reluctance of the forest
bureaucracy to give up control. The forest bureaucracy has misinterpreted the FRA as an instrument
to regularise encroachment. This is seen in its emphasis on recognising individual claims while ignoring
collective claims — Community Forest Resource (CFR) rights as promised under the FRA — by tribal
communities.

To date, the total amount of land where rights have been recognised under the FRA is just 3.13 million
hectares, mostly under claims for individual occupancy rights.
3. Narrow interpretation of the FRA:
The narrow interpretation of the FRA is also to be blamed. It is against the letter and spirit of the law,
which seeks to undo historical injustices and return the forests to community jurisdiction. It also
contradicts the estimates for forest area collectively used by tribal and other forest communities that
are provided by government agencies themselves.
4. Environment Ministry’s moves:
The Environment Ministry’s conduct also causes concern. Entrusted with stewarding our forests, it has
instead concentrated great energy on how to hasten their felling (through the forest clearances it
awards). In doing this, it appears that it has, among other things, mounted a prolonged effort to see
if and how meaningful community participation can be eliminated from the clearance process.
What needs to be done now?
The government can start by recognising the role played in the FRA’s meagre implementation by the
forest bureaucracy’s resistance as well as the acute lack of awareness of FRA’s community rights
provisions in State administrations and forest communities. In almost all States, the Forest
Department has either appropriated or been given effective control over the FRA’s rights recognition
process. This has created a situation where the officials controlling the implementation of the law
often have the strongest interest in its non-implementation, especially the community forest rights
provisions, which dilute or challenge the powers of the forest department.
 If the government is serious about implementing the FRA, it should confront the forest
bureaucracy and make it clear that any obstruction on their part is unacceptable. The little
progress that has been made in implementation so far has been due to close coordination
between tribal departments, district administrations and civil society.
 There is also a clear need to strengthen the nodal tribal departments, provide clear instructions
to the State and district administrations, and encourage civil society actors. Without a strong
political will, this historical transformation is unlikely to take place.
Way ahead:
Many states have a poor record of implementation of the act: Bihar, Jharkhand, Himachal Pradesh,
Karnataka, Kerala, Odisha, Telangana, Uttarakhand, Uttar Pradesh and West Bengal have been
identified as having lagged behind in implementation of the FRA. The misuse of a law cannot be the
reason to dilute it or call for its repeal. Land is a valuable resource for those who live off it and one
way of ensuring lesser fragmentation is to approve community forest rights which take a long time for
clearance. People are at the centre of protecting forests and conservation and if the FRA is not
delivering its promise, it can be blamed squarely on the government’s devious approach and its barely
concealed intent to enfeeble the law.

Conclusion:
The implementation of the Forest Rights Act, 2006 has been opaque and there is serious lack of
awareness about its provisions not only among the beneficiaries but also among the officials in charge
of implementing it. Given the complaints from either side, it is time the government reviewed the law
and also looked at the objections raised when it was first tabled as a bill.
08/12 : After calls to uphold press freedom, one-day ban on NDTV India
put on hold
Summary:
The government has decided to put on hold the one-day ban on Hindi news channel NDTV India, a
week after announcing to take it off air for allegedly compromising national security with its coverage
of a terrorist attack on an air force base.
Background:
NDTV India was asked to go off the air after the

government said the channel revealed sensitive
details during its coverage of a militant attack
on the Pathankot airbase in January. This
crucial information could have been readily
picked up by the militants’ handlers and
jeopardised national security.
This was the first time a channel was asked to

stop broadcasting over concerns about
national security.
Under what legal provisions did the government impose the one-day ban on NDTV India?
It was banned under the provisions of The Cable Television Networks (Regulation) Act of 1995.
Section 20(3) of the Cable TV Act says: “Where the Central Government considers that any programme
of any channel is not in conformity with the prescribed programme code referred to in section 5 or the
prescribed advertisement code referred to in section 6, it may regulate or prohibit the transmission or
re-transmission of such programme.”
The Information and Broadcasting Ministry found that NDTV India had violated 6(1)(p) programme
code.
What does Rule 6(1)(p) of the Programme Code say?
Rule 6(1)(p) prohibits live coverage of anti-terrorism activities: “No programme should be carried
(which) contains live coverage of any anti-terrorist operation by security forces wherein media
coverage shall be restricted to periodic briefing by an officer designated by the appropriate
Government, till such operation concludes.”

When was this Rule introduced?
The point 6(1)(p) was introduced by an amendment to The Cable Television Network Rules last year,
which came into force in March 2015. Following the 26/11 terror attacks in Mumbai, between
November 2008 and March 2015, the government issued five advisories to television channels on the
coverage of such incidents.
To whom does the Programme Code apply? Is it binding?
The Cable Television Networks (Regulation) Ordinance was promulgated in 1994, which gave the
government powers to issue Rules for Cable TV. The Cable Television Networks (Regulation) Act of
1995 made the Rules introduced in 1994 binding on all cable networks which are either downlinked
to, or uplinked from, India.
What is the main allegation now?
According to the I&B Ministry, the channel broadcast a report which stated that two terrorists were
alive and were very close to the ammunition depot. The government said this gave away sensitive
information and could have helped the terrorists.
What NDTV says?
NDTV claims that all such information was already in the public domain, already reported by
newspapers and by other news channels. The channel also said it reported after briefings by various
officers at different times, and based on already available reports.
So how does all of this fit in with the constitutional freedoms guaranteed under Article 19?
India does not have specific laws protecting the freedom of the media. But journalists and journalism
thrive on the broader freedom of expression guaranteed by the Constitution. Article 19 gives all
citizens the right to freedom of speech and expression. However, the first amendment in 1951 put
“reasonable restrictions” on the use of Article 19 with regard to topics such as the sovereignty and
integrity of India, security of the state, friendly relations with foreign states, public order, decency or
morality or in relation to contempt of court, defamation or incitement to an offence.
Opposition to this move:
Top media bodies have expressed solidarity with NDTV and condemned the Centre’s move, saying it
sends a “dangerous signal” to the entire press, the freedom of which is already under “increasing
threat” in the country.
It is also being seen as a direct violation of the freedom of the media and therefore the citizens of
India.
How the govt defends its move?
But the government has defended the action, saying many other channels were banned in the past
and that free speech couldn’t be absolute or override national security.

Also, disclosure of sensitive information has several ramifications such as causing alarm and de-
moralisation of citizens and security forces, collateral damage to critical assets, apprehension among
families of those serving in combat.
But, why the ban seems to be illegal?
According to the Rule 6 (1)(p) of the Programme Code of the Cable TV Network Rules 1994, under
which it has been imposed, “No programme should be carried in the cable service which contains live
coverage of any anti-terrorist operation by security forces, wherein media coverage shall be restricted
to periodic briefing by an officer designated by the appropriate Government, till such operation
concludes.”
The above rule states that a ban is applicable on broadcasting ‘live coverage’ of anti-terrorist
operations by security forces.
“Live coverage means showing scenes of security forces searching or pursuing terrorists, or fighting
with them. Mere reporting about anti terrorist operations is not live coverage. NDTV had only reported
about anti terrorist operations, but had not shown any scenes of security forces chasing or fighting
with terrorists. So there was no live coverage. The ban was therefore clearly illegal,” say few experts.
Way ahead:
The decision by the government to make Hindi news channel NDTV India go off air for a day does set
an unhealthy precedent.
 The media does need regulation, especially in an era of “breaking news” and click-bait journalism,
where responsible and fair coverage is usually the first victim of the pursuit of ratings and traffic.
 In democracies, this should take the form of self-regulation. If that doesn’t work, as it sometimes
hasn’t in India, regulation should be the domain of a quasi-judicial independent body.
 One of journalism’s original objectives and ideals is to speak truth to power. By giving itself the
powers to force news channels to go off air, the government is laying itself wide open to
accusations of trying to, at worst, muzzle or, at best, influence, the news.
Conclusion:
India is one of the few democracies in the world where defamation can be a criminal offence (in
addition to being a civil one). Both traditionally offered adequate legal recourse to penalise the media.
In recent times, there has been a demand from several quarters for more regulation. An independent
regulator would serve that purpose. This is not the government’s job — nor is it, in any right-minded
society, the government’s remit. Indian media should also strive to improve the quality of its self-
regulatory institutions and frame better guidelines to deal with conflict coverage.
09/12 : Rs. 500, Rs. 1,000 notes no longer legal tender

Summary:
The union government has announced that five hundred and thousand rupee notes will cease to be
legal tender from today. This move is aimed at rooting out the menace of black money and corruption.

What is this scheme?
The legal tender character of the existing bank notes in denominations of Rs 500 and Rs 1000 issued
by the Reserve bank of India till November 8, 2016 stands withdrawn. In consequence thereof, these
bank notes cannot be used for transacting business and/or storage of value for future usage. These
bank notes can be exchanged for value at any of the 19 offices of the Reserve Bank of India or at any
of the bank branches or at any head post office or sub-post office.
How many Rs 500 and Rs 1,000 notes are floating around?
According to the RBI press conference today, there are 16.5 billion ‘500-rupee’ notes and 6.7 billion
‘1000-rupee’ notes in circulation right now.
 In addition to this, RBI data shows that the share of Rs 1,000 notes in the stock of currency in
circulation at the end of financial year 2014-15 was 39%. Rs 500 notes accounted for a further
45% of currency stock.
 Putting it simply, a little over 80% of the cash in India (by value) will be worthless pieces of paper.
What was the need for such move?
The incidence of fake Indian currency notes in higher denomination has increased. For ordinary
people, the fake notes look similar to genuine notes, even though no security feature has been copied.
 The fake notes are used for anti-national and illegal activities. High denomination notes have also
been misused by terrorists and for hoarding black money.
 Therefore, in order to contain the rising incidence of fake notes and black money, the scheme to
withdraw the Rs 500 and Rs 1000 notes has been introduced.

What’s good about this move?
 First, people who have a lot of cash, legally earned, will deposit it in the bank. This will increase
bank’s deposits by a huge margin. This will also increase the lending activity because banks have
a CRR (cash reserve ratio) to maintain and with more deposits they can do more lending.
 Credit (loans) will become easier and interest rates may come down. More loans given out
increases broad money supply and creates inflation.
 On a long-term basis the government’s decision to curb black money would reduce corruption
and bring transparency into the sector.
 The move will benefit the poor, middle class and aspirational middle class by increasing
opportunity and bringing real estate and higher education within their reach again.
 The government’s move will benefit companies in the cashless economy.
 Rupee will strengthen as the time passes. Inflation will go down which will benefit poor and
middle class people.
 Investments in gold and jewelries will increase as trust on currency will go down. More people
will try to convert paper into gold. It will eventually increase investment in the government’s gold
monetization scheme.
 More and more businesses will be organized those who accept paper money only such as small
jewelers, hotels etc.
 Funding for arms, smuggling, terrorism will take a blow. This is most important advantage to the
country.
 Circulation of counterfeit currency will see the end soon.
Who will be affected by this move?
 The lower/middle class will not find it tough to account for or exchange the currency. The real
fear will be for those who have unaccounted money.
 Land and property prices, particularly those of luxury homes, are likely to come down in the short
to medium term as a result of this move.
 The impact of this will be huge in many markets where payment of cash is mandatory and the
major form of profit-taking. These markets will see a major crash making an already difficult
situation even more challenging.
 The demand for gold and other investment options such as diamonds and silver may shoot
through the roof until the deadline, and beyond it.
Challenges ahead:
This ban on high denomination currency has the potential to dramatically push up the volumes of
electronic transactions. Consequently there are new cyber security implications.
 In the emerging cashless transaction environment the government and the businesses will have
to be on their feet to guard against cyberattacks as they are carried out not merely by criminals,
but also by nation states.
 Cyber warfare perpetrated by enemy states has the potential to hit a country’s economy.
Terrorist networks will find ways to penetrate the most protected vaults in the world in the
absence of unregulated cash transactions.

There is an immediate need for banks to get proactive about information security and beef up their IT
infrastructure against potential cyberattacks. What holds good for banks, also holds good for other
businesses as cyber criminals are quite capable of targeting Point of Sale terminals, mobiles and a
variety of other devices.
With more electronic transactions and monitored cash disbursals the government will have better
control on who has access to money. But we will need a robust and a proactive cyber security strategy
to ensure these objectives will work.
Way ahead:
While political parties welcomed the announcement, they cautioned the government must be open
to changes so that common people are not penalized in the process of fighting corruption and black
money.
In the medium to long-term the policy that emerges will determine how much corruption will return
in due course. The RBI and government will need a massive outreach and communication program to
calm the frayed nerves of the common citizen and transition to the new currency notes.
Conclusion:
The government’s move is bold in its intent and massive in its measure. While the intent is clear, the
implementation and impact is yet to be seen. One thing is sure though – the Indian economy just had
a massive disruption overnight.
10/12 : November thunderbolt

Summary:
Bucking media opposition, popular perception and Hillary Clinton’s vicious campaign, Donald Trump
has emerged as the 45th president of the United States of America.
How would this victory affect India?
Trump elucidated on his 15-point agenda in the run-up to the elections. If he decides to implement
them, it could impact the Indian government, people and businesses in several ways.
Positive implications:
1. Foreign Policy and Terrorism:
Trump has used strong words on the need to curtail ISIS and curb immigration from countries that
export terror. This would comfort India, which has seen a surge in support for ISIS among its young
population. If Trump fulfils his promise of restricting immigration, that would further hurt Pakistan.
Trump has also planned to expose networks in American society that promote radical Islam and
rewarding people to report those exhibiting signs of radicalisation to authorities. This would come as
a big boost to Indian government’s own domestic security policies which focus on the need to curb
growing Islamic radicalization in India.

After coming to power, the Modi government has been proactive in using the National Investigative
Agency (NIA) to apprehend people influenced by or supportive of ISIS. Trump’s ideological offensive
against radical Islam could be a force multiplier for the Modi government.
2. The Energy Plan:
Trump has promised to unleash America’s shale oil, natural gas and coal reserves to make U.S energy
self-sufficient. If elected president, he has also promised to open onshore and offshore leasing on
federal lands and lift the moratorium on coal leasing.
India, like many other nations in the world, is at the mercy of Organisation of Petroleum Exporting
Countries (OPEC) when it comes paying a price for oil. A rise in the price of fuel bleeds India’s domestic
oil companies, throws the government’s fiscal deficit targets in disarray and leads to a spike in the
prices of essential goods.
If Trump were to come true on his promises, India could benefit massively. Opening up of the US oil
sector could lead to price stability globally. It could also throw open massive business opportunities
for Indian oil companies including the state owned Oil and Natural Gas Corporation of India (ONGC)
whose foreign arm ONGC Videsh Limited (OVL) has been expanding its operations globally.
Negative implications:
1. The Tax Plan:
One of the highlights of Trump’s economic campaign is his plan to reduce corporate tax rates in the
U.S to 15%. At present the rate stands at 35%. This would make the U.S one of the most attractive
destinations in the world for businesses, especially for American businesses that have set shop in other
countries to improve their profitability by paying less taxes. If Trump were to implement this plan, U.S
businesses in India could be lured back to American soil.
2. Plan to curtail Chinese Trade:
Trump has threatened to label China as a currency manipulator. He has called for imposing higher
tariffs on Chinese goods, initiate litigation against China for stealing American trade secrets and bring

trade cases against China at the World Trade Organisation (WTO) to force it to cut down its trade
subsidies. Trump has harped on the need to reduce the trade deficit with China which touched a
record high of $365 billion in 2015. If Trump fulfils his promises and decides to curb Chinese imports,
it would hardly benefit India. That’s because Chinese manufacturing and existing trade with the U.S is
eons ahead of India.
3. Cutting Down Immigration:
Trump has called for making Americans being prioritised for open jobs and restricting skilled visas to
make more jobs available to Americans. That would be bad news for top Indian IT companies that
make their billions by using the H1B visa programme that allows low cost skilled Indians to work in the
U.S. Trump had earlier termed the H1B visa regime unfair. And later in a bid to earn the support of the
Indian-American community, he softened his stand. But Indians companies know that every American
presidential opposes the H1B visa programme while pitching himself to be elected and never follows
through with the promise of curtailing them once in office.
4. Reviving the American Economy:
Trump plans to boost GDP growth to 4% by adding 25 million jobs over the next decade. He plans to
do this through his lower corporate tax rate plan and easing regulatory frameworks for businesses. He
has also promised to cut federal spending to balance the budget through his penny plan that envisages
cutting one cent for every dollar in the federal budget over the next few years. That would mean an
enhanced role for private businesses in creating jobs to achieve Trump’s targets. That would mean
enhanced opportunities for not just big businesses in India but also smaller ones to invest in the U.S.
5. EB-5 visa programme:
The EB-5 visa programme is likely to further gain traction in India if Trump were to follow through with
his agenda of cutting federal spending while at the same time easing regulation for businesses. Under
the programme, Indian businesses would require to invest a minimum of $1 million and create at least
10 jobs for American workers. If any entrepreneur can do this in the U.S, they are eligible for a green
card. India has 2.5 lakh millionaires and the number is expected to double by 2025. That would mean
more opportunities for Indians to invest in the U.S and get that much coveted and aspirational green
card.
6. Scrapping Obamacare:
Trump has used colorful adjectives to describe Obamacare during his campaign and has vowed to
scrap the scheme aimed at providing affordable healthcare to Americans. That could be bad news for
the Indian pharma sector. As pointed above, pharmaceuticals constitute the second biggest exports
of India to the U.S. India’s strength in manufacturing affordable generic drugs complemented the
objectives of Obamacare. Indian generic drug companies had gained massively with a sub-legislation
under Obamacare that allowed the use of ‘biosimilars’. If Trump implements his promise to junk
Obamacare, Indian drug companies could be severely hit. Indian IT companies which provide support
to the program could also end up losing their business that could lead to job cuts in India.

How would China and Pakistan be affected?
China and Pakistan have been using the US as a cash cow for decades: China by running a huge trade
surplus ($366 billion in 2015); Pakistan by soaking up US aid (more than $30 billion since 2002), while
pretending to fight radical Islam. All signs indicate that Trump would cut down on the flow of cash to
both these countries.
The US has lost five million manufacturing jobs over the past 15 years, while China has seen rapid
growth in its manufacturing sector over the same period. Trump is electorally committed to bringing
a material number of lost manufacturing jobs back to the US; the only way he can do so will be to
offset Asia’s (especially China’s) labour cost advantage in manufacturing with a combination of tariff
and non-tariff barriers.
Such a move would come at the worst possible time for China, when a decades-long credit-fuelled
investment boom may finally be turning to bust. For China, the potential outcomes of a trade war with
the US range from sharply slower growth (best case scenario) to outright recession, which in turn
could spark political unrest and, in a worst case scenario, revolution.
What should India do now?
Finally, like much of the world, India is unclear about the policy directions of a Trump administration.
therefore, India should not waste time in reaching out to Mr Trump and his team in order to establish
a durable understanding that will take the relationship forwards in all sectors of relevance. However,
Indian government should make an attempt to sensitize the new president about the strategic
interests that bind India and the U.S., and the multifaceted nature of the relationship between the
two nations including its regional and global relevance. The ‘golden hour’ to do this may be even
before the inauguration of the new President in January 2017.
11/12 : Is NDA bringing the income of farmers under tax scrutiny?

Summary:
It is being said that the recent partial demonetisation and consequent scrutiny of high value bank
deposits is aimed at bringing the Indian farmer under the tax net.
 Agricultural income in India is not subject to income tax. Though the tax department has often
cited the exclusion of farmers as one of the main reasons for the low tax base of 40 million, no
government has ever moved towards taxing this sector given the politically sensitive nature of
such a move.
Background:
Recently, the government scrapped existing Rs500 and Rs1,000 notes and asked the public to deposit
these bills with banks and post offices by 30 December.
What the law says?
Agricultural income earned by a taxpayer in India is exempt under Section 10(1) of the Income Tax
Act, 1961. Agricultural income is defined under section 2(1A) of the Income-tax Act.

As per section 2(1A), agricultural income generally means:
 Any rent or revenue derived from land which is situated in India and is used for agricultural
purposes.
 Any income derived from such land by agriculture operations including processing of agricultural
produce so as to render it fit for the market or sale of such produce.
 Any income attributable to a farm house subject to satisfaction of certain conditions specified in
this regard in section 2(1A).
Why tax agriculture income?
 A large portion of Indian farmers are illiterate or semi-literate and they do not maintain
systematic books of accounts regarding their production and income. Hence, assessing their true
income or income-earning potential becomes an onerous task for the bank loan officers.
 So, often bank loan officers in India rely on informal networks created by social affiliations in
order to elicit information about the borrowers. This provides opportunity to only those
borrowers who are connected to the loan officers. Only these people obtain optimal credit.
 Besides, loan officers are rotated every three years. This makes matters worse from a borrower’s
point of view. Various studies have shown that a new loan officer entering a branch after job
rotation restricts credit to borrowers who borrowed from the previous loan officer.
 Also, it has been found that many farmers in India are making large cash deposits derived from
non-farm sources but mask them as farm income.
How tax on agriculture helps?
 Taxing agricultural income can improve access to finance to a large section of farmers because
verified income tax returns can provide a credible signal of the earnings potential of a farmer.
 Such verifiable information can help to separate conscientious and productive farmers from the
unscrupulous or unproductive farmers. Such separation can be very useful in not only enabling
access to finance but also entered using the cost of credit borne by farmers.
 Taxing also helps banks to carefully eliminate strategic defaulter intending to exploit the lax
enforcement standards prevalent in the country.
 Well-directed agricultural loans would not only enhance agricultural productivity, but also hasten
the movement of unproductive agricultural workers to the manufacturing sector.
Concerns:
There could be a concern that the imposition of tax could lead to credit flowing only to big farmers as
they have higher income to show. However, researchers have shown that loan officers can easily infer
the true income of large borrowers even when tax records do not present a true picture.
Hence, large farmers are less credit constrained. But, in case of small farmers, the loan officer cannot
assess true income without carefully analysing credible evidence. Income tax return can be one such
evidence.

Way ahead:
The income tax department will soon scrutinize all high value cash deposits and cross check if it is in
line with the land holdings of the farmer and the corresponding yields. In case there is a large
discrepancy, the farmer will be asked to explain this difference.
Exemption of agricultural income from tax provides an opportunity to those intent on tax evasion.
Unless this loophole is plugged the problem will recur. Taxing agricultural income can be done without
hurting farmers who have borne the brunt of agrarian distress. Therefore, it is an idea worth pursuing.
Conclusion:
The government should now seize

the opportunity to benefit the small
farmers by taxing agricultural
income. If this issue is not taken
care of immediately, it would lead
to low agricultural productivity and
high default rates on agricultural
loans leading to farmer distress.
The case is also for a fair tax regime
and not an unfair burden on any
vocation. Exemptions provide
opportunities to avoid or evade
taxes. Shutting down exemptions is
an important part of the effort to
combat tax evasion.
12/12 : Blacklisting Policy on the Anvil

Summary:
The Defence ministry has approved a new ‘blacklisting’ policy for suppliers to tackle cases of
corruption in defence deals without adversely affecting the procurement process.
 The new policy was approved by the Defence Acquisition Council (DAC) under the chairmanship
of Defence Minister Manohar Parrikar recently.
 Since the details are yet to be released by the Ministry of Defence (MoD) there is some suspense
about what the policy will look like.
What was the need for this policy?
The defence forces were hit hard by existing blacklisting norms

under which the previous government had blacklisted many
critical firms under a blanket policy.
 From ammunition to guns, there is a long list of items that
could not be procured in time, or at all, from the best available sources because of allegations of

transgression against the manufacturer or the group of companies to which the manufacturer
belonged.
 The new government had also voiced concerns over indiscriminate blacklisting of companies
supplying defence products over “small issues”.
Highlights of the policy:
 Some media reports suggest that a company could be blacklisted for 1 to 10 years. Others suggest
that it could be blacklisted for a year at a time – if criminality is established against it or there is
evidence of kickbacks. The punishment will, however, be less harsh if the criminality is not
established.
 Reports also suggest that those found guilty of procedural lapses, oversight or omission will be
allowed to carry on business with MoD on payment of hefty fines. In other words, there will be a
system of graded punishment and fines commensurate with the gravity of transgression.
 Some reports indicate that the new policy envisages fast-track investigations and that the
duration of investigation will be taken into account while prescribing a ban on the offending
companies.
 Under the new policy, the decision to blacklist a company will not be an executive one. It will be
done in a collegiate manner by a committee, which will also include the vice-chiefs of the Army,
Navy and IAF.
 Under the new nuanced blacklisting norms, procurement of spares for platforms and equipment
already purchased from a company under the scanner will be allowed. Moreover, companies
already blacklisted will now also be able to appeal to the government for a review, based on
merits of a case.
What’s good about this policy?
 It strikes a balance between the need to effectively punish corruption but also ensure military
modernisation does not get adversely impacted.
 It will also not halt procurements as the policy will require action to be taken only against the
offending entity and not the entire group of companies to which such entity belongs.
 The focus of the new policy will be on graded blacklisting and fines. This means that if a defence
supplier is found guilty of wrongdoing in procurement of a particular military platform, it will be
banned for a specific number of years from dealing in that particular segment. This will ensure
that while defaulting companies are dealt with harshly, the modernisation is not affected.
What is to be ensured?
 The new policy must be comprehensive enough to ensure that no loose ends are left to be tied
at time of implementation. For instance, it is almost certain that only the offending company,
and not the entire group of companies to which it belongs, will face the consequences of
transgression under the new policy. It will need to be made clear whether such offence should
relate directly to its dealings with the Indian MoD, or whether involvement in corruption
anywhere in the world would be sufficient to attract penal action.
 In this regard, the policy should also strive to strike a balance between the need to
punish/penalize the offending companies and ensuring that the process of modernization does
not suffer in the process.

 The new policy is also not clear about the basis for deciding the duration of blacklisting and the
deciding authority. The policy must answer all such questions and lay down the procedure for its
implementation.
 It would be equally important to specify the procedure for investigation of complaints, the
authority competent to decide what action is to be taken based on the investigation report, the
agency which will be responsible for taking follow-up action, and the procedure for appealing
against the decision of the competent authority.
 Another important question that needs to be answered in the interest of fair play is as follows:
whether the company facing investigation will be required to hold in abeyance its commercial
offer if the investigation starts after submission of response to the Request for Proposal (RFP)
during the entire period of investigation or be allowed to revise its quote if it is subsequently
exonerated.
Conclusion:
Being a sensitive issue, the effectiveness of the policy will depend to a large extent on its acceptability
across the political spectrum. Therefore, proactively building a political consensus around it would go
a long way in establishing the credibility of the policy.
14/12 : The big deal with Japan

Summary:
The annual strategic dialogue between India and Japan which began in 2009 has now come to fruition
with the signing the nuclear cooperation agreement in Tokyo during Prime Minister Narendra Modi’s
visit.
 Japan has civil nuclear treaties with 13 countries, including the US, France and Russia, but this is
the first with a nation that is not part of the Nuclear Nonproliferation Treaty (NPT).
Background:
India and Japan were at loggerheads since 1998 when India conducted its nuclear tests. Japan was the
country that took it the hardest. It put all political exchanges with India on hold, froze aid and
announced economic sanctions within hours. A thaw in ties didn’t come until 2001, when sanctions
were lifted. And then, in 2009, the two countries began an annual strategic dialogue.
Why both countries took so much time to sign this deal?
The deal had been proposed six years ago and till very recently, it seemed that the process would not
be concluded.
 The two prime ministers had signed a memorandum of understanding last December but the
thorny issues of Japanese companies’ liability for nuclear accidents, the reprocessing of spent
nuclear fuel, and the consequences of any future testing of nuclear weapons by India, remained
on the table.

 The last stage of negotiations on the deal was keenly watched due to a “nullification clause”,
which sought automatic cancellation of the agreement if India resorts to nuclear testing in the
future.
 Another sticking point has been India’s refusal to sign the NPT, as it considers the treaty unfair to
the developing world.
What’s there in the

new deal?
 Nullification
clause issue was
resolved by
annexing a
separate
memorandum to
the treaty which
specifies that
Japan can
suspend
cooperation if
India breaches its
no-testing pledge
to the NSG.
 India conceded to
Japan on another
clause which says
that Japan can
notify India of the termination of the pact with one year’s notice.
Why this deal was important for India?
 Apart from the Russian reactors, India’s planned nuclear reactors with France and US also depend
on Japanese parts. Moreover, GE, Westinghouse, and Areva, the companies planning reactors in
India, have important ownership stakes of Japanese companies such as Hitachi, Toshiba and
Mitsubishi, which were stopped by the Japanese government from doing business with India
without a final nuclear deal. This deal will help guarantee Japan’s continued support to India’s
civil nuclear programme for generation of clean and cheap power.
 Reservations in Japan against nuclear energy have hardened after the Fukushima accident.
Tokyo’s support to the deal so far is therefore an indication of the importance it accords to
relations with India.
 The agreement is also important for the message of trust it would convey to Nuclear Suppliers
Group members in a year the country hopes to have its admission accepted. It gives a much-
needed moral boost.
 The move will also boost the meagre, and dipping, bilateral trade of $15 billion, and lift the
strategic military and defence relationship.

What’s in it for Japan?
This deal will mainly help Japan for economical reasons as companies like Mitsubishi and Hitachi are
also in the nuclear energy field, and they are running in loss ever since the Fukushima disaster. These
companies are frantically looking for new markets to expand in and there could be no better place
than energy starved India. Japan had initially opposed the Indo-US Nuclear deal, as India wasn’t a
member of NSG but later changed its position after realizing that its going to be the sole loser in the
lucrative Indian market.
Why few countries are opposing this deal?
They say, signing a nuclear trade deal with a country that has shunned the treaty designed to stop the
spread of nuclear weapons is itself a big mistake. Besides, the agreement contains many questionable
and worrisome elements. For instance, the pact doesn’t make it clear whether India has to
immediately shut down reactors using Japanese technology when it carries out a nuclear test.
Way ahead:
Now, Japanese Prime Minister must bring the deal to Parliament in early 2017 to ensure that the
commercial agreement for Westinghouse’s six reactors in Andhra Pradesh that is due in June 2017
comes through. This will also coincide with the next plenary of the NSG. Both New Delhi and Tokyo
must also be wary of the impact on Beijing of this new stage in their ties.
China has been hedging against deeper Japan-India ties in Asia by investing in its relationship with
Russia and Pakistan. As the two Asian rivals to China, India and Japan might need the partnership even
more in the days to come, as the U.S. President-elect has indicated a lower level of interest in “playing
policeman” in the region.
Conclusion:
Japan now follows eight other nations, including the US, France and Russia, in entering into a pact with
India. It signals a wider acceptance of India’s status as a responsible actor. Overall, given the economic,
nonproliferation, and regional power balance issues examined above, it is clear that full-fledged Japan-
India civil nuclear cooperation is fundamentally a development to be welcomed. The question remains
regarding whether India is likely to conduct further testing of nuclear weapons and how such tests
would impact the bilateral agreement.
15/12 : Impolitic musings

Summary:
India had always advocated a ‘no first use’ (NFU) nuclear doctrine based on credible minimum
deterrence. Thus India’s nuclear weapons are solely for deterrence and we pursue a policy of
‘retaliation only’. It implies that India would give an adversary an opportunity to strike before it
retaliates. This aspect was recently questioned by the Defence Minister when he commented that
India should state that “it is a responsible nuclear power and would not use it irresponsibly, instead
of declaring an NFU doctrine”.

 While these were his personal thoughts and he clarified them as such, they came from the
defence minister at a time the Prime Minister was in Japan to ink a spectacular nuclear deal, the
first by a non-NPT signatory country with Japan. It immediately drew criticism from all political
parties.
What is no first use nuclear doctrine?
No first use (NFU) refers to a pledge or a policy

by a nuclear power not to use nuclear weapons
as a means of warfare unless first attacked by
an adversary using nuclear weapons. Earlier,
the concept had also been applied to chemical
and biological warfare.
 India first adopted a “No first use” policy after its second nuclear tests, Pokhran-II, in 1998. In
August 1999, the Indian government released a draft of the doctrine which asserts that nuclear
weapons are solely for deterrence and that India will pursue a policy of “retaliation only”.
 The document also maintains that India “will not be the first to initiate a nuclear first strike, but
will respond with punitive retaliation should deterrence fail” and that decisions to authorise the
use of nuclear weapons would be made by the Prime Minister or his ‘designated successor(s)’.
Why India should retain this policy?
 Adopting a no-first use policy enables New Delhi to keep the nuclear threshold high, especially
as Pakistan tries to lower the threshold by developing tactical nuclear weapons, the Hatf-9 with
60km range.
 It must also be noted that New Delhi is not bordered by just one nuclear weapon state. China
adopts a no-first use policy and, in spite of calls for Beijing to revise its no-first use doctrine, it is
unlikely to do so. Hence, if New Delhi gave up its no-first use doctrine, it could give Beijing a
chance to adopt a first strike policy and shift blame on India.
 In fact, India’s adoption of a first strike policy would be an easy excuse for Beijing to give up its
no-first use doctrine against the United States and Russia as well.
 Moreover, India has always promoted herself as a responsible nuclear weapon state. Hence, a
first strike policy would severely damage India’s reputation as a responsible nuclear weapon
state. This means that while India would not be resilient to any nuclear attack by its adversaries,
at the same time, it will not act as a villain who tries to bully its adversaries by threatening to
strike first.
 Also, it is India’s no first use doctrine that has enabled both Pakistan and India to keep their
nuclear arsenal in a de-mated posture rather than a ready deterrent posture. This means nuclear
warheads are not mated with the delivery systems. This reduces the chances of nuclear terrorism
in Pakistan and also reduces the likelihood of an accidental launch of a nuclear weapon. A first
strike policy by India may not have allowed Pakistan to keep their nuclear arsenal in a de-mated
posture.
 There is also the issue of ballistic missile defense being developed by India which is highly
destabilizing in nature and hence, New Delhi would continue to resort to using its no-first use
doctrine in order to prevent instability in the South Asian region. A first-strike policy, coupled

with a ballistic missile defense system, could provoke Pakistan to launch a nuclear pre-emptive
strike against India.
 By adopting a no-first use doctrine, New Delhi has also made it evident that nuclear weapons are
indeed the weapons of last resort. Abandoning this doctrine would make it evident that India
considers the option of using nuclear weapons in the initial phases of the conflict. In fact, India’s
nuclear strategy is dependent on punitive retaliation. This strategy itself acts as deterrence
against Pakistan.
Threat from neighbors:
The region has three major nuclear powers, Pakistan, China and India. Since relations with the other
two nuclear powers of the region are unstable, India must always be prepared for an armed conflict.
 China like India also professes a NFU nuclear policy, while Pakistan makes no such claims. India
could face hostilities against either nation or in a worst-case scenario against both
simultaneously. India’s nuclear policy therefore needs to be understood in this light.
 Pakistan professing its right to employ nuclear weapons is based on its fear of India’s
conventional superiority. Since the announcement by India of the cold start doctrine, implying
launching swift operations from the line of march even before their defensive forces are
deployed and prepared, made Pakistan resort to development and deployment of tactical
nuclear weapons.
 Its aim was to stem the Indian offensive by employing these weapons, even in their own territory,
before a major town was threatened. This has compelled India to consider multiple operational
plans below possible nuclear threshold levels.
Way ahead:
A policy enunciated by a nation is a confirmation of the nation’s preparation for countering its
expected threats as also its commitment to international obligations and regulations. There cannot be
a policy against one country and a different one against another. India’s nuclear policy, like that of
other nations, is based on its strategic threat perceptions.
 India has always projected herself as the firm supporter of nuclear disarmament. She has been
the only state to call for a Nuclear Weapons Convention that would ban and eliminate nuclear
weapons. However, it is India’s no-first use stance that enables New Delhi to vouch for a nuclear
weapons free world.
 Therefore, India’s strategy of maintaining a ‘minimum credible deterrent’ should be married
successfully with its no first use doctrine. Instead of focusing on adopting a first strike policy,
India must work towards strengthening its counter strike and second strike capability.
 India’s third leg, its sea based nuclear deterrence, must be strengthened at the earliest. Long
range submarine launched missiles could enable New Delhi to enhance the survivability of its
nuclear arsenal. As India’s command and control would continue to get robust, the no-first use
doctrine would also be strengthened.
Conclusion:
A nation lays down its nuclear policy for international consumption. Mature nations always pursue a
NFU policy. In the present strategic context, there is no necessity for India to change its existing

nuclear doctrine. There are no immediate threats facing the nation which could escalate into a nuclear
conflict. Further, as India seeks to establish its credentials in the international comity as a responsible
nation and a growing economic power, it should also project the same by means of its nuclear
doctrine. At the same time, New Delhi must take the effort of making its neighbors believe in its
nuclear doctrine through effective confidence building measures.
16/12 : International Solar Alliance could be the climate change game-

changer
Summary:
Less than a year after it proposed a unique coalition of sunlight-rich countries to fight climate change
through deployment of renewable energy, India has been able to make the International Solar Alliance
(ISA) a reality. More than 20 countries recently signed a Framework Agreement on International Solar
Alliance which will take the shape of a separate international treaty once it is operationalised.
 ISA was proposed at the Paris climate conference last year and has become a reality at
the Marrakesh meeting now, thus getting closely linked with the UN climate process.
About International Solar Alliance

(ISA):
India launched the International Solar

Alliance (ISA) at the CoP21 Climate
Conference in Paris. The alliance brings
together developed and developing
countries, governments and industries, laboratories and institutions in a common enterprise.
What is it for?
Among the tasks that the Alliance would pursue are, cooperation in training, building institutions,
regulatory issues, common standards, and investment including joint ventures.
Aims of ISA: The main aims of ISA include reducing financial risk across a larger global market,
encouraging cooperation on technology, building capacity, and increasing energy access.
Significance of ISA:
More than 120 countries are geographically located in the tropics, between the Tropic of Cancer and
the Tropic of Capricorn, either fully or partially. These places get ample sunlight throughout the year,
making solar energy an easily available resources.
 These countries also happen to be ones where maximum growth in energy demand is expected
in the coming years, considering that these are areas where current production is woefully short
of requirement.
 The ISA is an effort to ensure that as these countries rapidly ramp up their electricity production,
they should predominantly use solar energy and avoid fossil fuels.

The ISA seeks to do three things to bring down the costs of technology as well as the costs of
finance needed for a solar project:
 It seeks to boost global demands which will result in further reduction in prices of solar energy
deployment.
 It seeks to promote standardisation in the use of equipments and processes for generating
electricity. Standardisation will make the manufacturing of equipments and other hardware
cheaper.
 It seeks to boost research and development, particularly in areas of efficient storage systems.
India and the ISA:
The secretariat of the ISA is to be located in India. India will also host a meeting of ISA assembly
every year.
 India has promised to contribute $27 million for creating building infrastructure and recurring
expenditure for five years, till 2020-21. A part of this money will also go towards creating a corpus
fund of $16 million that will generate revenues for the budget of ISA.
 Two public sector undertakings, the Solar Energy Corporation of India and the Indian Renewable
Energy Development Agency, have also promised $1 million each for the corpus fund.
Challenges:
Despite its promise, ISA faces two real dangers.
 The longer-term one is whether it devolves into a bloated bureaucracy. Although conceived as
an intergovernmental institution, ISA is not intended to be a typical international bureaucracy.
Its extremely lean Secretariat (possibly smaller than any other international agency) could
leverage networks and create tangible opportunities for manufacturers, developers, financiers
and innovators. A tight budget and a direct link to the private sector would hold ISA accountable
to real action on the ground.
 The more proximate danger is that 121 potential member countries get caught up in a battle
over legal form, membership rights, and giving precedence to procedure over pragmatism. This
would violate the very ethic of a dynamic international organisation for the 21st century, where
action is rewarded and initiatives judged by the effectiveness of their execution.
For the alliance to be successful, it is necessary to consider implementing the following steps:
Select a permanent director general (DG): A dynamic and permanent DG can draw attention to the
alliance, build relationships with member states and other international institutions, interact with the
media regularly, and develop a strategic plan.
Create a core ISA coordination group: Since its launch, the ministries of new and renewable energy,
external affairs and other agencies have been discussing informally and working together to keep the
ISA wheels moving. However, since the world is looking at how this evolves, a dedicated inter-
ministerial group will be needed to distribute the workload, allocate funds, maintain contact with
member states, and prepare related documents.

Issue a white paper on ISA governance: ISA is an inclusive multilateral institution but there is as yet
lack of clarity on its governance structure. A paper outlining alternative governance models would
draw in ideas from member states and other stakeholders and inform deliberations in subsequent
meetings.
Assess all proposals through a “value-add” lens: A number of ideas are beginning to come forward
on what other institutions (private, public and inter-governmental) could do to shape ISA’s agenda,
such as mobilising investments or deploying projects in member countries. It is important that ISA
activities do not overlap unnecessarily with those of other organisations. A “value-add” perspective –
and measuring each initiative against stated aims – would help ISA specify its unique proposition for
the benefit of members and investors.
Kick-start bold initiatives: It would be useful to launch one or two bold initiatives, which could capture
the imagination of ISA members. This could trigger interest from innovators, project developers,
bankers and other investors.
Establish formal links with private sector platforms: many other renewable energy-focused
organisations do not have strong links to the private sector. ISA can distinguish itself by giving private
sector consortia observer or associate member status, encouraging them to design and implement
ISA programmes, and build relationships for targeted investments.
Announce an ISA summit and expo: An annual or biennial summit and expo would draw further
interest.
Why solar energy is gaining momentum in recent times?
The total installed capacity of solar energy across the globe has risen by almost eight times during
the last six-seven years.
 The revolution in the deployment of solar energy in this period has been made possible by
a sharp drop in the costs of production of electricity through solar cells.
 The costs have come down by 80-85% in the last seven years, thanks to a rapidly growing
demand as countries look to move away from fossil fuels on climate change concerns.
 This has made solar energy very competitive in comparison to the more traditional sources of
electricity generation like coal-fired thermal power plants.
Way ahead:
The signing now has to be followed by ratifications by countries. The agreement will become
operational after at least 15 countries have ratified it.
Now, it is important that the key backers of ISA start speaking loudly, clearly and frequently about
ISA’s vision, activities and their added value.
Conclusion:
International Solar Alliance is one among many multilateral and plurilateral initiatives, which have
been launched in recent years. Other initiatives include the International Renewable Energy Agency,
Renewable Energy Policy Network, Renewable Energy and Energy Efficiency Partnership, Global Green
Growth Institute, and so on. As the newest inter-governmental institution in the world, it is imperative

that ISA carves a niche for itself and demonstrates genuine value to its members. The ISA also gives
India an opportunity to take global leadership in the fight against climate change.
17/12 : Russia withdraws backing for International Criminal Court treaty

Summary:
Russia has said it is formally withdrawing its signature from the founding statute of the international
criminal court, a day after the court published a report classifying the Russian annexation of Crimea
as an occupation.
 In this regard, Vladimir Putin has signed an order to have Russia withdrawn from the International
Criminal Court (ICC).
 Putin has also instructed Russia’s foreign ministry to notify the United Nations of the country’s
refusal to be subject to the body’s activity, following the same move by Gambia, South Africa and
Burundi.
Implications:
 Russia signed the Rome statute in 2000 and

cooperated with the court, but had not ratified
the treaty and thus remained outside the ICC’s
jurisdiction. This means that the latest move,
though highly symbolic, will not change much in
practice.
 The repudiation of the tribunal, though symbolic, is a fresh blow to efforts to establish a global
legal order for pursuing genocide, war crimes and crimes against humanity.
Reasons behind Russia’s move:
 According to Russia, the tribunal had failed to live up to hopes of the international community
and denouncing its work as “one-sided and inefficient”.
 Russia specifically said it had lost trust in the court over its handling of an investigation into the
five day war between Russia and Georgia in 2008, saying that it had not properly investigated
alleged Georgian crimes.
 Recently, ICC had published a report that recognised the annexation of Crimea as a military
conflict between Russia and Ukraine, and classified it as an occupation.
 The report also compared the situation in the Crimea and Sevastopol to the international armed
conflict between Ukraine and the Russian federation.
 Russia may also be concerned about ICC jurisdiction in Syria, where its forces have been
repeatedly accused of carrying out war crimes in recent months.
Russia’s arguments:
Russia insists Crimea was incorporated into Russia following a legitimate referendum in accordance
with international law and publicly denies its military involvement in the war in eastern Ukraine.

Background:
The Russian federation had employed members of its armed forces to gain control over parts of the
territory of Ukraine without the consent of the government of Ukraine.
 Russia has insisted that Crimea voluntarily joined Russia after a referendum, but international
observers say the referendum was hastily organised, did not meet international standards, and
was conducted as Russian troops swept through the peninsula.
 Having initially denied vehemently that Russian troops were involved in the takeover, Putin later
admitted it.
About ICC:
The International Criminal Court was set up by international treaty in 2000 to prosecute war crimes,
crimes against humanity, and genocide.
At a glance | The International Criminal Court (ICC):
 Established: 2002.
 Budget: €139.5 million (in 2016).
 Headquarters: The Hague, the Netherlands.
What does it do?
The ICC investigates and, where warranted, tries individuals charged with crimes of concern to the
international community.
What sort of crimes?
The ICC has jurisdiction over four main crimes:
 Genocide
 Crimes against humanity.
 War crimes.
 Crimes of aggression.
Key facts:
 It is the first permanent, treaty based, international criminal court established to help end
impunity for the perpetrators of the most serious crimes of concern to the international
community.
 The ICC is an independent international organisation, and is not part of the United Nations
system.
 Although the Court’s expenses are funded primarily by States Parties, it also receives voluntary
contributions from governments, international organisations, individuals, corporations and other
entities.
 The Assembly is presided over by a president and two vice-presidents, who are elected by the
members to three-year terms.

Recent developments:
In recent months, three African countries who were all full members of the ICC – South Africa, Burundi
and Gambia – have signalled their intention to pull out, following complaints that ICC prosecutions
focused excessively on the African continent. Significant numbers of people across Africa appear to be
tired of what they see as the court’s bias, with the vast majority of cases coming from this part of the
world.
Challenges ahead:
The ICC has struggled to obtain widespread international acceptance. The US, India and China as well
as most Middle Eastern states have declined to ratify the Rome statute which established the court.
About 120 countries, mainly smaller states, have ratified the treaty. The resurgence of nationalist
politics, apparent in Brexit and Donald Trump’s presidential election victory, suggests the tide may be
turning against international legal institutions.
How can the ICC be strengthened?
 If the court is expected to intimidate the worst type of criminals though, it needs powerful allies.
There’s a gaping hole in the ICC’s membership list. Several concrete steps should be taken to
strengthen international justice, including appointing an International Justice Ambassador,
putting more resources into charging suspected war criminals and advocating through
diplomacy.
 The court should also tread carefully around powerful states, particularly the U.S. It has opened
investigations into 10 countries; of these, nine are in Africa. It’s not a good look. The docket’s
imbalance doesn’t actually prove the court’s bias – let’s not forget that many African countries
were initially eager to fall under ICC jurisdiction, are not willing or able to conduct their own
proceedings, and have requested court intervention themselves. Still, investigations into
Western-led torture and abuse might improve the court’s reputation for impartiality, rather than
fuelling an unfair but powerful sense that the ICC is the enforcement agency of aggressive
Western states.
 Legally, politically and financially, the ICC isn’t as strong as it needs to be. That fact is sobering to
every person who honestly believes in the basic principles of justice – including those who believe
that no injustice has been committed. This should be taken care of.
Way ahead:
Membership of the Rome Statute is a voluntary and sovereign decision which is the prerogative of all
States. The ICC is respectful of each States’ sovereignty. At the same time, the support of the
international community is necessary for the ICC to fulfil its independent and impartial mandate to
help end impunity for the perpetrators of genocide, crimes against humanity and war crimes, provide
justice to the victims of such crimes and contribute to the prevention of future atrocities.
Conclusion:
The court has continued to do the work for which it was created and has made significant
achievements in addressing crimes of concern to the international community as a whole such as the
use of child soldiers, sexual violence in conflict, attacks on civilians and the destruction of cultural

property. Therefore, any act that may undermine the global movement towards greater accountability
for atrocity crimes and a ruled-based international order in this new century is surely – when
objectively viewed – regrettable. International criminal justice is a long-term project and should
remain a top priority in order to bring perpetrators of crimes to justice and protect victims across the
world equally.
18/12 : Time to move towards a new litigation policy

Summary:
Judicial system in India is in the process of undergoing reforms. However, a National Litigation Policy
is long overdue. Both executive and the judiciary have understood the need for such policy.
Why it is necessary to have a National

Litigation Policy?
 Government litigation reportedly

constitutes nearly half of all litigation
in the Indian judiciary. It acts as a
constraint on the public exchequer. It
has also contributed to judicial
backlog, thus affecting justice delivery in India.
 A National Litigation Policy would reduce the trivial litigations in which the government is also a
party and would make the government a responsible litigant, which could use alternate dispute
resolution mechanisms to bring an end to various litigations.
 The policy also helps to reduce the number of cases, thus reducing the burden of the judicial
system, which currently has to deal with a large number of cases. The Supreme Court, since the
1970s, has berated successive governments for being callous and mechanical in pursuing
litigation.
 The Law Commission of India also studied this problem in its 126th Report in 1988, and made
appropriate observations on this front.
Attempts so far:
The Law Minister in the United Progressive Alliance government had launched a “National Litigation
Policy” (NLP) in 2010 to transform the government into a “responsible and efficient” litigant. The
policy aimed at not only reducing average pendency of cases, but also placing compulsive restraint on
the government from approaching courts for petty claims or serious ones.
This concept of a national litigation policy has been explored by other countries as well. The Australian
Taxation Office, for example, conducts its litigation in accordance with the PS LA 2009/9 Conduct of
Tax Office Litigation, which is an elaborate set of guidelines obligating the government to be a model
litigant.
Why it failed?
The policy failed as an initiative due to ambiguity.

 The policy is seen as a replete with rhetoric and generic phraseology which has no scope for
implementation. Instead of being an analytical policy document attempting to address the causes
of excessive government litigation, it appears to have been drafted on anecdotal notions of the
problem, with no measurable outcomes or implementation mechanism.
 The policy fails to provide a yardstick for determining responsibility and efficiency. The policy
then idealistically states that there should be greater accountability regarding governmental
litigation, and mandates “suitable action” against officials violating this policy. However, the text
does not define this “suitable action”, or prescribe any method to conduct any disciplinary
proceedings.
 The NLP 2010 also creates “Empowered Committees” at the national and regional levels,
apparently to regulate the implementation of the policy. But there is ambiguity about their role
and powers, resulting in lack of transparency in their functioning. While these committees are
intended to be integral to the accountability mechanisms under the policy, the ambiguity in their
roles and functions make them susceptible to a constitutional challenge.
 The NLP 2010 also lacks any form of impact assessment to evaluate actual impact on reducing
government litigation. This absence of a monitoring mechanism is evident from the fact that
there is no data available even today to accurately verify the extent of government litigation in
India. Without such evaluation, this litigation policy remains a theoretical, ambiguous and fairly
inadequate document on the pretext of policy reform.
What has the new government done in this regard?
The new government at the centre proposed, in September 2015, a national litigation policy for out-
of-court settlement of cases among government departments, public sector undertakings and other
government bodies. However, no concrete decision has been taken yet in this regard.
The ongoing revision of the NLP needs to ensure certain critical features are not missed out:
 It must have clear objectives that can be assessed.

 The role of different functionaries must be enumerated.
 The minimum standards for pursuing litigation must be listed out.
 Fair accountability mechanisms must be established.
 The consequences for violation of the policy must be provided.
 A periodic impact assessment programme must be factored in.
What else needs to be done?
 All the state governments have already notified state litigation policies to reduce government
litigation. The law ministry should take up the matter now.
 To further bring down pendency of cases in courts, both the Centre and states should withdraw
“frivolous and ineffective cases”.
 States and central government departments should set up empowered panels and suggest
withdrawal of frivolous cases, particularly those of petty offences and traffic challans.
 To discourage future litigations, the government should compulsorily introduce arbitration and
mediation clauses in work contracts of its staff and public sector employees.

Conclusion:
PM Modi recently expressed greater political will to deal with the problem of pending cases. Now,
government response to the problem needs to be much more dynamic and resourceful. A litigation
policy can have a profound effect on how the government thinks about itself as a litigant, and can help
curb the problem, provided it is a constructed with a thorough understanding of the problem and
offers solutions based on evidence rather than conjecture.
19/12 : Does black money boost economic growth?

Summary:
Economic experts say the magnitude of the global economic crisis at times is not felt in India because
of strong (parallel) economy of black money.
What is black money?
Black money in economic terms means ‘unrecorded gains’. In other words, it is income which has
escaped taxation. It may be hoarded in cash, but eventually gets itself converted into various assets
like property, jewellery and durable consumer goods.
Black-money arises due to various

reasons. Some of those reasons are:
 The main cause of black-money is

unrealistically high rates of taxes which
strain human nature. India is today one
of “the highest taxed nation”, one
eminent authority put it, “in so far as
the rates of taxes are concerned,
because no country in the world penalizes honest work and endeavour as ruthlessly as India
does.”
 Tax-laws in country are so complicated that a layman fails to understand it. Even honest assesses
are unable to file correct returns. This encourages people to evade tax.
 Corruption prevailing in the tax collection department is also one of the causes of generation of
black money. The high rates of taxes induce businessmen to falsify their accounts and they are
successful in doing so by bribing the concerned authorities.
 Another cause of black-money is numerous controls, licenses and other governmental
regulations. It is no exaggeration to say that the controls, licensing and permit system has made
black money indispensable to businessmen.
 Black money also arises from political activities such as elections where candidates spend well
above the ceiling prescribed by the Election Commission. There is a growing tendency of funding
of political parties with the help of black money. Big business houses are donating a huge amount
of black money to the political parties, especially the ruling party with the sole intention to tame
the political leadership for deriving benefits by manipulating policy decision.
 Black money also arises from illegal activities like smuggling, drug-peddling and Government is
still not in a position to control it.

 Black money also arises from illegal activities like smuggling, drug-peddling and Government is
still not in a position to control it.
 Another factor responsible for widespread growth of black money is urban real estate
transactions. As we all know that no property can be purchased without making the payment in
black money.
 The reluctance to bring agricultural earnings in the realm of income tax has also contributed to
creation of black money. Big industrial houses, over the past few decades have entered the
agriculture sector in a big way by acquiring big farms. The black money accrued from other
sources is sought to be transformed into white by viewing it on the agricultural returns account.
 Black-money multiplies at a fantastic rate. Returns on black-money investments are often to the
order of 200 to 300%. Since money thus generated is re-invested in such activities as hoarding
and smuggling, it fetches still higher returns.
Why is black money good for any economy?
Black money is known to play a major role in sectors such as real estate. Hence, it could be argued
that a clampdown on black incomes would lead to reduced activity in the sector and hence adversely
affect employment generation in the construction sector, which has been a major employment
generation sector in recent times.
Why is black money not good for the economy?
 Black money means a substantial loss in revenue for the government, which could be used for
augmenting economic growth.
 Attempts to meet the shortfall created by black money by resorting to raise more indirect taxes
leads to a higher incidence of tax on the poor and consequently erodes mass demand.
 Black money encourages investment in precious stones and jewellery. This has adverse effects
on growth via its demonstration effect.
 Black money has encouraged diversion of resources in the purchases of real estate and
investment in luxurious housing and lot of black money is made white. This has also pushed up
prices of land to astronomical heights. As consequences, the middle classes are priced out in the
purchase of land for house.
 Black money results in transfer of funds from India to foreign countries through clandestine
channels. Such transfers are made possible by violations of foreign exchange regulations through
the device of under invoicing of exports and over invoicing of imports. The country thus finds
itself in a paradoxical situation.
 Black money has also corrupted our political system in a most vicious manner and at various
levels. Party functionaries openly go on collecting funds. At the local levels, the local leaders
receive money from small traders and businessmen.
 Black income has also been causing underestimation of GDP in India as an enormous volume of
income is diverted to this unaccounted sector resulting in growing continuation of parallel
economy of the country.
 A part of the black incomes is held in cash and as a result there is abundance of liquidity which
becomes available through the addition of savings held in the form of cash, bullion, gold, silver,
etc.

Why worry about this?
Black money, also described as tainted money, has seeped into every walk of life and is posing a great
threat to the stability of our real economy. The most unfortunate aspect is that it has come to be
accepted as normal act of life. It also has pernicious effect on the moral value of our society which
puts a premium on dishonesty and shatters the faith of the common man in the dignity of honest
labour and lawful living.
Way ahead:
Various measures including voluntary disclosure scheme and demonetisation have been taken by the
government to curb the menace of black money. However, this is not sufficient. Many more measures
need to be taken by the government for the smooth functioning of the economy. Demonetisation will
only solve part of the riddle, the government will have to carry out many other steps, such as checking
tax evasion, implementing anti-graft laws and checking crime, to rid the country of black money. To
check the parallel economy, the government also needs to first tackle the generation of unaccounted
wealth, then stop the conversion of black money into white, and lastly, clean up sectors, wherein black
money is parked.
Conclusion:
The problem of black money cannot merely be looked upon as an anti-social activity or an unlawful
activity. It is rather, like a cancer in the country’s economy which, if not checked in time, will ruin the
country’s economy. The short point is, black money at best can act as a steroid which gives temporary
boost to economic growth. Prolonged dependence on it can leave damaging effects on a nation and
its people.
21/12 : Getting real on climate

Summary:
The twenty-second session of the Conference of the Parties (COP 22) to the United Nations Framework
Convention on Climate Change (UNFCC), the twelfth session of the Conference of the Parties serving
as the meeting of the Parties to the Kyoto Protocol (CMP 12), and the first session of the Conference
of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA 1) were held in
Marrakesh, Morocco from 7-18 November 2016.
 About 200 nations attended the conference and adopted the Marrakesh Action Proclamation for
Our Climate and Sustainable Development.
 The adaptation of Marrakesh Action Proclamation gives a strong indication to the world on
climate action and shift towards a new era of implementation and taking action on climate and
sustainable development.
 With the end of the 11-days conference, all participating member nations were committed to
work in unity for climate change action under Paris Agreement adopted in November 2015.

Marrakesh Action Proclamation:
Referring to the momentum on climate change worldwide, and in many multilateral fora, the
Proclamation said that this momentum was irreversible, being driven not only by governments, but
by science, business and global action of all types at all levels.
 The Proclamation stressed on nations having to rapidly build on the post-Paris momentum, and
move forward purposefully to reduce greenhouse gas emissions and to foster adaptation efforts,
thereby benefiting and supporting the 2030 Agenda for Sustainable Development that was
adopted at the UN headquarters in New York last year.
 The countries stressed on strengthening cooperation to eradicate poverty, ensure food security
and to take strict action to deal with climate change challenges in agriculture.
 Countries also demanded support and agreement of those countries which are most vulnerable
to the impacts of climate change, to enhance their adaptive capacity, strengthen resilience and
reduce vulnerability.
 The countries also called for an increase in finance, from the developed to the developing
countries both, for climate projects, in order to improve capacity and technology.
 In the Marrakech Proclamation, developed country reaffirmed their $100 billion mobilization
goal per year by 2020 to support climate action by developing countries. All countries also called
on all non-state actors to join them “for immediate and ambitious action and mobilization,
building on their important achievements.”
Background:
Last December at the previous

Conference, known as COP 21, 196
Parties to the UNFCCC adopted the
Paris Agreement. It aims to
strengthen the global response to
the threat of climate change by
keeping the global temperature rise
this century well below 2 degrees
Celsius above pre-industrial levels
and to pursue efforts to limit it to 1.5 degrees Celsius. The Agreement entered into force on 4
November 2016, in time for COP 22.
The US, India, China and other countries had pledged to curb emissions under the Paris deal by moving
to renewable energy sources. But US president-elect Trump has vowed to boost oil, gas and coal and
“cancel” the Paris Agreement. Trump has termed climate change a “hoax” propagated by China, the
second biggest emitter after the US.
India and the Marrakech Action Plan:
Welcoming the Marrakech Action Proclamation, India said that most of its demands including the issue
of providing finance to developing nations to tackle climate change has been incorporated and it will
continue to push its agenda as per the Paris agreement. India had pushed for inclusion of sustainable

lifestyle with minimum carbon footprint and a clear cut mention of flow of funds in the draft of the
political proclamation which was earlier made.
The proclamation also said that nations who are Parties to the Kyoto Protocol, encourage the
ratification of the Doha Amendment. This point in the proclamation assumes significance especially as
India had asked the developed countries to ratify the Doha amendments to the Kyoto Protocol by April
next year to raise the ambition of climate actions in the pre-2020 period.
Significance of Marrakesh conference:
The UN conference on climate change held in Marrakech, with an emphasis on raising the
commitment of all countries to reduce greenhouse gas (GHG) emissions, is particularly significant as
it provided an opportunity to communicate concerns about the future climate policy of the U.S.
 It would be untenable for the U.S., with a quarter of all cumulative fossil fuel emissions, to renege
on its promise to assist vulnerable and developing nations with climate funding, technology
transfer and capacity- building under Donald Trump’s presidency.
 The biggest takeaway from Marrakesh, however, is that, unlike in the past, the developing
countries are not going to be bogged down by the stingy ways of the industrialised countries.
Way ahead:
Marrakech’s successes, and failures, however, go beyond the strong message to the US President-
elect. In the Moroccan city, negotiators had to set in motion processes to operationalise the Paris
treaty. They just about managed to do that. It was only on the final day of the 12-day meet that the
countries agreed to a 2018 deadline for framing rules to operationalise the Paris pact. If things go
according to plan, the new climate treaty could come into effect much before the 2020 deadline set
in Paris.
Marrakesh had another mandate: To ensure developed countries honour the commitments they had
made before the Paris CoP. The money pledged at Marrakesh —about 150 million dollars — is a drop
in the ocean given that at the CoPs in 2009 and 2010, rich countries had committed to jointly raise 100
billion dollars a year by 2020. But the developing countries had a minor victory when they were able
to insert a clause, in the final decisions, asking for a scaling up of financial resources beyond $ 100
billion dollars, per year, after 2020.
Conclusion:
As the Marrakech Action Proclamation issued at the close of the conference emphasises, the world
needs all countries to work together to close the gap between their intended reduction of carbon
emissions and what needs to be done to keep the rise of the global average temperature well below
2°C in this century. The action plan is definitely a step in the right direction. However, political
commitment and resource mobilisation will be crucial to meet targets for mitigation of emissions and
adaptation.

22/12 : Demonetisation and Beyond: Addressing the Finance of Terrorism

Summary:
The changeover of high denomination notes in India is arguably a major strategic step that has been
lauded by many Indians. The gaping chasm between our legal and illegal economy had reached an
alarming state where the anti-national elements ranging from corrupt officials and tax evaders to state
sponsored terrorists had a free run through India’s security apparatuses. Among others,
demonetization has badly affected terror financing in the country.
Finance of terrorism in India:
There are four essential elements needed by terrorists and organised crime groups to achieve its
objectives – mobility, logistic bases, communications and financing. The finance of terrorism in India
follows a hybrid model, which includes terror funding from within and beyond the country’s borders.
An assessment of past cases that have come to light suggests that terrorists have employed a variety
of channels to fund their activities.
Various forms of terror financing and the impact of demonetization on them:
Terror financing falls mainly into three categories:
1. Tactical terror financing: It is the money needed to mount specific operations. This aspect would
remain unaffected by the demonetisation of Rs 500 and Rs 1000 notes for the simple reason that
terror operations are incredibly cheap and can be funded by kosher resources.
2. Operational terror financing: This includes funds required for running a low-intensity campaign
like the ISI-sponsored ‘thousand cuts’ strategy in Kashmir. More than tactical financing, it is
operational financing that is well within the capability of state-sponsored terrorism. Equipping a
few hundred terrorists with assault rifles, explosives, communication tools and blood money is
well under a few score crores. However, demonetisation per se will not put a dent on this.
3. Counterfeit currency: Damaging our economy by flooding counterfeit currency is the main
strategic prong of terrorist groups. The demonetisation will disrupt it only for a brief period until
the terrorist groups replicate the new format of high denomination notes. Granted that the
newer currency will be harder to replicate, but if Indian mints can make them, so can Pakistani.
Additionally, they only need to make a near replica to pass the muster and not an exact copy.
Other forms of terror financing:
Banking channel: Amongst formal channels, money has been moved through the banking channels,
as was witnessed prior to the 1993 Mumbai bomb blasts. It can also involve the use of money transfer
service scheme (MTSS), as has been resorted to repeatedly by the Indian Mujahideen (IM) to finance
their operations in India. Benefactors in Pakistan transferred money to innocuous middlemen not
previously suspected of terrorist linkages in India. This money was later withdrawn and handed over
to IM cadres to fund their activities. Squeeze of cash flow due to demonetization could witness
increase in exploitation of formal channels by NGOs.
Barter trade: There have also been attempts to exploit the barter trade between India and Pakistan
through over or undervaluing the invoice, thereby creating a surplus value, which was then diverted

for funding terrorism. Demonetization would have impact on this limited given low volume of trade
with Pakistan. Squeeze of cash flow could witness increase in exploitation of trade with other countries
through proxies.
Movement by cash: Money is also transferred in the form of cash across borders through couriers,
and thereafter converted into Indian currency to support terror funding. Cash also forms the last mile
instrument of choice, for financing both organisational activities and terrorist operations. This includes
money spent for buying weapons, paying cadres, or organising terror strikes. This is especially the case
with groups which collect their funds directly in the form of extortion, kidnapping or so called taxation
etc. With demonetization, the groups which have most of their financial reserves in the form of cash
are likely to be affected the most. Subsidiary money parking options like property could also be
affected adversely affected due to limited liquidity.
Real estate: There have also been cases of money being invested in real estate deals or investments
in businesses both inside and beyond Indian borders, to cater for long term needs.
Hawala: The last, and possibly the most commonly used method of transferring value remains hawala
in the Indian context, especially by Pakistan and Pakistan based terror groups which have been
fuelling, funding and coordinating terrorism in Jammu and Kashmir (J&K) as well as through the IM.
This does not involve the physical movement of cash across borders, but through the employment of
hawaladars or hawala agents to collect and disburse money across different countries and continents.
However, they will have the maximum impact by demonetization.
Demonetization alone is not

sufficient in fight against terror
financing. What else needs to be
done?
 Two of the most vulnerable

sectors that have
traditionally been exploited
for parking crime proceeds
and black money is the
property, and gems and
jewellery market. These
sectors have also been used for the temporary investment of terror funds. Unless transactions
are made transparent and reflect real market value, black money and terror funds will continue
to find their way into these businesses.
 Fake currency can potentially be reintroduced into India after a break by Pakistan. In order to
sustain action, enhanced detection measures at public sector banks should be put in place. A
forensic cell should be established to monitor each case of counterfeit currency to better
understand the technology being applied to counterfeit notes. This must contribute to future
measures to enhance security against counterfeiting.
 Demonetisation provides an opportunity to encourage a shift to a digital economy. This is an
essential requirement to not only reduce corruption but also create an electronic trail for
transactions. This will help bring transparency into the financial transactions of individuals and
organisations thereby constraining corruption, criminal proceeds, money laundering and the

finance of terrorism, which are all linked given the common channels employed for transferring
funds. Suitable measures should be put in place to shield our digital economy.
 A large percentage of funds have been routed through NGOs in West Asia, especially in case of
Kashmir. The government should make it clear that each institution receiving funds must register
itself and seek clearance for receiving funds from foreign sources. The controlling group of the
NGO or establishment receiving money should be clearly established. A government panel of
charted accountants should audit the accounts of these NGOs.
 The finance of terrorism should become a priority area for intelligence and enforcement
agencies.
Way ahead:
Demonetisation is not a complete and all-encompassing end in itself. It is part of a process which must
be taken forward through additional allied and subsidiary policies. There is a need to take interlinked
steps and it is only the sum of these individual initiatives that can impact the larger fight against the
financing of terrorism.
Conclusion:
Demonetisation is an important step in the fight against the finance of terrorism. However, it should
neither be the first nor the last, if the interlinked threats of corruption, crime and the finance of
terrorism have to be controlled. These must also not be addressed simply within departmental and
ministerial silos. Instead, an all-of government approach is imperative if each of these challenges is to
be met.
23/12 : US exit from TPP to impact security architecture in Asia-Pacific

US President-elect Donald Trump’s has resolved to undo the Obama administration’s recalibration of
Asia-Pacific strategic equations by pulling out of the Trans Pacific Partnership (TPP) Agreement. The
agreement was signed this year after seven years of protracted negotiations between 12 Pacific Rim
countries.
Background:
With more than five years of negotiation,

TPP, one of the most ambitious free trade
deals negotiated between developing
and developed countries, officially
entered into an agreement in February.
 Countries have two years to ratify

this more than 2,000-pages pact,
involving higher labor standards,
intellectual property rights, environmental rules and other issues.
 None of the 12 countries have completed the ratification process so far. Japan, the second-largest
economy after the U.S in this treaty, voted to ratify the deal this month.

What’s good about TPP?
Those in favour say this trade deal will unleash new economic growth among countries involved. It is
being said that the TPP has high potential to promote economic growth and improve people’s living
standards by facilitating the free cross-border movement of key factors of economic activity, such as
goods, people, money, and information. Failure to bring the TPP into force would be a great loss to
not only the TPP countries such as Japan and the US but also the global economy they argue.
Criticisms:
 Those against TPP fear it could mean jobs will move from the US to developing countries. They
also do not like the fact the five-year talks were held largely in secret.
 The TPP would also have extensive negative ramifications for users’ freedom of expression, right
to privacy and due process, as well as hindering peoples’ abilities to innovate.
 The TPP suffers from a serious lack of transparency, threatens to impose more stringent copyright
without public input, and pressures foreign governments to adopt unbalanced laws.
 Some critics also claim that TPP paves the way for companies to sue governments that change
policy on, say, health and education to favour state-provided services.
 The TPP will also intensify competition between countries’ labour forces.
Why Trump is against this deal?
Although Trump’s policy statements have been, at best, contradictory, he has been consistent in his
opposition to TPP. He thinks such deals will hurt American workers and undercut US companies. His
stance on trade is protectionist: he has vowed to shield Americans from the effects of globalised trade
by slapping hefty tariffs on cheap Chinese imports of up to 45%.
Trump says, “The TPP creates a new international commission that makes decisions the American
people can’t veto, making it easier for our trading competitors to ship cheap subsidised goods into US
markets – while allowing foreign countries to continue putting barriers in front of our exports.”
However, this pullout could threaten the US’ Asia rebalancing.
Good News for China?
The U.S-led TPP is an important initiative under President Obama’s Asia pivot strategy, where it seems
to have more strategic implications for the U.S. than economic benefits. The aim was to counter
China’s growing clout by bringing together its neighbours and reduce their dependence on Chinese
trade. With US’ exit, China now has more space to flex its muscles in the region.
Implications for India:
Walking out from TPP threatens the US strategy of rebalancing Asia, which amounted to India-Japan-
US security cooperation. This will force India — where US anchored its Asia-Pacific policy — to rethink
its Look East Initiative.
 India was not part of the TPP, but it has been an important instrument of realpolitik for
Washington and New Delhi as they sought to counter the rise of an assertive China without
hurting their economic equations with the country.

 In the rebalancing of its resources in Asia-Pacific, the US saw India’s role as the “lynchpin” of the
strategy.
 The US’ “Pivot to Asia” and India’s “Act East” policies conflate. Washington sees India as having
a greater role in providing security and stability in the region.
 The two strategies have been shaping the security order in the region as India was reinvigorating
its ties with Asian powers like Japan and Australia that has rattled China greatly.
 Now, India should not be complacent because of the current uncertainty surrounding TPP. We
must fully understand the implications of the various TPP disciplines and how we should
strategise ourselves in response to the very many ways they can impact us.
What next?
The text of the agreement has to be signed and then ratified by all 12 signatories. Details of how the
deal will be implemented would be argued out in individual countries’ legislatures.
 To take effect, the deal has to be ratified by February 2018 by at least six countries that account
for 85% of the group’s economic output. And this means that Japan and the US will need to be
on board.
 But Mr Trump’s comments suggest Congress will be directed to clearly reject it – if they get to
vote on it at all.
 Some countries, including New Zealand, have suggested some sort of deal may be possible
without the US. There has been loose talk of changing some of the conditions to let Mr Trump
approve it without losing face. But given the rhetoric coming out of Trump Towers, that looks
unlikely.
 The TPP’s two biggest economies are the US and Japan, and if Trump follows through on his
promise to withdraw from the pact it would send remaining states scrambling to salvage it.
Conclusion:
Now the way forward from an uninterested US could be strengthening economic ties between ASEAN
countries. Alongside, the way forward for Asia is to intensify efforts towards a Regional
Comprehensive Economic Partnership (RCEP). RCEP is seen as a counter to TPP as it would include
more than 3 billion people or 45% of the world’s population, and would have a combined GDP of about
$21.3 trillion, accounting for about 40% of world trade.
24/12 : Benefitting from China’s Belt and Road Initiative

Summary:
Since 2013, the ‘One Belt, One Road’ (OBOR) initiative has become the centrepiece of China’s
economic diplomacy. The essence of OBOR is to promote regional and cross-continental connectivity
between China and Eurasia. It represents the first major attempt by China to design and implement a
cross-continental mercantile strategy and will surely have significant global and geopolitical
consequences.

What is OBOR?
The ‘One Belt’ and ‘One Road’ refer to China’s proposed ‘Silk Road Economic Belt’ and ‘Maritime Silk
Road’.
Connectivity covers five major areas of interest: policy coordination, infrastructure construction
(including railways and highways), unimpeded trade, financial integration and people-to-people ties.
Among these, infrastructure construction is the dominant feature of the New Silk Road.
The Silk Road Fund:
The US$40 billion Silk Road Fund has been established to finance the Belt and Road Initiative. It will
invest mainly in infrastructure and resources, as well as in industrial and financial cooperation. The
Fund was set up as a limited liability company in December 2014 with its founding shareholders
including China’s State Administration of Foreign Exchange, the China Investment Corp, the Export-
Import Bank of China and the China Development Bank. The Fund will comply with market rules and
the international order of finance, and welcome participation from domestic and overseas investors,
such as the China-Africa Development Fund and the Asian Infrastructure Investment Bank.
Why is OBOR important for China?
 China is obviously going to benefit from the “Belt and Road Initiative,” but what is unclear is to
what extent. Critics said that Beijing is going for a bigger role as a global superpower. With this
in mind, having a direct link to major countries may not only boost its economic power, but also
its political clout in both the Western and Eastern hemisphere.
 Also, many of China’s production sectors have been facing overcapacity since 2006. The Chinese
leadership hopes to solve the problem of overproduction by exploring new markets in
neighbouring countries through OBOR. The OBOR initiative will provide more opportunities for
the development of China’s less developed border regions.
 China also intends to explore new investment options that preserve and increase the value of the
capital accumulated in the last few decades. OBOR has the potential to grow into a model for an
alternative rule-maker of international politics and could serve as a vehicle for creating a new
global economic and political order.

 China has cash and deposits in Renminbi equivalent to USD 21 trillion, or two times its GDP, and
expects that the massive overseas investment in the OROB will speed-up the internationalization
of the Renminbi.
 OBOR is also seen as a strategic response to the military ‘re-balancing’ of the United States to
Asia.
 China can also benefit from the New Silk Road project through other means like the easing up of
growth of state-owned enterprises as well as an increase in the Chinese people’s income.
Benefits for ASEAN:
Many ASEAN countries are rich in resources but lacking in construction funding which slows their
economic growth, causing an infrastructure deficit and resulting in a low level of industrial
development. The OBOR Initiative is probably a direct response to the ASEAN countries’ cry for help.
Challenges that confront the OBOR initiative:
 First, the perception, process and implementation to date do not inspire trust in OBOR as a
participatory and collaborative venture. The unilateral ideation and declaration — and the
simultaneous lack of transparency — further weaken any sincerity towards an Asian entity and
economic unity. However, China says that it is committed to pursue wide-ranging consultations
with the 60-plus nations on this issue.
 It is widely accepted that through this initiative China is projecting its military and political
presence along OBOR. China is also willing to underwrite security through a collaborative
framework. Hence, few countries including India have wholeheartedly not welcomed this
initiative.
 Another challenge deals with the success of the ‘whole’ scheme, given that the Chinese vision
document lays out five layers of connectivity: policy, physical, economic, financial and human.
While no developing country will turn away infrastructure development opportunities financed
by the Chinese, they may not necessarily welcome a rules regime built on a Chinese ethos.
 This belt runs through Pakistan-occupied Kashmir. Hence, a formal nod to the project will serve
as a de-facto legitimisation to Pakistan’s rights on Pakistan-occupied Kashmir and Gilgit-Baltistan
under the China-Pakistan Economic Corridor (CPEC) that is closely related to OBOR.
How is China countering these challenges?
 It has been inviting governments to organize summits to identify issues and seek common
understandings, cooperation memorandum and people-to–people contact as the basis for
regional cooperation.
 China is also organizing technical workshops of the concerned countries to facilitate investments
and is partnering with multilateral institutions in this effort to give greater legitimacy. It is
entering into areas the United Nations and bilaterals have ignored but have been considered
important by developing countries.
 China is also using money to resolve security issues, like paying Pakistan for an army division
dedicated to the protection of Gwadar and is actively considering setting up a private security
agency, borrowing ideas from something the United States has done for decades, but paid for by
the companies rather than the government.

Is OBOR a threat or an opportunity for India?
The answer undoubtedly ticks both boxes. Chinese political expansion and economic ambitions,
packaged as OBOR, are two sides of the same coin. To be firm while responding to one facet, while
making use of the opportunities that become available from the other, will largely depend on the
institutional agency and strategic imagination India is able to bring to the table.
Way ahead for India:
India now needs to match ambition with commensurate augmentation of its capacities that allows it
to be a net security provider in the Indian Ocean region. This will require the government to not only
overcome its chronic inability to take speedy decisions with respect to defence partnerships and
procurement, but will also necessitate a sustained period of predictable economic growth; OBOR can
assist in the latter.
 Chinese railways, highways, ports and other capacities can serve as catalysts and platforms for
sustained Indian double-digit growth. Simultaneously, India can focus on developing last-mile
connectivity in its own backyard linking to the OBOR — the slip roads to the highways, the
sidetracks to the Iron Silk Roads.
 Currently, India has neither the resources nor the political and economic weight to put in place
competitive and alternative connectivity networks on a global scale. Therefore, for the time
being, it may be worthwhile to carefully evaluate those components of the OBOR which may, in
fact, improve India’s own connectivity to major markets and resource supplies and become
participants in them just as we have chosen to do with the AIIB and the NDB.
Conclusion:
In the short term, China’s OBOR initiative will likely only deliver very modest results despite immense
investments. It is still hard to predict whether China’s OBOR projects will be effective over the
medium-to-long term as this depends on the responsiveness of governments to challenges, as well as
the external environment. Still, OBOR marks the beginning of a new economic diplomacy for China as
it shifts towards being an active driver of the regional and global economy.
25/12 : Restore the ceasefire

Summary:
THE November 2003 ceasefire agreement was a landmark in the strained bilateral relations between
India and Pakistan. It came after a long cycle of violence along the 725-kilometre-long Line of Control
(LoC) which divides Jammu and Kashmir into two parts. It followed a framework of military confidence-
building measures (CBMs) that kept the artillery pieces at least 20 km away from the LoC, thus
promising a sustained halt to heavy firing. However, violence across the Kashmir divide is growing.
Background:
The ceasefire agreement has now become unrecognizable. This ceasefire agreement, reached
between Pakistani President Pervez Musharraf and Indian Prime Minister Manmohan Singh, was
respected until 2008. From 2008, there were occasional spikes in firing across the LoC. This situation

changed in late 2012 – around the time that India began to build additional bunkers along the LoC.
Firing across the LoC has now increased.
What is LoC?
The 435 mile stretch along the Kashmir divide has been termed the LoC since the 1972 Simla
Agreement. What India terms the International Border, and what Pakistan terms the Working
Boundary, runs southward from the LoC.
Ceasefire agreement 2003:
On November 26, 2003 the ceasefire took effect along the entire stretch of the India-Pakistan frontier
i.e. the IB, the LoC and the AGPL. For the first time in several decades, the guns along this frontier
went silent, bringing much needed respite to the shelling-scarred lives of people in hamlets along the
LoC and to soldiers guarding the border posts.
 It facilitated the opening of the Srinagar-Muzaffarabad and Poonch-Rawalkot routes, paving the
way for bus and truck services linking the two Kashmirs for the first time in six decades and
encouraging cross-LoC contacts, exchanges, travel, and trade.
 The ceasefire also enabled India to complete the construction of a fence near the LoC to prevent
Pakistan’s infiltration of terrorists into Kashmir, a project that it had begun a couple of decades
earlier but had to suspend due to Pakistan’s artillery fire.
Causes for recent tension:
The ongoing ceasefire violations have come amidst a significant deterioration in India-Pakistan
relations, with the immediate trigger for the latest downturn being the September 18 attack on an
Indian army camp at Uri in J&K. The attack, which was carried out by the Lashkar-e-Taiba, a Pakistan-

based terrorist group with close ties to Pakistan’s Inter-Services Intelligence (ISI), was the deadliest on
an Indian military facility in over a decade. It resulted in the death of around 18 Indian soldiers,
prompting India to carry out a military assault on terrorist “launch pads” in Pakistan Occupied Kashmir
(POK) on the night of September 28-29.
Following the Uri attack, India stepped up its diplomatic efforts to isolate Pakistan at the regional and
global level for Islamabad’s support of anti-India terrorist groups. Delhi was successful in getting other
South Asian countries to boycott a South Asian Association for Regional Cooperation (SAARC) summit
that Islamabad was to host. More recently, India and Pakistan have been locked in a tit-for-tat contest
to identify and expel each other’s High Commission staffers for alleged involvement in espionage
activities.
Why be concerned about this?
The steady increase in the rate of ceasefire violations along the LoC is concerning. It comes at a time
when India and Pakistan have been unable to establish effective diplomatic channels to address
outstanding issues. Diplomatic channels are used only sporadically, and in multilateral settings. Efforts
to improve trade relations and visa liberalization are proceeding slowly, and there is no forward
movement on confidence-building and nuclear risk reduction measures.
Under these circumstances, continued and increasing violence along the LoC not only poses a barrier
to improved ties, but also makes crisis management more difficult and the risks of escalation greater.
Why there is a need to reconsider the ceasefire agreement?
A breakdown of the ceasefire is in the interest of neither country. In addition to the human toll and
the economic costs, it would have negative long term consequences for the security of India and
Pakistan.
In the case of India, for instance, a breakdown of the ceasefire or continued shelling and firing would
undo its many achievements in curbing infiltration and terrorism in Kashmir in the past decade.
Pakistan is known to provide cover via shelling and firing to infiltrate terrorists into India. Continued
shelling would provide Pakistan with space and opportunity to resort more frequently to this tactic.
Additionally, Pakistan could use artillery fire to destroy the LoC fence, which India built at enormous
cost and which has helped India curb infiltration.
As for Pakistan, the breakdown or unraveling of the ceasefire along its frontier with India would
require it to deploy more troops to its eastern front. This would mean shifting troops from the western
front to the east, in essence forcing Islamabad to shift attention away from eliminating terrorism from
its soil at a crucial stage.
Keeping the ceasefire alive is therefore in the interest of both India and Pakistan.
What needs to be done now?
India and Pakistan accuse each other of violating the ceasefire agreement. While blaming the other
for “unprovoked firing” they describe their own actions as mere “retaliation.” Both boast that they
are responding “befittingly” to the other’s aggression and inflicting “heavy casualties.” And both allege
that it is domestic considerations that are driving the other’s cross-LoC aggression.

There is no comprehensive database of ceasefire violations along the LoC. Indian and Pakistani sources
– both government and non-government – report contradictory figures with regard to the number of
ceasefire violations each year. The governments of India and Pakistan are also doing little to address
international concerns over the violence occurring across the Kashmir divide, violence that could
magnify existing tensions.
Now, both sides need to summon the political will to safeguard the ceasefire. So far in the current
phase of conflict escalation, neither side has displayed signs of such will. Then, as the most powerful
and cohesive power in the region, India needs to chart a road map to restore the ceasefire on the Line
of Control.
Conclusion:
The increase in violence along the LoC since late 2012 is a clear and concerning marker of the
deterioration of India–Pakistan relations on a broader scale. Whether or not ceasefire violations can
be attributed to signaling related to high-level meetings, they carry the risk of escalating into a larger
crisis or standoff if accompanied by a triggering event. They also make the actual meeting of high-level
officials more unlikely, and add another difficult dimension to crisis resolution. The ceasefire put into
effect in 2003 has deteriorated badly. One way for India and Pakistan to stabilize relations would be
to reestablish a ceasefire. India and Pakistan have not agreed to new confidence-building measures
since 2007. Quieting the LoC would be a good place to start.
26/12 : A change called NeHA

Summary:
The Government of India is now scheduled to launch the National e-Health Authority (NeHA). A
regulatory body, tasked with overseeing the digitisation of health information, NeHA holds great
promise.
Background:
Currently, the Indian healthcare system

services a diverse population of
approximately 1.24 billion across a wide
range of geographic and socio-economic
settings. The services are provided by a
complex network of public and private care
providers.
About NeHA:
NeHA will be the nodal authority that will be responsible for development of an Integrated Health
Information System (including Telemedicine and mHealth) in India, while collaborating with all the
stakeholders, viz., healthcare providers, consumers, healthcare technology industries, and
policymakers.

 It will be responsible for enforcing the laws and regulations relating to the privacy and security
of the patients health information and records.
 National e-Health Authority (NeHA) aims to promote standardization of Electronic Health
Records (EHRs) and facilitate its exchange across facilities in a secured manner.
 The proposed National e-Health Authority (NeHA) would not be responsible for centralization of
the medical history of the patients.
Composition:
The authority will have one chairman and four full-time members. The chairman will be an eminent
person from the field of medicine or law and three members will be from diverse fields like medicine,
public health, IT standards, health economics, management etc. A standing consultative committee
would have representations from ministry of health, directorate general of health services, NASSCOM,
IRDA, WHO, MCI and consumer rights activists among others.
NeHA would be responsible:
 To guide the adoption of e-Health solutions at various levels and areas in the country in a manner
that meaningful aggregation of health and governance data and storage/exchange of electronic
health records happens at various levels in a cost-effective manner.
 To facilitate integration of multiple health IT systems through health information exchanges.
 To oversee orderly evolution of state-wide and nationwide Electronic Health Record
Store/Exchange System that ensures that security, confidentiality and privacy of patient data is
maintained and continuity of care is ensured.
NeHA has been envisaged to support:
 Formulation of policies, strategies and implementation plan blueprint (National eHealth Policy /
Strategy) for coordinated eHealth adoption in the country by all players; regulation and
accelerated adoption of e-health in the country by public and private care providers and other
players in the ecosystem.
 Establish a network of different institutions to promote eHealth and Tele-medicine/remote
healthcare/virtual healthcare and such other measures.
 Formulation and management of all health informatics standards for India; Laying down data
management, privacy & security policies, standards and guidelines in accordance with statutory
provisions.
 To promote setting up of state health records repositories and health information exchanges
(HIEs).
 To deal with privacy and confidentiality aspects of Electronic Health Records (EHR).
Need for NeHA:
One of the major challenges faced by patients in India today is that whenever he visits any healthcare
provider he is typically subjected to a certain number of tests before the care provider initiates a
treatment plan for his/her condition. If a visit is required to another healthcare provider for either the
same or another care setting, the patient is likely to be put through the same process of examination,
testing and treatment unless s/he diligently carries around his medical records.

With NeHA, a patient visiting another doctor wouldn’t need to undergo tests again or fill lengthy forms
regarding their health information or addresses as the information will be readily available with the
respective hospitals.
Benefits of NeHA:
 A centralised electronic health record repository of all citizens which is the ultimate goal of the
authority will ensure that the health history and status of all patients would always be available
to all health institutions.
 Such a move would mean the present practice of patients undergoing fresh tests every time they
switch doctors would be discontinued and expenditure reduced. This would also expedite
diagnosis and treatment.
 It would also be a repository of full health information that can be processed to generate
epidemiological data on a massive scale.
 It will help avoid problems arising out of uncoordinated induction of IT systems in hospitals and
public health systems.
 It will also enforce the laws and regulations relating to the privacy and security of patients’ health
information and records.
 There would be a provision of Electronic Health Records (EHR) of patients. EHRs help doctors and
hospitals to better manage care for patients by providing accurate, up-to-date and complete
information, access patient records quickly for more efficient care and share electronic
information securely with patients and other clinicians.
 The system will also reduce medical errors, promote legible and complete documentation, coding
and billing and improve productivity.
Challenges ahead:
The poor uptake of electronic records by doctors in India, the lack of inter-operability between
systems and devices, and the legitimate concern for privacy, security and safety of medical data are
all formidable barriers.
To get doctors to adopt electronic medical records (EMRs), any proposed systems must be easy to use
and affordable. Careful attention must be paid to human-centered design and data minimisation.
 All too often, health information systems’ design and implementation strategies do not include
end-users. Doctors are more likely to voluntarily adopt solutions that improve workflow,
efficiency and access to information. This matter should be taken up while designing the
software.
 The lack of inter-operability poses another challenge. The highly sequestered systems in US
hospitals are not portable and result in duplication of tests and wanton waste. Risk-averse
institutions and outdated laws have stymied digital innovation in healthcare. Millions are now
being spent on retrofitting these systems to make them inter-operable, as required by the US
Affordable Care Act. Such retrofitting can be bypassed in India.

 The easier the data flow between entities, the greater the potential for abuse. Therefore, inter-
operability will need more than law and mandates. Substantial intellectual rigour must be
devoted to building safeguards to protect the most vulnerable — the patients.
Way ahead:
NeHA is a good beginning as many experts have often argued in favour of having some form of
regulations and systems in place in areas like telemedicine, which very loosely is really doctor
consulting over telephone or over the internet with the patient sitting miles away from the doctor.
 Yet, questions remain on how good an integrated health information system will be in a scenario
where there is either lack of data or where there are huge gaps in data. And to top it all, the
ability or the lack of it to manage data confidentiality and the standardisation so that it can be
moved from one hospital to another.
 Therefore, unless the above mentioned challenges are addressed, NeHA may not succeed. Much
now depends on what the government does to address these chalenges.
Conclusion:
NeHA and regulatory laws that define India’s health information landscape will have deep, long-lasting
ramifications on healthcare delivery. The necessary ingredients are all present: A digital health
greenfield, robust telecom infrastructure, unique ID authentication, and a large talented pool of IT
professionals. Utilising them may allow India to shape healthcare delivery globally.
28/12 : RBI shows interest in no-interest banking. What does it mean?

Summary:
The Reserve Bank of India (RBI) has proposed opening of

‘Islamic window’ in conventional banks for ‘gradual’
introduction of Sharia-compliant or interest-free banking in
the country. Both the Centre and RBI are exploring the
possibility of introduction of Islamic banking for long to
ensure financial inclusion of those sections of the society that
remain excluded due to religious reasons.
 The central bank’s proposal is based on examination of
legal, technical and regulatory issues regarding
feasibility of introducing Islamic banking in India on the
basis of recommendation of the Inter Departmental
Group (IDG).
 In late 2008, a committee on Financial Sector Reforms, headed by former RBI Governor
Raghuram Rajan, had opined the need for a closer look at the issue of interest-free banking in
the country.
What exactly is Sharia/Islamic banking?
Sharia banking refers to banking activity that conforms to Islamic law or Sharia. The fundamental
principle of Islamic finance is the rejection of usury, along with the requirement that there must be no

engagement in immoral businesses. Usury is seen as the levying of unreasonably high interest rates
while lending money. Interest is Riba, which in its current interpretation, covers all interest — not just
excessive interest. Under Islamic law, a Muslim is prohibited from both paying and accepting interest.
Thus, Sharia banking means money can only be parked in a bank without interest — and this money
cannot be used for speculative trading, gambling, or trading in prohibited commodities such as alcohol
or pork.
Need for Islamic Banking:
Certain faiths prohibit the use of financial instruments that pay interest. The non- availability of
interest-free banking products results in some Indians, including those in the economically
disadvantaged strata of society, not being able to access banking products and services due to reasons
of faith. This non-availability also denies the country access to substantial sources of savings from
other countries in the region.
Therefore, introduction of Sharia or Islamic banking could bring more Muslims into the banking
system, and help in the inflow of institutional wealth from entities operating in the Islamic world to
the Indian economy. Sharia banking is not restricted to Muslims alone, and other communities who
are interested in other forms of banking like ethical banking could be allowed to participate.
How Sharia compliant banks operate?
1. Credit:
There are mainly three instruments here:
 Ijara: It is for those who want to take credit from a Sharia compliant bank. Here, the bank
purchases the asset on behalf of the client and allows its usage for a fixed rental. After a mutually
agreed time, the ownership of the asset is transferred to the client.
 Murabaha: It is for working capital, in which the asset is purchased by the bank at market price
and sold to the customer at a mutually-decided marked-up cost. The client can repay in
instalments.
 Musharaka: It is a joint investment by the bank and the client, in which both contribute to funding
an investment or purchase, and agree to share the profit or loss in agreed-upon proportions.
2. Savings:
For savings accounts, there are two kinds of deposits.
 In one, customers can deposit their savings and allow the bank to use this money, with the
assurance that they would get the full amount back. The bank is not liable to pay interest to the
savers. However, some banks do give a certain sum back to the account holder as profit accrued
from their operations.
 In the other kind, the holder allows the bank to invest his money in specific projects and gets
returns after a stipulated term based on how the business performs.
Sharia banking globally:
A 2015 World Bank report estimated Sharia-compliant financial assets to be in the range of US $ 2
trillion, covering bank and non-bank financial institutions, capital markets, money markets and

insurance. The Islamic Finance Industry has been expanding at a rate of 10%-12% annually. According
to the World Bank, in many Muslim countries, Islamic banking assets have been growing faster than
conventional banking assets. There has also been a surge of interest in Islamic finance in non-Muslim
countries such as the UK, Luxembourg, South Africa, and Hong Kong.
What are the drawbacks?
Even though the concept is sound, the calculation method adopted by each bank differs significantly.
Though the outcome may not be detrimental to the bank or the consumer, due to the restriction in
procedure, a degree of uncertainty exists for both the bank and the customer.
Alteration of terms of financing may be more troublesome. Should a customer choose to alter the
terms of financing, a new Sale and Buy-back agreement needs to be created and signed. A
conventional loan would only require the amendment to be stamped which incurs less cost.
India’s present laws obstruct the establishment of Islamic banking – the Banking Regulation Act (1949)
prohibits the operation of banks on a profit-loss basis, forbids murabaha, or, the buying, selling, or
barter of goods, impedes ijara, or, bars the holding of immovable property for a period greater than
seven years, and requires the payment of interest.
These regulations need to be amended. The purpose of regulations is to ensure smooth and
standardised operations, not vet business models; the market will be the best judge of the efficiency
and pitfalls of Islamic banking.
How does India benefit from Islamic banking?
Introduction of Islamic Banking was mooted by Raghuram Rajan in his report on the Financial Sector
in the year 2008 where he recommended that interest-free banking techniques should be operated
on a larger scale so as to give access to those who are unable to access banking services, including
those belong to economically disadvantaged section of the society.
 There are many advantages in introducing an Islamic window in the banks. For instance, majority
of companies in the Stock Exchange are shariat compliant (this number is more than the shariat
complaint companies on the Stock Exchange in Malaysia), thus this would result in attracting
huge funds in the domestic market alone.
 An Islamic Banking window will encourage many from the Muslim community to come forward
and invest in projects thereby mobilising huge amount of capital which they may not be willing
to put in the banks. This also means that India will be able to attract huge investments from West
Asia and from those who invest only in shariat compliant projects.
Conclusion:
Over the past decade Islamic finance has emerged as an effective tool for financing development
worldwide, including in non-Muslim countries. Major financial markets are discovering solid evidence
that Islamic finance has already been mainstreamed within the global financial system — and that it
has the potential to help address the challenges of ending extreme poverty and boosting shared
prosperity. However, there is some political opposition for its introduction in India. Because of the

strict adherence to not paying or taking interest, Sharia banking will call for a complete overhaul of
the banking regulatory system. There is also concern that India lacks adequate manpower trained in
Sharia banking. These issues need to be addressed at the earliest.
29/12 : For Modi’s smart-city vision to become a reality, India needs smart
villages first
Summary:
It is now widely agreed that development of rural India holds the key to the nation’s sustainable
economic growth. In this regard, experts have advocated transformation and development of “smart
villages” across the country to improve standard of living in the rural areas and boost the rural
economy.
Why concentrate on villages?
Almost 70 of the Indian population lives in villages. In recent times, more cases of farmers’ suicides
due to crop failure have been reported. Even after 70 years of independence, we lack a ‘support and
guidance system’; nor do we have professional counselling for farmers. Many of them have no
secondary source of income — this is a major lacuna.
 The lack of job opportunities in villages coupled with less remunerative farming (except in the
case of large land holdings) compels village youth to migrate to cities. There, many of them do
not enjoy a reasonable quality of life because they manage to get only subsistence jobs.
 The migration is also unidirectional as they continue to live in cities in the hope of landing better
jobs. In the long term, this leads to desertion from villages, dilution of village culture, reduced
land under cultivation and, consequently, farm output.
 In the cities, uncontrolled migration adds to pollution, traffic problems, crime, and over-
burdening of civic amenities and infrastructure. Therefore it is natural that for ‘inclusive’
development, the Government must focus on them.

Present scenario:
According to the most recent socioeconomic and caste census data, a third of India’s rural households
are landless and dependent on manual labour for an income.
 About 13% of rural households are still only one-room tenements built with mud walls and fragile
roofs.
 There is not even basic health insurance in case of serious illnesses. Rural health centres are not
easily reachable, and even if they are, they don’t have either the facilities or the medicines to
treat anything other than diarrhoea and bacterial infections.
 Malnutrition is widespread and one of India’s most enduring enigmas.
 Roads in the interiors are also not in good condition. They are difficult even to walk, not to speak
of travelling by carts, and have been in that condition for years.
 The top priority should be the creation of opportunities for youths in villages, thereby
discouraging migration to cities. We must create an eco-system that makes youth interested in
working from their villages. BPOs/KPOs can operate from villages and young people can be
encouraged to take up IT jobs there. Many jobs require computer skills instead of degrees. The
digitisation of post offices, rural banks, and IT-enabled services provide excellent opportunities.
 Farming should be made a remunerative occupation, with guidance and mentoring to small
farmers on how to get the best yield and market at remunerative prices. It’s important to train
them to develop a secondary source of income.
 The benefits of schemes such as crop insurance, soil health card, and neem pesticides must reach
the grassroots. Proper implementation is key. A helpdesk set up in every village and manned by
trained individuals to handle farmers’ queries and provide solutions would be most useful.
 Projects supported by Digital India and Skill India should be integrated through a unified agency
to reach villages. For instance, Skill India can empower youths to start their own small businesses
after training as masons, mechanics, electricians, and drivers or to run repair shops, poultry and
dairy farms, kirana stores, tea-shops, dhabas and so on.
 India’s crafts thrive in villages, especially as cooperative ventures. Pottery, metal craft, weaving,
jewellery making, wood craft, shell craft, cane craft, embroidery, ivory craft, glass craft and paper
craft could be sources of income. The arts and crafts ecosystem of villages is impossible to
recreate in cities. A great deal of export potential is hidden here. Senior/elderly artisans can be
employed as ‘trainers’.
 Villages traditionally preserve large number of water bodies like ponds, wells, bawadis, canals
etc. Training villagers in water harvesting methods, rejuvenating ponds/wells to improve water
storage and sharing these good practices systematically with others, would help mitigate
hardships.
Things to consider while making villages smart:
Basic facilities should include health and sanitation, housing, power, skill development centres and
micro-industries.

A four-step method has also been proposed to create a smart village:
 First, a central place must be chosen as a hub and person must be assigned to work with villagers.
This person could be a wealthy local elder who is well respected and influential in his village or
town. Having a local leader will generate more trust and support among the villagers. The hub
should preferably be a pucca (proper) building that is centrally located in the village. The building
should have a few guest rooms, a common room and dining area, and should be in a safe location.
 Second, is the availability of basic infrastructure. Although many city dwellers want to experience
rural lifestyle, they are accustomed to basic comforts like clean drinking water, fans, internet, TV,
fridge, clean toilets, easy access to roads and public transport. People will prefer places that
already have the basic infrastructure in place or that can be upgraded with minimum effort. A
genuine village experience coupled with the availability of basic infrastructure could attract
people to the village.
 Third, is to encourage people to move to locations outside the city. With urban centres getting
over crowded and expensive, many people will be willing to consider relocating. Working from
rural locations will help startups widen their focus, and take up new challenging business domains
and niche problems. This will also allow the firm to test the market before formally launching.
Besides, as founders of startups usually prefer working round the clock to stabilise their projects,
they are the ideal long-term tenants for the village hub building.
 Finally, it is important to find the right kind of investors. Conventional investors may not be
interested in people- or rural-centric projects. The ideal investor would be an ‘angel investor’
with a critical connection to the locality community. Tapping into CSR funding from a large
corporate with a local presence is also an option. Additionally any government projects or funds
for the area could augment the initial growth phase of the smart village.
Way ahead:
The task is enormous and requires tremendous planning as well as a huge amount of resources. State
Governments, corporate sector and charitable institutions have to contribute generously. The NITI
Aayog can draw a master plan to make every village smart in the next five years. Invite support from
private institutions or NGOs; however, execution must remain with a governmental ‘nodal agency’.
Conclusion:
While it is true that India is urbanising at a faster rate than many other countries, it will not be fully
urbanised overnight. The simple truth is we must continue to look after our villages well in order to
let our cities survive. Smart villages can translate into improved farm productivity, water conservation
and economic independence to village youth. It makes great social, economic and political sense.
30/12 : Long road to gender equality in India

Summary:
Gender Budgeting has become a powerful tool for gender mainstreaming. Over the past two decades,
women’s empowerment has been increasingly recognized as a crucial factor for any country’s holistic
and sustainable development. Several programs and projects across the world have been launched

and are currently in progress to bring social, economic and political equity and broader access to basic
livelihood needs.
 India formally adopted gender budgeting in 2005. In that year, finance minister P. Chidambaram
included in the budget documents a separate statement on spending programmes that benefit
women in particular. It was his predecessor Yashwant Sinha who began the preparatory work for
a shift to gender budgeting.
Why emphasis on gender?
 Women represent 48% of total population in country.

 Women face disparities in access to and control over services and resources.
 There are specific needs of women that need to be addressed (practical and strategic gender
needs).
 Bulk of Public Expenditure and policy concerns are in Gender Neutral Sectors.
 Implications on women in the above sectors are not recognised or identified (gender blind).
What is Gender Budgeting?
It is an attempt to scrutinize the budget from the gender lens and bring out the gender differential
impact. In Gender Budgeting, “Gender” means women and her empowerment.
 Gender budgeting is used as a tool for effective policy implementation where one can check if
the allocations are in line with policy commitments and are having the desired impact.
Gender budget is not:
 A separate budget.
 About spending the same on women and men.
 Just about assessing programmes targeted specifically at women and girls.
 Confined to budgets alone. It covers analyzing various economic policies from the gender
perspective.
Why is gender budgeting necessary?
The achievement of human development is highly dependent on the development and empowerment
of the 496 million women and girls. In addition, the Constitution of India has mandated equality for
every citizen of the country as a fundamental right.
 Nevertheless, the reality is that women in India continue to face disparities in access to and
control over resources. These disparities are reflected in indicators of health, nutrition, literacy,
educational attainments, skill levels, occupational status among others.
 The poor status and value attached to women is also reflected in the fact that the female sex
ratio for the 0-6 age group declined from an already low 945 in 1991 to 927 in 2001, implying
that millions of girls went missing in just a decade. There are a number of gender-specific barriers
which prevent women and girls from gaining access to their rightful share.

 Unless these barriers are addressed in the planning and development process, the fruits of
economic growth are likely to completely bypass a significant section of the country’s population.
This, in turn, does not augur well for the future growth of the economy.
Issues to be addressed:
 Total magnitude of Gender Budget is very low.

 Focus has been mainly on identifying programmes/schemes meant entirely for women or having
visible components that benefit women.
 Very little information is available in the public domain as regards the assumptions made by
various ministries in the reviews of their expenditure profiles from a gender perspective.
 Many misleading and patriarchal assumptions limit the scope of Gender Budgeting.
 Sectors such as Water Supply, Sanitation, and Food & Public Distribution still remain outside the
purview of the GB Statement.
 Large schemes do not figure yet in the Gender Budgeting Statement.
What needs to be done to make gender budgeting more effective?
 Gender budgeting should be fully incorporated into standard budget processes so that it
becomes fully institutionalized. Otherwise, even initiatives adopted with enthusiasm may not be
sustained. Some elements of gender budgeting, such as an analysis of benefits or tax incidence,
may require periodic special efforts.
 It should address specific goals, such as reducing inequality in educational attainment, that have
clear benefits and can be measured even with somewhat crude tools and data.
 It should draw on civil society for support and assistance with the more research-oriented
aspects, and should apply to subnational levels of government where relevant. It should cover
both spending and revenue.
 It should not be a rule set specific goals for spending on women-related objectives because this
tends to reduce flexibility, making the budget process less effective.

What else is needed?
Interventions like gender budgeting are undoubtedly welcome. However, gender budgeting alone is
unlikely to solve the massive problem of gender inequality that not only prevents women from living
a full life but also hurts economic growth.
 For example, India has the lowest level of female participation in the labour force when
compared to most other regional economies. Indian women enter the labour force only when
there is economic distress while they retreat back into their homes once the situation improves—
a rare case of employment going down when the economy improves.
 Another issue that needs public policy attention is public goods. These by their very nature are
accessible for all citizens because their consumption is neither exclusive nor rival. Yet, the lack of
certain core public goods such as safe streets or lack of clean drinking water are more likely to
hurt the economic prospects of women more than men.
 The argument for safe streets is almost self-evident. The lack of clean drinking water on tap in
effect means that women in many parts of the country spend several hours every day walking in
search of water.
Conclusion:
Reducing gender disparities can lead to improved macroeconomic performance. The recognition that
gender disparities are harmful and that government budgets are not gender neutral implies a need to
incorporate gender considerations into the budgeting process. Although gender-budgeting initiatives
can take many different forms, their most important purpose is to influence the budgeting process
and help policymakers focus on ways that public policies can help reduce gender disparities and
improve economic outcomes. India is still a laggard when it comes to gender equality, and changing
this situation is an urgent task.
Insights into Issues
I. Mihir Shah Committee Analysis

A high-powered committee led by Mihir Shah submitted its report recently to PMO. The report was
titled “A 21st Century Institutional Architecture for India’s Water Reforms: Restructuring the CWC
and CGWB”.
About CWC & CGWB:
 The CWC was established in 1945, is in

charge of surface water and creating
storage structures such as dams and
medium-scale reservoirs
 The Central Ground Water Board (CGWB) is
has objective of managing groundwater
resources
 The Shah committee was set up last year to recommend ways to restructure the CWC, which
develops surface water projects, and the Central Ground Water Board (CGWB)

Committee Recommendations:
 Committee has suggested that an urgent overhaul of the current water management system is
required
 Change is required both in surface water as well as ground water management policies to face
the new challenges that are emerging
 The committee has suggested a restructuring of Central Water Commission and Central Ground
Water Board. It has recommended the establishment of National Water Commission to be
established as the nation’s apex facilitation organization dealing with water policy, data and
governance. It has suggested thati ndustrial water should be brought under its ambit, which is
rapidly increasing.
 Panel has warned against the perils of dependence on large dam projects and also about the
dismal spread of irrigation facilities over decades
 The Gujarat and Madhya Pradesh model of participatory last-mile connectivity should be
deployed across the country.
 States should only concentrate on technically and financially complex structures, such as main
systems up to secondary canals and structures at that level.
 Tertiary level canals and below, minor structures and field channels should be handed over to
Water Users Associations of farmers and Integration into the planning and cost developing
process for all irrigation projects.
 The key recommendation of the committee is to shift focus from construction to decentralized
management and maintenance in order to ensure that the promise of “Har khet ko pani” under
Pradhan Mantri Krishi SInchai Yojana does not go unfulfilled
Why is an overhaul of water management required?
 In 2016, a situation of drought or semi scarcity was reported in over 1000 villages
 Groundwater sustains around 60 per cent of agriculture in India, while 80 per cent of the people
living in rural areas use groundwater for their domestic needs. Nearly half of India’s farm lands
are un-irrigated and groundwater is the major source of water for irrigated holdings. 45% of
irrigated land the source of water is through tube wells drawing groundwater resources. In
comparison, canals irrigate just 26% of irrigated land, and tanks and wells only 22% of irrigated
land.
 Big dams which were widely considered to be the panacea for the water woes of the country are
now faced with several challenges. The issue today is to utilize the potential of dams through
creation of field application channels etc. Moreover widespread ground water exploitation has
led to a situation where ground water is rapidly depleting in many parts of the country,
highlighted by reports of NASA and Central Ground Water Board
 If the current pattern of water usage continues, about half of the demand for water will be unmet
by 2030. Besides, contamination by fluoride, arsenic, mercury, and even uranium is another
major challenge.
 Recent instances of droughts and farmers’ suicides underscored the gravity of the situation.
Climate change poses fresh challenges as more extreme rates of precipitation and evapo-
transpiration exacerbate impacts of floods and droughts.

Design of the proposed National Water Commission:
The commission report recommended that NWC be headed by a chief national water commissioner
and should have full time commissioners representing hydrology, hydrogeology, hydrometeorology,
river ecology, ecological economics, agronomy (with focus on soil and water) and participatory
resource planning and management.
 It will be an autonomous body & will to have a countrywide base and mandate, and greater
human-power.
 It will subsume Central Water Commission & the Central Ground Water Board.
 The commission aims at reducing inter-state water disputes, bring greater efficiency, better
planning and increased emphasis on conservation of water.
 It also ensures that all water resources in the country are managed in a holistic manner and not
separately as surface water, groundwater or river water
 The new body will forge partnerships with world class institutions, eminent experts and voluntary
organisations in the water management field. The new body is to serve as a world class capacity
building, data and knowledge institution.
Why restructuring Central Water Commission is necessary?
 To deal with the issue of water shortage and scarcity. The focus is on developing water resources
in India so that all river basins and resources can be managed to serve the water needs of the
country
 Decreasing per capita availability of water and the huge projected demand of this natural
resources by 2050 are also triggers for such a move.
 The mandate of CWC belongs to an old era when dam construction and tube well drilling was the
prime need of the hour. The CWC now lacks expertise in water utilisation, environmental and
socio-economic issues and in efficient irrigation management to deal with present-day challenges
of droughts, floods, climate change and food and water security.
 The country has invested Rs 4 lakh crore in major and medium irrigation projects since
independence, created 111 mha of irrigation potential, of which only 89 mha is utilised, hence
leaving a huge gap. Vast storages of water are not reaching farmers
 Also, at present, the CWC, which develops surface water projects, and the Central Ground Water
Board (CGWB), which monitors ground water use and contamination, carry out functions
independent of each other. For integrated water management, development, planning, water-
use efficiency and for budgeting the adoption of a river basin approach, restructuring is
necessary.
Issues:
 CWC Civil engineers and hydrologists are against the Shah committee’s recommendations
 Main argument being that water is a state subject and such reforms from centre go against the
spirit of cooperative federalism.
 According to the engineers, India can meet its food and water security requirements only through
the development of surface water through the construction of dams. Not following this
approach, as per the employees of CWC, would affect social security in India

 The argument engineers cite is, China with a population of 1.4 billion has created live storage
capacity of 718 bcm, while India has a live storage capacity of 259 bcm for its population of 1.3
billion. We need to build more storage capacity for sustainability of water usage.
Conclusion:
An integrated approach to solve the country’s water crisis is much needed. Despite investments in
increasing the agricultural potential through irrigation, vast tracts of our land are still rainfed due to
the absence of tertiary infrastructure providing water to farms. Participatory approach to water
management that has been successfully tried all over the world, as also in Madhya Pradesh, Gujarat
and Andhra Pradesh, needs to be adopted. Groundwater and surface water must also be viewed in an
integrated, holistic manner.
The recent water crises in the face of droughts in 2014 and 2015 and growing concerns with
groundwater contamination have provided a fresh trigger towards reorganization of CWC. The
recommendations are futuristic and have potential to restructure water resource agencies in India.
The recommendation should be implemented after building consensus with all stakeholders within
the framework of cooperative federalism.
II. FRBM Act – Need for a paradigm shift

FRBM act
The Fiscal Responsibility and Budget Management Act, 2003 (FRBMA) is an Act of the Parliament of
India to institutionalize financial discipline, reduce India’s fiscal deficit, improve macroeconomic
management and the overall management of the public funds by moving towards a balanced budget.
Objectives
 to introduce transparent fiscal

management systems in the
country
 to introduce a more equitable and
manageable distribution of the
country’s debts over the years
 to aim for fiscal stability for India in
the long run
Why the debate:
 Union Minister has recently commented that fiscal expansion or contraction should be aligned
with credit contraction or expansion respectively of the economy.
 This suggests that there should be an inverse correlation between fiscal deficit (fiscal expansion)
and bank credit (monetary expansion).
 This is to ensure adequate money supply to the economy in all the cycles
 The finance minister, in his budget speech, announced that a committee would be set up to
review the implementation of the Fiscal Responsibility and Budget Management Act (FRBM Act)
and suggest modifications for the future

Assessment of FRBM Act:
1. FRBM Act is neither necessary nor sufficient to ensure that fiscal discipline is maintained. They
have the potential to help, definitely. Under the FRBM Act, the state requires centre’s permission
to borrow but similar check is not imposed on the centre. Due to this, the centre’s FD declined
from 3.9% in 2004-05 to 3.1% in 2007-08. However, at the time of recession, like many other
countries of the G20, the centre decided to go for counter cyclical measures to allay the affect of
2008 recession on the economy. The FD increased to 6% of GDP in 2008-09. It is important to
understand that sovereign governments in Parliamentary System are not easily reined in by
controls of FRBM Act, unlike a Presidential System where there is a clear separation of power
between the executive and the legislature. The Parliament can exercise a check through
discussions. One of the amendments to FRBM Act in 2012 allowed the centre to change FRBM
targets but only after providing reasons to the Parliament. This has been done to ensure
continuous control of Parliament over the Fiscal policies of the government.
2. The existing FRBM Act prescribes a target fiscal deficit of 3% of GDP for the centre but with no
explicit justification for the number. Since there is also a separate limit for the states (although
not specified in the Act), the combined fiscal deficit (general government deficit in International
Monetary Fund terminology) is much larger. The Fourteen Finance Commission, under the
Chairmanship of YV Reddy, suggested a combined deficit of 6% (3% respectively for centre and
states) for the period of 2015-16 to 2019-20. However, the reasonability of such a target should
be based upon two criteria
 Crowding out of private investment – This is to be determined by looking at the deficit
versus the net financial savings of household, which is the common pool of savings for which
the government and corporate sector vie for. In 2007-08, the net financial saving of
households was about 11.6% of GDP and the combined fiscal deficit of the centre and states
together was only 4.1%. This meant that 7.5% of GDP was left for the corporate sector. We
know that private investment boomed at that time. Net financial saving of the household
sector has declined considerably since then, to about 7.3% of GDP. This probably reflects
higher levels of inflation, prompting households to shift from financial assets to real estate
and gold. If the combined fiscal deficit is fixed at 6% of GDP, it would leave only 1.3% of the
GDP for the corporate sector. This would mean that there is a crowding out of corporate
investment.
 Debt Sustainability – Since fiscal deficit is equal to the increase in total government debt at
the end of the year, the size of the deficit in successive years determines what happens to
the government debt-to-GDP ratio. India’s ratio is 65%, which is much higher than that of
most other countries. The saving grace is that most of the debt is serviceable in domestic
currency which is still a comfortable position to be in.
 Ideally, the FRBM Act should not prescribe specific numbers. Instead it should require the
government to present every year an explicit analysis of the crowding-out implications and
government debt-to-GDP ratio implications of the proposed fiscal deficit trajectory of the
combined deficit over the next five years based on explicit assumptions about GDP growth,
household savings and inflation. This would bring out more clearly the rationale for the
target and would guide discussions of departures.
3. The third issue is with regards to apportioning the debt between centre and states. The
14th Finance Commission has gone for greater devolution of taxes to the states which should

mean that the fiscal capacity of the central government, ideally needs to be enhanced through
liberal limit on the FD of central government vis a vis the states. For distribution of deficit targets
among the various states, we must ensure that states with greater debt burden and lower growth
potential should be allowed to borrow less. These states should be helped through greater grants
instead of allowing them greater borrowing limits in light of sustainability of debt
4. It is also argued that the current FD targets are not flexible which makes it difficult for the
government to adhere to it when the going gets tough. This can happen, for instance, when there
is widespread drought, or when exports go down.
 In a cyclical downturn, it doesn’t make sense to be rigid with FRBM targets. Instead, we
should allow the deficit to exceed the target in a structurally adjusted manner as a counter
cyclical measure. The structurally adjusted deficit is what the deficit would have been if the
cyclical shocks had not occurred. And the approach must be symmetric—when positive
shocks produce an unexpected gain in revenue, the observed fiscal deficit should be lower
than the target
 Flexibility may also be needed because of non-cyclical shocks, for example a permanent
increase in oil prices. In such a situation the correct approach is to go back to the drawing
board, work out the implications for GDP growth and revenues, and determine a new fiscal
trajectory, which takes appropriate account of crowding out and the debt/GDP ratio.
5. Both the Thirteenth Finance Commission and the Fourteenth Finance Commission recommended
the establishment of an autonomous body to review fiscal performance under the FRBM Act.
This could evolve into a statutory Fiscal Council, reporting to Parliament through the finance
ministry. Such institutions have been set up in several countries, with somewhat varying
mandates. Advantages would be:
 A Fiscal Council, with technical expertise, would help generate better understanding of the
consistency of fiscal stance of each budget with the longer-term fiscal trajectory envisaged
under the FRBM Act
 improve the quality of Parliamentary oversight
 contribute to a more informed public debate
Logic of linking credit expansion and FD limits:
This is because of following reasons –

 Money is the blood of economic growth
 Money that fuels the economy is created by banks, not by government. Banks and financial
institutions fund business and others, and it is that credit money which drives the economy
 If bank credit to the economy does not adequately grow, like it did not in the last few years,
economic growth will suffer for want of adequate money, like it has happened in the past 2 years.
It is then that the Budget needs to step in, to pump money into the economy by incurring deficit,
and, for the purpose, borrow the money lying with banks or even by printing more money, if that
is needed. This ensures that growth does not decelerate for want of enough money circulating in
the economy. The FRBM law has ignored this logic and fixed the 3 per cent fiscal deficit as
inviolable

Steps taken by the government:
The government thus formed a five-member committee under former revenue secretary N K Singh to
review the working of the 12-year old FRBM Act and examine the feasibility of a fiscal deficit range
instead of a fixed target. The committee will look into various aspects, factors, considerations which
go into determining the FRBM targets. The committee will also examine the need and feasibility of
aligning fiscal ‘expansion or contraction’ with ‘credit contraction or expansion’ in the economy
Way forward:
 Transition to a cyclically adjusted fiscal deficit framework. Under this arrangement, government
spending would increase during economic downturns to shore up aggregate demand, only to
recede when private spending strengths. The policy stance would thus be counter cyclical-
increase government spending during times of distress as opposed to a pro-cyclical policy and
increase government spending when the going is good. Theoretically sound but difficult to
implement practically as it involved making forecasts which are not always reliable.
 Another idea is of having a range or a band in terms of target. The problem in this however is
that automatically the upper end of the band would be followed. Thus prudent step would be to
link the range for fiscal deficit to a number of indicators such as the government’s debt level, its
interest service obligations and its revenue deficit which gauge the fiscal health of the
government. This step however would ignore the supply side issues
III. Internet Governance

The Internet Corporation for Assigned Names and Numbers (ICANN) in a meeting at Marrakesh
(Morocco) decided that the ICANN will now be governed by a “multi-stakeholder” (multistakeholder
ICANN community) model, including businesses, individual users and members of governments across
the world. Since this group elects ICANN’s board of directors in the first place, it can be said that ICANN
will now be an independent organisation, with no external oversight.
ICANN and its present

governance architecture
 It is a non-profit body
founded in 1998 that
administrates domain names
and Internet protocol
addresses (IPs) globally.
 ICANN has been assigned the
task to manage Internet by
the US Commerce
Department’s National
 Telecommunications and Information Administration (NTIA) under a contract, which expires on
September 30.
 IANA (the Internet Assigned Names Authority, the part of ICANN that handles country codes,
Internet

 numbers and protocols) then went on being part of ICANN, despite concerns raised by a number
of countriesover the US’s stranglehold over the Internet.
 ICANN’s architecture renders it answerable only to U.S. law and courts.
 The main issue that non-U.S. actors have with the U.S. control over ICANN is that it can
unilaterally interfere with the ICANN’s policy process, and the Internet’s root server
Why the debate:
 Controversial US practices such as snooping on foreign leaders, as revealed in Wikileaks

 Allegations that ICANN, though a transnational body functions under the supervision of
Department of Commerce with which it has contract
 A broader debate on internet governance touches the topics of cyber security, trade secrecy,
freedom of expression and sovereignty
What is Internet Governance
In 2005, UN sponsored World Summit on Information Society defined Internet Governance as –

“development and application of rules, norms, principles, practices by govt, civil society, business,
each within its own respective role, to enable the evolution and use of internet”.
It encompasses
 Technical aspects such as control over DNS servers etc

 Civil aspects such as privacy, freedom of expression etc
 Political aspects such as maintenance of sovereignty
 Security aspects such as data security, cyber security etc
Problem with ICANN’s role currently:
 It is transnational but not global in its current avtar

 It is dominated by non state actors which is hugely problematic for countries like China, Russia
etc which are trying to maintain state control over the internet
 It is one of the few centralized points of control over the internet
 It is overseen by US
Assessment of various models for Internet Governance:
 Model 1 – Oversight by an intergovernmental organization (proposed by International

Telecommunication Union). It replaces US control over IANA with an organization composed of
the nation state representatives from countries around the world. This is supported by China,
Russia etc
 Pros
 Democratizes the oversight mechanism as all countries would be represented in the
policy formulation
 Gives nation state the power to enforce public policy
 Curtails the power of non state actors to influence policy decisions thereby curbing
misuse by vested private interests

 Making use of international law to produce accountability. Currently US laws apply

over ICANN . Replacing oversight over ICANN by intergovernmental organization would
enable international law duly formulated to extend control
 Cons
 Erosion of the bottom up process on which the internet has been built and flourished
so far. In international arena, states are more guided by maintaining security and
sovereignty as opposed to protection of the interests of the citizens
 All nation states are not democratically elected
 International law would also give primacy to national security and sovereignty as
opposed to interests of the people
 Involvement of nation states would mean involvement of bureaucracy thereby slowing
down the decision making process which is dangerous for the growth of flexible, fast
changing contours of the net
 Promotion of vested business interests by nation states. Eg. Ethiopia had banned VoIP
services to maintain monopoly of state owner telecom company
 Fragmentation of global internet in accordance with national interests
 Model 2 – Hierarchical Multi Stakeholder Organization. In this model, there will be
involvement of all stakeholders as identified by the Tunis Agenda such as Civil Society,
Private Sector, Intergovernmental and International Organization & Technical and Advisory
groups in policy discussions. The recommendations will be included in policy formulation by
committee of nation states which are geographically representative
 Pros
 Strengthens bottom up process of internet agenda by giving voice to multiple
stakeholders
 Control on unlimited power exercised by nation states
 Most practical form
 Helpful for flourishing of business etc
 Cons
 Problem in recognition of stakeholders
 Involvement of multiple stakeholders in policy discussion but not decision making
would still lead to control of nation states
 Model 3 – This is the alternative by Internet Governance Forum . It holds that
multistakeholderism to be there not just in policy discussions but also in decision
making.
 Pros
 True multistakeholderism
 Effective check on nation state’s power
 Cons
 Unelected representatives would be involved in decision making
 It would be difficult to develop consensus
 For nation state the principle of assisgning votes can one state, one vote. But
assigning votes to civil society, private players would be difficult

India’s Stand:
 India’s proposal is that the Internet should be managed through the multi-stakeholder approach
(state centred multistakeholderism and not true multistakeholderism) and the governments
should have “supreme right and control” on matters relating to international security.
 India has described the role of the government as “an important stakeholder” and “a custodian
of security” for the global Internet infrastructure
 India in its submission has said that under the new transition, the body managing the Internet
should have“accountability towards governments” in areas where “governments have primary
responsibility, such as security and similar public policy concerns”
Assessment of India’s stand:
India’s stand primarily emanates from the concern that control of internet would be hijacked by
multinational corporations, especially US based corporations. India fears that with an independent
status, ICANN may promote its narrow self interest and commercial pursuits disregarding public good.
However, India’s stand has disappointed the Indian private sector that has led the nations’s rapid
advances in IT sector and the civil society groups which are wary of excessive state control. C. Raja
Mohan writes that India is still some steps away from nuancing its position on Internet Governance
that is in tune with India’s political values and the aspirations of its flourishing IT sector and concern
of civil society groups
IV. WTO Dispute – Domestic Content Requirement

The World Trade Organization’s Appellate Body has declared domestic content requirement (DCRs) in
India’s Jawaharlal Nehru National Solar Mission (JNNSM) as illegal. Last year in Aug 2015, the WTO
disputes panel also ruled that India’s subsidies for solar power contravene WTO trade rules and India
must remove the subsidies or face trade sanction.
United States filed the WTO

complaint in 2013. The US alleged
that India’s subsidies for the
JNNSM discriminates against
foreign suppliers of solar
component. The primary point of
conflict is with regards to
government entering into long
term electricity purchase contract
with eligible solar power
developers (SPDs), assuring them
guaranteed prices for 25 years.
This government procured electricity is then sold to distribution companies who, in turn, sell it to
consumers. However only those SPDs who source certain types of solar cells and modules domestically
are eligible.

Background:
 In Phase 1 of NSM, the DCRs only covered solar cells and modules. From the US standpoint, this
was bearable as US companies export few solar cells and solar modules to India.
 But in phase II to NSM, India extended the DCRs to thin film technologies that have traditionally
dominated the Indian market
 A similar ruling was passed in 2013 when Canada had launched a similar effort to encourage the
growth of solar power. Japan and EU objected to the local content requirement that Canada had
manadated
 Ironically, the US itself provides subsidies for renewable. Over the past 5 years, federal subsidies
for renewable energy have averaged 39bn$ a year.
 Domestic Content Requirement are part of many state and federal projects in the US. India had
called attention to DCRs attached to renewable energy programmes in Michigan, Texas and
California.
 Additionally, US also protects its own solar sector – it has imposed tariffs against Chinese solar
products
Impact of the verdict on India:
 India has said that it will ratify the Paris Climate Deal on 2nd Under the treaty, India has committed
to 30% of its energy requirements being met through renewables by 2030. By 2022, India plans
to have 100GW of installed solar capacity. The domestic manufacturers are yet to establish their
competitiveness vis a vis the imported solar panels and modules. The specification of DCR was
built in to provide support to this nascent industry so that India would be able to fulfill the targets
for renewable it had set out to achieve. This now seems problematic. However Ministry of New
and Renewable Energy has indicated that it is willing to replace the DCR measures with subsidies
to safeguard solar manufacturing
 India had claimed that the DCR should not be countered as it is a government procurement
programme which fall under Article III.8 of GATT that renders rules against discrimination
inapplicable to government procurement. This was the argument given by India’s Chief Economic
Advisor Arvind Subhramaniam
 The WTO ruling signals once again that neoliberalism favours trade over environment protection.
The measure of India was to promote green energy. India has also taken the lead in establishing
International Solar Alliance which focuses on exploiting the potential of solar power for fulfilling
energy needs
Legal Rationale at the WTO
 India argued that its DCR measures should be excused because they fall under three exceptions
 First is the Article III.8 of GATT. The Appellate body rejected it by citing the WTO
jurisprudence in case of Canada, which ruled that for a measure to fall under Article III.8 of
GATT, it should be in a competitive relationship with the product being discriminated
against. Since the government procured electricity while the discrimination was against
solar panels, the test of competitive relationship is not satisfied
 The second exception India sought was under Article XX(j) of GATT that allows a country to
adopt measures essential to acquisition or distribution of products in general or local “short
supply”. India argued that since the domestic production of solar modules is limited, these

products are in “short supply”. The Appellate body disagreed stating that to decide whether
a product is in short supply or not, need to look at all supply sources and not just domestic
supply
 The third is under Article XX(d), which allows countries to adopt measures necessary to
secure compliance with laws or regulations that are not inconsistent with GATT. India
however failed to show a domestic law or international legal norm with direct application
in India, compliance with which necessitated the DCR
Why India needs US support for achieving its objectives under JNNSM?
 India has not gone on to file a complaint against subsidies for renewable in the US. Nor has it
applied anti dumping complaint against US for selling solar materials in India below cost
 Experts believe that is because of PM’s goal of expanding India’s reliance on renewable is
achievable and will require around 100bn$ in new investment. US is providing support to India
through its PACE programme.
 It is believed that more than half of the required 100bn$ is going to come from overseas,
specifically US. Thus action against US may antagonize the very source of funding.
Does the ruling hamper India’s chances of expanding renewable energy:
 While the ruling does tie down government hand in promoting the domestic solar panel
manufacturers and is another instance where WTO has favoured a developed country, the ruling
per se would not impact India’s clean energy objectives.
 Because Indian manufacturing of solar panels etc has not developed fully, those installing
solar plants prefer to purchase foreign content which is cheaper and subsidized
 The government can continue with JNNSM by allowing the SPDs the free choice to either
import solar cells and modules or buy from domestic industry
V. Minority Educational Institutions and Minority Status

In January, the central government reversed the stand of its predecessor Government and decided
not to support minority status for Aligarh Muslim University or Jamia Millia Islamia.
Background of the Issue
 AMU
 AMU was founded as the Madrasatul
Uloom in 1875 in Aligarh, and
evolved into the Mohammedan
Anglo Oriental College.
 In 1920, the Indian Legislative
Council set up the university, and all
assets of Mohammedan Anglo
Oriental College were transferred to
it. Those arguing for minority character say that this was done by an Act as that was the only
way a university could be set up at the time.

 In Azeez Basha vs UoI, 1967 case, the SC ruled that AMU was not a minority educational
institution as it was set up by British legislature, and not by Muslims
 In 1981, Parliament passed an AMU Amendment Act, which accepted that AMU was set up
by Muslims
 The Allahabad High Court, in 1981, ruled that the 1981 Act was ultra vires of the
Constitution, and that AMU was not a minority educational institution. This decision of the
HC was stalled by SC
 Recently, the Central government has filed a fresh affidavit in SC reversing the earlier
position that the AMU, a Central University, can not be granted minority status
 Jamia Millia Islamia
 The Law Ministry has given the advice that the government can withdraw its earlier support
given to the 2011 order of National COmmision for Minority Educational Institution which
declared Jamia Millia Islamia as a religious minority institution
 The advice in this case, like the previous one, is on the ground that the university was
established by an Act of Parliament and not set up by religious minorities
Constitutional Provisions regarding Minority Educational Institutions:
Article 30(1) recognizes linguistic and religious minorities but not those based on race, ethnicity. It
recognizes the right of religious and linguistic minorities to establish and administer educational
institutions, in effect recognizing the role educational institutions play in preserving distinct culture. A
majority community can also establish and administer educational institution but they will not enjoy
special rights under Article 30(1)(a).
Special rights enjoyed by religious minority institutions are:

 Under Art 30(1)(a), MEI enjoy right to education as a Fundamental Right. In case the property is
taken over by state, due compensation to be provided to establish institutions elsewhere
 Under Article 15(5), MEIs are not considered for reservation
 Under Right to Education Act, MEI not required to provide admission to children in the age group
of 6-14 years upto 25% of enrolment reserved for economically backward section of society
 In St Stephens vs Delhi University case, 1992, SC ruled that MEIs can have 50% seats reserved for
minorities
 In TMA Pai & others vs State of Karnataka & others 2002 case, SC ruled that MEIs can have
separate admission process which is fair, transparent and merit based. They can also separate
fee structure but should not charge capitation fee
Why the debate?
 While a number of minority educational institutions exist, there are issues with regard to minority
universities. This is because for incorporating any university, a statute is needed and that is done
by state
 Those who oppose the tag of MEI being accorded to AMU and JMI argue that since these
universities are established through an Act of Parliament, these institutions are not MEIs
 Those who argue against the current government’s stand hold that there is a difference between
incorporation and establishment. The statutes incorporate these institutions as universities but
they are still established by minorities and hence are liable to enjoy the special rights accorded
to MEI mentioned above

Stand of the government:
 Centre argues that conferring minority status to AMU or any institution set up by a parliamentary
enactment or state enactment would be contrary to Article 15 of the Constitution, which
prohibits discrimination by state on grounds of religion
 Centre also states that minority status to AMU and Jamia Millia Islamia universities is
“unconstitutional” and“illegal” since these two government-run institutions were discriminating
against Scheduled Castes, Scheduled Tribes and Other Backward Classes by using the minority
tag
Analysis of Supreme Court’s Judgement:
 The Supreme Court in Azeez Basha case has held that the term “educational institution” does
include a “university”
 It also observed that the minority have the choice to choose a central university with some
governmental supervision, and whose degrees are recognized at par with degrees of other
universities
 The Supreme Court in the 1967 case has also not ruled out possibility of a central university being
a minority institution. It merely said that from the provisions of the AMU Act, 1920, it is not clear
that it is a minority institution. This is the heart of this case.
 Analysis of reasoning of the Supreme Court in Azeez Basha case simply means that a religious or
linguistic minority is debarred from establishing a university inasmuch as a university can only be
established either by an act of the Central or state legislature. This contradicts Azeez Basha’s own
position that an educational institution, for the purpose of Article 30(1), includes a university as
well.
 Confusion emanates from the blurring of the distinction between the words “establish” and
“incorporate”. Founding a university afresh with all its buildings and other infrastructure is
altogether different from merely incorporating or upgrading an existing functional institution.
We should not overstate the role of the Central legislature and underplay the role of those who
really founded the AMU. A sum of Rs 30 lakh was collected by Muslims in 1920 to constitute a
permanent endowment to meet the recurring expenses of the proposed university.
Whether a secular state should establish a minority educational institution?
Arguments in favour:
 Constitutional Provisions:
 Article 30(1) confers the rights on religious and linguistic minorities to establish educational
institutiuons. The SC in its judgement in Azeez Basha vs UoI, 1968 accepted that universities
come under the definition of “educational institution” in Article 30(1). A university can only
be recognized so by an Act of Parliament. Thus the spirit of Art 30(1) dictates that it is
obligatory on central govt to recognize minority universities.
 Article 25(2)(a) states that the state can make laws to regulate or restrict the non secular
activities of a religion.
 Art 30 cannot be viewed in isolation and needs to be read with Art 26(a) which states that
religious denominations can establish institutions for religious and charitable purposes as
determined by SC in TMA Pai Foundation Case. AMU has been involved with commendable

work in Social sciences and imparting education to Muslim youth which can be considered
as charitable work.
 State is duty-bound under Art 38 to implement all policies which minimize inequalities
among different sections of the society. In such a scenario, setting up universities may be
helpful as they adhere to highest standards of imparting education and are allowed to award
degrees. Besides, revoking minority status from such institutions is also against SC
adjudication in Kerala Education Bill Case which limits State regulation from depriving
minority from managing the institution
 International Law
 Article 13(1) of the Council of Europe’s Framework Convention for the Protection of National
Minorities, 1994, says: “Within the framework of their education systems, the parties shall
recognise that persons belonging to a national minority have the right to set up and to
manage their own private educational and training establishments.”
 Article 14(3) of the European Charter of Fundamental Rights (2000), which binds members
of the European Union, says explicitly: “The freedom to found educational establishments
with due respect for democratic principles and the right of parents to ensure the education
and teaching of their children in conformity with their religious, philosophical and
pedagogical convictions shall be respected, in accordance with the national law governing
the exercise of such freedom and right.”
 The United Nations’ International Covenant on Economic, Social and Cultural Rights, to
which India is a party, recognises in Article 13(4) “the liberty of individuals and bodies to
establish and direct educational institutions”.
Arguments against:
 Under Article 27, no proceeds of any taxes shall be utilized for promotion or maintenance of any
particular religion or religious denomination. AMU was receiving funds from the state. This was
thus problematic.
Conclusion:
Justice A.P. Sen made a pertinent observation in Lilly Kurian vs Sr Lewina and others ,1978, “the
protection of the minorities is an article of faith in the Constitution of India”. The constitution explicitly
recognizes the right of minorities to establish and administer MEI. It is the duty of the government to
ensure that the rights guaranteed to minorities are not turned into a teasing illusion and promise of
unreality. These guarantees are essential in a democratic and pluralistic country like India.
VI : Pradhan Mantri Fasal Bima Yojana – How Different is it from Earlier

Agri Insurance Schemes?
Problems with the current Insurance Schemes:
 There is low awareness about the current schemes. Only 19% farmers have heard of such
schemes
 Low penetration of Financial Institutions also adds to the cause of poor insurance coverage
 Currently the infrastructure to measure crop loss accurately is outdated which makes it difficult
to make loss assessments uniformly

 The existing insurance schemes are unable to protect the farmers against price fluctuations
 Getting data on reliable yield and price is difficult because it keeps on fluctuating from season to
season
 The time taken to fulfill claims is quite high. This is despite the rules stating settlement within 45
days
 Compulsory deduction of premium from loans hedge the banks and not farmers
 Modified NAIS and WBCIS have very high premium rates to the tune of 10% of sums insured
based on 3 years average data collected for Kharif and Rabi season. This is a major reason behind
the NSSO’s data that only 5% of farmers who go for institutional credit opt for insurance
 Financial Stability Report by RBI highlights that linkage of loans with insurance doesn’t meet good
response from banks as the burden of Priority Sector Lending is already there on banks
Reasons for High Premium:
 It is primarily due to lack of scale. Less than 15 mn ha out of total 140 mn ha cropped area is
covered under some form of insurance scheme
 This is also due to low penetration of institutional credit which hinders economies of scale from
coming into operation
The US and China experience:
 US is the world’s biggest crop insurers where state provides support for 70% of the premium paid
by farmers. In China as well, state coverage of premiums is to the tune of 70-80%. This shows
that Indian state will have to pitch in heavily in covering premiums
 If we increase the coverage area to at least 100 mn ha, premium rates, owing to economies of
scale, would fall from 10% to 5%. Centre and states under the rubric of cooperative federalism
can jointly share the burden
Features of PMFBY:
1. Premium rate fixed @2% for kharif, 1.5% for rabi, 5% for horticultural crops and vegetables.
Remaining burden of premiums to fall on Central and state government
2. Paymentto be transmitted directly to account to reduce leakages

3. Aim is to Increase insurance coverage from 23% currently to 50%

4. Use of technology being encouraged. Smart phones used to upload crop yield data to facilitate
quick settlement of claims. Remote sensing satellites used for field surveillance in place of manual
surveillance to quicken the process.
1. Tech can be used to ascertain that farmers/tenants have a stake in the crop being insured
2. Capture and upload data of crop cutting to reduce delays in claim payment to farmers
3. Remote sensing will be used to reduce the number of crop cutting experiments. Larger use
of such technology will reduce dependence upon role of Patwari and junior district level
officers
5. Long standing demand of farm level assessment fulfilled
6. Post harvest losses will also be covered
7. Earlier there was capping on amount insured for which subsidy burden was borne by the govt.
That has been removed under the scheme
8. TheCentre currently has a bill of Rs 3,100 crore on account of its share of the premium for the
23 per cent crops that are currently insured in the country. Once 30 per cent of the crop comes
under insurance cover, the Centre’s financial liability is estimated to go up to Rs 5,700 crore. This
financial liability is expected to touch a whopping Rs 8,800 crore once the target of bringing
50 per cent crop under insurance is achieved in three years. However as the no of farmers under
insurance schemes increase, the subsidy burden will decrease courtesy economies of scale
Issues in previous schemes
 In PMFBY insurance unit is a village as against the revenue administrative unit of a block in
previous schemes. A block covers a large area with sub regional weather variations, risk of
exclusion in previous scheme was higher
 Without adequate use of technology in previous schemes, burden fell on state governments to
conduct crop cutting experiments to estimate the actual yield and thereby calculate losses. Such
experiments were often poorly done and do not give real value of the produce. Also the
assessment process done manually by Patwari and chances of corruption at the lowest rung of
revenue administration very high depriving the farmers of the benefit
Benefits
 The scheme is in sync with the stated objective of the government to double farmer income by
2022
 With back-to-back droughts, and unseasonal rain and hail in certain pockets, it became clear that
the risks in farming are on the rise, and the existing system of crop insurance was nowhere near
meeting the needs of the peasantry. In this context, the new scheme is surely a step in the right
direction and very timely — which will help in saving Indian agriculture from the increasing risks
of nature
 The premium rates to be paid by farmers are very low and balance premium will be paid by the
Government to provide full insured amount to the farmers against crop loss on account of natural
calamities. The low premium will drive penetration and enrolment and make the insurance scheme
viable for insurers.
 Post-Harvest losses are also included, so it will provide safety and confidence to the farmers.

Issues
 Post harvest losses does not include storage losses

 83% of farmers are small and marginal farmers , use of technology is difficult for them
 Not income insurance but only revenue loss coverage
 Only insures against weather risk and not crop loss risk. Risks such as destruction by wild animals
not covered under the scheme
 Problems related to insurance run far deeper than premium rates. For e.g. In many states where
premium rates are low in MNAIS still have very low subscription
 One key problem of crop loss or damage compensation, the unit of assessment, remains
unaddressed in the new scheme
 There does not seem to be anything in this scheme to address the problem of tenant farmers
who bear the risk of crop failure but are not entitled for compensation and insurance payments
Conclusion
De-risking agriculture does not begin or end with insurance. The assessment of risk should begin much
before sowing and proceed beyond harvest. The decision of what to sow and reap is currently not a
well informed choice based on a sound assessment of soil, yield and prices. If insured, small and
marginal farmers show an increasing tendency to sow cash crops reliant on the monsoon—a classic
case of moral hazard. It is here that better risk assessment, contract design and cooperatives prove
handy. Mixed farming and inter-cropping also helps in diversifying the risks generally associated with
monocropping. Commodity futures are yet another solution to achieve price risk management and
price discovery. Unfortunately in India, no significant price discovery has occurred in agricultural
commodity markets which started their operation a decade ago. This is primarily because of the lack
of integration between the futures and spot markets.
These loopholes are to be addressed along with making steps to improve the insurance coverage.
VII. India Africa Relations

Importance of Africa:
 Geostrategic
 Africa is critical to India’s security, especially the Horn of Africa region, because of its
proximity with India. The threat of radicalism, piracy, organized crime emerge from this
region
 Economic
 Africa can help us in diversifying our energy sources, which is one of the stated objective of
our Integrated Energy Policy
 Africa also contains rich reservoir of valuable minerals, metals including gold and diamond
 Africa provides a space for Indian investment
 Africa has ample agricultural land which cab address India’s food security. India is looking at
leasing land in Africa to overcome the land deficit that we face in terms of arable land
 Geopolitical
 Support of African countries is important for India’s aim of gaining a permanent seat in UNSC
 Africa provides a space for displaying both India’s soft and hard power

 India has been actively involved in peace and stability of African countries through UN Peace
keeping operations. India is involved in capacity building of African countries. Africa is also
the largest beneficiary of India’s ITEC programme
History of India Africa Relations:
The foundations were laid by

Mahatma Gandhi. According to him,
there will be a “commerce of ideas and
services and not of raw materials and
goods like imperialist powers”. The
present government continues to take
this approach as the foundation of
India’s Africa Policy. According to Vice
President Hamid Ansari, “ India shares
Africa’s dreams and India Africa
cooperation is genuine 2 way street
partnership”
Relations uptill 1960:
Nehru talked about Afro Asian solidarity. African countries provided strength to Nehru’s NAM. The
policy in this phase is described as “ideational” and “pragmatic”
2nd phase (1970s – 1990s):
There was neglect of Africa because of India’s attention on South Asia and India’s attention on inward
looking foreign policy. Though India in this phase continued to support Africa against Apartheid.
3rd phase (1990s onwards):
This is the phase of reengagement with Africa. However the lead was taken by private sector, rather
than government. Private sector of India should be given credit to push attention of GoI towards the
region of strategic and economic importance.
Present status of relations:
Since 2008, India and Africa relations have been institutionalized. India has started engagement with
African Union (Pan African Platform). So far 3 summits have been organized under the aegis of India
Africa Forum Summit. It is to be noted that the approach of GoI is also influenced by China. China has
also initiated the Forum for Africa and China cooperation in the year 2000.
Strategies adopted by Indian government:
 Pan African level engagement

 Partnership with regional organization
 Development partnership through IBSA and BRICS

 Bilateral engagement with countries

 Involving Indian communities and Indian Diaspora
Whether India’s relationship with Africa should be seen through Chinese prism?
 While China has been in Africa’s infrastructure, mining, oil and natural gas sectors for many years,
India, despite moving late, has worked through training, education and capacity-building
programmes — which have been very well-received by the countries.
 China is developing series of important ports in Africa on the western and eastern coast right
uptill Mediterranean and building rail linkages to connect to those ports
 Over the last 15 years, India-Africa trade has gone up 20 times, and reached, according to the
government, $ 70 billion.
 Indian investment in Africa is between $ 30 billion and $ 35 billion.
 India has given concessional credit to the tune of $ 7.4 billion, of which $ 5 billon has been
disbursed. The credit lines have helped create 137 projects in 41 countries.
 A Pan-African e-Network for education and health is functional in 48 countries.
 Since 2008, India has extended 40,000 scholarships to African countries under ITEC programme
Thus it would be wrong to conclude that India’s African outreach is with a view to counter China’s
expanding influencing in the region. Moreover Chinese strategy of exporting Chinese labour as part
of its push to create excess capacity abroad to counter unemployment in China is rattling the African
population. There have been protests against the discriminatory employment practices of China in
matters of employment in Nigeria, Kenya etc.
Challenges India faces from the presence of countries like U.S in Africa
 US trade with Africa initially was high because of its strategy to reduce dependence of middle
East oil and hence they went for greater purchase from Africa. With shale revolution in USA, trade
volume has declined. USA still involved in infrastructural development, export of commodities
(food stuff, refined products), export of equipments, projects for Mineral exploration. All these
fields are also what India is interested in. Same is the case with china
 USA along with China has also been offering soft loans which are being lapped up by capital
starved African nations
Shortcomings of U.S (and other developed countries) involvement
 US products are too costly for African customers compared to Indian and Chinese products
 Export of raw materials to USA unlikely to grow a lot because of relative stagnation of GDP growth
rate of U.S economy compared to India and china
 USA’s involvement in building transport infra etc can lead to increased sale of Indian cars etc
which are cheaper
 Development of African primary industries by these countries can lead to increased exports to
India

Shortcomings of India’s involvement in Africa
 In terms of cheque book diplomacy, India can not compete with China or U.S. Some of the African
countries, even the richer ones like Nigeria, expect India to bear gifts for them under IAFS.
However India asserts for joint endeavour for better development
 India abrogates its responsibility in terms of mid stream and down stream delivery processes,
instead relying on multilateral agencies like African Union. This leads to India losing credit for a
project despite the financial, technological backing it gives
 India contributed a lot more than other countries in terms of ebola relief but did not highlight it.
Indian assistance was largely through multilateral forums and in a piecemeal manner
Impact of IAFS process so far:
 India has committed unprecedented level of resources to Africa (in soft loans and grants). $5bn
in soft loans, half a billion dollars in grants, institution building and training fellowship to Africa
 Earlier in IAFS 1 India had offered DFQF (Duty Free Quota Free) access to LDCs of Africa
 Increased people to people contact as observed in the increasing flow of medical tourists,
students, trainees and Indian entrepreneurs and experts.
 IAFS process has also given a boost to cultural and information contact and mutual awareness
 Growth in India’s trade and investment activities has partially slowed down due to the effects of
recession.
SWOT analysis
Strength
 Indian diaspora in Africa to be leveraged for involvement in building social infra
 Similar socio economic challenges and historical linkages
 Indian developmental model more in line with Africa’s needs
 Private sector involvement in Africa. India’s private sector is involved in 2x more Greenfield
projects as compared to Chinese counterparts. Another advantage that India has, in any projects
it employs local people thereby generating employment, earning goodwill. China exports Chinese
labour.
Weakness
 Multiple competing interests present. China and USA are the top 2 trading partners
 Chequebook diplomacy can not be done by India
 Lack of emphasis on bilateral relationships instead engaging mostly through forums like IAFS
Opportunities
 Shift from line of credit approach to private sector involvement which would help in providing
loans at cheaper interest rate, risk mitigation
 Better organized, more coherent and faster responding mechanism accompanied by an
appropriate media campaign required for highlighting India’s contribution
Threats
 Bureaucratic hurdle in trade expansion as we interact largely with African Union. We have focus
on nations individually to take projects forward

 No efforts by India to curb racial discrimination. Several reports in the past have highlighted that
the propensity if Indians to discriminate on grounds of race is quiet high. China has undertaken
educational projects to bury the African stereotype
IAFS 3 – Delhi Declaration:
 The declaration placed development cooperation at the heart of India-Africa partnership, with
India unveiling $10 billion in Lines of Credit for a host of development projects over the next five
years and pledging a grant assistance of $600 million. This grant includes an India-Africa
Development Fund of $100 million and an India-Africa Health Fund of $10 million. It will also
include 50,000 scholarships in India over the next five years and support the expansion of thePan
Africa E-Network and institutions of skilling, training and learning across Africa.
 Amid the growing salience of ocean economy, IAFS-III mapped out a blueprint for enhanced
cooperation in developing blue economy and to promote what Prime Minister Narendra Modi
called “the blue revolution.” Blue Economy aims at sustainable development of marine
resources, which will drive growth and prosperity of India, Africa and other littoral states blessed
with long coastlines.
 The third India-Africa Forum Summit saw a striking convergence of positions between India and
54 African countries to address a host of cross-cutting global issues, ranging from the UN Security
Council reforms, piracy/maritime security and terrorism to multilateral trade negotiations,
climate change and sustainable development.
 India plans to conduct a new training course at the Centre for UN Peacekeeping (CUNPK) in New
Delhi and at other Peacekeeping Training Centers in Africa dedicated for Training of Trainers from
upcoming Troop Contributing Countries from Africa. They also agreed on jointly promoting
greater involvement of the Troop Contributing Countries in the decision-making process.
VIII. Basic Income Guarantee Scheme

While the world pondered the fallout of Brexit, another referendum took place in Europe, which was
no less significant. In Switzerland, a proposal for adults to be paid an unconditional monthly income
(1.75l pm), whether they worked or not, was up for a vote. It was defeated by a big margin – 77%
opposed the plan, with only 23 per cent backing it. If successful it would have led to a radically new
model of the welfare state, where all forms of transfers from the state to the poorer sections
— housing, food, child support, and unemployment benefits — would have been replaced by a single
cash transfer.
The Swiss setback aside, the idea of a Basic Income Guarantee
(BIG) has gained traction in the debate on reforming the welfare
state in major market economies on both sides of the
Atlantic. The idea also resonates with a recent policy shift in India
towards direct cash transfers, under the acronym JAM
(Jan Dhan Yojana, Aadhaar cards, Mobile money platforms),
which involves rolling all subsidies into a single lump-sum cash
transfer to households.

Plans Proposed:
 Y Combinator, of Silicon Valley fame, is testing out a new business model: handing out money,
without any strings, in an unnamed U.S. community in an attempt to replace safety net welfare
policies that often fail to help those with the greatest need.
 Finland is considering a plan to give 100,000 citizens $1,000 a month, while four cities in
Netherlands are starting trial programmes.
 Canadian province of Ontario is planning a trial run of Basic Income Guarantee programme
Indian Experience
A pilot in eight villages in Madhya Pradesh provided over 6,000 individuals a monthly payment (Rs.100
for a child, Rs.200 for an adult; later raised to Rs.150 and Rs.300, respectively). The money was initially
paid out as cash, while transitioning to bank accounts three months later. The transfer was
unconditional, save the prevention of substitution of food subsidies for cash grants.
Results:
 Most villagers used the money on household improvements (latrines, walls, roofs) while taking
precautions against malaria — 24.3 per cent of the households changed their main source of
energy for cooking or lighting; 16 per cent had made changes to their toilet.
 There was a seeming shift towards markets, instead of ration shops, given better financial
liquidity, leading to improved nutrition, particularly among SC and ST households, and better
school attendance and performance.
 There was an increase in small-scale investments (better seeds, sewing machines, equipment
repairs etc).
 Bonded labour decreased, along with casual wage labour, while self-employed farming and
business activity increased.
 Financial inclusion was rapid – within four months of the pilot, 95.6 per cent of the individuals
had bank accounts. Within a year, 73 per cent of the households reported a reduction in their
debt.
 There was no evidence of any increase in spending on alcohol.
Pros:
 Instead of having many different forms of welfare programmes targeted at the poor, and
administered through government bureaucracy, just make a simple unconditional regular cash
transfer to every adult. This would help in downsizing bureaucracy and doing away with
cumbersome procedures associated with bureaucracy.
 Universal cash transfer has 3 basic characteristics:
 First, it is universal and not targeted at the poor alone, thereby removing the numerous
problems associated with means-testing. In the Indian context, this makes sense because of
the less-than-satisfactory experience with targeting welfare services. Apart from the
standard arguments against targeting—that it often excludes a lot of the deserving
households from receiving subsidies, people often fall in and out of poverty and therefore
it becomes difficult to ascertain who are rightfully entitled to receive such benefits.

 It is a simple cash transfer, so there is no need to provide in-kind transfers (for example food
stamps) or subsidies for certain goods and services (for example housing support), both of
which come with standard inefficiencies associated with interfering with market forces
 It is unconditional, so that it is not contingent on the recipients conforming to stipulated
norms of behaviour, such as looking for jobs or having children enrolled in schools, and the
problems of monitoring that this entails. This takes care of the problem of inefficient
targetting
 Individuals retain any additional income earned over the basic income, subject to paying a
fraction in taxes. So only those with zero income will receive the full basic income in net terms.
For others, the net benefits will taper off and so even though the basic income is universal, the
benefits of the non-poor are clawed back through taxation and only the poor are net recipients
of support. Moreover, it has work incentives built in since the net incomes of individuals will
increase with extra earnings.
 It is one of the few policies where there is support from both the left and the right end of the
political spectrum. The right likes it as it is non-paternalistic, leaving the decision to the recipient
as to how to spend the money. It also trims down the need to have a large bureaucracy, and it is
less prone to corruption and exclusion and inclusion errors. The left likes it since it is a smart
redistribution policy where the redistributed income directly reaches the poorer section,
avoiding the leaky bucket problem.
 It also empowers workers in the labour market by separating their subsistence needs from
finding jobs that are a good match for them.
 Proponents also argue that in the years to come, jobs will be taken up, due to advancement in
technology, by robots. In such a scenario the idea of a basic income guarantee makes economic
sense
Problems
 It is mighty expensive with 11,600 bn rupees required which is equivalent to 11% of

GDP. Compared to MGNREGA where 0.3% of GDP is used. If only given to BPL, cost comes down
which can be met by eliminating leakages. Economic Survey of India notes, that fiscal resources
could be released if we get rid of some subsidies. If we just take a few major items that the
government subsidises, the direct fiscal cost of this subset of subsidies is about Rs 3,780 bn. It is
still only about 4 per cent of the GDP, well short of the 11 per cent needed for a universal transfer.
 The idea of a basic minimum income guarantee is inevitably linked with government withdrawal
from other channels of public service delivery, which in effect would provide the fiscal space to
carry on with this scheme. However withdrawal of government support from public goods and
necessities like health, education, caring for the disadvantaged section is not justifies as the
weaker section have varied needs which can not be met simply by transferring money. For
instance, even if tribal population is provided with a basic income they would still be dependent
on state for provision of health and employment services.
 Transition to cash transfers could easily be used by the government as an opportunity to dilute
people’s entitlements, e.g. by imposing conditionalities, restricting eligibility, or going slow on
the indexation of cash transfers to the price level. It could also become a stepping stone towards
state withdrawal from many essential services
 Tax base of the country very poor. Tax avoidance common. Difficult to generate resources. Only
1 per cent of Indians actually pay income tax, while a mere 2.3 per cent file tax returns

 The other major problem of basic income guarantee is that it may adversely affect work
incentives. Any welfare programme will affect work incentives to some degree, and given the
unconditional nature of cash transfers, one would expect distortions to be minimum. Still, the
fact that a section of the population is earning an income without having to work is likely to create
resentment.
India could move towards a basic income, replacing “some egregiously dysfunctional welfare
spending” but leaving untouched “public education and healthcare, pre-school nutrition programmes,
or employment guarantees in public works”. The required budgetary resources could be raised by
trimming the implicit and explicit subsidies to the rich (often in the form of tax breaks or subsidies
given to goods largely consumed by the relatively well-off), or by raising additional taxes by “improving
property tax collections. A regular unconditional basic income, scaled up through pilots, and rolled out
slowly and carefully, seems ideal for India.
However this idea has been debated ad nauseam by libertarians and conservatives alike and a
consensus on it seems elusive. In the meanwhile, the government is steadily moving towards
Conditional Cash Transfers as the mode of subsidy delivery. The experience of implementation of the
scheme would suggest whether India is ready in the future to have a Basic Income Guarantee.
IX. 4D Printing
Understanding 3D printing:
3D printing or additive manufacturing is a process of making three dimensional solid objects from a
digital file. The creation of a 3D printed object is achieved using additive processes. In an additive
process an object is created by laying down successive layers of material until the object is created.
Each of these layers can be seen as a thinly sliced horizontal cross-section of the eventual object.

Working of 3D printing:
It all starts with making a virtual design of the object we want to create. This virtual design is for
instance a CAD (Computer Aided Design) file. This CAD file is created using a 3D modeling application
or with a 3D scanner (to copy an existing object). A 3D scanner can make a 3D digital copy of an object.
Recently, companies like Microsoft and Google enabled their hardware to perform 3D scanning, for
example Microsoft’s Kinect. In the near future digitising real objects into 3D models will become as
easy as taking a picture. Future versions of smartphones will probably have integrated 3D scanners.
Application of 3d printing:
The worldwide 3D printing industry is expected to grow from $3.07B in revenue in 2013 to $12.8B by
2018, and exceed $21B in worldwide revenue by 2020. As it evolves, 3D printing technology is destined
to transform almost every major industry and change the way we live, work, and play in the future.
 Medical industry
The outlook for medical use of 3D printing is evolving at an extremely rapid pace as specialists are
beginning to utilize 3D printing in more advanced ways. Patients around the world are experiencing
improved quality of care through 3D printed implants and prosthetics never before seen.
 Bio-printing
3D printing technology has been studied by biotech firms and academia for possible use in tissue
engineering applications where organs and body parts are built using inkjet techniques. Layers of living
cells are deposited onto a gel medium and slowly built up to form three dimensional structures. This
is also known as bio printing
 Aerospace & aviation industries

The growth in utilisation of 3D printing in the aerospace and aviation industries can, for a large part,
be derived from the developments in the metal additive manufacturing sector. NASA for instance
prints combustion chamber liners using selective laser melting and in March 2015 the FAA cleared GE
Aviation’s first 3D printed jet engine part to fly: a laser sintered housing for a compressor inlet
temperature sensor.
 Automotive industry
Although the automotive industry was among the earliest adopters of 3D printing it has for decades
relegated 3D printing technology to low volume prototyping applications. Nowadays the use of 3D
printing in automotive is evolving from relatively simple concept models for fit and finish checks and
design verification, to functional parts that are used in test vehicles, engines, and platforms. The
expectations are that 3D printing in the automotive industry will generate a combined $1.1 billion
dollars by 2019.
 It is predicted by some additive manufacturing advocates that this technological development
will change the nature of commerce, because end users will be able to do much of their own
manufacturing rather than engaging in trade to buy products from other people and
corporations.

4D Printing:
The revolutionary concept of 4D technology has a step by step processing; unlike 3D technology that
is built on the piles of different layers on upon another, 4D is more like a transformation from one
shape to another. Advances in the nano biotech world are being applied at a macro scale, using
exciting new materials that can be programmed to change their form over time.
The fourth dimension in 4D printing refers to materials that are able to change and mutate over time
when exposed to water, temperature changes and/or air to self assemble. 4D object formats will soon
have APIs (Application Programming Interfaces) that enable designers to define the characteristics of
the materials they are made from, which are then printed using sophisticated chemical calibrations to
enable specific attributes and functionality.
4D Printing, developed as a collaboration between the Self-Assembly Lab, Stratasys and Autodesk, is
a new process for printing customizable smart materials. 4D Printing entails multi-material prints
utilizing the Stratasys Connex printer with the added capability of shape-transformation from one
state to another, directly off the print-bed. This technique offers a streamlined path from idea to full
functionality built directly into the materials, including; actuation, sensing and material logic.
Techniques of 4D Printing:
 At Harvard’s Wyss Institute for Biologically Inspired Engineering, a team of scientists is studying
a way that a special ink, known as hydrogel ink, can change shape and form when stimulated
with water. Hydrogel ink works by allowing the objects that it prints on to change shape to form
new structures which are similar to those found in flowers. The tissue microstructures and
compositions of different plants can change depending on the situation of their environments.
Wyss has replicated the process by developing 4D-printed hydrogel composites which are
programmed to contain precise swelling, allowing 3D-printed flowers to change shape when
exposed to water and other environmental changes.
 At the University of Wollongong in Australia, Professor Marc Panhuis and a team of researchers
have created the 1st 4d printed water valve that shuts when exposed to hot water and re-opens
when hot temperatures subside by using a hydrogel ink that responds rapidly to heat. The team
demonstrated the functioning of this water valve by pouring hot water through it and showing
how it closed instantaneously and then re-opened when cooler water was pumped through it.
Application of 4D printing:
 We can use it to achieve robotics-like behavior without the reliance on complex electro-
mechanical devices
 Home appliances and products that can adapt to heat or moisture to improve comfort or add
functionality
 Childcare products that can react to humidity or temperature, for example, or clothes and
footwear that optimise their form and function by reacting to changes in the environment
 There are also uses for pre-programmed self-deforming materials in healthcare – researchers are
printing biocompatible components that can be implanted in the human body

 In the future we aim to produce larger structures which can handle more complex
transformations, as well as smaller, miniaturised models which can be used in the body.
 3d and 4d printing is set to revolutionize manufacturing the way we know it in the years to come.
X. Autonomous Vehicle Technology

For the past hundred years, innovation within the automotive sector has created safer, cleaner, and
more affordable vehicles, but progress has been incremental. The industry now appears close to
substantial change, engendered by autonomous, or “self-driving,” vehicle technologies.
An autonomous car is a vehicle that is capable of sensing its environment and navigating without
human input. Autonomous cars can detect surroundings using a variety of techniques such as radar,
lidar, GPS, odometry and computer vision. Advanced control systems interpret sensory information to
identify appropriate navigation paths, as well as obstacles and relevant signage. Autonomous cars
have control systems that are capable of analyzing sensory data to distinguish between different cars
on the road, which is very useful in planning a path to the desired destination.
National Highway Traffic Safety Administration in USA has adopted the classification of automated
cars on the basis of definition by Society of Automotive Engineers :
 Level 0: The driver completely controls the vehicle at all times.

 Level 1: Individual vehicle controls are automated, such as electronic stability
control or automatic braking
 Level 2: At least two controls can be automated in unison, such as adaptive cruise control in
combination with lane keeping.
 Level 3: The driver can fully cede control of all safety-critical functions in certain conditions. The
car senses when conditions require the driver to retake control and provides a “sufficiently
comfortable transition time” for the driver to do so.

 Level 4: The vehicle performs all safety-critical functions for the entire trip, with the driver not
expected to control the vehicle at any time. As this vehicle would control all functions from start
to stop, including all parking functions, it could include unoccupied cars.
Autonomous cars usage:
Companies like Google, Delphi Automotive, Bosche, Tesla, Nissan Mercedes-Benz, Uber and Audi
have already begun testing self-driving cars on the roads. Uber has launched a self driven car cab
service in partnership with Nutonomy in Singapore. Tesla has already launched self driven cars called
Model S on the road, 2 of which have been involved in fatal accidents raising questions over the safety
of such cars
Automated Vehicle Technology Offers Several Benefits
 Without driver error, fewer vehicle crashes will result.

 The mobility of the young, the elderly, and the disabled will be increased.
 Traffic flow could be more efficient and congestion decreased.
 Vehicle occupants could spend travel time engaged in other activities, so the costs of travel time
and congestion are reduced.
 Fuel efficiency can be increased and alternative energy sources facilitated.
 Because such vehicles won’t need proximate urban parking, space used for parking could be
repurposed.
There Are Possible Drawbacks
 Because the technology would decrease the cost of driving, congestion might increase, rather
than decrease.
 Occupations and economies based on public transit, crash repair, and automobile insurance
might suffer as the technology makes certain aspects of these occupations obsolete.
 There are debates over the safety of such cars especially in the case of Tesla model which
combines autonomous driving features with human intervention. Such technology, as pointed
out by Google, is counter intuitive which leads to more accidents.
 Self driven cars in countries like India would be opposed by taxi unions as it affects employment
opportunities
Policy Implications Include Liability and Regulation Issues
 Manufacturer liability is likely to increase while personal liability is likely to decrease. If a vehicle
and a human share driving responsibility, the insurance issues could become more complicated.
 Inconsistent state regulation poses a risk — if different states have different regulations, it would
be difficult for manufacturers to match them all; likewise, vehicle owners might not be able to
travel outside their state of residence.
 Because many of the benefits of autonomous vehicle technology accrue to those other than the
purchaser, subsidies or taxes may be necessary in order to maximize social welfare by equalizing
the public and private costs and benefits.

Autonomous Vehicles in India:
Every year 5 lakh road accidents are reported in the country in which 1.5 lakh people lose their
lives. Government is committed to reduce the accidents and fatalities by 50% in five years. To address
the issue of road safety, a draft Road Transport & Safety Bill is prepared by NDA government.
The focus of the bill is on:

 Enhancement of compensation for Hit & Run cases from Rs. 25000 to Rs. 2lakhs. It also has
provision for payment of compensation upto Rs 10 lakh in road accidents fatalities.
 The amendments mainly focus on issues relating to improving road safety, citizens’ facilitation
while dealing with the Transport Department. Strengthening rural transport, last mile
connectivity and public transport, automation and computerization and enabling online services
 The process for testing and certification for automobiles is proposed to be regulated more
effectively. The testing agencies issuing automobile approvals have been brought under the
ambit of the Act
 To facilitate transport solutions forDivyang, the bottlenecks have been removed in respect of
grant of driving licenses as well as alterations in the vehicles to make it fit for use of Divyang.
These policy measures show the enhanced focus on improving the road safety scenario in India and
the growing recognition that road accidents have a significant economic impact. There also needs to
be greater improvement in the regulatory environment before autonomous cars are introduced in
India, first step being taken by the aforementioned bill.
Other challenges in the introduction of autonomous cars in India are:

 Vehicles would need to be able to handle the extreme conditions on Indian roads such as avoiding
major potholes, animals that share the roads with cars, other cars that do not always obey traffic
signals, and dealing with the vast number of cars on the roads
 India’s slow-moving legislation would present a challenge for the autonomous car, as it is quite
behind in terms of imposing expected traffic rules.
However car makers around the world are looking at India despite these challenges because of
following reasons:
 Large market
 IT and analytics skills huge in India
 Make in India push in India which focuses on developing manufacturing sector
 Expertise of automobile part manufacturers in India
Way forward for autonomous cars:
 Further research should be conducted to better quantify the likely costs and benefits of the
technology and, just as importantly, to whom they will accrue.
 As the technology evolves, policymakers should consider subsidies or taxes to equalize the public
and private costs and benefits of this technology.
 In general, autonomous vehicle technology ought to be permitted if and when it is superior to
average human drivers.

 Judges should consider incorporating the long-run costs and benefits of a technology in ruling on
product liability suits.
 At this point, aggressive policymaker intervention with respect to regulations or liability is
premature and would probably do more harm than good, but that may change over time.
XI. Copyright Case verdict

In The Chancellor Masters and Scholars of the University of Oxford vs Rameshwari Photocopy Services
case, the Delhi HC gave the verdict that photocopying portions of academic publications to make
course packs for students does not amount to copyright infringement. Along with the verdict in
Novartis case, this marks an important point in the evolution of IPR laws in the country.
Understanding Copyright:
Copyright is a legal
right created by the law of a
country that grants the
creator of an original
work exclusive rights for its
use and distribution. This is
usually only for a limited
time. The exclusive rights
are not absolute but limited
by limitations and
exceptions to copyright law, including fair use. A major limitation on copyright is that copyright
protects only the original expression of ideas, and not the underlying ideas themselves. Copyright is a
form of IPR that is recognized under the 1995 TRIPS Agreement.
Judgement by Delhi HC:
The Delhi HC in its verdict mentioned that copyright is a statutory right and not a natural right. Hence,
any right that is granted to the owner is also limited by exceptions carved out by law. Section 52(1)(i)
of Copyright Act of India provides that exception. It allows for reproduction of work in the following
cases:
 By a teacher or pupil in the course of instruction
 As part of question to be answered in the course of the exam
 As part of the answer given in the course of exam
The crux of the dispute was whether course packs fall within this exception. The petitioners tried to
provide a narrow reading of the section, claiming that at best what the section allows for is the
provision of materials in the course of a lecture and spatially restricted to a classroom. The court, while
rejecting this claim, argues that “instruction” cannot be narrowly understood. It held that “when an
action if onerously done is not an offence, it will not become an offence when owing to advancement
in technology, doing thereof is simplified”. Photocopiers have made the task simpler and faster, but
if the act of copying for a particular purpose is itself not illegal, and “the effect of the action is the
same, the difference in the mode of action cannot make a difference so as to make one an offence”.

The court also questioned the unidimensional suggestion that the purpose of copyright is protection
of the property rights of owners. It is designed rather to stimulate activity and progress in the arts for
the intellectual enrichment of the public. Copyright is intended to increase and not to impede the
harvest of knowledge. It is intended to motivate the creative activity of authors and inventors in order
to benefit the public.
Impact of the judgement
 The judgment has immense consequences beyond India and is a bold articulation of the principles
of equitable access to knowledge — and one that deserves to be emulated globally. For a while
now, the globalisation of copyright norms through international law (Berne Convention, TRIPS
Agreement) has been accompanied by the globalisation of copyright standards that have
primarily emerged from the global north. Aggressively pushed by the copyright lobby, such as
Hollywood, the music industry and the publishing cartels, copyright law had effectively been
hijacked by narrow commercial interests (albeit always speaking in the name of authors and
creators). Thus even when it came to discussing fair use and exceptions and limitations, countries
have found themselves constrained by judicial precedents from the U.S. and elsewhere that have
defined quantitative restrictions on photocopying.
 The Delhi High Court has held that the exception in the copyright law provided for the
reproduction of copyrighted work in the course of instruction for the purpose of teaching with
the conviction that it does prejudice the legitimate interest of the authors. This is also in tune
with the international obligation under TRIPS, which provides for reasonable exception by
providing the flexibility for reproduction in certain cases. Access to education is an important
consideration for a developing country like India where libraries and universities have to cope
with the needs of thousands of students simultaneously, and it would be naïve to expect every
student to buy copies of every book.
 The judgment along with the judgement in the case of generic medicine (Novartis case) sets a
precedent for developing countries around the world to follow. Sec 3(d) verdict has now been
incorporated in the IPR laws of many developing countries such as South Africa and Phillipines.
 It is important to note that In March 2013, over 300 academics — many of whose works were on
reading lists in Delhi University syllabi — wrote to the publishers asking them to withdraw the
case and expressed solidarity with the students.
 The verdict may justly raise the concern whether conferring unrestricted reprographic rights on
academic institutions will drive reputed publishers out of the field of education. It is true that
academic publications, especially international ones, are expensive, putting them beyond the
reach of many students. But the question is whether the balance between the competing
interests has been fully preserved in the law. If reputed publishers feel that there is insufficient
copyright protection and back out of educational publishing in the country, it will be equally
injurious to the public interest.
Conclusion:
In light of the argument given by the court with regard to access to education the judgement is needed
for a country like India where the demand for books is high and university and public libraries are short
in supply, crowded and noisy. The Indian Copyright law and the exception provided under it (Section
52(1)(i) is fully compliant with international obligations under TRIPS and Berne Convention. Many of

the published works are prohibitively expensive putting them beyond the reach of many students and
the onus falls on these publishers to come up with innovative business models so that the cost impact
on students can be reduced. In an era of rapidly evolving technology such as ebooks etc, coming up
with cost effective solutions which can enhance the reach of knowledge is the need of the hour.

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01/12 : How to judge the judges ______________________________________________________________________ 2

Insights into Issues _______________________________________________________________ 67

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INSIGHTS into EDITORIAL

01/12 : How to judge the judges

What’s the concern now?

While this action of the State

How are Judges assessed in India?

How is it done in other countries?

What reforms are needed in India?

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Need For Judicial Accountability:

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02/12 : Delhi pollution bonanza isn’t due to crackers alone

Why worry about this?

What else is to be blamed for Delhi’s worst air quality?

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What needs to be done to improve the air quality in Delhi?

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What is expected from governments, both at the central and state?

 The government, in partnership with non-governmental organisations, technical specialists and

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03/12 : Agribusiness: Making up for lost time

 Based on the sector’s current trajectory, the demand-

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What should the government do?

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04/12 : Is Indian pharma breeding superbugs?

What are superbugs?

What’s the main concern now?

Why India is more vulnerable?

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What has the Indian government done in this regard?

What needs to be done?

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05/12 : ICANN57 – A Backgrounder

What is the ICANN?

The Internet Corporation of Assigned Names and

 ICANN coordinates and ensures the smooth

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ICANN performs four major functions namely:

Issues and limitations of the ICANN:

Why should India be interested in this issue?

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07/12 : The Unmaking of the Forest Rights Act

About Forest Rights Act (FRA):

Rights under the Act:

 Title rights –e. ownership

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 Relief and development rights – to rehabilitation in case of illegal eviction or forced

Process of recognition of rights:

Why this law was necessary?

1. Process of documenting communities’ claims:

2. Reluctance of the forest bureaucracy to give up control:

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3. Narrow interpretation of the FRA:

4. Environment Ministry’s moves:

What needs to be done now?

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NDTV India was asked to go off the air after the

This was the first time a channel was asked to

What does Rule 6(1)(p) of the Programme Code say?

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