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Below are the answers of UPSC Mains Marathon Current Affairs Questions – August 28.


1. The recent report of the Justice B.N. Srikrishna committee has recommended several changes in the Indian arbitration law and institutional mechanisms to promote arbitration in India. Discuss its key recommendations on bilateral investment treaty (BIT) arbitration. Do you think that Srikrishna committee has lost an opportunity to push for the recalibration of the Indian BIT regime?(GS 2)

The Hindu

Introduction:-

  • BIT is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in another state.
  • The Srikrishna committee’s report was recently released, with a focus on recalibration of the Indian BIT regime.

Recommendations:-

The committee was constituted to prepare a road map to make India a hub of international arbitration.

  • It recommended the creation of the post of an ‘international law adviser’ (ILA) to advise the government on international legal disputes, particularly BIT disputes.
  • Creation of an inter-ministerial committee (IMC), with officials from the Ministries of Finance, External Affairs and Law for better managing BIT disputes was also called for.
  • It also mentioned the possibility of establishing a BIT appellate mechanism and a multilateral investment court.
  • It recommended hiring of external lawyers and appointing counsels having expertise in BITs to boost the government’s legal expertise.
  • It called for the creating of designated fund to fight BIT disputes.

Shortcomings :-

  • Framework:
    • The call for appointing an ‘Law Adviser’ will amount to duplicating the existing arrangement. Where the Legal and Treaties (L&T) division of the External Affairs Ministry is mandated to offer legal advice to the government on all international law.
  • Narrow window:
    • The report named the investor-state dispute settlement (ISDS) mechanism as robust.
    • But it provides for only a narrow 90 day window for filing of BIT arbitration.
    • The report is also silent on many other jurisdictional limitations given in Article 13 in the ‘Indian model BIT’ that also limit the usefulness of ISDS.
  • Critical issues such as appointment of arbitrators,transparency provisions, enforcement of awards, standard of review were also overlooked.
  • BIT arbitration has three aspects namely:
    Jurisdictional (such as definition of investment)
    Substantive (such as provision on expropriation)
    Procedural (ISDS mechanism).But it focussed only on the procedural aspect

Way forward:

  • Instead of creating a new office the L & T division of external affairs ministry needs to be strengthened.
  • The IMC should have a member from the commerce ministry as well as it deals with India’s trade agreements that also cover the investment protection.

2. Nine- judge Supreme Court bench has delivered a landmark judgement unanimously declaring the Right to Privacy as a fundamental right under the constitution. What implications the ruling would have on state policy and citizens’ rights? Discuss, (GS 2)

Link BBC

Introduction:

  • The Supreme court recently ruled that the right to privacy was “an intrinsic part of Article 21 that protects life and liberty”.
  • The verdict overturns two previous rulings by the top court which said that privacy was not a fundamental right.

Implications of the judgement :-

Positives:

  • The ruling has implications for the government’s vast biometric ID scheme, covering access to benefits, bank accounts and payment of taxes.
  • It is a huge setback for the government which has insisted that privacy is not an inalienable fundamental right guaranteed under the constitution
  • The Supreme Court also criticised a previous ruling by the top court that reinstituted a law criminalising homosexuality, saying that discrimination against an individual on the basis of sexual orientation is deeply offensive to the dignity and self-worth of the individual.
    • So this provides a huge boost to petitioners for LGBT rights in India.
    • Equality demands that the sexual orientation of each individual in society must be protected on an even platform.
    • The right to privacy and the protection of sexual orientation lies at the core of the fundamental rights guaranteed by Articles 14, 15 and 21 of the Constitution.
  • It will have a bearing on the challenge to the validity of the Aadhaar scheme on the grounds of its being violative of the right to privacy.
  • Apart from Aadhaar, criminalisation of homosexuality under Section 377 will also become a matter of contention following the verdict.
    • The validity of the provision will raise further questions as homosexual relationship between consenting adults will be seen under the purview of privacy.
  • A favourable verdict to right to privacy will also challenge the validity of WhatsApp’s new privacy policy.
  • On Euthanasia and Abortion:
    • An individual’s rights to refuse life prolonging medical treatment or terminate his life is another freedom which falls within the zone of the right of privacy.
    • A woman’s freedom of choice whether to bear a child or abort her pregnancy are areas which fall in the realm of privacy.
  • Section 66a of the IT act:
    • with to Right to Privacy verdict, an individual breaching privacy by on social networking sites could be held accountable.
  • DNA Profiling Bill 2017
    • The bill has not clarified on privacy and security safeguards, which could be questioned now about Right to privacy has been declared a fundamental right by the Supreme Court.
  • It could potentially affect the judicial view of the popular, possibly-cultural understanding of communal concerns superseding those of the individual

Concerns:

  • Aadhaar has cut waste, removed fakes, curbed corruption and made substantial savings.
  • Supreme Court did not hold that the right to privacy is absolute. It cannot, for example, be used by individuals to exempt themselves from zoning regulations. The state is within its rights to fetter privacy in some circumstances but the onus would be on it to justify itself.

Once the ‘right to privacy’ hits the road and is used in more legal cases down the road, its eventual effect and potential restrictions will become clear. This broadly, however, applies to crucial upcoming cases on everything from marital rape to criminal defamation.


3. Justify the need for FDI for the development of the Indian economy. Why there is gap between MOUs signed and actual FDIs? Suggest remedial steps to be taken for increasing actual FDIs in India.(GS 3)

(UPSC Previous Year Question Paper)

Link-1 | Link-2 | Link-3

Need for FDI for development :-

  • The government increased the foreign investment upper limit with an aim to promote India as an important investment destination and a global hub for manufacturing, design and innovation.
  • It allows capital to seek out the highest rate of return
  • International flows of capital reduce the risk faced by owners of capital by allowing them to diversify their lending and investment.
  • global integration of capital markets can contribute to the spread of best practices in corporate governance, accounting rules, and legal traditions.
  • the global mobility of capital limits the ability of governments to pursue bad policies
  • FDI allows the transfer of technology particularly in the form of new varieties of capital inputs that cannot be achieved through financial investments or trade in goods and services. FDI can also promote competition in the domestic input market.
  • Recipients of FDI often gain employee training in the course of operating the new businesses, which contributes to human capital development in the host country.
  • Profits generated by FDI contribute to corporate tax revenues in the host country
  • FDI brings with it capital and technical know-how.
  • Increases the competitiveness of the domestic manufacturers and service providers due to international competence pressure.
  • supplements domestic investment to sustain high growth rate by inter-form collaboration.
  • could also promote growth by contributing to exports.
  • FDI imparts desired dynamism to the economy on account of its global marketing network.

Gap between Mou’s signed and actual FDI are because :-

  • Unsuitable investment climate due to heavy paperwork and red-tapism.
  • poor physical infrastructure and absence of skilled labour.
  • outdated labour and contract enforcement laws
  • tax terrorism.
  • corruption and kickbacks expectations from the official machinery.
  • High Fiscal deficit and policy paralysis post 2009-10.
  • No proper exit mechanism in place
  • private sector involvement has been limited which has put the onus on the government

How to increase FDI in India:-

  • Active promotion of FDI by developing viable projects necessary.
  • Single window clearances.
  • High Government investment in physical infrastructure, esp industrial corridors and ports.
  • Rational tax laws and gradual decrease in corporate taxes.
  • Having Fiscal and CAD under control.
  • Bring down the negative list of FDI.
  • Faster adjudication of disputes and better contract enforcement mechanism
  • Need to track new projects being implemented and stalled ones restarting to feel convinced that the campaign is resulting in core investment.

 

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