9 PM Daily Brief – June 17th,2020

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9 PM for Main examination

GS-2

  1. How to achieve better conditions of work for migrant workers?
  2. Unique relationship between Nepal and India.
  3. Why suspension of MPLADS is not a good idea?

GS-3

  1. Wave of Pandemic in Rural India
  2. COVID 19 Causing Contractual Disputes

9 PM for Preliminary examination

FACTLy


1.How to achieve better conditions of work for migrant workers?

Source: The Hindu

Syllabus: GS 2-Development processes and the development industry —the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders

Context: After the lockdown, thousands of migrant workers have returned to their villages.

This is an opportunity to provide security to workers and improve their living conditions in rural areas.

Role of cooperative societies to improve conditions of workers:

  • Formation of cooperatives: Many migrant workers worked as tailors, plumbers, cooks and construction workers in cities. They can form cooperative societies in rural areas.
  • Purpose of these cooperatives:
    • With expansion and forming hubs, they could start developing their services or products that can be sold with better terms and conditions. For example, many tailors can come together in a village and come together to form a cooperative society of tailoring. They could attract contracts from garment manufacturers in their state.
    • Institutional strength: There are many government agencies and cooperative banks to help such societies.
  • Whose skills or products do not have enough marketing in a local area: They can re-enter the city as labourcooperatives or unions with demands that they get housing and other support systems that help them have a decent living.
  • Role of NGOs and cooperative federations:Agencies such as the National Cooperative Union of India and labour unions can intervene as many workers do not have work in the village but they also do not want to move elsewhere.
  • Fair models: The AMUL project is a model of one kind but there are other lesser-known models which are not as fair in terms of wages and other terms as AMUL but offer solutions. India has examples of putting-outwork in several industries. Such as the women are paid poorly with no benefits in some industries. Cooperatives can get the same process done without the middleman.
  • Better shaping MGNREGA: MGNREGA is being used as a way of alleviating migrant workers’ distress. This is a short term and vulnerable wage-earning occupation as sites cannot be opened during the monsoon season. Also, there may not be enough sites to engage many people. Another possibility is to give MGNREGA better shape so that MGNREGA funds can be used to enable women or artisans to market their products.
  • Protecting from exploitation by middlemen:Successful unionisation of workers can protect them from exploitation. It is possible to have dispersed production to start a supply chain to markets such as local markets or capital city markets or export markets.

State has an opportunity to build new kinds of economic structures in India such as a pyramid of group economic activity going from the rural areas through collective marketing to fill the demand from the cities.

Way Forward

This is an opportunity to rebuild economic production through different institutional arrangements for providing an optimal solution to the workers.

2.Unique relationship between Nepal and India.

Source: The Hindu

Syllabus: GS 2-India and its neighbourhood- relations

Context: Analysing the change in Nepal’s policy of dealing with India.

Relations between India and Nepal:

    • Special relationship: India-Nepal has open borders and Nepalis are allowed tolive and work freely.
    • Benaras as a keystone of India-Nepal ties: Many in the bureaucracy and politics of Nepal had studied at BHU and Varanasi. Even Nepal’s intellectual software was largely coded here.
    • Burgeoning colony of Nepali programmers: One of the most profitable sectors for Nepal Airlines is Kathmandu-Bengaluru as Nepali programmers work for storied Indian tech companies.
    • Ignoring India’s concerns: In 2015, the Nepal government adopted the new Constitution ignoring India’s concerns.
    • Lack of progress on Indian projects: Such as the game-changing 5,000 MW Pancheshwar hydroelectric project. Nepal generates only 1,000 MW and import 600 MW from India.

Changes in Nepal:

    • Change in Geography:Chinese now have the potential to bore through the Himalayas and exhibit their presence in Kathmandu in economics and politics.
    • Change in polityIt is now a democratic republic after nearly 250 years of monarchy.
      • Nationalism as a mask for anti-India sentiment: Politicians use it for personal gain and it is deeply ingrained in the bureaucracy, academia and the media.
      • The current PM is cementing his legacy as a nationalist by extending Nepal’s map into Indian territory.
    • Identity politics with India:It is visible within the country where Nepali citizens from the Terai (Madhesis) feel discriminated against as being “Indian”.
    • Exposure of Globalisation:
      • Trend of migration: Due to security uncertainties with the Maoist insurgency, students and skilled personnel began moving to Europe, the US, Australia, etc. As of 2019, nearly a fifth of Nepal’s population were reportedly overseas.
      • Global remittances account for nearly 30% of Nepal’s nominal GDP.
      • Leftist ideology and presence of international NGO: They are present to resolve conflict and alleviate poverty in Nepal. They have added to Nepal’s exposure to the world.
    • Long-standing efforts of Nepal for options beyond India:
      • Multilateral development banks are by far the biggest lenders to the country’s developmental needs.
      • Major investments in the telecom sector are coming from Malaysia and the largest international carrier in Nepal is Qatar Airways.

Despite all these changes, Nepal continues to have a unique relationship with India.

Robust linkage of Nepal with India: 

    • Trade: Nepal’s trade with India continues to account for more than two-thirds of Nepal’s external trade of around $12 billion annually.
    • India continues to be the largest aggregate investor in Nepal: The massive under-construction Arun-III 900 MW hydro-electric project is slated to singly produce much as much power as Nepal produces today.
    • Stability for economy: The peg with the Indian Rupee provides unique stability to the Nepali Rupee.

India should focus on developing its border areas with Nepal with better roads and amenities of interest (such as shopping malls) to the burgeoning Nepali middle class. This would keep ties strong at the people’s level.

Way Forward

The Special relationship of India-Nepal is particularly important today with COVID-19-caused global contraction. India needs a new prism to view its relationship with Nepal by keeping in mind the past and the future.

3.Why suspension of MPLADS is not a good idea?

Source- The Hindu

Syllabus: GS-2– Government policies and interventions aimed at development in various sectors and issues arising out of their design and implementation.

Context: The Union government suspended the Members of Parliament Local Area Development Scheme (MPLADS) for two years in order to divert these funds for strengthening the government’s effort in tackling the Covid-19 pandemic and its adverse effects.

Salient Features of MPLADS

  1. Role of MP:
    • The role of the MP is only recommendatory in nature.
    • Elected Members of Rajya Sabha can recommend works in the state from where they have been elected.
    • Nominated Members of both the Rajya Sabha and Lok Sabha can recommend works anywhere in the country.
  1. Allocation of Funds: An MP is entitled to Rs. 5 crore per annum to identify and fund developmental projects.
  2. Release of Funds: Funds are released in the form of grants in-aid directly to the district authorities in two equal instalments of Rs 2.5 crore each. The funds released under the scheme are non-lapsable.
  3. Works permitted: Education, Drinking Water, Electricity, Non-conventional Energy Sources, Health and Family Welfare, Sanitation and Public Health, Irrigation, Sports, Animal Care, roads, pathways and bridges.
  4. Implementation of the Work: Following the recommendation of the MP, the district authority is responsible for sanctioning the eligible works, and implementation of the sanctioned ones

Why suspension of MPLADS is problematic?

    • Undermines the role of MP: The MPLADS enables the MPs to play a leadership role in the developmental process of his constituency and sort out its day-to-day problems. The suspension has done away with this vital role of MPs
    • Regional Equality:The pork barrel policy of State and Union Governments often leads to skewed development and regional imbalance with one region getting favored more than others. The MPLADS provide opposition MPs chance to cater to the developmental needs of their constituency. The suspension has taken away this opportunity.
    • Developmental needs of marginalized: Of the MPLADS corpus, 15% has been earmarked for the development of Scheduled Castes and 7.5% for the Scheduled Tribes. Around ₹20 lakh of the MPLADS fund per annum has been allotted for the welfare of differently abled people. Suspension of MPLADS will hinder the developmental aspirations of the marginalized in the society.
    • Corruption in the scheme is unfounded: Critics have demanded the scrapping of the scheme citing reasons that remain unfounded. For example, the nature of the scheme leads to corruption cannot be supported by empirical data.

Conclusion: The MPLAD scheme empower the MPs to directly address the issues of his/her constituency. It not only facilitates creation of durable assets but also generates local employment. It is important to restore the scheme at the earliest.

 4.Wave of Pandemic in Rural India

Source – The Hindu

Syllabus – GS 3- Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.

Context – While the lockdown affected the country in one go, the urban and rural waves of the pandemic are asynchronous

Urban India 

Population – In 2017, the population residing in urban areas is ~34%, according to The World Bank.

Features of Urban India – Industrialized, literate population, concentration of health and education services all this making urban cities as engine of national growth.

Rural India 

Population – ~66% of the country’s population is rural which is characterised by vulnerable people lacking employment opportunities, poor agrarian growth, lack of social infrastructure like healthcare and education services.

Pandemic is now about to reach its peak in rural India because of the following factors:

  1. Limited restoration of the public transport– This will give more push to migration of rural people from urban towns to their native villages.
  2. Lacks healthcare services– Indian rural areas are marked with poor health infrastructure, lack of healthcare personnel’s, poor incentives to ASHA’s and non-affordability of medicines and require tests. This makes rural population more vulnerable to pandemic.

Suggested steps to limit the spread of Pandemic in Rural India:

  1. Administrative synchronisation– This includes:
    • blocking urban-rural importations,
    • quarantining those who move from red zone to green,
    • diagnosing and managing clinical COVID-19 syndrome with or without positive PCR test results, and
    • providing field hospitals exclusively for isolating and managing COVID-19 cases (manned by younger, and therefore less vulnerable, medical and nursing teams).
  1. Social vaccine– Through Information, education and communication administering the social vaccine for introducing behavioural changes. Two behavioural changes are critical —
    • Wearing mask – Every man, woman and child must wear a cotton cloth mask when out of the home and observe strict hand hygiene.
    • Reverse Quarantine – All elders and any person with a co-morbidity should be cocooned (by reverse quarantine) — all wearing masks when interacting with others even inside homes.
  1. Using tele-medicine– Non-communicable diseases and other common diseases should be handled on a tele-medicine platform manned by experienced and older (age more than 55 years) medical personnel; there should be a follow-up over the mobile phone.
  2. Reducing burden from health infrastructure-Mildly and moderately symptomatic COVID-19 patients should be managed by home isolation, delivering essential and medical supplies at home. Each such patient should be followed up daily by a designated medical professional, who should call over the phone and identify those who need hospitalisation for life-threatening pneumonia.

 Way forward – “By failing to prepare, you are preparing to fail.” This quote applies aptly for preparedness of rural India to tackle the virus. Need of the hour is to take all measures to prevent the pandemic from reaching to the hinterlands of India.

 5.COVID 19 Causing Contractual Disputes 

Source – The Hindu

Syllabus – GS 3 – Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment

Context – Due to the lockdowns, a large number of firms find their contractual obligations impossible to meet and they have refused the promised employment and suspended supplies of goods or services, triggering legal claims of compensation from the counterparties.

Analyzing the repercussions of COVID-19 on business contracts in India considering “force majeure” and “frustration of a contract”.

  1. Force Majeure   – It is an event or effect that can be neither anticipated nor controlled. From a contractual perspective, a force majeure clause provides temporary reprieve to a party from performing its obligations under a contract upon occurrence of a force majeure event.
  2. Non-exhaustive list of force majeure–  A force majeure clause in a contract would typically include an exhaustive list of events such as acts of God, war, terrorism, earthquakes, hurricanes, acts of government, explosions, fire, plagues or epidemics or a non- exhaustive list wherein the parties simply narrate what generally constitute force majeure events and thereafter add “and such other acts or events that are beyond the control of parties”.
  3. Use of Force majeure– The clauses can usually be found in various contracts such as power purchase agreements, supply contracts, manufacturing contracts, distribution agreements, project finance agreements, agreements between real estate developers and home buyers, etc.


COVID 19 is not FORCE MAJEURE

  1. COVID-19 is not FM per se– It is the lockdowns, not the virus that has made it impossible for the airlines, hotels and caterers to deliver as promised and contractors to complete projects on schedule. Under such contexts, it is justified to use the lockdowns as FM for non-performance or delayed performance, as the case may be.
  2. Misuse of the clause– The clause has been used for dubious reasons. For instance, Discoms have invoked it under power purchase agreements. They have withheld monthly payments and have asked some power producers to stop the project. However, the virus and the lockdowns have not affected the generation-capacity of power producers, nor have they rendered it impossible for discoms to off-take electricity, an essential service.In any case, a reduced demand or the agreement becoming commercially onerous does not qualify as a FM event.
  3. Dispute Resolution–  The courts and arbitrators will have to evaluate and decide each dispute on individual merits, which would be based on the terms of the contract, the intent of the parties, steps taken to mitigate.

If the contract does not have a FM clause, parties can seek termination of the contract on grounds of frustration.

  1. Frustration of Contract – Under the doctrine of frustration, impossibility of a party to perform its obligations under a contract is linked to occurrence of an event/circumstance subsequent to the execution of a contract and which was not contemplated at the time of execution of the contract.
  2. List of events when doctrine is applicable – Generally, frustration of contract can be in the following cases:
  • Death or incapacity of a party:- Where a party to the contract has died after entering into contract or the party is incapable of performing the contract, in such a situation the contract will be.
  • Frustration by virtue of legislation:- Where, a law promulgated after the contract is made, makes the performance of the agreement impossible and thereby the agreement becomes void.
  • Frustration due to change of circumstances:- This particular situation deals with those cases where there was no physical impossibility of performance of the contract, but because of the change in circumstances, the main purpose for which the contract was entered has been defeated.
  1. Dispute Resolution– The courts have to ascertain whether the contract has become impossible to perform and whether the doctrine of frustration of contract could be made applicable to such a contract.

Way Forward – Riskiness of returns is an integral part of most business and commercial activities. The Supreme Court in Naihati Jute Mills Ltd v. Hyaliram Jagannath (1967) held that a contractual obligation becoming economically arduous is not a ground for absolving a party of its commitment. Thus, Courts and regulators should encourage litigants to go for negotiations or mediation to settle disputes.


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