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GS – 2
- Issue of summoning state legislature and their performance
- Need for reform in Governance structure of public universities
- Issue of Retrospective tax cases; what should India do next?
9 PM for Preliminary examination
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Syllabus: GS-2 – parliament and state legislature and their functioning
Synopsis: Conflicts like the one in Kerala over the power to call session of legislature, will only add up to the already dismal records of sessions of state legislatures.
Issue of summoning the sessions in state legislature:
The events in Kerala and Rajasthan are an abnormality.
- Kerala Event: Lately, the Kerala government recommended the governor for summoning the state’s legislature for a one-day session to discuss the issue of farmers’ protest, but the recommendation was turned down by the governor on the ground that there is no emergent situation to meet the assembly on such short notice.
- Event in Rajasthan: The Rajasthan governor had rejected the recommendation of Chief Minister Ashok Gehlot’s government to call a session for proving the majority of his government.
- Constitutional Provision: The state government is constitutionally empowered to call a session of the legislature.
- The dates and the duration of the session is decided by the council of ministers.
- Governor is communicated of their decision, who is constitutionally bound to act on most matters on the aid and advice of the government.
- The state legislature is then summoned by governor to meet for a session.
Such conflicts between the governor and the government are hurdles in the functioning of state legislators, which are already suffering from dismal performances.
Performance of state legislatures
The data as follows depicts the dismal performance of the state legislature in their functioning;
- Number of assembly meetings: In the last 20 years, state assemblies across the country, on average, met for less than 30 days in a year. But states like Kerala, Odisha, Karnataka are an exception.
- The Kerala Vidhan Sabha, for example, has on an average met for 50 days every year for the last 10 years.
- Performance of state legislatures: Legislatures meet for longer budget sessions at the beginning of the year. Then for the rest of the year fewer meetings are held just to meet the constitutional requirement that there should not be a gap of six months between two sessions of a legislature.
What are the reasons for decline in the sitting days of the state legislature?
The blame for the decline in the sitting days of the state legislatures rests with the government.
- Interest of government: Legislatures are grounds for debate and giving voice to public opinion. As accountability institutions, they are responsible for asking tough questions to the government and highlighting uncomfortable truths.
- So, it is in the interest of a state government to organise lesser sittings of the legislature and bypass their enquiry.
- Not enough time: Lesser number of sitting days also means that state governments are free to make laws through ordinances and when they assemble legislatures, there is little time for MLAs to inspect laws brought before them.
What can be done?
Continuous and close scrutiny by legislatures is essential for improving governance in the country.
- Increasing the number of working days for state legislatures is a first step in increasing their effectiveness. One way to do that is by assembling legislatures to meet all around the year.
- In many mature democracies, a fixed calendar of sittings of legislatures, with breaks in between, is announced at the beginning of the year. It allows the government to plan its calendar for bringing in new laws.
- It also has the advantage of increasing the time for debate and discussion in the legislative assembly. And with the legislature sitting throughout the year, it gets rid of the politics surrounding the convening of sessions of a legislature.
Syllabus – GS-2, Social Issues, Issues related to education in India
Synopsis: The governance structure of public universities must be reformed on urgent basis as it may help them become world-class universities.
55 central universities, endowed with prime land and extensive central grants, are crown jewels of the Indian academic system.
However, lately, these universities are facing governance related challenges. Six vice-chancellors (VCs) of central universities have been sacked. Another five have been charge-sheeted.
Need for Public universities
- There are some important public universities, where cross-disciplinary research to solve complex modern problems take place, with the focus on all the major branches of learning.
- The locus of innovation has been switched towards innovative private universities which have failed to develop into broad-based universities with the full range of humanities, social and natural sciences, and professional disciplines.
Thus, central universities must be saved to save academia.
What is the governance structure in public universities?
As each of the 55 central universities is governed by a separate Act, there are difference in governance structures, but broadly it is as follows:
- VC: President of India is the Visitor of the university. On his behalf, Ministry of Education appoints chancellor.
- For that purpose, Ministry appoints search committee to interview multiple candidates and to come up with the list of 3 candidates. From the list ministry appoints a VC.
- Senate or court: It is chosen through different process and constituted of nominees from various stakeholders, including the government, faculty, students, and citizens.
- Technically, this is the governing council (GC) of the university.
- Executive council: Council carry on the university work. It is chaired by VC and appoints the registrar.
- Finance committee: Finance committee is appointed to maintain financial checks and balances. It is headed by a chief finance officer.
What are the issues in governance structure in public universities?
- GC has no say in the selection of the VC and meets only once a year. In theories, it approves the annual plan of the university, presented by VC. But in reality, plan is approved without discussions or questions.
- After approval there is very minimal direction or monitoring from the GC throughout the year.
- Size of the GC is very big to organise any fruitful meeting. For example; GC of Delhi University has 475 members.
Example of IIM
- In contrast to the general Governance structure, IIM structure is much better version.
- It has set a limit on the members of GC at maximum of 19. All of them are expected to meet s certain standard i.e. eminent citizens with broad social representation and an emphasis on alumni.
- Functions of GC includes:
- Selection of Director,
- Providing overall strategic direction,
- Raising resources,
- Monitoring the performance of director
Example of Harvard
- Until 150 years ago, Harvard was also a government university and was on verge of collapse.
- It only became what it is today after governance reform by creating an empowered board comprising its most successful alumni. They brought dynamism, oversight, and resources with them and made it a world-class university.
- Thus, it is apparent that the governing councils of all central universities IITs, and all other central institutions is restructured by an Act of Parliament.
- Boards of these universities should comprise of their most eminent alumni.
- Recently the billion-dollar endowment campaign announced by university is being spearheaded by its most successful alumni, many of them created Unicorns, or billion-dollar companies. If alumni like them invited to GC, they may help it become a world-class university like Harvard.
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Syllabus – GS-2, International events and their impacts on India
Synopsis: Britain and the European Union have struck a free-trade deal as a Post-Brexit trade agreement to ensure Britain and the 27-nation bloc can continue to trade in goods without tariffs or quotas .
- Brexit: It is the withdrawal of the United Kingdom from the European Union and the European Atomic Energy Community.
Key Features of the Post-Brexit trade agreement:
- Trade in Goods: The agreement ensures that most goods traded between the EU and U.K. won’t face new tariffs or quotas.
- Quotas means limits on the amount of things that can be traded.
- Level Playing Field: The deal commits both sides to upholding their environmental, social, labor and tax transparency standards to make sure they don’t undercut each other. The British say the deal doesn’t include a ratchet mechanism that would force it to stiffen its rule in lockstep with the EU.
- Customs: Both sides pledge to limit customs red tape, including through programs for trusted traders known as authorized economic operators (AEOs have benefits including fewer controls).
- Dispute Settlement: Disputes on the deal must be negotiated between the EU and the U.K. with no role for the EU courts.
- Professional Services: There will no longer be automatic mutual recognition of professional qualifications like engineers, doctors etc. They will have to seek the recognition in the country they are practising.
- Mobility – freedom of movement: UK nationals no longer have the freedom to work, study, start a business or live in the EU. Visas will be required for stays over 90 days.
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Syllabus: GS – 3, Indian Economy, Mobilisation of resources
Context: After Vodafone, India has lost its 2nd case to Cairn Plc at Permanent Court of Arbitration over a retrospective tax demand. Now, what are the options left with India and which one should it chose?
What are the cases in question?
- Very recently, Cairn Plc has won a case of retrospective tax against India at Permanent Court of Arbitration. Court has asked Indian government to pay for damages to the tune of $1.4 billion.
- Previously in this year only, Indian Government lost a retrospective taxation case to Vodafone, where government need to pay around ₹80 crore, if it doesn’t make any further appeal.
Now India has been left with the option of either conceding defeat and making payment to the companies or making further appeals. But cost-benefit analysis of both the option is necessary.
Read More – India lost Retrospective taxation case to Cairn
Why Government should not make any further appeals?
- Firstly, there is a need for attracting global investments to the country and any further appeal would put investors in a doubt.
- Secondly, the stance of the present government on the issue was different in the past. They called out the UPA government for setting free “tax terrorism” and “uncertainty” in the country by enacting retrospective taxation.
- The Centre has now filed an appeal in the Vodafone matter in Singapore because it cannot take a different stance on two similar cases. A similar appeal too can be expected on Cairn.
- Thirdly, it would further dampen India’s reputation as the court already noted that this was a breach of fair treatment under the UK-India bilateral investment treaty.
Why government should make further appeals?
- Keeping in mind the cost on exchequer, the government should make further appeals. This verdict includes a sharp $1.4 billion payable as damages to Cairn.
- In the Vodafone case, the government would need to divide out around ₹80 crore if it were to accept defeat.
- Finance Minister Nirmala Sitharaman has repeatedly stated that India retains the supreme right to put taxes.
As a first step after this setback, government must analyse carefully all the available options with it, as India is already suffering from an economic slowdown and looking to strengthen its domestic manufacturing capability. Some of the available options might turn away the foreign investment and technology associated with it.