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IASbaba’s Daily Current Affairs – 23rd December, 2015
ECONOMICS
TOPIC:
- General Studies 3:
- Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
- Inclusive growth and issues arising from it; Effects of liberalization on the economy
- Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer stocks and food security
- General Studies 2:
- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
- Effect of policies and politics of developed and developing countries on India’s interests
- Important International institutions, agencies and fora- their structure, mandate
- Issues relating to poverty and hunger.
Message from Nairobi- WTO Negotiations
- The 10th Ministerial Conference of the World Trade Organization (WTO) has just concluded in Nairobi over the weekend and the overall conclusion of the nature of the event might just keep oscillating between being a modest success to an utter failure.
- Outcomes of these conferences have always combined legally binding commitments with an effective system of review and enforcement and the dispute-settlement system of the WTO has always been acknowledged to be fair, efficient and effective
The long-stalled Doha round of negotiations have finally been reached, clearing the way for the World Trade Organization to start focusing on smaller agreements with a better chance of success
Major breakthrough for the rich countries with six ministerial-level decisions on agriculture, cotton and other issues—
- Commitment to abolish export subsidies for farm exports,
- Public stockholding for food security purposes,
- A special safeguard mechanism for developing countries,
- Measures related to cotton and
- Preferential treatment for least developed countries in the area of services
Major Roadblock: Failure of the final ministerial declaration to “reaffirm” a commitment to the Doha Development Agenda (DDA), which was affirmed at the end of the Doha Ministerial Conference of the WTO in November 2001
Key political issues:
Equity:
- In terms of the contributions/ commitments to be made by developed and developing countries
- Basis for differential treatment lies in the historical responsibilities of developed countries and the lower capabilities of developing ones; special and differential treatment (S&DT) in the WTO for developed countries
- The contentiousness in the current negotiations arises from the remarkable changes in the global economy over the last two decades with the substantially enhanced role of emerging economies in global trade.
- Though, the demand for differentiation between emerging economies and other poorer developing countries remains the same, as few economies may have become competitive in some areas, they continue to struggle with poverty and underdevelopment.
India’s View-point
Farm subsidy regime:
- India has always stood for its right to provide subsidies to her farmers as 85 per cent of farmers have holdings of less than five acres, and that too given the backdrop of rural distress after successive years of drought
- Nairobi conference:
- Members of developed countries have committed to removing export subsidies immediately, except for a handful of agricultural products
- Developing countries will remove the subsidies by 2018, with flexibility to cover marketing and transport costs for agriculture exports until the end of 2023 as well as political feasibility which will have to be taken into account
- Status quo on some critical issues, including the “peace clause” for food stock holding, has not been disturbed and the arrangement binds other countries to refrain from challenging India’s food-grains procurement operations at minimum support prices and stock holding for the public distribution system, till this issue is finally resolved.
Issue of a special safeguard mechanism or SSM:
- It allows India to raise tariffs to protect the interests of local farmers against surges in imports(meant to curb sudden increases in imports of commodities, which could hurt domestic agricultural interests)
- Ministerial decision on SSM for developing countries: These countries will have the right to temporarily increase tariffs in the face of import surges while committing members to engage constructively in finding a permanent solution on public stockholding for food security.
At a glance— Key Issues
- Issues of public stockholding of food crops and special safeguard mechanism in agriculture have not seen major progress
- Rich nations want new issues to replace Doha Development Agenda
- The ministerial declaration effectively barricades Doha because the WTO procedures mandate that any new resolution must garner the unanimous support of all member countries
- WTO has recognised developing members’ rights to have recourse to special safeguard mechanism as envisaged under the Hong Kong ministerial
- Touted as the “most significant outcome on agriculture” in the WTO’s history, the declaration on export competition will see all countries reducing export subsidies paid to farmer
IASbaba’s Views:
- India’s trade policy is a function of domestic reform and competitiveness and India should make an effort to explore adequately the possibility of restructuring its farm-support programmes to conform to Green Box requirements. The decisions are of the nature of them being politically sensitive, but if successfully pursued, would free India to follow other trade objectives
- India needs to also pursue the efficiency gains from domestic market integration in various sectors of the economy, particularly agriculture. The GST is a vital instrument and along with other initiatives, the looming danger might just surpass.
- Market integration is an important aspect that needs capacity building and that which would lead to significant competitive gains, enabling countries in the region to focus on their comparative advantage, thus creating thousands of jobs. The government’s policy emphasis on “Make in India” needs to also be replicated in services, thus generating greater potential for job creation in the economy.
- Formulation of a forward-looking trade policy based on India’s competitive strengths and a clear vision for the future that India can shape the WTO’s agenda needs to be speeded up.
Connecting the dots:
- With the enhanced role of emerging economies in global trade in the recent decades, does the ‘principle of equity’ hold relevance?
- What is the impact of the recent WTO negotiations on developed and developing countries? What effect will this have on India’s trade policy?
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NATIONAL
TOPIC: General Studies 2
- Parliament and State Legislatures – structure, functioning, conduct of business, powers & privileges and issues arising out of these.
Misdiagnosis of the Rajya Sabha malfunction: Legislative productivity vis-à-vis legislative dissent
- The 2015 winter session of the Rajya Sabha has been one of the least productive sessions in recent times. The Goods and Services Tax Bill, could not be passed in the process. This has triggered outrage, with some questioning the need for an Upper House at all.
- Some others have opined that an indirectly elected body such as the Rajya Sabha should not be allowed veto powers over a directly elected Lok Sabha. However, mere opposition to a bill in the Rajya Sabha that has been passed by the Lok Sabha cannot be an excuse to curtail its powers. It is important to separate the two issues, legislative productivity vis-à-vis legislative dissent.
Argument in support of RS: Legislative dissent
- It was obvious even to our founding fathers that the “House of People” (Lok Sabha) can fall prey to passionate rhetoric and thus felt a need for a “House of Elders” (Rajya Sabha) to instil calm. The powers of the Upper House to delay and oppose legislation passed by the Lower House were recognised and enshrined right from the very birth of the Rajya Sabha that, the Rajya Sabha would an indirectly elected body and would act as a balance to certain whimsical legislation of the people’s representatives in the Lok Sabha was a conscious design of our founding fathers
- Next is this false narrative of indirectly elected members of the Rajya Sabha having veto powers over the members of the Lok Sabha who are direct representatives of the people.
In our first-past-the-post electoral system where a political party can form a government without the majority of citizens voting for it, legislation passed by the Lok Sabha may not necessarily represent the views of the majority. The percentage of seats won in the Lok Sabha by a political party is not the same as percentage of Indians voting for that party, as we all know. It then becomes even more pertinent and critical to have an active and vibrant Rajya Sabha. This principle still remains very relevant for a large, diverse polity such as ours, with a large number of regional parties
There is the argument that the Anti-Defection Act, which immediately disqualifies any member of Parliament who either changes political parties mid-way or disobeys the whip of her party, aggravates the chances of a dysfunctional Parliament.
The core principle behind the Anti-Defection Act is to prevent horse-trading on the floor of the House and penalise members who succumb to temptations from opposition parties. This principle still remains very relevant for a large, diverse polity such as ours, with a large number of regional parties.
The Lok Sabha recently held a discussion on a private member’s bill to de-criminalise certain Section 377 of the Indian Penal Code. There was no whip issued by the major parties and members voted according to their choices, many times contrary to their party colleagues. The choice of when to issue a whip rests with the party. The Anti-Defection Act in itself cannot be made a villain for an internal matter of political parties over degrees of freedom to be given to their members for voting in Parliament. But to argue that the construct of the Upper House and the Anti-Defection Act need to be amended or done away with lends credence to our founding fathers’ fears of lawmaking in a fit of frenzy.
Scope for reform: Legislative Productivity
- There has to be an outlet for opposition members to voice their protests without disrupting productivity and to have designated day(s) in a week on which the opposition can raise, discuss and debate issues rather than the government dictating the order of business every day of the session.
- There can be innovative ways to create a framework within which the right to protest is not taken away but is done constructively.
- Performance of Nominated MP’s: According to PRS Legislative Research, Lack of proper attendance of Nominated MP’s such as Sachin Tendulkar and Actress Rekha which is less than 10 percent as against the national average of 78 percent. Such low attendance will make them inactive as far as engaging in debates on vital issues and asking relevant questions to make the session active and passing vital bills which would be the need of the hour.
Do these celebrities feel out of place in Parliament?
- In that case the process of selecting the nominated MP’s must be reviewed. In parallel, Reason for their absence must be identified and they must be encouraged to participate in democratic process so that to engage them in the debate to review bills and scrutinize the same.
Connecting the dots:
- Can Legislative dissent and Legislative productivity make both the houses of the parliament responsive to the needs of the society in passing appropriate bills? Comment.
- House of elders ( Rajya Sabha) is needed to comment and compliment the work done by House of People (lok Sabha) to keep up the democratic spirit? Comment.
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