IASbaba's Daily Current Affairs Analysis

IASbaba’s Daily Current Affairs – 14th Nov 2017

NATIONAL

TOPIC: General studies 2:

Structure, organization and functioning of the Judiciary

The institution of judiciary facing crisis of credibility: A conflict between Supreme Court judges

In news:

The Supreme Court of India is facing its worst crisis of credibility since the Emergency.

What happened?

An order was passed by Justice J Chelameswar to constitute a five-judge bench in a petition filed by CJAR. The conflict is over a plea by the Campaign for Judicial Accountability and Reforms that has sought the setting up of a SIT to probe the role of Orissa High Court judge Ishrat Masroor Quddusi in enabling private medical colleges to admit students to MBBS courses despite the Supreme Court barring the institutes from doing so.
Quddusi, an Orissa High Court judge between 2004 and 2010, has been accused by the CBI of legally guiding the private medical colleges and assuring them of favourable settlement of their cases in the Supreme Court.
Justice J Chelameswar constituted a bench and had heard the matter despite orders from the Chief Justice of India (CJI) that his bench cannot hear the matter. He said judges cannot assign matters to themselves.

Issues:

Can the chief justice be part of the hearing, since the scandal allegedly criminalises a judgment the CJI himself wrote? – As done by the Chief Justice.
By setting himself up as a judge in his own cause and setting up a bench whose composition looks arbitrary, he has undermined the authority of the judiciary.
Could a constitution bench be constituted bypassing the chief justice in violation of the current procedure through which such benches are constituted?
Justice Chelameswar’s order setting up a five-judge bench also made the judiciary vulnerable. Surely, there were better ways of securing the removal of the chief justice from the case and setting up a bench in a way that did not depart from existing court procedure or humiliate the chief justice.
A robust judicial consensus would have been built rather than judges projecting their own individual heroism.

An analysis:

It is the CJI’s prerogative, and his alone, to constitute a bench and to direct that a particular matter be heard by that or any other bench.
The argument that Justice Chelameswar did so in order to prevent a conflict of interest is undermined by the ill-judged manner in which Justice Chelameswar sought to make his point.
The distrust amongst judges, as evident in the ways benches are being constituted, seems extraordinarily high.
Many have defended Justice Chelameswar’s move by invoking Article 142 that gives judges the power to do whatever it takes to secure justice. But the use of Article 142 has also become a sign of immense judicial indiscipline, where judges can overlook procedures.

Other instances denting the authority of the Supreme Court:

The quality of the court’s reasoning.
The abdication of its constitutional role in some cases.
Judicial overreach in some instances.
Corruption within the judiciary– There are issues of corruption in the courts. The judiciary has failed to find a mechanism to deal with allegations of corruption within its ranks. Every justice in the court needs to be above suspicion.

Challenges:

Caution needs to be taken so that the anti-corruption measures taken do not undermine the independence of the judiciary. It has to be done in a way that does not make the judiciary vulnerable to implicit blackmail and leads to undermining its independence. Reforms that undermine independence in the name of accountability has to be avoided.
At stake, now, is the reputation and credibility of an institution that has earned itself the title of India’s most trusted, a protector of citizens’ freedoms, an upholder of the constitutional poise. What is more, this public display of divisions within comes at a time when the court appears at its most vulnerable without. In the last three years or so, the independence of the judiciary has often seemed besieged in the face of a strong political executive that has sought to use the electoral mandate to subdue dissent and circumscribe other institutions, including in the crucial matter of the appointment of judges.
The court’s loss of external credibility combined with internal anarchy does not bode well for Indian democracy. The court has itself become a reflection of the worst rot afflecting Indian institutions. The institutional crisis that the Supreme Court has now created will create the conditions under which it will be easier to legitimise diluting judicial independence.

Way forward:

At the CJI’s door lie two key questions: How to address potential conflict of interest issues and how to assert the primacy of his position in a manner that strengthens rather than divides the institution. Between a chief justice who does not recognise conflict of interest, and justices who think the only recourse is public grandstanding, the judiciary will not be able to survive.

Conclusion:

Judicial corruption is an important issue but the judiciary cannot address it by turning on itself. If its senior-most judges give the impression of using a case to settle issues with each other, the institution will only be prone to be attacked by the executive. Most of all, it will be failing in its duty to live up to the trust and faith that the people of India have come to vest in it.

Connecting the d0ts:

A conflict emerged amongst the senior-most judges of the Supreme Court. Discuss the issues associated with the conflict and how such instances hurt the credibility of the highest judiciary.

NATIONAL

TOPIC : General Studies 3:

Infrastructure: Energy

Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Power Sector reforms: Rationalizing coal cess

Background:

India is a power-starved country.
With annual per capita consumption of about 1,100Kwh, India lags behind most of the other developing countries.
In countries such as Iran and South Africa, this exceeds 2,500 and 4,000, respectively.
The global average stands at around 2,500.
There is sizeable power capacity in the country, yet there are large pockets of unmet power demand. Systemic and regulatory shortcomings have been responsible for this irony.

Supply side issues:

The average PLF (plant load factor) for coal-based power plants, which constitute about 60% of India’s total power generation capacity, continues to languish below 60%.
What is PLF?
It is a measure of the output of a power plant compared to the maximum output it could produce. A lower PLF indicates inefficiency in production and distribution and low-capacity utilization.

Issue arising because of low PLF:

Low-capacity utilization is causing extreme financial strain on the entire power value chain—right from the lenders to the power distribution companies, to the power users.

Way forward:

India’s power generation can grow comfortably at a compounded annual growth rate (CAGR) of more than 12% over the next five years—subject to demand.

Improved utilization of existing power capacities.
A healthy pipeline of new capacities.

Demand side issues:

Poor availability at the consumer end.
Low affordability.

Way forward:

Strengthening Discoms’ power affordability can be a powerful way to enhance power consumption.

Rationalising coal cess:

Issue:

The total taxes on thermal coal work out to more than 65%, on an average, over Coal India’s basic price.
The GST compensatory cess (that has replaced the clean environment cess that existed before the GST roll-out) is about 40% of the average coal price.
Total tax on the common grades of coal is more than 80%, which is higher than taxes on even alcohol, cigarette or luxury cars.
Although optically these taxes and cess are applicable on coal miners and, hence, on power generators, ultimately, they are borne by end consumers across socio-economic segments, despite power being a basic necessity.
Such a high rate is unfair, futile and self-defeating, given that coal usage cannot be stopped for the 195 gigawatts (GW) coal-based power capacity (plus the 50 GW in the pipeline) in India.
The GST compensatory cess has been put in place after the implementation of GST to compensate state governments for the potential revenue shortfall from GST. This cess may seem like a good way to smoothen the issues in GST implementation. However, burdening an important sector like coal and power that is already suffering from many issues with such a steep tax seems unjustifiable.

Way forward:

Taxes on this part of power’s value chain need urgent rationalization.

Removing the GST compensatory cess on coal can curb the cost of power.
The tax revenue—about Rs 22,000 crore—that the Central government would forgo if this were to happen would effectively be transferred, in the shape of lower power cost, to discoms and thus to the state governments. So, the country’s total fiscal deficit math wouldn’t change much.
The thrust on shutting down older, inefficient and highly polluting power plants should be intensified.

Conclusion:

Redressal of the flaw in our taxation system can be a game changer not just for the power sector, but for the entire economy, through the multiplier effect that it will result into.
Reforming power sector can drive improvements in the standard of life for a large proportion of Indians and aid small and medium enterprises.

Connecting the dots:

Apart from demand and supply side issues in power sector, an unreasonable coal cess is hurting the sector and overall Indian economy. Critically analyze.