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SYNOPSIS [22nd February,2022] Day 23: IASbaba’s TLP (Phase 1): UPSC Mains Answer Writing (General Studies)
1. With the help of suitable examples, explain the significance of parliamentary committees for the effective functioning of the legislature.
Candidates need to write about Parliamentary committees and it’s constitutional role. Also as question demands highlight the role of PSC for effectively functioning of the legislature with suitable examples.
The Parliamentary committees are established to study and deal with various matters that cannot be directly handled by the legislature due to their volume. They monitor the functioning of the executive branch and provide legislature with various policy input, playing an important role in Indian democracy.
Significance of parliamentary committee for effective functional of legislature:
- Ensures all parties voice their opinion: All committees have MPs representing different parties, in roughly the same proportion as their strength in Parliament
- Feedback from multiple stakeholders: When bills are referred to these committees, they are examined closely and inputs are sought from various external stakeholders, including the public. They help in reshaping institutions which may not be functioning as required . For example Parliamentary committee on Medical Commission of India.
- Less burden of populist posture: By virtue of being closed-door and away from the public eye, discussions in committee meetings are also more collaborative, with MPs feeling less pressured to posture for media galleries. For example, the Consumer Protection Act, 2019, overhauling the 1986 law. An earlier version of the Bill had been examined by the Committee on Food and Consumer Affairs.
- Put pressure on government: Although committee recommendations are not binding on the government, their reports create a public record of the consultations that took place and put pressure on the government to reconsider its stand on debatable provisions.
- Scrutiny of public funds: The Public Accounts Committee scrutinize the government accounts and the report of the Comptroller and Auditor-General of India. Thus reduce chance of misspending and also validate government’s spending statistics. For example JPC formed on the 2G scam, Coal scam have helped assess violations made by the executive.
- Ensure answerability: The Committee on Government Assurances committee scrutinize the various assurances, promises, undertakings, etc., given by ministers, from time to time report on the extent to which such assurances have been implemented. They verify the promises made in parliament by the executive to their actual course of action eg. Committee on Government Assurances.
- Expertise: Committees allow use of input and suggestions of various expertise on subject matter of law thereby helping to formulate better policies and laws. For example, the Committee on Health and Family Welfare studied the Surrogacy (Regulation) Bill, 2016.
Committees have substantially impacted Parliament’s efficacy in discharging its roles, their performance affects the Parliament as an institution that makes laws, holds the Government accountable, and gives sanction for public spending, still there is scope for strengthening the Committee system for overall effectiveness of Indian parliamentary system.
2. Compare and contrast the emergency provisions of the Indian constitution vis a vis that of Canada.
Students are expected to write about the emergency provision in India and then simply compare and contrast emergency provisions of Canada and India.
The emergency provisions have been contained in Part XVIII of the Indian constitution, from Articles 352 to 360. The rationale was to enable the central government to deal with abnormal situations and thus help safeguard integrity and sovereignty of India.
Canada invoked the Emergencies Act, to be used for the first time in the country, in a bid to end the anti-vaccine mandate protests taking place across the country and blocking parts of the capital Ottawa.
Comparison and contrast emergency provision of the India and Canada:
- The Emergencies Act of Canada can be invoked in parts depending upon the emergencies. The act covers four emergencies: public welfare emergency, public order emergency, war emergency and international emergency.
- The Indian constitution stipulates three types of emergencies National Emergency, Constitutional Emergency and Financial Emergency.
- The Emergencies Act has been invoked for the first time in Canada. Article 352 emergency has been proclaimed three times so far- in 1962, 1971 and 1975. Under article 360 financial emergency never was imposed in India despite economic recession or any other financial crisis.
- The Emergencies Act of Canada can be invoked in parts depending upon the emergencies. This emergency in India can be imposed either for the whole of India or could be restricted to certain territories (42nd amendment act).
- The application of the Public Order Emergency in Canada expires after 30 days of its declaration unless it has already been revoked or the decision to continue it has been taken in accordance with the act. The Parliament also has the right to revoke the act. Also, any regulations or orders passed under the act can be challenged in Canadian courts.
- In India Emergency can be revoked at any time by the President by passing a subsequent proclamation to this effect. If approved by both the houses, the Emergency continues for 6 months and can be extended to an indefinite period with an approval of the Parliament for every six months.
- While a proclamation of Emergency is in force, the normal fabric of the Centre-State relations undergoes a basic change.
- Canada- Emergency can be declared by provincial, territorial and municipal governments. India- Declared by President on the advice of executive.
Thus, it can be concluded that the emergency provision vary from one country to other depending on the political setup. It is observed that unitary polity/constitutions like the India empowers the national government to proclaim emergency while federal polity like Canada empowers the provincial and local governments to declare emergency as well. Our emergency provisions are in conformity with the quasi federal nature of our polity with substantial safeguards to prevent abuse.
3. What are the recent initiatives announced by the government to address the challenge of NPAs in the banking sector? Explain.
Candidates need to write about the attitude and then elucidate how attitude matters though being little things or mental construct it makes big difference.
As per the economic survey 2022, Banks have weathered the pandemic better than expected with non-performing assets (NPAs) lesser than prior to Covid and its resultant lockdowns. At the same time restructured loans have also increased due to the various dispensations offered to support businesses as a result of which there could still be a lagged impact of distress on their assets as the economic impact plays out.
The recent initiatives announced by the government to address the challenge of NPAs in the banking sector
- The government has approved providing Rs 30,600 crore as state guarantee for the security receipts issued by the bad bank, National Asset Reconstruction Company Ltd (NARCL).
- This government guarantee mechanism will be paving the way to operationalise the country’s first bad bank in which majority 51 per cent stake is held by public sector banks.
- This guarantee will allow banks to transfer their non-performing assets (NPAs) to NARCL, which will buy the stressed assets on payment of 15 per cent of the amount in cash and the balance 85 per cent in security receipts; the move will reduce bad loans on the books of banks,
- The government also announced the setting up of a ‘bad bank’, including an asset reconstruction company and asset management company to take over the existing stressed debt of banks.
- The bad bank will be a bank set up to buy the bad loans and other illiquid holdings of another financial institution.
- NARCL and the Indian Debt Resolution Company Ltd, or IDRCL, are both part of the plans of the government to address the issue of bad loans on the books of banks. The latter will manage the assets and help resolve the debt.
- The creation of the two, an asset reconstruction company (NARCL) and an asset management company (IDRCL) was announced.
- It is expected that the asset management company – India Debt Resolution Company Ltd (IDRCL) – will resolve stressed assets worth ₹2 lakh crore in five years.
- The bad bank structure will assist in consolidation of debt, currently fragmented across various lenders, thus leading to faster, single-point decision making, including through Insolvency and Bankruptcy Code (IBC) processes.
- It will incentivise quicker action on resolving stressed assets, thereby helping in better value realisation.
- This approach will also permit freeing up the management bandwidth of banks to focus on increasing business and credit growth. As the holders of these stressed assets and SRs, banks will receive the gains.
- The government’s guarantee will also enhance liquidity of SRs as these are tradable, this basically means banks can sell these down to the market.
While it is necessary to pump in more money in to the system to help sustain businesses and to boost the economy, it is also equally a necessity to keep bad loans at bay. Bad loans lead to higher NPAs over time, so due diligence has to be observed when offering funds.
TLP Synopsis Day 23 PDF