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Daily Current Affairs 09.10.2021 (Reflections on the ‘quasi-federal’ democracy, Prompt action proved IAF’s combat readiness: IAF chief, RBI suspends GSAP, holds interest rates)

Daily Current Affairs 09.10.2021 (Reflections on the ‘quasi-federal’ democracy, Prompt action proved IAF’s combat readiness: IAF chief, RBI suspends GSAP, holds interest rates)

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1.Reflections on the ‘quasi-federal’ democracy

Despite a basic structure, Indian federalism needs institutional amendment to be democratically federal

Events coinciding with the jubilee of India’s Independence draw attention to the federal structure of India’s Constitution, which is a democratic imperative of multi-cultural India, where the constituent units of the sovereign state are based on language, against competing identities such as caste, tribe or religion. This built-in structural potential for conflict within and among the units, and that between them and the sovereign state, need imaginative federal craftmanship and sensitive political management. The ability of the Indian Constitution to keep its wide-ranging diversity within one sovereign state, with a formal democratic framework is noteworthy. Possibly, with universal adult suffrage and free institutions of justice and governance it is nearly impossible to polarise its wide-ranging diversity within any single divisive identity, even Hindutva; so that, despite its operational flaws, the democratic structure and national integrity are dialectically interlinked. But its operational fault lines are increasingly denting liberal institutions, undermining the federal democratic structure as recent events have underscored.

Some fault lines

First, the tempestuous Parliament session, where the Rajya Sabha Chairperson broke down (in August 2021), unable to conduct proceedings despite the use of marshals; yet, the House passed a record number of Bills amidst a record number of adjournments. Second, cross-border police firing by one constituent State against another, inflicting fatalities, which also resulted in retaliatory action in the form of an embargo on goods trade and travel links with its land-locked neighbour.

Such unfamiliar events of federal democracy are recurrent in India, except their present manifest intensity. Legislative disruption was described by a Union Law Minister (while in Opposition) as a ‘legitimate democratic right, and duty’. In the 1960s, the Troika around Lohia claimed its right to enter Parliament on the Janata’s shoulders to exit on the Marshals; posters with labels such as ‘CIA Agent’ were displayed during debates; ‘suitcases’ were transferred publicly to save the government; occasionally, “Honorable Members” emerged from debates with injuries. This time, in the “federal chamber”, “Honorable Members” and Marshals are in physical contact — both claiming ‘casualties’ — official papers vandalised and chairpersons immobilised. Even inter-State conflict has assumed a new dimension.

Key changes

Such empirical realities have led scholars to conceptualise India’s “Post-colonial democracy”, and federalism, differently from their liberal role-models. Rajni Kothari’s “one party dominance” model of the “Congress system” has now been replaced by the Bharatiya Janata Party; Myrdall’s “soft state” is reincarnated in the Pegasus era with fake videos and new instruments of mass distraction and coercion. Galbraith’s “functioning anarchy”, now has greater criminalisation in India’s democracy, which includes over 30% legislators with criminal records, and courtrooms turning into gang war zones; it is now more anarchic, but still functioning, bypassing any “Dangerous Decade” or a “1984”.

Federal theorist K.C. Wheare analyses India’s “centralized state with some federal features” as “quasi-federal”. He underscores the structural faultlines of Indian federalism not simply as operational. So, while many democratic distortions are amenable to mitigation by institutional professionalism, Indian federalism, to be democratically federal, needs institutional amendment despite being a “basic structure”. Wheare’s argument merits consideration.

Many deficits

Democratic federalism presupposes institutions to ensure equality between and among the units and the Centre so that they coordinate with each other, and are subordinate to the sovereign constitution — their disputes adjudicated by an independent judiciary with impeccable professional and moral credibility. But India’s federal structure is constitutionally hamstrung by deficits on all these counts, and operationally impaired by the institutional dents in the overall democratic process. Like popular voting behaviour, institutional preferences are based either on ethnic or kinship network, or like anti-incumbency, as the perceived lesser evil, on individual role-models: T.N. Seshan for the Election Commission of India, J.F. Ribeiro for the police or Justices Chandrachud or Nariman for the judiciary.

India’s federal structure, underpinned on the colonial ‘1935 Act’ which initiated ‘provincial autonomy’, attempted democratising it by: renaming “Provinces” to autonomous “States”; transferring all “Reserved Powers” to popular governance; constitutionally dividing powers between the two tiers; inserting federalism in the Preamble, and Parts 3 and 4 containing citizens’ “Fundamental Rights” and “Directive Principles”; but nothing about States’ rights, not even their territorial boundaries. This has enabled the Centre to unilaterally alter State boundaries and create new States. The Indian Constitution itself has been amended 105 times in 70 years compared with 27 times in over 250 years in the United States.

With ‘nation-building” as priority, the constitutional division of power and resources remains heavily skewed in favour of the Centre; along with “Residual”, “Concurrent” and “Implied” powers, it compromises on the elementary federal principle of equality among them, operationally reinforced by extra-constitutional accretion. While the judiciary is empowered to adjudicate on their conflicts, with higher judicial appointments (an estimated 41% lying vacant), promotion and transfers becoming a central prerogative, their operations are becoming increasingly controversial.

Structural conflicts

The story is not different for the “all India services”, including the State cadres. What is operationally most distorted is the role of Governors:appointed by the Centre, it is political patronage, transforming this constitutional authority of a federal “link” to one of a central “agent” in the States. Thus, the critical instruments of national governance have been either assigned or appropriated by the Centre, with the States left with politically controversial subjects such as law and order and land reforms. Thus, most of India’s federal conflicts are structural, reinforced by operational abuses.

Yet, there is no federal chamber to politically resolve conflicts. The Rajya Sabha indirectly represents the States whose legislators elect it, but continue even after the electors are outvoted or dismissed; with no residential qualification, this House is a major source of political and financial patronage for all political parties, at the cost of the people of the State they “represent”.

Possibly, this explains its continuity. Constituting roughly half the Lok Sabha, proportionately, it reinforces the representative deficit of Parliament, which, through the Westminster system of ‘winner-take-all’, continues to elect majority parties and governments with a minority of electoral votes. The second chamber is not empowered to neutralise the demographic weight of the populous States with larger representation in the popular chamber; it cannot veto its legislations, unlike the U.S. Senate. It can only delay, which explains the disruptions. Joint sessions to resolve their differences are as predicable and comical as the “voice votes” in the Houses. India’s bicameral legislature, without ensuring a Federal Chamber, lives up to the usual criticism: “when the second chamber agrees with the first, it is superfluous, when it disagrees, it is pernicious”.

Historically, party compositions decide when they agree or disagree. Whenever any party with a massive majority in any state finds itself marginalised in the central legislature, it disrupts proceedings, just as popular issues not reflected in legislative proceedings provoke undemocratic expressions and reciprocal repression. Such examples abound in India’s “quasi- federal” democracy till now.

Lessons to learn

Empirical and scholarly evidence suggest Wheare’s prefix about federalism arguably applies to other constitutional goals (largely operationally), while the federal flaws are structural, reinforcing conflicts and violence, endemic in the distorted democratic process. It is a threat to national security by incubating regional cultural challenges to national sovereignty, and reciprocal repression. We might learn from the mistakes of neighbouring Sri Lanka and Pakistan rather than be condemned to relive them. India’s national security deserves a functional democratic federal alternative to its dysfunctional “quasi-federal” structure, which is neither federal nor democratic but a constitutional “basic structure”.

The Indian Constitution keep its wide-ranging diversity within its sovereign boundries. With universal adult franchise and free and intgrated judicial system and governance, it is generally very difficult to polarise its wide-ranging diversity within any single divisive identity, even Hindutva; so that, Inspite of its operational flaws, the democratic structure and national integrity are interlinked.

 But its operational fault lines are increasingly diminishing the institutions, undermining the federal democratic structure as recent events have underscored.

THE UNWANTED CHANGES DEVELOPING:-

  1. The uncontrollable Parliamentary sessions, where the Rajya Sabha Chairperson broke down (in August 2021), and was unable to conduct proceedings despite having marshals. 

Even after all this, the House passed a record number of Bills midway through a number of adjournments. It is quite strange but has become like a new normal.

  • Cross-border police firing by one State against other, causing casualties, resulting in revengeful action in the form of a ban on goods trade and travel links with its land-locked neighbour.

The Union Law Minister (while in Opposition) said that Legislative disruptions are ‘legitimate democratic right, and duty’, justifying the current debate and discussion.

Legislative scenes in 1960’s-

  • Posters with labels such as ‘CIA Agent’, displayed during debates 
  • ‘Suitcases’ were transferred publicly in order to save the ruling Government
  • Honorable Members emerged from debates with injuries, on some occasions.

Legislative scenes in current scenarios:-

  • In the federal chamber, Honorable Members and Marshals are in physical contact both claiming injuries.
  • Official papers vandalised 
  • Chairpersons immobilised
  • Assuming new dimensions in Inter-State conflict

Key changes-

Rajni Kothari’s description of the single party dominance model with respect to the “Congress system” is now replaced by the BJP.

  • Myrdall’s “soft state” is reincarnated in forged videos and new instruments of mass obstruction and enforcement.
  • Functioning anarchy of Galbraith , now has greater criminalisation in India’s democracy, [over 30% legislators with criminal records].
  • It is now more anarchic, but still functioning, bypassing any “Dangerous Decade” or a “1984”.
  • Federal theorist K.C. Wheare analyses India as quasi-federal. WHEARE argues saying that Indian federalism, to be democratically federal, needs Institutional amendment even after being a “basic structure”. 

 Like popular voting behaviour, institutional preferences are based either on ethnic or kinship network, or like anti-incumbency, as the perceived lesser evil, on individual role-models:

  • T.N. Seshan with respect to the Election Commission of India
  • J.F. Ribeiro for the police 
  • Justices Chandrachud or Nariman for the judiciary.

GOVERNMENT OF INDIA ACT- 1935-

India’s federal structure, is strengthened on the colonial ‘1935 Act’,which has :-

  • Provincial Autonomy
  • Attempted to democratise it by: renaming “Provinces” to autonomous “States” 
  • Transferring “Reserved Powers” to popular governance
  • Constitutionally dividing powers between the two tiers
  • Inserting federalism in the Preamble 
  • Inserting Part 3 and 4 containing citizens’ “Fundamental Rights” and “Directive Principles of State Policy” 
  • It is silent about States’ rights and their territorial boundaries 

The Indian Constitution has been amended 105 times in 70 years as compared to 27 times in over 250 years in the United States.

With ‘nation-building’ as priority, the constitutional division of power and resources remains heavily inclined in favour of the Centre, it compromises on the basic federal principle of equality among them, operationally reinforced by extra-constitutional accretion. 

Vacancies in judicial appointments are still continuing(approx 41% lying vacant), judicial promotion and transfers becoming a central prerogative. 

Indian federalism needs institutional amendment to be democratically federal.

Structural conflicts-

  • All India Services, including the State cadres.
  • The role of Governors: appointed by the Centre, a political patronage.

Thus, most of India’s federal conflicts are structural, reinforced by operational abuses.

Yet, there is no federal chamber to politically resolve such conflicts. The Rajya Sabha indirectly represents the States whose legislators elect it; this House is a major source of political and financial patronage for all political parties, at the cost of the people of the State they “represent”.

The Rajya Sabha is not empowered to neutralise the demographic weight of the populous States with larger representation in the popular chamber; it cannot veto its legislations, unlike the U.S. Senate. It can only delay, which explains the disruptions. 

Joint sessions of LOK SABHA and RAJYA SABHA do not appear as successful as expected. 

TO CONCLUDE:-

India’s federal structure is described in different ways like quasi Federal, with central tendency, sui Generis among others. Reinforcing conflicts and violence, in the democratic process. India needs to arrive at a solution where Democratic Process should be restored with the participation of opposition also in the process. Otherwise it will be a threat to national security.

2.Prompt action proved IAF’s combat readiness: IAF chief

Three units that were deployed on the front during the stand-off with China get citations on 89th Air Force Day

The prompt actions in response to developments in eastern Ladakh were a testament to the Indian Air Force’s combat readiness, the Chief of the Air Staff, Air Chief Marshal (ACM) V.R. Chaudhari, said on Friday.

Three units that were deployed on the front during the stand-off with China last year and had also participated in the Balakot air strike on February 26, 2019, were presented unit citations on the occasion of 89th Air Force Day. The units include a fighter squadron, a helicopter unit and a surface-to-air nissile (SAM) squadron.

“When I look at the security scenario we face today, I am acutely conscious that I have assumed command at a crucial time. We must demonstrate to the nation that external forces will not be allowed to violate our territory,” ACM Chaudhari said addressing the ranks at the Air Force Day parade. “Our efforts in completing all COVID-related tasks were also a major achievement in support of the national efforts,” he added.

Coinciding with the celebrations of the 75th year of Independence, 75 aircraft and helicopters took part in the Air Force Day parade and fly-past with several formations showcasing some of the key air operations of the 1971 Liberation War of Bangladesh.

The No. 47 Squadron, equipped with upgraded MiG-29 fighters, was deployed for a defence role after the Balakot air strike. It flew extensively and maintained a constant vigil to ensure that there were no misadventures by adversaries, the IAF said.

The citation said, “In May 2020, the squadron was deployed for air defence as well as air-to-ground operations in the northern sector and carried out extensive operations at high altitude.”

The squadron also undertook the first overseas deployment by a MiG-29 UPG aircraft when it participated in Exercise Eastern Bridge V with the Royal Oman Air Force, the citation said.The squadron was formed on December 18, 1959.

The second unit citation went to the 116 Helicopter Unit, formed on August 1, 1967. It is now equipped with the the indigenous Advanced Light Helicopter Mark IV (ALH Mk IV) Rudra. After Balakot, the unit was deployed at the forward bases of the South Western Air Command Area of Responsibility (AOR) to counter threats of slow-moving aerial platforms, the citation said.

Day and night operations

In May 2020, after the Galwan skirmish, the unit was deployed for offensive operations at a high-altitude airfield in the Ladakh area. “The unit quickly established the first-ever high-altitude attack helicopter detachment in the region and executed day-and-night operations, including air to ground weapons delivery at high altitudes,” the citation read.

The third unit citation was given to 2255 Squadron Detachment Air Force, a frontline OSA-AK-M, SAM-guided weapon squadron in the Kashmir AOR. “The squadron was mobilised for air defence activation in Ladakh in response to the Galwan stand-off in the last week of June 2020. Since then, the squadron has undertaken various innovations to sustain serviceability and reliability of its equipment,” it said.

Key Points

  • 8th October: On this day, the Air Force in India was officially raised in 1932 as the supporting force of the Royal Air Force of the United Kingdom.
  • History:
    • 1933: First operational squadron.
    • 1940s: After participation in World War II (1939-45), the Air Force in India came to be called the Royal Indian Air Force.
    • 1950: It became the Indian Air Force after the republic came into being.
  • Facts:
    • India Air Force is the fourth largest in the world after the USA, China and Russia.
    • Headquarters: New Delhi
    • Motto of the IAF is ‘Touch the Sky with Glory’ and it was taken from the eleventh chapter of the Bhagavad Gita.
    • The President of India holds the rank of Supreme Commander of the air force.
    • The Chief of Air Staff, an air chief marshal is responsible for the operational command of the air force.

Operations:

  • After independence, IAF took part in wars with Pakistan and the People’s Republic of China.
    • Operation Meghdoot: It was on 13th April in 1984 when the Indian Army along with the Indian Air Force and paramilitary forces launched the ‘Operation Meghdoot’ to secure the control of the heights predominating the Siachen glacier.
    • IAF took part in relief operations during natural calamities such as Gujarat cyclone in 1998, the tsunami in 2004, etc.
    • IAF works with the United Nations’ peacekeeping missions.
  • Celebrations:
    • The day is being marked by the main event comprising a parade and flypast at Hindon Air Force Base (Ghaziabad) along with events at IAF establishments across the country.
    • This year, the Tejas LCA, Mig-29 and 21 and Sukhoi-30 along with newly inducted Rafale jets will be on show.
    • It will also have helicopters like ChinookApache, etc.

3.RBI suspends GSAP, holds interest rates

Governor Das cites strengthening growth impulses, ample liquidity for decision to halt bond buying

The Reserve Bank of India (RBI) on Friday said it was halting its bond buying under the G-Sec Acquisition Programme (GSAP) for now, with Governor Shaktikanta Das stressing that the measure had succeeded in ensuring adequate liquidity and stabilising financial markets.

“Coupled with other liquidity measures, it facilitated congenial and orderly financing conditions and a conducive environment for the recovery,” Mr. Das said after announcing the Monetary Policy Committee’s decision to keep interest rates unchanged and retain an ‘accommodative’ policy stance.

“The total liquidity injected into the system during the first six months of the current financial year through open market operations (OMOs), including G-SAP, was ₹2.37 lakh crore, as against an injection of ₹3.1 lakh crore over the full financial year 2020-21,” he noted.

“Given the existing liquidity overhang, the absence of a need for additional borrowing for GST compensation and the expected expansion of liquidity in the system as Government spending increases in line with budget estimates, the need for undertaking further G-SAP operations at this juncture does not arise,” Mr. Das added.

The RBI, however, remained ready to undertake G-SAP as and when warranted by liquidity conditions, and would also continue to flexibly conduct other liquidity management operations including Operation Twist (OT) and regular open market operations (OMOs).

Stating that the growth impulses seemed to be strengthening, supported by ebbing of infections, the robust pace of vaccination, expected record kharif foodgrains production, the government’s focus on capital expenditure and buoyant external demand, Mr. Das said the inflation trajectory was also turning out to be more favourable than anticipated.

Lowers inflation outlook

The RBI retained its growth forecast for this fiscal at 9.5% and cut its projection for average inflation for the full year to 5.3%, from 5.7% earlier, even as it flagged core inflation that ‘remains sticky’. Elevated global crude oil and other commodity prices combined with an acute shortage of key industrial components and high logistics costs, were adding to input cost pressures, it added.

“Headline inflation continues to be significantly influenced by very high inflation in select items such as edible oils, petrol and diesel, LPG and medicines,” the RBI Governor said.

‘Rate hike by FY22-end’

“Like many other central banks, the RBI is signalling a gradual move towards ‘normalising’ its monetary policy as the economy emerges from the shadow of the second wave,” Crisil Research said in a report.

“We expect this normalisation to continue in the coming months and a hike in the repo rate by 25 basis points by fiscal 2022-end, assuming strengthening economic recovery and elevated inflation risks,” it added.

G-SAP: Securities acquisition plan for market boost:

The Reserve Bank of India (RBI) has put in place a secondary market Government Security Acquisition Programme (G-SAP) 1.0 for orderly evolution of the yield curve in FY22.

  • Under the programme, the central bank will purchase government bonds of worth Rs 1 trillion (or one lakh crores of rupees).

Significance:

  • The GSAP 1.0 will provide more comfort to the bond market. As the borrowing of the Government increased this year, RBI has to ensure there is no disruption in the Indian market.
  • The programme will help to reduce the spread between repo rate and the ten-year government bond yield.
  • The G-SAP will almost serve the purpose of an OMO calendar, which had been on the bond market’s wish list for a long time.

What is OMO?

Open market operations is the sale and purchase of government securities and treasury bills by RBI or the central bank of the country.

The objective of OMO is to regulate the money supply in the economy.

  • It is one of the quantitative monetary policy tools.

How is it done?

RBI carries out the OMO through commercial banks and does not directly deal with the public.

OMOs vs liquidity:

  • When the central bank wants to infuse liquidity into the monetary system, it will buy government securities in the open market. This way it provides commercial banks with liquidity.
  • In contrast, when it sells securities, it curbs liquidity. Thus, the central bank indirectly controls the money supply and influences short-term interest rates.

RBI employs two kinds of OMOs:

Outright Purchase (PEMO) – this is permanent and involves the outright selling or buying of government securities.

Repurchase Agreement (REPO) – this is short-term and are subject to repurchase.

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