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Daily Current Affairs 28.06.2021 (On the margins with full equality still out of reach, Govt. faces a tough choice on interest rates)

Daily Current Affairs 28.06.2021 (On the margins with full equality still out of reach, Govt. faces a tough choice on interest rates)

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1.On the margins with full equality still out of reach

Despite judicial verdicts, India’s sexual minorities face discrimination in employment, health issues and personal rights

This year, the world woke up to June, pride month, gazing at the Google Doodle of Dr. Frank Kameny (1925-2011), an American astronomer, veteran, and gay rights activist. Kameny, in the early 1970s, ‘successfully challenged the American Psychiatric Association’s classification of homosexuality as a mental disorder’. The global LGBTQ+ community marched ahead after the 1970s. But in India, the queer community is still a stigmatised and invisible minority, a fact that is alarmingly incompatible with the country’s living, liberal and inclusive Constitution.

The Constitution was conceived by India’s founding fathers as a beacon of fundamental rights, leading once enslaved Indians to the promised land of life and freedom. Despite such a liberating Constitution, the Indian state and the law have been abusing and given many marginalised segments of the citizenry such as the queer community of India the cold shoulder.

Launch pad for jurisprudence

The Constitutional courtroom in post-colonial India became a space where the individual and the state could converse with each other. The meagre gains that the queer community won have been granted by the judiciary; not by legislatures. In the book, Sex and the Supreme Court: How the Law is Upholding the Dignity of the Indian Citizen (2020), Saurabh Kripal observes: “In the tug of war between the demands of the traditional conception of society and the rights of individuals to their identity and dignity, the Supreme Court has come down firmly in favour of individual.” The Supreme Court of India’s ruling in Navtej Singh Johar & Ors. vs Union of India (2018), that the application of Section 377 of the Indian Penal Code (IPC) to consensual homosexual behaviour between adults was “unconstitutional, irrational, indefensible and manifestly arbitrary”, has been a great victory to the Indian individual in his quest for identity and dignity. This judgment has provided a launch pad for the LGBTQ+ jurisprudence and queer liberation movement in India.

The Delhi High Court’s verdict in Naz Foundation vs Government of NCT of Delhi (2009) was a 38th parallel in the law of sexuality and equality jurisprudence in India. The court held that Section 377 offended the guarantee of equality enshrined in Article 14 of the Constitution, because it creates an unreasonable classification and targets homosexuals as a class. Earlier, in a retrograde step, the Supreme Court, in Suresh Kumar Koushal vs Naz Foundation (2013), reinstated Section 377 to the IPC. But India witnessed the anastasis of Naz Foundation through the top court’s judgment in Navtej Singh Johar & Ors. with an embedded firewall of the doctrine of progressive realisation of rights.

Despite the judgments of the Supreme Court, full equality is still a pie in the sky for the queer community in India. In matters of employment, health and personal relationship, there is still a lot of discrimination against sexual minorities. It is only when these problems are adequately addressed that the LGBTQ+ community will be able to enjoy full autonomy and agency.

Legal sanction opposed

The Union of India has recently opposed any move to accord legal sanction to same-sex marriages in India stating that the decriminalisation of Section 377 of the Indian Penal Code does not automatically translate into a fundamental right for same sex couples to marry. This was stated in response to the Delhi High Court notice to a plea by LGBTQ+ activists and couples who sought recognition of same-sex marriages. Justice Anthony Kennedy of the U.S. Supreme Court, in Obergefell vs Hodges (2015) underscored the emotional and social value of the institution of marriage and asserted that the universal human right of marriage should not be denied to a same-sex couple. As of 2021, same-sex marriage is legally performed and recognised in 29 countries. Indian society and the state should synchronise themselves with changing trends.

Amend Article 15

Article 15 secures the citizens from every sort of discrimination by the state, on the grounds of religion, race, caste, sex or place of birth or any of them. This Article is the cornerstone of the concept that equality is the antithesis of discrimination. Imbibing the zeitgeist, the grounds of non-discrimination should be expanded by including gender and sexual orientation. In May 1996, South Africa became the first country to constitutionally prohibit discrimination based on sexual orientation. Section 9(3) of its Constitution dictates that state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth. Let Gandhiji’s nation learn from Mandela’s nation!

The United Kingdom passed the “Alan Turing law” in 2017 which ‘granted amnesty and pardon to the men who were cautioned or convicted under historical legislation that outlawed homosexual acts’. The law, named after Alan Turing, a World War II code-breaker and computing genius, who was convicted of gross indecency in 1952, provided a ‘posthumous pardon, also an automatic formal pardon for living people who had had such offences removed from their record’. To expiate the excesses committed against the LGBTQ+ community in the past and present, the Indian state should also enact a law on these lines to do justice to the ‘prisoners of sexual conscience’.

Justice Rohinton F. Nariman had directed in Navtej Singh Johar & Ors., the Government to sensitise the general public and officials, including police officials, to reduce and finally eliminate the stigma associated with LGBTQ+ community through the mass media and the official channels. But the Government has simply disregarded this obligation. School and university students too should be sensitised about the diversity of sexuality to deconstruct the myth of heteronormativity. Heteronormativity is the root cause of hetero-sexism and homophobia.

Rohit De illustrated, in his A People’s Constitution: The Everyday Life of Law in the Indian Republic (2018), how laws and policies were frequently undone or renegotiated from below by the ordinary citizenry using constitutional remedies. He unfolded the stories of individuals from socially and economically marginalised sections such as prostitutes, butchers, refugees, and vegetable vendors who turned to the court for ‘rewriting’ the Constitution. However, for Queeristan, the Constitution has been ‘a beautiful and ineffectual angel’ so far. Hence, it is time for change; but the burden should not be left to the powers that be. The onus remains with the civil society, the citizenry concerned and the LGBTQ+ community itself.

Section 377

Why in News?

  • The Supreme Court (SC) recently decriminalised homosexuality by striking off parts of Section 377 of the Indian Penal Code (IPC) which were held violative of Fundamental Rights of LGBTQ Community.

Key Observations

  • SC made it clear that Article 14 of the Constitution guarantees equality before law and this applies to all classes of citizens therby restoring ‘inclusiveness’ of LGBTQ Community.
  • SC upheld the pre-eminence of Constitutional morality in India by observing that equality before law cannot be denied by giving precedence to public or religious morality.
  • SC noted that modern psychiatric studies and legislations recognise that gay persons and transgender do not suffer from a mental disorder and therefore cannot be penalized.
  • SC observed that homosexuality is not unique to humans, which dispels the prejudice that it is against the order of nature.
  • Supreme Court stated that the ‘Yogyakarta Principles on the Application of International Law in Relation to Issues of Sexual Orientation and Gender Identity’ should be applied as a part of Indian law. 

Yogyakarta Principles recognise freedom of sexual orientation and gender identity as part of Human Rights. They were outlined in 2006 in Yogyakarta, Indonesia by a distinguished group of International Human Right experts.

Section 377

  • Section 377 of the Indian Penal Code 1860, a relic of British India, states that “whoever voluntarily has carnal intercourse against the order of nature with any man, woman or animal shall be punished.”
  • This included private consensual sex between adults of same sex.
  • After the recent SC judgement, provisions of Section 377 remain applicable in cases of non-consensual carnal intercourse with adults, all acts of carnal intercourse with minors, and acts of bestiality.

Issues Involved

Fundamental Rights

  • Sexual orientation and its relationship to the Fundamental Rights of the individuals has been at the heart of the debate.
  • SC in its judgement specifically said that the Right to Privacy and the protection of sexual orientation lie at the core of the fundamental rights guaranteed by Article 14 (Equality before Law), Article 15 (Prohibition of discrimination on the basis of race, religion, caste, sex, place of birth), Article 21 (Protection of life and liberty) and Article 19 (Freedom of expression) of the Constitution.
  • The Supreme Court, while decriminalising consensual sex between homosexuals, observed that members of the LGBTQ community possessed the same fundamental rights as others.

Health Issues

  • Criminalisation of homosexuality leads to discrimination and results in LGBTQ people getting poor or inadequate access to services within the health system.
  • It also creates barriers to both the availability and the ability to access HIV prevention, testing and treatment services.
  • Public health evidence also indicates a clear relationship of a lack of social acceptance and legal rights with substance abuse, violence, isolation, and mental illness.

Law and morality

Those against legalising gay sex argue that it is against the moral values of the society. However, activists arguing for it say what is forbidden in religion need not be prohibited in law.

Landmark Judgements related to issues

  • Naz Foundation vs. Govt. of NCT of Delhi (2009)
    • Delhi High Court struck off section 377, legalising consensual homosexual activities between adults.
  • Suresh Kumar Koushal Case (2013)
    • SC overturned the previous judgment by Delhi High Court (2009) that decriminalised homosexual acts and criminalised homosexuality once again.
    • SC argued that in 150 years, less than 200 persons had been prosecuted under Section 377.
    • Therefore, “plight of sexual minorities” could not be used as argument for deciding constitutionality of law.
    • Further, SC ruled that it was for the legislature to look into desirability of deleting section 377 of IPC.
  • Justice K.S. Puttaswamy vs. Union of India (2017)
    • SC ruled that Fundamental Right to Privacy is intrinsic to life and liberty and thus, comes under Article 21 of the Indian constitution.
    • SC declared that bodily autonomy was an integral part of the right to privacy.
    • This bodily autonomy has within its ambit sexual orientation of an individual.
  • Navtej Singh Johar vs. Union Of India (2018)
    • Decriminalised homosexuality.
    • Dismissed the position taken by SC in Suresh Kumar Koushal case (2013) that the LGBTQ community constitute a minuscule minority and so there was no need to decriminalise homosexual sex.

Impact of Decriminalising Homosexuality

  • Sexual minorities in India are one step closer to living with dignity.
  • LGBTQ Community will be able to come out in the open with their sexual preferences.
  • Discrimination faced by them in accessing health and their harassment by Police will cease.
  • Decriminalisation has also been associated with more self-acceptance as well as psychological and emotional security among LGBTQ Community.
  • This judgement will spur LGBTQ Community to demand more progressive laws like Gay marriage laws, right to form partnerships, inheritance, employment equality, protection from gender-identity-based discrimination among others.
  • The judgment has opened up grey areas, and guidelines will be needed to deal with cases where, say, a gay individual withdraws “consent” and lodges a complaint against the partner. India’s laws on sexual assault do not recognise men as victims of rape.

2.Govt. faces a tough choice on interest rates

A cut in small savings rates will be ‘unpopular’ and further hurt households amid a surge in inflation, say economists

The Union government has a tricky political decision to make over the next couple of days, with the quarterly reset of interest rates on small savings schemes due on June 30. A cut in small savings rates at this point would be an “unpopular” move and further hurt households amid a surge in inflation, according to economists.

Sharp cuts in the rates for the current quarter on instruments, including the Public Provident Fund (PPF) and National Savings Certificates (NSCs) announced on March 31, were rolled back within hours amid the West Bengal Assembly election campaign.

While there are no polls around the corner now, retail inflation has shot up sharply to 6.3% in May this year after averaging 6.2% through 2020-21. Inflation is expected to stay elevated around 5.5%-6% through 2021-22.

Moreover, household savings have been shrinking significantly for two quarters in a row even before the second COVID-19 wave, as per recent Reserve Bank of India (RBI) data on savings rates for the third quarter of 2020-21.

“If you go strictly by the formula set for small savings rates, they may need to cut rates to some extent. But I think the government will not do it this time as it will be a very unpopular move due to the rising inflation and declining savings rates,” CARE Ratings chief economist Madan Sabnavis told The Hindu.

However, the government will also have to weigh the costs of leaving the rates unchanged on its borrowing plans.

Recent auctions

Some recent auctions of 10-year government securities (Gsecs) have struggled to find takers at the interest rates being offered by the Central bank.

No bids were received for such an auction held last Friday, which suggests borrowing from the market at low rates may not be sustainable. The RBI has often blamed the high administered interest rates on small savings for poor transmission of its rate cuts in the economy.

Mr. Sabnavis said the government must revisit the formula adopted since April 2016 that links small savings rates to Gsecs’ rates, as they are not really market-determined, but being managed by the Central bank.

Policy rethink needed

“This is a tad convoluted. The RBI is ensuring rates don’t rise through a policy-induced stance of managing the yield curve, so the gsec rates are getting divorced from reality. Even the market is signalling [that] the RBI needs to pay more to raise government borrowings, with Friday’s auction eliciting no bids,” he said.

Bengaluru Dr. B.R. Ambedkar School of Economics University Vice-Chancellor N.R. Bhanumurthy said the extent of rate cuts on small savings should be carefully calibrated.

“We can’t give a shock that discourages financial savings by effecting sharp rate cuts like those announced last time. We are a savings-dependent economy and need a policy that gives them the same importance as investments,” he said.

Small savings rates had been slashed between 0.5% and 1.4% on different instruments in April 2020, bringing the PPF rate to 7.1% from 7.9%.

The PPF returns were further slashed to 6.4% for the first quarter of 2021-22, before the government reversed the move citing an “oversight”.

The range of rate cuts proposed at the time was 0.4% to 1.1% on various instruments.

History

  • The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
  • The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated.
  • Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.

Preamble

  • To regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.
  • To have a modern monetary policy framework to meet the challenge of an increasingly complex economy.
  • To maintain price stability while keeping in mind the objective of growth.

Structure

  • The Reserve Bank’s affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act.
  • The directors are appointed/nominated for a period of four years.

Constitution

  • Official Directors (central board of directors)
    • Full-time: Governor and not more than four Deputy Governors
  • Non-Official Directors
    • Nominated by Government: ten Directors from various fields and two government Official
    • Others: four Directors – one each from four local boards (regional)

Main Functions

1. Monetary Authority:

  • It implements and monitors the monetary policy and ensures price stability while keeping in mind the objective of growth.

An amendment to RBI Act, 1934, was made in May 2016, providing the statutory basis for the implementation of the flexible inflation targeting framework. 

Section 45ZB of the amended RBI Act, 1934, also provides for an empowered six-member Monetary Policy Committee (MPC) to be constituted by the Central Government by notification in the Official Gazette

Monetary Policy Committee

  • It was created in 2016.
  • It was created to bring transparency and accountability in deciding monetary policy.
  • MPC determines the policy interest rate required to achieve the inflation target.
  • Committee comprises of six members where Governor RBI acts as an ex-officio chairman. Three members are from RBI and three are selected by government.
  • Inflation target is to be set once in a five year. It is set by the Government of India, in consultation with the Reserve Bank.

Current inflation target is pegged at 4% with -2/+2 tolerance till March 31, 2021.

2. Regulator and Supervisor of the Financial System:

  • Prescribes broad parameters of banking operations within which the country’s banking and financial system functions such as issuing licenses, branch expansion, liquidity of assets, amalgamation of banks etc.
  • Objective: maintain public confidence in the system, protect depositors’ interest and provide cost-effective banking services such as commercial banking, co-operative banking, to the public.

3. Manager of Foreign Exchange:

  • Manages the Foreign Exchange reserves of India.
  • It facilitates external trade and payment and promotes orderly development and maintenance of foreign exchange market in India.
  • It also maintains external value of rupee.

4. Issuer of Currency:

  • Issues and exchanges or destroys currency and coins not fit for circulation.
  • Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.

5. Developmental Role:

  • Performs a wide range of promotional functions to support national objectives such as making institutional arrangements for rural or agricultural finance.
  • Commercial banks lend loans to small-scale industrial units as per the directives (Priority Sector Lending) issued by the Reserve Bank of India time to time.

6. Financial Inclusion:

  • The Reserve Bank has selected a bank led model for financial inclusion in India. RBI has undertaken a series of policy measures. Some of the important ones are:
    • No Frills Accounts – account either with nil or very low minimum balance as well as charges that would make such accounts accessible to vast sections of population.
    • Use of Technology – devices such as ATMs, hand held devices to identify user accounts through a card and biometric identifier, Deposit taking machines and Internet banking and Mobile banking facility to provide the banking services to all sections of society with more ease.

7. Related Functions:

  • Banker to the Government: performs merchant banking function for the central and the state governments.
  • It is entrusted with central govt.’s money, remittances, exchange and manages its public debt as well.
  • Banker to banks: maintains banking accounts of all scheduled banks. It also acts as lender of last resorts by providing fund to banks.

Independence of RBI

  • Under section 7 of the RBI Act, the central government may from time to time give such directions to the RBI as it may, after consultation with the Governor of the Bank, consider necessary in the public interest. Moreover, there is no legal act mandating autonomy of the RBI.
  • Yet, RBI has always been looked upon as an autonomous body which has under its umbrella all commercial banks, be it PSBs or private banks or foreign banks.
  • It is not only vested with the powers to formulate the monetary policy but also to monitor the functioning of all banks.
  • To play its role effectively, autonomy in its functioning is sine qua non for RBI.
  • However, the independence of RBI has been challenged many times due to a continued tug of war for wresting more power between the bank and the govt.
  • The main reasons for this have been:
    • RBI’s failure to check the growth of Non Performing Assets.
    • Reduced liquidity in the economy due to tight monetary policy followed by RBI.
    • Corrective measures taken by RBI to clean up the banking system which are not seen very positively by the government
    • Clash between short term populist agenda of the government and long term view for price stability taken by RBI.
    • Regulation of Public Sector Banks: One important limitation is that the Reserve Bank is statutorily limited in undertaking the full scope of actions against public sector banks (PSBs) – such as asset divestiture, replacement of management and Board, license revocation, and resolution actions such as mergers or sales –– all of which it can and does deploy effectively in case of private banks.
    • Erosion of statutory powers of the central bank through piece-meal legislative amendments that directly or indirectly eat at separation of the central bank from the government.

RBI’s Important Publication (half yearly)

  • Financial Stability Report
  • Monetary Policy Report
  • Report on Financial Review

3.Blinken, Lapid to meet in Rome to reset U.S.-Israel ties

Replenishment of Iron Dome Defence System may figure in talks

U.S. Secretary of State Antony Blinken and Israeli Foreign Minister Yair Lapid will meet in Rome on Sunday as their new governments look to turn the page on former President Donald Trump and former Prime Minister Benjamin Netanyahu, whose close alliance aggravated partisan divisions within both countries.

President Joe Biden and Prime Minister Naftali Bennett are focused on pragmatic diplomacy rather than dramatic initiatives that risk fomenting opposition at home or distracting from other priorities.

That means aiming for smaller achievements, such as shoring up the informal cease-fire that ended last month’s war with Gaza’s militant Hamas rulers and replenishing Israel’s Iron Dome defence system. A major push to revive the long-dormant peace process between Israel and the Palestinians could unsettle the delicate balance.

“Nobody thinks it’s a good idea to start charging through on a major new peace initiative,” said Ilan Goldenberg, a Mideast security expert at the nonprofit Center for a New American Security. “But there are things you can do quietly under the radar, on the ground, to improve the situation.”

That approach — of managing the conflict rather than trying to solve it — may succeed in papering over domestic divisions. But it also maintains a status quo that the Palestinians find increasingly oppressive and hopeless, and which has fueled countless cycles of unrest.

The Americans and Israelis will try to work out differences away from the public, as in Mr. Biden’s “quiet” diplomacy, when he privately urged Netanyahu to wind down the Israel-Hamas war ahead of a truce that took effect May 21.

Why in News

Recently, US Secretary of State Mike Pompeo met Israeli Prime Minister Benjamin Netanyahu to discuss Israel’s plans to annex parts of the West Bank.

  • Pompeo’s visit was exempted from Israel’s mandatory two-week quarantine for arrivals and shut borders due to the Covid-19 pandemic.
  • For Israel, this visit was an indication of the strength of its alliance with the USA and the talks focused on discussions on annexation, shared concerns about Iran, the battle against the coronavirus, Israel’s incoming government and threats from Israel’s ties with China.
  • Israel-China Ties: The US has reportedly been pressuring Israel to rethink a bid by a Hong Kong company to build a massive desalination facility.

Key Points

  • Plans for Annexation of West Bank
  • Israeli hard-liners are eager to unilaterally redraw the Mideast map before November’s US Presidential Election.
  • The presumptive Democratic nominee, Joe Biden, is in the opposition of unilateral annexation plans by Israel.
  • Annexation would give Donald Trump an accomplishment to shore up his pro-Israel base, particularly politically influential pro-Israel evangelical (of or according to the teaching of the gospel or the Christianity) Christian voters.
    • These voters believe in the notion that God promised the land to Jews and it should be returned to them.
  • Background
    • The Israel-Palestine Conflict can be traced back to 1917.
    • Mideast War, 1967: It is also known as the six-day war or Third Arab-Israeli war. Israel captured the West Bank, east Jerusalem and Gaza Strip in the war. The Palestinians seek these territories for a future independent state. In the decades since, Israel has built settlements in the West Bank and east Jerusalem that now house nearly 700,000 Israelis. Most of the international communities consider these settlements a violation of international law and obstacles to peace.
    • Mideast Plan or Middle East Peace Plan: It was unveiled by Trump in January, 2020. Under it, the Palestinians would have a limited statehood contingent on a list of stringent requirements while Israel would annex some 30% of the West Bank.
    • The Palestinians rejected the plan and threatened to withdraw from key provisions of the Oslo Peace Accords, which are a series of agreements between Israel and the Palestinians signed in the 1990s.
    • The Trump administration believes that Israel’s West Bank settlements are consistent with international law and supports the annexation of West Bank territory, as long as Israel agrees to enter peace talks with the Palestinians.

Criticism
The annexation will trigger widespread international condemnation because it will crush already faint Palestinian hopes of establishing a viable state on the lands captured by Israel in the Mideast war.

  • The Arab League has mentioned the annexation as a war crime.
    • The European Union (EU) and other individual member states, have warned of tough consequences if Israel moves forward in the annexation process.
  • India’s Stand
    • India was

one of the few countries to oppose the United Nations’ partition plan in November 1947, echoing its own experience during independence a few months earlier.
India recognised Israel in 1950 but it is also the first non-Arab country to recognise Palestine Liberation Organisation (PLO) as the sole representative of the Palestinians. India is also one of the first countries to recognise the statehood of Palestine in 1988.
In 2014, India favored the United Nations Human Rights Council’s (UNHRC) resolution to probe Israel’s human rights violations in Gaza. Despite supporting the probe, India abstained from voting against Israel in UNHRC in 2015.
As a part of Link West Policy, India has de-hyphenated its relationship with Israel and Palestine in 2018 to treat both the countries mutually independent and exclusive.
In June 2019, India voted in favor of a decision introduced by Israel in the UN Economic and Social Council (ECOSOC) that objected to granting consultative status to a Palestinian non-governmental organization.

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