24, January 2017

FRBM panel to relax 2017-18 fiscal deficit target to 3-3.5 per cent: Report

The report noted that Finance Minister Arun Jaitley is expected to target a fiscal deficit of 3.5 per cent of GDP –same as that of 2016-17 in his February 1 Budget.

The Fiscal Responsibility and Budget Management (FRBM) Committee headed by Shri N.K. Singh, former Revenue and Expenditure Secretary and former Member of Parliament presented its Report to the Union Finance Minister.

After jallikattu, it is kambala’s turn

With an Ordinance promulgated to lift the ban on jallikattu in Tamil Nadu, the demand for lifting the ban on kambala — buffalo racing — is gaining momentum in coastal Karnataka.


1.Govt lays down specific ‘timeline’ for completing enquiry against officers and members of All India Services

Source: PIB

Government has laid down specific timeline for completing enquiry against officers and members of All India Services (AIS) within a given deadline, in a time-bound manner.

  • Giving details about the DoPT (Department of Personnel & Training) decision (Not UPSC), Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, and
  • The AIS (D&A) Rules, 1969 have been amended to provide specific timelines at different stages of the enquiry, with a view to complete the disciplinary proceedings against the members of All India Services in a time-bound manner.

Key facts:

  • As per the amended rules, a time limit of six months has been fixed for completion of departmental enquiry and submission of report.
  • In case it is not possible to complete the enquiry within six months for justifiable reasons to be recorded in writing, additional time limit not exceeding six months at one time can be granted by the Disciplinary Authority, thereby ensuring accountability for completion of enquiry.
  • Further, 30 days’ timeline has been fixed for the delinquent officers to give his representation to the charge-sheet which can be extended to not more than 30 days by the Disciplinary Authority and, in any case, no extension will be provided beyond 90 days.
  • Similarly, a period of 15 days has been provided to send a representation on the advice of UPSC regarding the penalty to be imposed on the delinquent officer and for such representation also, no extension will be provided beyond 45 days.

To bring in more accountability and time-bound completion of every exercise in the course of governance.

The new amendment in the Rules, will certainly strengthen the culture of working within deadlines and timelines without showing any slackness.

2.Multilateral investment pact: India against Canada, EU bid on investment agreement at WTO

Source: Indian Express

Multilateral investment pact: India against Canada, EU bid on investment agreement at WTO

India has rejected an informal proposal by the European Union (EU) and Canada for a multilateral investment pact with a provision for an investor-to-state dispute settlement (ISDS) at the World Trade Organization (WTO).

Key facts:

  • The informal proposal was discussed at an “informal meeting” of some major WTO members — including India, China, Brazil, Japan and Australia — in Davos.
  • The informally proposed ISDS is actually part of a bilateral agreement between the EU and Canada.
  • Both the EU and Canada want other WTO members to agree to the regime proposed by them for dispute resolution at the multilateral level.
  • However, disputes against the government should ideally be settled by the domestic laws and courts first and only after that, an aggrieved party should appeal outside (other countries).

Contentious mechanism: The ISDS mechanism has become contentious as it permits companies to drag governments to international arbitration without exhausting the local remedies and claim huge amounts as compensation citing losses they suffered due to reasons, including policy changes.

  • The EU and Canada have inked an investment pact that has incorporated the contentious ISDS.
  • At the meeting (of trade ministers of select countries held on the sidelines of the recently held World Economic Forum in Switzerland), they wanted the investment pact to be the template for a similar multilateral agreement.

India reject:

  • So, India summarily rejected such an idea, Commerce and Industry Minister. Japan also opposed the idea on the grounds of the costs involved in international arbitration.
  • Only after all local options have been exhausted for settling disputes between a corporate and a government, want to permit issues to be taken up in international arbitration tribunals. Such provisions could be a part of bilateral agreements but they can’t be allowed in a multilateral agreement.
  • India has sought concrete work plans on a special safeguard mechanism (SSM) for developing countries to protect their farmers from a spurt in imports, and a permanent solution to the issue of its official grain procurement and food security in the country, as agreed on in the Bali ministerial.
  • In Doha Round agriculture: a tool that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls. SPECIAL SAFEGAURD MECHANISM.

What is ISDS?

ISDS is a neutral, international arbitration procedure.  Like other forms of commercial, labor, or judicial arbitration, ISDS seeks to provide an impartial, law-based approach to resolve conflicts

Governments put ISDS in place for at least three reasons:

  1. To resolve investment conflicts without creating state-to-state conflict
  2. To protect citizens abroad
  3. To signal to potential investors that the rule of law will be respected

3.Tamil Nadu ordinance to permit jallikattu

Source: The Hindu

Why was an ordinance promulgated by the Tamil Nadu government to facilitate the conduct of jallikattu in Tamil Nadu?

Jallikattu was under a judicial ban in Tamil Nadu following the Supreme Court’s verdict in May 2014. An amendment to the relevant law, the Prevention of Cruelty to Animals Act, 1960, was needed to remove the basis on which the judgment was passed.

As the Assembly was not in session and a volatile atmosphere prevailed in the State because of the strident demand for legal protection to the conduct of jallikattu, the State government promulgated an ordinance.

Why did the Union government not amend the Act for the same purpose?

The Union government is currently defending a January 2016 notification it had issued to enable the conduct of jallikattu, subject to some regulations, despite bulls being barred from use as performing animals under the PCA.

The Supreme Court has reserved its judgment on the validity of the notification. As the matter was sub judice, the Centre did not want to promulgate an ordinance for the same purpose.

What is the legal status of the ordinance?

  • The ordinance is a ‘State amendment’ to the Central Act. This means that in its application to Tamil Nadu, some provisions will be different from what they are for the rest of the country.
  • PCA falls under Entry 17 (Prevention of Cruelty to Animals) in the Concurrent List of the Constitution. This means both the Centre and the States have concurrent power to enact laws on the subject.
  • Subject to some restrictions and a prescribed procedure, State governments may amend central laws or have their own laws on the same subject in which the Union government has its own law.
  • This may be done by the Legislative Assembly in its usual course or it may be promulgated as an ordinance if circumstances warrant such recourse.

What was the procedure adopted by the Tamil Nadu government to bring this ordinance?

  • This ordinance to amend the PCA was brought after prior ‘instructions’ from the President under Article 213 of the Constitution. (Governor assent the bill).
  • The draft of the ordinance was sent to the Union government, which examined it and gave its consent on behalf of the President to its promulgation by the Governor.

Why is the President’s prior approval necessary?

This is necessary because the Constitution says that where there is ‘repugnancy’ or ‘conflict’ between a Central law and a State law, the provisions of the Central law will prevail. However, if the State law obtains the President’s assent, it will prevail over the Central law.

What are the key aspects of the ordinance?

The ordinance defines jallikattu, and amends some sections to the effect that those provisions do not apply to the conduct of jallikattu. Its overall purpose in protecting jallikattu from legal challenge is to promote and follow tradition and culture, and to ensure survival and continuance of native breeds of bulls. In particular,

  1. It defines ‘jallikattu’ as an event involving bulls conducted with a view to following tradition and culture between January and May every year in Tamil Nadu, and which includes ‘manju virattu’, ‘vadamadu’ and ‘eruthu vidum vizha’.
  2. It amends Section 3 of PCA so that notwithstanding its provisions, jallikattu may be held subject to rules and regulations.
  3. It amends Section 11 to add ‘the conduct of jallikattu’ as another exception to the list of actions that do not amount to cruelty.
  4. It amends Section 22, which relates to restrictions on some animals being used for performances, to make this clause inapplicable to jallikattu.
  5. It adds jallikattu as another item in a list of ‘exemptions’ from the rule against using some animals as performing animals. The original list contained use of animals by the police and military after training them and for use for scientific and educational purposes.
  6. It adds Section 28A to say nothing in the Act would apply to jallikattu.

How does the ordinance seek to undo the effect of the Supreme Court judgment?

  • The ordinance seeks to address the specific grounds on which the Supreme Court held jallikattu illegal. In particular, the court had held jallikattu to be violative of Sections 3, 11 and 22 of the PCA.
  • So, the new law amends or adds to the relevant sections. In addition, it seeks to overcome the objection that the State law is not in conformity with the relevant central law.
  • An earlier Act, the Tamil Nadu Jallikattu Regulation Act, 2009 was struck down by the Supreme Court on this ground. The present ordinance seeks to eliminate the elements of conflict with the Centre’s prior permission.

Is the ordinance enough to safeguard jallikattu events from a future ban?

In the event of a legal challenge, this new law is also subject to judicial review.

In particular, it may be questioned on the ground

  • That jallikattu is inherently cruel and cannot be given an exemption from the PCA
  • That it violates animal rights and dignity and
  • It is contrary to the Fundamental Duties enjoined by the Constitution and fundamental freedoms that animals are entitled to enjoy under international principles laid down by the World Health Organisation for Animals.

Is the ordinance a permanent solution or a temporary fix?

  • There is a wrong impression that the ordinance is not a permanent solution.
  • Any ordinance comes into effect immediately. It has to be laid before the legislature within six weeks of the legislature being convened.
  • Ordinance, the question of its longevity is irrelevant. Unless stayed, suspended or set aside by a court of law, this law will prevail in Tamil Nadu.

4.Japan threatens to drag India to WTO on steel

Source: The Hindu

Japan is threatening to take India to the WTO over restrictions that nearly halved its steel exports to the South Asian nation over the past year, a step that could trigger more trade spats as global tensions over steel and other commodities run high.

What’s the issue?

India imposed duties of up to 20% on some hot-rolled flat steel products in September 2015, and set a floor price in February 2016 for steel product imports to deter countries such as China, Japan and South Korea from undercutting local mills.

Tokyo says India’s actions are inconsistent with WTO rules and contributed to the plunge in its steel exports to India, which dropped to 11th-largest on Japan’s buyer list in 2016 through November, down from sixth-largest in 2015.

Why is Japan so much concerned?

With global trade friction increasing, Japan’s defence of an industry that sells nearly half of its products overseas is getting more vigorous.

Besides concern over India’s protection of its domestic steel industry, Japan is also worried about the more rough and tumble climate for global trade being engendered by incoming U.S. President Donald Trump, and feels it must make a strong stand for open and fair international markets.

Way ahead:

The two countries will shortly discuss over this issue. But, if consultations fail to resolve the dispute, Japan may ask adjudication by a WTO panel.

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