Current Affairs 25 December 2021 for UPSC Exam | Legacy IAS Academy

Contents

1. Assam to reserve 50% seats for women in municipalities
2. China’s BRI Investments decline, EU plans €300 billion counter
3. ‘Monetary policy is financially inclusive’: RBI Deputy Governor
4. Increased investments in ESG funds

Assam to reserve 50% seats for women in municipalities

Context:

The Assam Assembly has passed two Bills for reserving 50% of seats in the State’s civic bodies for 10 years by rotation.

Relevance:

GS-II: Social Justice and Governance (Issues related to women, Government Policies and Initiatives), GS-II: Polity and Constitution (Constitutional Provisions)

Dimensions of the Article:

1. About Assam’s reservation of seats for women in municipalities
2. Gender Reservation in constitution and legislations
3. Success of gender reservation in Urban Local Bodies
4. Shortfalls in gender reservation in ULBs
5. Challenges faced by Women in PRIs
6. Way Forward

About Assam’s reservation of seats for women in municipalities

• An Amendment to the Assam Municipal Act of 1956 is sought which will provide for half the seats in any municipality to be filled up by direct election to be reserved for women.
• These seats include those reserved for women from the Scheduled Castes and Scheduled Tribes.
• The amendment also proposes the allotment of the municipal seats for reservation by rotation every 10 years.
• The step to provide reservation in a ward for 10 years will encourage women to participate in the elections and enable them to bring sustainability to the schemes implemented by the urban local bodies.

Gender Reservation in constitution and legislations

• ‘Panchayat’, being “Local government”, is a State subject and part of State list of Seventh Schedule of Constitution of India.
• As early as in 1992, the 73rd Constitutional Amendment Act mandates 33.3% reservation for women in (Panchayati Raj Institutions) PRIs across the country and the 74th Amendment of the Constitution mandated gender reservation of not less than 33 percent of the total number of seats to be filled by direct election in urban local bodies (ULBs). These amendments pioneered gender reservation at the sub-national level.
• Article 243D of the Constitution ensures participation of women in Panchayati Raj Institutions by mandating not less than one- third reservation for women out of total number of seats to be filled by direct election and number of offices of chairpersons of Panchayats.
• Article 243T of the Constitution provides that a minimum of one-third of the total number of seats filled by direct elections in every Municipality shall be reserved for women.  The seats may be allotted by rotation to different constituencies in a Municipality. Also, a minimum of one-third seats shall be reserved for SC/ST women within the seats reserved for SC/STs in a Municipality.
• Article 15 (3) to the Constitution of India empowers the State to make special provisions for women.
• In order to bring about 50% reservation for women in Panchayats in all States, the 110th Constitution Amendment Bill was introduced in the Lok Sabha in 2009, but it was NOT PASSED despite being tabled several times.
• At the national level, gender reservation in Parliament is yet an undone deal. The Women’s Reservation Bill, seeking to reserve 33 percent seats in the lower house of Parliament, is STILL PENDING approval in the Lok Sabha. The Bill has been in discussion for more than two decades.
• As per the information available with the Ministry of Panchayati Raj by the end of 2020, 20 States have made provisions of 50% reservation for women in Panchayati Raj Institutions in their respective State Panchayati Raj Acts. These 20 states are: Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Sikkim, Tamil Nadu, Telangana, Tripura, Uttarakhand and West Bengal.
• Andhra Pradesh, Kerala, Maharashtra, Tripura and now Assam are amongst the number of states which have exceeded this and reserved 50 percent of (Urban Local Bodies) ULB seats for women.

Success of gender reservation in Urban Local Bodies

• It is evident that local gender reservations have drawn out tens of thousands of women from the kitchen and home in every five-yearly election and catapulted them into the arena of local politics. Without the Constitutional command, they would not have become part of electoral democracy.
• A study of the women councillors of Jaipur Municipal Corporation revealed that many independent-minded women have emerged and made politics a career and have shown abilities that match those of the male councillors. They have enabled some constructive modifications in gender prejudices held by society in general and by municipal bureaucracies in particular.
• Further, a study conducted in the Kolkata Municipal Corporation found that women councillors fared very well in programme implementation, and they had advanced community services and interests. This, in turn, rewarded the women leaders as they got re-elected from their wards, even after they were declared open seats.
• Women councillors had also excelled in fund utilisation. It varied from 60 to 90 percent and utilisation below 50 percent was rare.
• Occupying positions such as mayor or chairpersons of statutory municipal committees equip women with skills needed for higher levels of political office. These also have a multiplying effect and encourage other young women and girls to aspire for positions of leadership.

Shortfalls in gender reservation in ULBs

• Gender reservations at the local level have failed to become a platform for women to move into state and national politics and the number of women elected at the state and national level have barely improved. There are less than 15 percent women legislators in assemblies and Parliament.
• Despite the effective implementation of the reservation for over two decades, gender inequalities remain in party hierarchies, and women continue to be kept out of key governance posts.
• Within the ULBs, one witnesses the wide-spread tokenism that exist within gender-reserved seats, where wives of councillors have stepped into the shoes of husbands who have found themselves blocked by gender reservation. Husbands continue to control the wards as elected wives work as proxies for their husbands.
• Political parties have a pivotal role in regard to women’s political participation. It is the parties that determine which candidates are nominated, and it is their assessment about which candidates are likely to be elected that prevails in the process of selection.

Challenges faced by Women in PRIs

• Many women are not allowed to contest elections and many continue to work as proxies for their male family members. Their male co-workers show insensitivity and may refuse to cooperate. Burden of household responsibilities, purdah (veil) system and domestic violence negatively affect their functioning.
• Majority of women representatives enter into public life for the first time and do not have enough knowledge and skills to handle affairs of panchayats. Training programmes conducted by government training agencies are unable to cover all elected representatives in time.
• A few States like Odisha and Rajasthan have the two-child norm for contesting panchayat elections. In rural areas women hardly have any say in the number of children in the family and such laws restrict their entry into panchayats.
• Lack of women coworkers and at higher administrative level also hinders the free functioning of women representatives.

Way Forward

• The objectives sought to be served through gender reservation in ULBs should not be stopped just at women empowerment and gender justice – attention should also be paid to the issues that are specifically related to urban women. Though women constitute almost half the city’s population and have customised needs in the city, there is not much evidence of any pronounced focus on their problems by women councillors.
• Women form a small percentage of the work force in Indian cities (just over 10% participation on average) – this situation is unfair as it may pose to be hindrance for functioning of women representatives, and steps need to be taken so that more women can get employed.
• Women with small children need support systems that take care of their children, allowing them to go to work. Those that work in the informal sector or produce goods need access to markets.
• Women-led households, where they are the sole providers, especially require assistance through support services.
• No significant effort seems to have been made by women councillors in increasing the employment percentage or in providing specialised services – hence, women need facilities that allow acquisition of skills and skill upgradation through capacity building programmes.
• There is, therefore, a clear need for capacity building programmes that target women councillors to enable them further to perform the normal functions of councillors as well as proactively play a strong advocacy role in the ULBs for the focused needs of women citizens.

-Source: The Hindu

China’s BRI Investments decline, EU plans €300 billion counter

Context:

The European Commission announced a plan to mobilise €300 billion ($340 billion) in public and private infrastructure investment around the world, a move seen as a response to China’s Belt and Road strategy.

According to a China based think tank report, investments in China’s much-touted Belt and Road Initiative (BRI) have fallen by 5% since 2019.

Relevance:

GS-II: International Relations (India’s Neighbors, Foreign Policies affecting India’s Interests)

Dimensions of the Article:

1. What is Belt and Road Initiative (BRI) One Belt One Road (OBOR)?
2. About the Current Status of investments in BRI
3. About the study on Debts due to BRI
4. Initiatives to Tackle BRI by other countries
5. More about EU’s Global Gateway Plan
6. Steps taken by India to Counter the BRI/OBOR

What is Belt and Road Initiative (BRI) One Belt One Road (OBOR)?

• One Belt One Road (OBOR), also called the Belt and Road Initiative (BRI), the brainchild of Chinese President Xi Jinping, is an ambitious economic development and commercial project that focuses on improving connectivity and cooperation among multiple countries spread across the continents of Asia, Africa, and Europe spanning about 78 countries.
• Initially announced in the year 2013 with the purpose of restoring the ancient Silk Route that connected Asia and Europe.
• The project involves building a big network of roadways, railways, maritime ports, power grids, oil and gas pipelines, and associated infrastructure projects.
• The project covers two parts:
  • The first is called the “Silk Road Economic Belt,” which is primarily land-based and is expected to connect China with Central Asia, Eastern Europe, and Western Europe.
  • The second is called the “21st Century Maritime Silk Road,” which is sea-based and is expected to will China’s southern coast to the Mediterranean, Africa, South-East Asia, and Central Asia.
• Landlocked Nepal has also joined OBOR by signing a deal that will help it improve cross-border connectivity with China, and Pakistan is set to benefit from the $46 billion China Pakistan Economic Corridor (CPEC) that will connect southwestern China to and through Pakistan, allowing access to Arabian Sea routes.

About the Current Status of investments in BRI

• More than 100 countries signed agreements with China to cooperate in BRI projects like railways, ports, highways and other infrastructure.
• From 2000 to 2020, China helped African countries build more than 13,000 kms of roads and railways, and more than 80 large-scale power facilities, and funded over 130 medical facilities, 45 sports venues and over 170 schools and built the African Union Conference Centre.
• According to the China-based think tank report, investments in China’s much-touted Belt and Road Initiative (BRI) have declined by 5% since 2019.
• The fall in investments was contributed to unsuccessful deals and the Covid-19 pandemic. In addition, due to criticism over infrastructure debt and loan defaults, China is no longer providing hard cash for projects in Africa.
• Lack of transparency of the BRI agreements and mounting debt to China by smaller countries have raised global concerns. Example: The 99-year lease of Hambantota port to China by Sri Lanka has raised red flags about the downside of the BRI and push for major infrastructure projects costing billions of dollars in small countries.

About the study on Debts due to BRI

• A new study by AidData, a development research lab at the College of William & Mary in the U.S., has found that the Chinese debt burdens among many countries under China’s Belt and Road Initiative (BRI) are substantially larger than previously estimated.
• Notably, most of this debt remains hidden from the country’s accounts as an increasing number of the project deals are being struck not directly between governments but structured through often opaque arrangements with a range of financing institutions. Hence, they remain systematically under-reported to the World Bank’s Debtor Reporting System (DRS).
• Currently, nearly 70% of China’s overseas lending is now directed to state-owned companies, state-owned banks, special purpose vehicles, joint ventures, and private sector institutions. This leads to what experts have termed as opaque lending practices of China.
• The study estimates that the average government is under-reporting its actual and potential repayment obligations to China by an amount that is equivalent to 5.8% of its GDP and collectively, these under-reported debts are worth approximately $385 billion.
• 42 countries now have debt exposure to China in excess of 10% of GDP. India ranked 23rd in the list of top recipients of Chinese loans from 2000 to 2017, receiving $8.86 billion.

Initiatives to Tackle BRI by other countries

1. The G7 Countries proposed a ‘Build Back Better World (B3W) initiative’ at the 47th G7 summit to counter China’s BRI – aimed at adressing the infrastructure investment deficit in developing and lower income countries.
2. An initiative formed by the US, Japan and Australia – called Blue Dot Network (BDN) – was formally announced in 2019 at the Indo-Pacific Business Forum in Bangkok, Thailand. It aims to bring together governments, the private sector and civil society to promote high-quality, trusted standards for global infrastructure development.
3. European Commission has announced an international infrastructure plan called the “Global Gateway Plan” which aims to invest €300 billion ($340 billion) globally in infrastructure, digital and climate projects by 2027.

More about EU’s Global Gateway Plan

• The Global Gateway Plan will help strengthen health, education and research systems across the world by investing €300 billion ($340 billion) globally.
• The investment will be made in projects that can be delivered with high standards, good governance, transparency while ensuring financial sustainability at the same time.
• The Plan will be implemented in a Team Europe approach that brings together funding by the EU, its Member States and European financial institutions. The plan will also require buy-ins from international institutions and the private sector as well.

Steps taken by India to Counter the BRI/OBOR

• India has taken its own steps to provide practical alternatives to BRI which are economically viable and strategically balance Chinese spreading sphere of influence.
• India has rightly transformed its ‘Look East’ policy to ‘Act East’ policy. Strong relations with Vietnam, pursuance of Trilateral Highway project, proposed Mekong-Ganga Economic Corridor, strengthening BIMSTEC and developing maritime relations with Indonesia and Singapore are steps in this ambit.
• Further with ‘Go West’ strategy, India is pursuing to be a partner in International North South Transport Corridor, ensuring access to Central Asia.
• India’s interest in development of strategic Chabahar port in Iran is viewed as a counter to Gwadar. Additionally, India and Japan are also collectively working on ‘Asia Africa Growth Corridor’ (AAGC).
• On the strategic front, India has donned the role of a ‘Net Security Provider’ in the Indian Ocean Region (IOR).
• The Indian Navy, transforming its operational philosophy to ‘mission-based deployment’ is playing a key role in ‘securing the seas’.
• Through the conduct of joint naval exercises such as Malabar, Varuna, MILAN, coordinated patrol with neighbouring regional navies; participation in RIMPAC (Rim of Pacific Exercise), KOMODO multinational exercises; goodwill visits to foreign ports and HADR (Humanitarian Assistance and Disaster Relief) – the Indian Navy has built strong partnerships with strategic partners.
• Further, through strong security relations with the IOR countries such as Seychelles, Mauritius and Oman and leading role in promoting collective security forums like Indian Ocean Naval Symposium (IONS), India has gained a leading and respectful position in the IOR.

-Source: The Hindu, Business Standard

‘Monetary policy is financially inclusive’: RBI Deputy Governor

Context:

The Reserve Bank of India (RBI) Deputy Governor observed the significance of the monetary policy and financial inclusion.

Relevance:

GS-III: Indian Economy (Monetary Policy, Inclusive Growth)

Dimensions of the Article:

1. What does Financial Inclusion mean?
2. About the Monetary Policy Committee (MPC)
3. Objectives of the MPC
4. What is the Significance of Monetary Policy for Financial Inclusion?

What does Financial Inclusion mean?

• Financial inclusion means the availability and equality of opportunities to access financial services. It refers to a process through which individuals and businesses can access appropriate, affordable and timely financial products and services.
• The financial products and services include equity, banking, loan and insurance products.
• The efforts to broaden financial inclusion target those who are unbanked or underbanked and directs sustainable financial services to them.
• Simply put, financial inclusion extends beyond opening a bank account, as it is possible for individuals with bank accounts to be excluded from financial services.
• A more inclusive financial system is linked to stronger and more sustainable growth and development and that is why it has become a key priority for countries across the world.

About the Monetary Policy Committee (MPC)

• The Monetary Policy Committee of India is responsible for fixing the benchmark interest rate in India.
• The meetings of the Monetary Policy Committee are held at least 4 times a year and it publishes its decisions after each such meeting.
• The committee comprises six members – three officials of the Reserve Bank of India and three external members nominated by the Government of India.
• They need to observe a “silent period” seven days before and after the rate decision for “utmost confidentiality”.
• The Governor of Reserve Bank of India is the chairperson ex officio of the committee.
• The Reserve Bank of India Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC which will bring more transparency and accountability in fixing India’s Monetary Policy.
• The monetary policy is published after every meeting with each member explaining his opinions.
• The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months.
• Key decisions pertaining to benchmark interest rates used to be taken by the Governor of Reserve Bank of India alone prior to the establishment of the committee.
• The Governor of RBI is appointed and can be disqualified by the Government anytime.

Objectives of the MPC

• Monetary Policy was implemented with an initiative to provide reasonable price stability, high employment, and a faster economic growth rate. The major four objectives of the Monetary Policy are mentioned below:
  • To stabilize the business cycle.
  • To provide reasonable price stability.
  • To provide faster economic growth.
  • Exchange Rate Stability.
• Average inflation overshooting the upper tolerance level or remaining below the lower tolerance level for any three consecutive quarters constitutes a failure to achieve the inflation target.
• In such an event, the Reserve Bank of India (RBI) is required to send a report to the Centre, stating the reasons for the failure to achieve the inflation target, the remedial actions it proposes to initiate, and an estimate of the time-period within which it expects to achieve the inflation target through the corrective steps proposed.

What is the Significance of Monetary Policy for Financial Inclusion?

Monetary policy and financial inclusion have a two-way interaction.

• India’s monetary policy is financially inclusive by design, and more participation would improve policy efficacy over time by building social intolerance to inflation.
• It is undeniable that financial inclusion may reduce inflation and production volatility.
• This is accomplished through smoothing consumption by allowing consumers to withdraw money resources during difficult times for daily requirements.
• The inflation targeting monetary policy protects individuals on the periphery of financial inclusion from unfavourable income shocks that occur when prices increase unconscionably.
• Monetary policy’s effectiveness in reaching its stability goal improves when it targets a price measure that includes food costs rather than one that excludes them, such as core inflation.

-Source: The Hindu

Increased investments in ESG funds

Context:

The demand and growth for of ESG (Environment, Social and Governance) Funds in Asia, especially in India, has been overwhelming at more than 30%.

Relevance:

GS-III: Indian Economy

Dimensions of the Article:

1. What Are Environmental, Social, and Governance (ESG) Criteria?
2. What are ESG (Environment, Social and Governance) Funds?
3. Significance of ESG funds
4. Reasons for the growth of ESG funds

What Are Environmental, Social, and Governance (ESG) Criteria?

• Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.
  • Environmental criteria consider how a company performs as a steward of nature.
  • Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.
  • Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
• Many mutual funds, brokerage firms, and robo-advisors now offer products that employ ESG criteria.
• ESG criteria can also help investors avoid companies that might pose a greater financial risk due to their environmental or other practices.

What are ESG (Environment, Social and Governance) Funds?

• ESG (Environment, Social and Governance) Funds are, in a way, a type of mutual funds (regulated by Securities and Exchange Board of India, SEBI), used synonymously with sustainable investing or socially responsible investing.
• While selecting a stock for investment, the ESG fund shortlists companies that score high on environment, social responsibility and corporate governance, and then looks into financial factors. – This is different from typical Mutual Funds that look for a good stock of a company that has potential earnings, management quality, cash flows, the business it operates in, competition etc.
• Therefore, the key difference between the ESG funds and other funds is ‘conscience’ i.e., the ESG fund focuses on companies with environment-friendly practices, ethical business practices and an employee-friendly record.

Significance of ESG funds

• As ESG funds gain momentum in India, companies will be forced to improve governance and ethical practices, and act with greater social and environmental responsibility.
• As the policy framework changes, companies that do not alter business models or become more environmentally sustainable, could have their revenue and profits impacted in the long term.
• Globally, many pension funds and sovereign wealth funds do not invest in companies that are seen as polluting or socially not responsible.

Reasons for the growth of ESG funds

• Greater policy focus on aspects such as cleanliness, skill development, expanded healthcare coverage, and education indicates potential public investment in these social development and environmentally sensitive sectors of the economy.
• There is increasing awareness and understanding among younger investors about the impact of business on social development and environment.
• Modern investors are re-evaluating traditional approaches, and look at the impact their investment has on the planet. Thus, investors have started incorporating ESG factors into investment practices.

-Source: The Hindu