R2R SSB BATCHES START EVERY 1ST & 15TH of month. Referred articles were published in The Hindu.
1: A Practical, Pragmatic, and Innovative Education: Higher Education Reforms in India
Background
- There's an urgent need to address challenges in practical utility, employability, global capacity, and the innovativeness of university research in India.
- The National Education Policy (NEP) 2020 aims for a long-term structural reform, envisioning education in a three-fold way: improving research, creating skilled professionals, and fostering innovation globally.
- The NEP proposes a four-year flexible teaching program that integrates vocational skills and emphasizes earning while learning.
- This approach aims to bridge the gap between academic learning and industry requirements, with students gaining practical experience.
- The NEP seeks to prepare students for global competitiveness.
The Situation Now - The NEP focuses on skills and industry needs, with over 30,000 students currently enrolled in degree programs or short-term vocational courses.
- 197 universities and 93 colleges offer internships to 36,75,568 students at the undergraduate level, with 58,334 students placed for internships in the past five years.
- Research and Development (R&D) cells have been established in 242 universities and 113 colleges, fostering innovative research skills.
- In terms of global competition and innovation, India ranks Q500 among countries, with 163 universities from India.
- India has seen a 26.7% jump in total entries, with 10 higher education institutions (including 8 Indian Institutes of Technology, and two Indian Institutes of Management) placed in the global top 50 across various disciplines.
- India's capacity in higher education has grown, with 7.40% of Ph.D.s from India in 2022. India's performance in the Global Innovation Index has been laudable, with an experimental improvement from a decade ago.
- In the SNP period, there has been much change in the Indian research and innovation sphere.
- The National Research Foundation (NRF) Act, 2023, the All India Council for Technical Education (AICTE) initiatives, and the Scheme for Promotion of Academic and Research Collaboration (SPARC) have contributed to intellectual property.
- SPARC has been instrumental in fostering cultural exchange and research collaborations, with 28 countries, including the United States, the United Kingdom, Australia, and France, having participated.
- Indigenous scientific imagination and education is prioritized, with the Indian Knowledge System (IKS) 2020 framework being implemented.
- The Smart India Hackathon is nurturing innovation at the grassroots level, with 13.9 lakh students participating and 18.5 lakh ideas submitted, showing sevenfold growth since 2017.
- Sustainable employment faces challenges due to multifaceted issues like economic downturns and the COVID-19 pandemic.
- Employment conditions have improved, with 29% to 44% between 2014 and 2019, and from 2018-19 to 2022-23, employment has grown by 6%.
- For all age groups, employment has increased by 1.6%. For female employment, the rate grew by 30.7% in 2022-23.
- The proportion of regular workers has grown, from 17.2% in 2004-05 to 24.88% in 2022-23.
- Informal employment (casual labor, especially among females) constitutes 30.1% to 19.66%, and overall (28.85%) in unemployment data.
- A qualitative transition survey suggests irregular, unorganized, and low-paying jobs. There is an increase in the proportion of regular workers (from 17.2% in 2004-05 to 24.88% in 2023-24), suggesting that more individuals are moving into formal and structured job roles.
Way Forward - The data and changes in employment conditions highlight the need for a strong societal effort to create stable, productive, and innovative employment opportunities.
- Continued focus on industry-academia linkage, vocational training, and global competitiveness will be crucial for sustained growth.
2: Sound and Fury: India Needs Societal Effort in IMD ForecastsBackground - The southwest monsoon arrived in Kerala a week ahead of its scheduled arrival on June 1.
- This early arrival was not unexpected by meteorologists.
- Monsoon arrival in Kerala is a crucial milestone before its spread over the rest of India.
- Monsoon rainfall has been irregular over the last 35 years, with a pro-cyclonic circulation in the Arabian Sea impacting parts of Maharashtra and the Konkan Coast.
- The India Meteorological Department (IMD) forecasts an 'above normal' monsoon, with a 5% increase from the historical average of 87 cm, and has since increased it to 6% above average.
The Situation Now - One of the key aspects of IMD's measurement of monsoon rainfall is that it counts rainfall from June 1 to September 30 as 'monsoon rainfall.'
- Kerala, Mumbai, and other cities experienced heavy rainfall on May 24 when the monsoon landed.
- The IMD has indicated that it anticipates 'above normal' rains this year.
- This news is positive for agriculture, helping to improve crop yields and build up reserves for exports.
- The monsoon and forecasts are seen as a vital component of Indian agriculture, and a significant portion of India relies on it for growth.
- Unpredictable rainfall due to climate change is leading to erratic rainfall and disruptions in livelihoods.
- Flooding in overwhelmed cities is no longer limited to major metropolises but also tier-2 and tier-3 towns.
- Several of these cities are not equipped for 'normal' rainfall administration.
- States and central governments must effectively incorporate the changes from climate change into citizen forecasting, to help avoid future disruptions.
Way Forward - Improved and high-resolution forecasts are a positive development, but they require a broader societal effort to incorporate their warnings into everyday life.
- The nation needs to develop better infrastructure and planning to mitigate the impacts of erratic rainfall and urban flooding.
- Continuous efforts are needed to make communities resilient to the effects of climate change.
3: India's Financial Sector Reforms Need a Shake-up
Background - India's financial sector is at an inflection point, with government and regulators having implemented incremental reforms in banking, financial services, and the financial system.
- These reforms are not sufficient.
- The financial sector faces challenges like disruptors and slow growth.
- A truly professional, transparent, and investment-friendly financial sector demands deep structural reforms, particularly for corporate bond markets, retirement planning instruments, non-performing assets (NPAs), and the growth of shadow banking.
The Situation Now - The government has nominated individuals across various financial bodies (banks, mutual funds, insurance) for fixed terms, but this approach does not have a legal or logical basis.
- Some nominees are chosen through political influence, undermining the system.
- Public interest is served by maintaining three separate nomination regimes.
- A harmonized nomination framework with clarity on criminal rights versus legal fault claims is overdue.
- The current framework is inefficient, with the government making decisions without sufficient evidence.
- The large structural lacuna in India's financial landscape is the underdeveloped corporate bond market.
- Despite years of policy pronouncements, it remains shallow, illiquid, and opaque.
- The biggest determinant of capital is the single-matter because the cost of capital is high.
- The inefficient bond market can reduce funding costs by 2% to 3%, potentially unlocking massive gains for industry and employment.
- The Reserve Bank of India once expanded the National Stock Exchange (NSE) to develop a secondary bond market, but this directive was ignored.
- Equity trading offers more profit, especially through opaque algorithmic strategies that attract regulatory scrutiny and journalistic exposures.
- A journalist called out malpractices when the NSE responded with a ₹100-crore defamation suit, demonstrating the high court's stance.
- India's bond market regulatory concerns are exacerbated by lower regulatory comfort either, particularly around transparency in capital flows.
- A member of the Financial Action Task Force (FATF), India is committed to implementing Know Your Customer (KYC) norms, including Ultimate Beneficial Owners (UBOs).
- FATF's updated guidelines in 2022 underscore the need for countries to maintain accurate and accessible ownership data to prevent misuse of financial structures.
- In recent months, the Securities and Exchange Board of India (SEBI) has had to pause two Mauritius-based foreign portfolio investors (FPIs) who failed to disclose granular shareholder data related to their holdings.
- These funds reportedly did not comply with multiple disclosure requests, complicating regulatory oversight and delaying enforcement action.
- India's current UBO disclosure threshold (10%) for companies and 15% for partnerships creates loopholes, allowing entities to structure investments just below these limits, thereby avoiding identification.
- This makes it difficult to regulate or ascertain the true economic interest behind trades in Indian exchanges or bond markets, particularly when routed through jurisdictions such as Mauritius.
- This opaque ownership structure weakens market integrity and may inhibit sustained long-term investments, both domestic and foreign.
- Retirement planning for young Indians, especially in the informal sector, remains unmet.
- Retirement planning in India is mostly routed through annuities which are costly.
- There is a simpler and cheaper alternative: long-dated zero-coupon government securities.
- The government receives 2% intermediation fee over a 30-year period, leading to massive gains for the saver.
- The government already has the technology to "strip" principal and coupon payments, and offers zero-coupon bonds.
- The government and the Reserve Bank of India have shown little initiative.
- Shadow banking is a major blind spot, with non-banking financial companies (NBFCs), lending repos, and brokerages posing systemic risks.
- India's shadow banking sector is a full regulatory oversight, and it is facing a financial crisis.
- In 2008, the financial crisis originated in the United States via unregulated derivatives.
- In India, retail investors are being financed by brokers who offer loans masked as margin funding.
- The effective interest rates in such transactions can exceed 20%, often without the investors even realizing it.
- The broker folds the investor's contribution as collateral, lending it back to them.
- The European Union has already passed legislation to gather comprehensive data on shadow banking activities.
- India must follow suit.
- Transparency must precede regulation, and data is the first step toward transparency.
- India's financial sector reforms must go beyond slogans and cosmetic amendments.
Way Forward - India needs a forward-looking strategy that harmonizes rules, innovates in retirement finance, and reins in shadow banking.
- Structural reforms are crucial for the bond market, and for addressing issues like NPAs and the growth of shadow banking.
- Transparency and data collection are paramount to ensure financial stability and prevent future crises.
4: The Importance of the Deputy Speaker: A Constitutional Role
Background - The Deputy Speaker is not a mere substitute for the Speaker but plays an indispensable role in maintaining the continuity of legislative work.
- Conventionally, this position has been handed down to the Opposition, to develop harmony between the ruling party and the Opposition.
- The Deputy Speaker's position has been vacant for six years, raising questions about the constitutional adherence and democratic practice in Parliament.
- The position has gained ceremonial significance and is indispensable to parliamentary democracy.
- The present scenario of the Deputy Speaker must be understood through some very important questions.
- The framework of the Constitution was adopted by the framers to ensure the effective representation of the people of India in the political system.
- This idea would be lost if the system did not function properly, effectively, and smoothly.
- It is extremely important that debates and discussions between the ruling establishment and the Opposition remain in proper order, the government is accountable, and that checks and balances are ensured.
- It has been alleged that the ruling government has purposely delayed the election of the Deputy Speaker to an Opposition member.
- This is against the principle of parity of power, which is one of the pillars of a successful parliamentary democracy.
- Many constitutional conventions have statutory effect in cases of absence.
The Situation Now - The Deputy Speaker's role is not a mere substitute of the Speaker; he plays an indispensable role in maintaining the continuity of legislative work.
- He also presides over committees such as the private member's Bill and the House Budget Committee of Parliament, oversees crucial debates, and serves as a neutral arbiter during sensitive discussions.
- Provisions for the Deputy Speaker are listed under Article 93 of the Constitution. The language of the article indicates that the Deputy Speaker is 'as soon as may be' elected.
- While Article 93 provides for the election of the Deputy Speaker 'as soon as may be', it does not set a timeline.
- The misinterpretation of this phrase may lead to a long delay, which could import constitutional issues.
- The Speaker is empowered to preside over the House under Rule 8 of the Rules of Procedure and Conduct of Business in Lok Sabha 1952.
- The Speaker can also fix the date of the Deputy Speaker's election.
- A member can propose a Deputy Speaker, and the Speaker can preside over a sitting House.
- According to Article 180 of the Constitution, the Deputy Speaker acts as the Speaker when the Speaker's chair is vacant.
- This vacancy violates Articles 93, 94, and 180 of the Constitution.
- The government of India did not appoint a Deputy Speaker in the 17th Lok Sabha (2019-24), and it appears now that it does not have the intention to appoint one in the 18th Lok Sabha as well.
- While Article 93 provides for the election of the Deputy Speaker "as soon as may be," it does not set a timeline.
- The misinterpretation of this phrase may lead to a long delay, which could import constitutional issues.
- The Deputy Speaker is constitutionally a conventional role.
- The position is meant to ensure that the Speaker and the ruling party collaborate with the Opposition.
- In fact, the constitutional convention to strike a delicate balance between the ruling party and the Opposition to ensure that parliamentary democracy is maintained and sustained in the parliamentary system, based on the Westminster model, which mandates effective discussions and debates even in case of disruption.
- A serious crisis of incapacitation of a Speaker or even death can result in a fundamental disruption of the democratic system.
Way Forward - The absence of a Deputy Speaker undermines the spirit of consensus politics.
- It is crucial to appoint a Deputy Speaker to maintain the balance of power and ensure the effective functioning of Parliament.
- A clear timeline for the election of the Deputy Speaker should be established and adhered to, to prevent future constitutional issues.
NEWS IN SHORTS
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Govt. notifies rules enabling greater ‘jointness’, command efficiency in armed forces
The Indian government has notified new rules under the Inter-Services Organisations (Command, Control and Discipline) Act 2023. These rules aim to enhance "jointness" and operational efficiency among the armed forces by empowering Commanders-in-Chief to maintain discipline and exercise control over personnel.
