Category: INTERNATIONAL RELATIONS
Australia rejects China’s sea claims
Why in news
Australia’s formal declaration to the UN on the South China Sea dispute.
- In a formal declaration to the UN, Australia has rejected China’s territorial and maritime claims in the South China Sea.
- Australia has held that there is no legal basis for China’s historic claims in the South China Sea.
Australia- U.S. compact:
- Australia’s declaration to the UN comes after the U.S. Secretary of State declared China’s pursuit of territory and resources in the South China Sea as illegal, backing the claims of Southeast Asian countries against China’s claims.
- Through this move, Australia seems to be aligning itself more closely with the U.S. in the escalating tensions between China and the U.S.
- S. relations with China have markedly deteriorated in recent months, especially over trade disputes, the COVID-19 pandemic and China’s crackdown on dissent in Hong Kong.
- The latest escalation comes ahead of annual talks between Australia and the U.S.
Category: POLITY AND GOVERNANCE
Cabinet decision binding on Governor
Why in news
Political turmoil in the state of Rajasthan.
- There has been a deadlock between Rajasthan Governor and Rajasthan Chief Minister over the summoning of an Assembly session for a floor test.
- While the Chief Minister has been demanding the summoning of an Assembly session at the earliest, the Governor has not been receptive of the demand.
- The article discusses a key Supreme Court judgment which could act as a guiding light during the current deadlock.
- Nabam Rebia versus Deputy Speaker, 2016: In the Nabam Rebia versus Deputy Speaker case of 2016, a Constitution Bench of the Supreme Court had held that a Governor is bound to convene a meeting of the Assembly for a floor test on the recommendation of the Cabinet.
Important observations made in the judgment:
- The judgment was based on the constitutional provision which states that the Governor can summon, prorogue and dissolve the House only on the aid and advice of the Council of Ministers with the Chief Minister as the head.
- Article 163 of the Indian constitution notes that there shall be a council of Ministers with the Chief Minister at the head to aid and advise the Governor in the exercise of his functions.
Limited discretionary power for the governor:
- The Supreme Court has noted that despite the provision for some degree of discretion for the governor provided for under Article 163 (2) of the Indian Constitution, it does not mean a general discretionary power to act against or without the advice of his Council of Ministers.
- This judgment limits the Governor’s discretionary power to specific areas. It noted that the Governor’s discretionary powers are limited to specified areas like giving assent or withholding/referring a Bill to the President or appointment of a Chief Minister or dismissal of a government which has lost confidence but refuses to quit, etc.
- The judgment further held that even in areas where there is scope for discretion for the governor, the action should not be arbitrary or fanciful and must be dictated by reason, actuated by good faith and tempered by caution.
Responsible form of government:
- India has a parliamentary democracy with a responsible form of government. In such a form of government, the Governor functions only as a Constitutional or formal head of the State and his/her powers cannot be enlarged at the cost of the Council of Ministers, who are the real executive.
Constituent assembly discussions:
- The judgment noted the fact that even the Constituent Assembly was wary of extending the Governor’s discretion.
- Though the draft Constitution had vested the Governor with the discretion to summon and dissolve, it was later omitted by the framers of the Constitution.
- 200 proposals from China wait for security clearance by MHA
Why in news :
About 200 investment proposals from China are awaiting security clearance from the Ministry of Home Affairs (MHA).
- In April 2020, new rules making prior government approval mandatory for foreign direct investments (FDI) from countries which share a land border with India were notified by the Department for Promotion of Industry and Internal Trade (DPIIT).
- Investors from countries that are not covered by revised FDI policy are only required to inform the Reserve Bank of India after the completion of a transaction.
- They do not have to seek prior clearance from the administrative ministry.
- The amendment was aimed at preventing “opportunistic takeovers” of Indian companies amid the COVID-19 pandemic.
- Recently, the Centre amended the General Financial Rules, 2017.
- The amendment was to enable the imposition of restrictions on bidders from countries which share a land border with India in relation to public procurement for reasons of national security and other factors directly or indirectly related to the country’s defence.
- Earlier, these proposals did not require MHA’s nod as FDI is allowed in non-critical sectors through the automatic route.
- For investments in critical sectors such as defence, media, telecommunication, satellites, private security agencies, civil aviation and mining and any investments from Pakistan and Bangladesh, security clearance from MHA was required.
- With the delays in approval and the proposals remaining in the pipeline for months, it is possible that many might withdraw due to the delay or stringent conditions put in place.
- Foreign investment in India has proved to be a game-changer in many sectors like automobiles, pharmaceuticals, aviation, real estate, and fintech, providing employment, transmitting technology, and adding value to the economy.
- Sectors like automobiles, construction, real estate, other service sectors, that are already stressed due to decelerating demand, tepid lending, and India’s inherent weakness in capital formation could further face severe consequences.
- This could also result in fewer potential buyers, depressing the value of Indian firms that need immediate capital infusions.