GS 2
Category: POLITY AND GOVERNANCE
- Land acquisition order gifted govt. laxity: CJI
The issue in news
The Chief Justice of India (CJI) has questioned the infallibility of a land acquisition judgment delivered by a Constitution Bench, led by Justice Arun Mishra stating that the verdict had left things unsaid.
Main points:
- The CJI, heading a three-judge Bench, said the order gifted the government laxity in several aspects.
it was pointed out that:
- The verdict does not specify for how long the government could possess a land acquired without paying compensation.
- The verdict does not give clarity on when the acquisition would lapse.
- The Parliament also did not provide clarity with respect to those aspects under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013.
Land Acquisition Judgement March 2020:
- In March 2020, a Constitution Bench, led by Justice Arun Mishra gave out a judgement on Section 24 on land acquisition compensation awards.
- The five-judge Bench also overruled an earlier 2014 ruling under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013.
- The judgment had declared that acquisition would only lapse if the government had neither taken possession nor paid the compensation due to the landowner for five or more years prior to January 1, 2014.
- The compensation would be considered paid if the amount is put in the Treasury.
- There was no obligation that the amount should be deposited in the court in order to sustain the land acquisition proceedings.
- Thus, there is no lapse if possession has been taken and compensation has not been paid.
- Also, if compensation has been paid and possession not taken of the land, there is no lapse.
GS 3
Category: DEFENCE
- Offset clause goes for IGAs
The issue in news
The new Defence Acquisition Procedure (DAP), 2020 has been released. The draft was finalised by a committee headed by the Director General Acquisition, Defence Ministry that was set up in August 2019.
Main points
- The first Defence Procurement Procedure (DPP) was promulgated in the year 2002 and has since been revised periodically to provide impetus to the growing domestic industry and achieve enhanced self-reliance in defence manufacturing.
- DAP 2020 has been aligned with the vision of the government of Atmanirbhar Bharat and empowering the Indian domestic industry through the Make in India initiative.
The Defence Acquisition Procedure (DAP), 2020:
- The Defence Ministry has removed the offset clause requirement in Inter-Governmental Agreements (IGA). From now on there will be no offset clause in government-to-government, single vendor and IGAs.
- It also introduces a new category for leasing of military equipment.
Other proposed measures include:
- Making after-sales support a part of the capital acquisition contract Higher indigenous content in acquisitions Incentives for local material and software and emphasis on product export under offsets.
- Leasing has been introduced as a new category for acquisition in addition to the existing ‘Buy’ and ‘Make’ categories.
- This would substitute huge initial capital outlays with periodical rental payments.
- A new procedure has been included as a new chapter in Defence Acquisition Procedure and structured as an enabling provision for Services to procure essential items through Capital Budget under a simplified procedure in a time-bound manner.
Note:
- Under the offset clause, foreign companies are required to invest part of their deal value in the country, and meant to improve the domestic defence manufacturing.
- Recently, the Comptroller and Auditor General (CAG) had observed that French defence majors Dassault Aviation and MBDA have till date not confirmed the transfer of technology to the Defence Research and Development Organisation (DRDO) under the 60,000 crore deal for 36 Rafale fighter jets.
- The deal has a 50% offset clause to be executed by the French companies.
Category: ECONOMY
- ‘New codes don’t promote hire and fire’
The issue in news
The Parliament has passed three Bills in the Lok Sabha to amalgamate laws on social security, occupational safety and health and industrial relations.
Main points
- Concerns have been raised about the increase in threshold from 100 workers to 300 workers for seeking prior permission for retrenchment, lay-off and closure.
The governments response:
- Workers’ rights such as notice before retrenchment, compensation at the rate of 15 days wages per completed year of service and pay in lieu of notice period have not been compromised.
- Further, the Industrial Relations Code envisages an additional monetary benefit equivalent to 15 days of wages under the newly created Reskilling Fund.
- There has been no empirical evidence to suggest that higher threshold promotes hire and fire.
- The Ministry also said that the Economic Survey, 2019 analyzed the pain of dwarfism prevalent in Indian firms.
- Dwarfism refers to the phenomenon in which firms survive for more than 10 years but their growth in terms of employment is stunted.
- It was observed that the threshold under labour legislation creates a perverse incentive to remain small.
- The Ministry said fixed-term employment had already been notified by the Central Government and 14 States.
- It was pro-worker and such employees would be eligible for all benefits and service conditions that a regular employee enjoyed.
- Non-availability of fixed-term employment implied that an employer had options to either employ on regular basis or through contractual basis.
- The employment of workers through contractual basis means higher transaction cost to the employer, lack of permanence of contract labour, untrained and unskilled contract labour.
- It also lacks a committed and long-term relationship between employer and contract labourer, as there are on the ground, two employers, i.e., contractor and principal employer.
- RBI extends enhanced borrowing limit for banks till March 31
The issue in news
The Reserve Bank of India has decided to extend the enhanced borrowing facility provided to banks to meet the shortage of liquidity by six months.
Main points
- The RBI had increased the borrowing limit for scheduled banks under the marginal standing facility (MSF) scheme from 2% to 3% of their net demand and time liabilities (NDTL) with effect from March 27, 2020.
Significance:
- The announcement comes as a move to provide comfort to banks on their liquidity requirements.
- It provides increased access to funds and also qualifies as high-quality liquid assets (HQLA) for the liquidity coverage ratio (LCR).
- It enables banks to continue to meet LCR requirements.
- The liquidity coverage ratio (LCR) is the requirement whereby banks must hold an amount of high-quality liquid assets that’s enough to fund cash outflows for 30 days.
Marginal Standing Facility:
- Marginal standing facility (MSF) is a window for banks to borrow from the Reserve Bank of India in an emergency situation when inter-bank liquidity dries up completely.
- Banks borrow from the central bank by pledging government securities at a rate higher than the repo rate under the liquidity adjustment facility.
- The MSF rate is pegged 100 basis points or a percentage point above the repo rate.
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