SECURE SYNOPSIS: 31 AUGUST 2019
NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.
Topic: Indian Constitution- historical underpinnings, evolution, features, amendments, significant provisions and basic structure.
Rationale behind Aadhar-Social Media link:
- The dangers of the dark web are a compelling reason behind Aadhar-Social Media link.
- There are rising instances of cyberbullying, spreading of defamatory and humiliating messages and other intolerable activities on social media. Aadhar-Social media link can help reduce it.
- Aadhaar-social media linking is needed to keep a check on fake news and defamatory, anti-national and terror-sponsoring articles or content and pornographic material on social media.
- The State also referred to the Blue Whale game, which had reportedly claimed the lives of several children in India.
Threats posed to Right to privacy by Aadhar-Social Media link:
- The linking of user profiles on social media with Aadhaar would make every message and post by the user traceable.
- Though the move will serve as a deterrent to social media instigators and perpetrators of defamatory and fake posts, it would also violate the privacy of the users, keeping a record of each message along with the registered mobile number or email account.
- This would mean the end of private communications.
- The privacy experts fear that the linking would allow India’s nationalist government to force social media platforms to become surveillance tools.
Right to choice also affected due to Aadhar-Social Media link:
- It is unclear as of now of what will happen to those who don’t link their social media accounts to their 12-digit Aadhaar number. Will their accounts be deleted or blocked?
- It is also unclear what action will be taken against parody accounts of users.
- Users also have concerns that if a tweet they did years ago suddenly goes viral out of context then will all the people who shared it also get investigated or punished or will their accounts be deactivated?
Challenges apparent in the linking of Aadhaar number with social media profiles:
- The private use of Aadhaar itself has been controversial since the striking down of Section 57 of the Aadhaar Act.
- The limited eKYC provisions, which have been allowed only for banks and other regulated entities, are indicative of this.
- The use of Aadhaar, further, has mainly been restricted to receiving government benefits such as the Section 7 benefits.
- It is thus difficult, legally, to find a way to permit Aadhaar-social media linking within the ambit of the Supreme Court’s verdict on Aadhaar.
Need of the hour:
- The K.S. Puttaswamy decision (2017) in the ‘privacy’ case is worth mentioning here.
- Accordingly, any state intervention for regulation of online content has to pass the test of proportionality laid down by the court.
- Supreme Court stressed the need to find a balance between the right to online privacy and the right of the State to detect people who use the web to spread panic and commit crimes.
- The Supreme Court also called for Parliament to draft and pass a data protection law
- Supreme Court also impressed upon the respondents to bring out a robust data protection regime in the form of an enactment on the basis of Justice BN SriKrishna (Retd.) Committee Report with necessary modifications thereto as may be deemed appropriate.
- The government needs to move away from relying on Aadhaar and linking as a one-stop solution for issues ranging from terrorism (SIM linking), money laundering (bank account linking), electoral fraud (voter ID linking) and now cybercrime (social media account linking).
- It is without question that a solution is required, but it is increasingly worrying as the solutions move toward deprivation of fundamental rights and the first steps towards a possible surveillance state.
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
2) The idea of merging banks has become a practice in the recent past. In this context, discuss the issues and potential benefits associated with merging of Public Sector Banks. To what extent, it would help to address the burgeoning of Non-Performing Assets?(250 words)
Public Sector Banks (PSBs) in India are fragmented, with some of them reeling under the mounting pressures of Non Performing Assets (NPAs). Economic Survey points out that constant failure of banks to provide credit to both emerging and existing industries has resulted in stagnation in the economic growth of the nation. The government plans to merge 10 public sector banks into four. This would take the number of banks in the country from 27 in 2017 to 12.
Narasimham committee (1991 and 1998) suggested merger of strong banks both in public sector and even with the developmental financial institutions and NBFCs. PJ Nayak Committee in 2014 had also suggested that government either merge or privatize state-owned banks.
Benefits of mergers of bank:
- For Banks:
- Small banks can gear up to international standards with innovative products and services with the accepted level of efficiency.
- PSBs, which are geographically concentrated, can expand their coverage beyond their outreach.
- A better and optimum size of the organization would help PSBs offer more and more products and services and help in integrated growth of the sector.
- Consolidation also helps in improving the professional standards.
- This will also end the unhealthy and intense competition going on even among public sector banks as of now.
- In the global market, the Indian banks will gain greater recognition and higher rating.
- The volume of inter-bank transactions will come down, resulting in saving of considerable time in clearing and reconciliation of accounts.
- This will also reduce unnecessary interference by board members in day to day affairs of the banks.
- After mergers, bargaining strength of bank staff will become more and visible.
- Bank staff may look forward to better wages and service conditions in future.
- The wide disparities between the staff of various banks in their service conditions and monetary benefits will narrow down.
- For economy:
- Reduction in the cost of doing business.
- Technical inefficiency reduces.
- The size of each business entity after merger is expected to add strength to the Indian Banking System in general and Public Sector Banks in particular.
- After merger, Indian Banks can manage their liquidity – short term as well as long term – position comfortably.
- Synergy of operations and scale of economy in the new entity will result in savings and higher profits.
- A great number of posts of CMD, ED, GM and Zonal Managers will be abolished, resulting in savings of crores of Rupee.
- Customers will have access to fewer banks offering them wider range of products at a lower cost.
- Mergers can diversify risk management.
- For government:
- The burden on the central government to recapitalize the public sector banks again and again will come down substantially.
- This will also help in meeting more stringent norms under BASEL III, especially capital adequacy ratio.
- From regulatory perspective, monitoring and control of less number of banks will be easier after mergers.
Challenges associated with mergers:
- A complex merger with a weaker and under-capitalized PSB would stall the bank’s recovery efforts as the weaknesses of one bank may get transferred and the merged entity may become weak.
- Bigger banks may follow monopolistic behavior with increased market power – resulting in neglect of local needs.
- Amalgamation of balance sheet of PSBs will only impact NPA cosmetically, without actually working on NPA recovery. This will further divert the process of NPA resolution.
- Without addressing the governance issues in the banks, merging two or three public sector banks may not change the architecture.
- Unless there is a change in the operating structures, mergers may not deliver the desired results in the long run.
- Problems to adjust top leadership in institutions and the unions.
- Mergers will result in shifting/closure of many ATMs, Branches and controlling offices, as it is not prudent and economical to keep so many banks concentrated in several pockets, notably in urban and metropolitan centres.
- Mergers will result in immediate job losses on account of large number of people taking VRS on one side and slow down or stoppage of further recruitment on the other.
- This will worsen the unemployment situation further and may create law and order problems and social disturbances.
- Mergers will result in clash of different organizational cultures. Conflicts will arise in the area of systems and processes too.
- When a big bank books huge loss or crumbles, there will be a big jolt in the entire banking industry. Its repercussions will be felt everywhere.
- Giving the PSBs autonomy along with accountability.
- Merged entity will require capital support from the government, otherwise such a merger would not improve their capitalisation profile.
- Dual regulation by the Ministry of Finance and RBI on PSBs often results in paralysis in decision making – which makes consolidation of banks a redundant measure if they are not given power to act swiftly, as pointed by PJ Nayak.
- Governance of public banks needs to be improved before making any significant change in any emerging architecture.
- Bigger banks offer more resilience to the banking sector but overlooking bigger red flags like strong credit appraisal and risk control system would do little help in creating robust banks.
- Therefore due focus on ensuring strong foundation of PSBs is important.
- RBI should continue to give banking licences for more small finance banks as well as universal banks along with bank mergers
- Government on its part would do well to start infrastructure development banks to fund infrastructure projects and relieve PSBs of this task.
Merger is a good idea. However, this should be carried out with right banks for the right reasons. Merger is also tricky given the huge challenges banks face, including the bad loan problem that has plunged many public sector banks in an unprecedented crisis.
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
3) With the acceptance of the Bimal Jalan committee’s report, the Reserve Bank of India (RBI) agreed to transfer one lakh seventy six thousand to the government. Suggest the ways through which government can prudently utilize these funds?(250 words)
The central board of the Reserve Bank of India (RBI) recently decided to transfer a surplus of Rs 1.76 lakh crore to the government-its highest transfer ever-sparking a fierce debate. The government was, it must be noted, acting on the recommendations of a committee chaired by former RBI governor Bimal Jalan, on capital transfer.
Bimal Jalan committee Recommendations:
- The surplus from the central bank comprised two components-Rs 1.23 lakh crore of surplus for the year 2018-19 and an additional Rs 52,637 crore of excess provisions that was made available as per the revised economic capital framework recommended by the Bimal Jalan committee.
- It suggested that the framework may be periodically reviewed after every five years.
- It recommended to align the central bank’s accounting year with the financial year, which could reduce the need for paying interim dividend.
- The panel recommended clear distinction between the two components of economic capital, realised equity and revaluation balances. This is because of the volatile nature of the revaluation reserves.
- Only realised equity built from profits must be distributed.
- The panel recommended that the Contingency Fund be maintained within a range of 6.5% to 5.5% of RBI’s balance sheet.
- Hence, the excess from the pre-decided 5.5% level or Rs. 52,637 Cr has been written back, that is transferred to the Centre.
- Revaluation gains from market fluctuations on foreign currency, gold or other assets must be retained. Revaluation balances were not distributable.
- Hence, bulk of RBI’s legacy reserves are ring-fenced from transfer demands.
- The Bimal Jalan committee should also be complimented for clearly specifying that the revaluation reserve cannot be used to bridge shortfalls in other reserves.
Ways through which the fund can be used prudently:
- The amount could either be used to provide a fiscal stimulus to the economy-which is in the grip of a slowdown-
- It could be used to reduce off-balance sheet borrowings.
- The other option is to use it to meet an expected shortfall in revenue collections.
- In the Union budget, the government had presented an optimistic scenario of raising Rs 4.76 lakh crore in additional resources to meet budget expenses.
- However, since there is a clear slowdown ahead, this revenue target may not be met, in which case the surplus from the RBI would be used to bridge the shortfall.
- Normally, the money is transferred to the Consolidated Fund of India from which salaries and pensions to government employees are paid and interest payments done, besides spending on government programmes.
- The large pay-out can help the government cut back on planned borrowings and keep interest rates relatively low.
- If the government manages to meet its revenue targets, the windfall gain can lead to a lower fiscal deficit.
- The other option is to earmark these funds for public spending or specific projects, which could lead to a revival in demand in certain sectors and boost economic activity.
- If the tax revenue growth picks up, then the government can use the additional money to clear the dues of the Food Corporation of India and fertiliser companies to minimise spillover of deficits to the next year.
- The additional funds can also be used to spend on much-needed capital expenditure.
Views of Economists:
- Some economists have welcomed the move as it will help the government counter the shortfall in revenue and tax collection.
- Since inflationary pressure is low, economists believe that the move will not have a negative impact in the long run.
- Another group of economists which include the likes of Raghuram Rajan and former RBI governor Urjit Patel said earlier that the move could put RBI in a vulnerable position apart from diminishing its autonomy.
The decision of the RBI Board must be welcomed as it has not come a day sooner and should help the government in combating the economic slowdown and to conform to the fiscal targets. It is hoped that the government will be prudent in using these funds.
Topic: Various Security forces and agencies and their mandate.
4) The need for a single-point adviser between the government and the armed forces has been a long-standing demand of the defence establishment. In this context, discuss the challenges and strategic advantages of creating The Chief of Defence Staff post in Indian Army.(250 words)
The Chief of Defence Staff (CDS) is a high military office that oversees and coordinates the working of the three Services, and offers seamless tri-service views and single-point advice to the Executive (in India’s case, to the Prime Minister) on long-term defence planning and management, including manpower, equipment and strategy, and above all, “jointsmanship” in operations. It shall provide “effective leadership at the top level” to the three wings of the armed forces, and to help improve coordination among them.
CDS – the strategic advantages:
- The appointment of the CDS will certainly change the civil-military balance, and, if done correctly, will address some of the grievances of the Armed Forces pertaining to their status vis-à-vis the civil services.
- The underlying rationale for appointing a CDS is to separate management and command of the Armed Forces.
- To take the logic of the CDS to its conclusion, the Armed Forces must be operationally restructured into theatre commands—complete joint war-fighting formations—led by combatant commanders.
- In the years ahead, a combination of climate change, violent non-state actors and volatile politics will increase the demands on the government to deploy military forces beyond the subcontinent.
- Despite a multitude of threats, India’s Armed Forces have very limited capacity to operate overseas. Hence, the need for an expeditionary CDS.
- From a defence policy perspective, the CDS presents us with the opportunity to optimize defence economics and make expenditure more effective.
Challenges of CDS:
- The challenge, however, will be execution and preventing the political apprehensions, bureaucracy-military and inter-service rivalry from scuttling these reforms.
- Human capacity deficit: Each individual service neither understands modern industrial supply chains or economics of scale, but more importantly because their respective leaderships refuse to rationalise and streamline their services.
- Poor leadership and atrocious supply chains because of a heavily-outdated logistics chain, too many different types of ammunition and equipment to bring about economies of scale and general disinterest in logistics is complicating.
- The problem of mass producing cheap precision munitions is still absent in India.
- The heavily army-centric approach of the Indian military as a whole, ignoring the fact that it is air forces and navies that win modern wars.
- Worse still, while armies themselves have moved towards a less manpower-intensive paradigm, the Indian Army continues to invest heavily in manpower, as for example the ill-fated mountain strike divisions.
- To take the logic of the CDS to its conclusion, the Armed Forces should be operationally restructured into theatre commands
- The late strategic thinker K. Subrahmanyam argued that the army and navy chiefs should first hand over their command to theatre commanders, with the air chief doing so at a later stage.
- Three theatres are straightforward: Northern, Western and Southern to address the threats from China, Pakistan and the Indian Ocean, respectively.
- He envisaged doubling the air force to 60 squadrons by 2030 and placing them under theatre commands.
- The solutions are required at the foreign interaction, educational, and industrial level — not at the top, but at the bottom. This is not a macro problem, it is a severe micro problem.
Most countries with advanced militaries have such a post, albeit with varying degrees of power and authority. The United States Chairman Joint Chiefs of Staff Committee (CJCSC), for example, is extremely powerful, with a legislated mandate and sharply delineated powers. The role of the CDS becomes critical in times of conflict.
Topic: Accountability and ethical governance; strengthening of ethical and moral values in governance;
Governance can be described as the process of decision making and the process by which decisions are implemented. Government is one of the actors in governance apart from interest groups, NGOs and civil society organizations etc. Governance is government in action.
Good governance is about the processes for making and implementing decisions. It’s not about making ‘correct’ decisions, but about the best possible process for making those decisions.
Good governance share several attributes as being participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of law. It assures that corruption gets minimized, the views of minorities are taken into account and that the voices of the most vulnerable in society are heard in decision-making. It is also responsive to the present and future needs of society. But the concept of inclusive growth requires amalgamation of ethical perspective in the decision making process.
E.g.: The implementation of Right to Information Act which improved transparency and accountability. It has been highly praised by many UN agencies.
Ethical governance denotes administrative measures, procedures and policies that fulfil criteria required for the ethically good or acceptable handling of public affairs, such as in public administration, public health care, education, and social security.
For example government programs and policies related to developmental projects come under the concept of good governance as it aims at inclusive growth and development with proper accountability and transparency system but it becomes ethical governance only when the people displaced due to land acquisition are rehabilitated properly with required livelihood facilities.
Governance can be likened to act of ruling, Good governance to the act of serving & ethical governance to letting righteousness work by itself. When all act according to the right laws of the universe there will be no requirement of a ruler & no requirement of punishment & all will be equally responsible partners, in line with Mahatma Gandhi’s concept of Swaraj.
Topic: Probity in Governance: Concept of public service; Philosophical basis of governance and probity;
Efficiency and honesty in a public servant are sine qua non for an efficient and sustainable administration. The concept of public handling over the responsibilities to sustain the society to the state itself is enough to maintain such values. The public servants are the repositories of public conscience, they secure their livelihoods and control the macro and micro economy. However these traits alone are not enough.
Importance of Dedication in public service:
- Dedication means quality of involving oneself completely or applying one’s attention, time to a particular activity, cause or a person.
- Dedication in public service is required as civil servants in India, a developing country need to perform the regular administrative and also play an important role in socio-economic development of the nation.
- In carrying out these activities he may be faced with several obstructions like social opposition against any programme which is against their deep rooted belief, lack of support from political executive.
- Schemes for promoting family planning are generally opposed in rural as they consider contraceptives as taboos here dedication is required to fulfil the goal of healthy society. One’s employees and superiors may be involved in corruption. These obstacles can only be overcome when one has perseverance and dedication.
- Public service is not a goal but journey which may be non-exciting and unwanted at times, only a dedicated civil servant can remain motivated in such situations.
- Dedication would make sense of duty an end in itself, which will be independent of assignment.
Dedication ensures that the sense of duty becomes an end in itself. It is not dependent upon the nature of assignment given to a civil servant. Dedication to public service is very important, especially in countries like India. There will be many internal and external factors which will force you to deviate you from your goal. Under such condition it is your dedication towards the constitution as well as towards the policies of government which will help you in accomplishing your duty.