Context:

• This article is based on a news “Indo Pacific region is ‘a web of interdependencies’: Army Chief” which was published in the Hindu. Recently, the 13th Indo-Pacific Armies Chiefs’ Conference (IPACC), was held alongside the 47th Indo-Pacific Armies Management Seminar and the Senior Enlisted Leaders Forum in New Delhi.

Territorial Disputes & Terrorism in Indo Pacific Region

• Territorial disputes and transnational threats of terrorism are among the many land-related challenges in the Indo-Pacific region, Army Chief General (Indian Army).

What is the Indo Pacific Region?

• The term “Indo Pacific region” gained prominence recently and refers to a geopolitical concept that surrounds a vast maritime area in the Indian Ocean and Pacific Ocean.
• It spans from the eastern coast of Africa to the western coast of the Americas and is strategically significant due to its major trade route, important sea lanes, and critical maritime chokepoints it contains.
• The USA sees the Indo Pacific region as a free and open region based on rule-based order.
• ASEAN interprets it as a model of cooperation based on shared power.
• Track 1.5 Dialogue: Held between India, France and Australia with focus on the identification of security challenges and issues in the Indo-Pacific.

What Initiatives Has India Taken to Shape the Indo Pacific Region?

• India stands for a free, open and rules-based Indo Pacific region. For India, the Indo-Pacific is an inclusive space for all stakeholders based on common responsibilities and common interests.
• India’s vision towards the region is based on the trinity: open, integrated and balanced region.
•  India’s Indo Pacific policy has been transformed significantly covering the whole gamut of the ocean and it has taken various new policy initiatives on the Indo Pacific region.
• Act East: Moving from Look East Policy to Act East policy.
• SAGAR: Strategic vision for the Indian Ocean, “Security and Growth for All in the Region” (SAGAR).
• Indo-Pacific Oceans Initiative: It is an initiative that builds upon the SAGAR initiative. It endorses an open, inclusive, non-treaty-based global initiative for mitigating challenges especially in the maritime domain through practical cooperation.

What is the strategic importance of the Indo Pacific Region?

• Economic Vitality: Indo Pacific region is the most populous region and encompasses some of the world’s fastest-growing economies, including India, USA, Japan, China, and Four Asian Tiger Countries/Economies, etc.
• Strategic Location: This region serves as a crossroads for trade and transportation between Asia, Europe, the Americas, and Africa. Control over key maritime routes and chokepoints in the region is essential for global power projection and security.

• Important Chokepoints in the Indo Pacific region are Strait of Malacca, Strait of Hormuz, Bab-el-Mandeb, and Mozambique Channel.
• Security: Maintaining peace and the law-abiding nature of stakeholders in the region has gained significant importance in the backdrop of rising security challenges in the region with China emerging as an aggressive player.
• Opportunities for India:
  • The ongoing trade war between China and the United States, as well as the repercussions of the COVID-19 pandemic, have led many multinational corporations to pursue a China Plus One strategy, which involves diversifying their supply chains outside of China in order to reduce dependence on the country.
  • Indo Pacific Economic Framework (IPEF): It is a US led initiative and aims to strengthen economic partnership among participating countries. India agreed to three out of four pillars viz. supply chains, tax and anti-corruption and clean energy.

What are the Challenges in the Indo Pacific Region?

• Chinese Threat: China is using military and economic coercion to bully its neighbours, advance unlawful maritime claims, threaten maritime shipping lanes, and destabilise territory along its periphery in the Indo Pacific region.
  • Territorial Conflicts: China invaded and occupied Scarborough shoal in spite of the Philippine’s claims.
  • For India: Supply of military equipment to Bangladesh, Sri Lanka, Myanmar and Thailand. Rising Chinese debt in the Indo Pacific region, as exposed by the recent Sri Lankan Financial Crisis.

• Maritime Security: Preventing piracy and illegal fishing are ongoing challenges in the region. For instance, Quadrilateral Security Dialogue (Quad) alliance held several joint defence operations for mitigating Indo Pacific piracy.
• Regional Extremist Groups: Some countries in the Indo Pacific Region have faced threats from regional extremist groups with local grievances. For example, groups such as Abu Sayyaf in the Philippines and Jemaah Islamiyah in Southeast Asia have been active in the region.
• Transnational organised crimes: They pose significant challenges to security, stability, and economic development. Major crimes in the region involve drug trafficking (Golden Triangle), human and wildlife trafficking, money laundering and smuggling.
• Geopolitical Alignments: The region sees evolving geopolitical alignments as countries seek to balance between major powers like the United States and China. Striking a delicate balance in alignment choices is a challenge for many nations.

Also read: Drug Trafficking in India

Other Issues in the Indo Pacific Region

• North Korean Threat: North Korea’s nuclear program and its missile tests pose a security challenge in the region. Its long-range missile poses an immediate security challenge.
• Environmental Issues: The Indo Pacific region is home to fragile marine ecosystems, including coral reefs. Environmental challenges such as climate change, marine pollution, overfishing, and habitat destruction threaten the region’s biodiversity and livelihoods.
• Humanitarian Crises: Including refugee and migrant flows, can strain regional resources and stability. The Rohingya crisis in Myanmar and Bangladesh is an example of such a challenge.

Way Forward

• Multilateral Diplomacy and Dialogue: Promote dialogue and diplomatic negotiations as the primary means of resolving territorial issues, addressing security concerns, and finding peaceful solutions to conflicts in the Indo Pacific region. Encourage countries in the region to adopt confidence-building measures (CBMs) to reduce tensions and build trust among neighbouring nations.
• Strengthen Regional Organisations: Enhance the role and capacity of existing regional organisations like ASEAN, SAARC, and the Pacific Islands Forum to foster cooperation and conflict resolution in the Indo Pacific region.
• Counterterrorism Cooperation: Strengthen counterterrorism cooperation among countries in the Indo Pacific region by sharing intelligence, conducting joint exercises, and implementing measures to combat terrorist financing and recruitment.
• Transnational Crime Combating: Regional and international organisations like INTERPOL and UNODC (United Nations Office on Drugs and Crime) can play a crucial role in coordinating responses and building capacity to address the challenges including drug trafficking, human trafficking, and wildlife trafficking, through coordinated law enforcement operations and intelligence sharing in the Indo Pacific region.
• Climate Change Mitigation and Adaptation: Take collective action to combat climate change by reducing greenhouse gas emissions, adopting sustainable practices, and investing in climate-resilient infrastructure.
  • Enhance disaster preparedness and response mechanisms to mitigate the impact of natural disasters, such as typhoons, tsunamis, and earthquakes.
• Promote Rules-Based Order: Encourage adherence to international law, including the United Nations Convention on the Law of the Sea (UNCLOS), to resolve maritime disputes and ensure freedom of navigation in the Indo Pacific Region.
• Soft Power Diplomacy: Promote cultural exchange, educational programs, and people-to-people ties to build understanding and trust among nations.

Conclusion

The Indo Pacific region is undeniably a complex web of interdependencies, where geopolitical, economic, and security concerns intersect. As highlighted in this article, it’s a region of immense strategic importance due to its economic vitality and critical maritime routes. The countries in the Indo Pacific region should have equal access to the use of common spaces on water and in the air that would require freedom of navigation, economic resources and peaceful settlement of disputes in accordance with international law.

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Context:

• Recently, India’s External affairs minister addressed the 78th session of the United Nations General Assembly (UNGA).

About the 78th session of UNGA

• The theme of the 78th session of UNGA is “peace, prosperity, progress, and sustainability.”

Key Highlights of the  External Affairs Minister’s address:

•  India has evolved from the era of non-alignment to the “era of Vishwa Mitra,” or a friend to the world.
• India seeks to promote cooperation with diverse partners from the QUAD, BRICS to I2U2.
• Respect for territorial integrity and non-interference in internal affairs cannot be exercised in cherry picking,”
• The United Nations should make the Security Council contemporary and emphasized that broad representation is a prerequisite for both effectiveness and credibility.
  • The African Union’s inclusion in the G20 should inspire the United Nations to also make the Security Council contemporary.

What is the UNGA? 

The UNGA is the only universally representative body of the United Nations.

• Each of the 193 Member States of the United Nations has an equal vote.
• The six main Committees of UNGA are:
  • the Disarmament and International Security Committee
  •  the Economic and Financial Committee
  • the Social, Humanitarian and Cultural Committee
  • the Special Political and Decolonization Committee
  • the Administrative and Budgetary Committee
  • the Legal Committee

What are the functions of the UNGA?

• UNGA appoints a Security General on the recommendation of the Security Council.
• Election of the non-permanent members to the Security Council.
• Approval of the UN budget.
• It discusses, debates, and makes recommendations on subjects pertaining to international peace and security, including development, disarmament, human rights, international law, and the peaceful arbitration of disputes between nations.
• It also considers reports from the other four organs of the United Nations and assesses the financial situations of member states.

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Context:

• The Income Tax Department has notified new angel tax rules that comprise a mechanism to evaluate the shares issued by unlisted startups to investors.

Previous Angel Tax Rules

• While previously the angel tax applied only to local investors, the Budget for 2023-24 fiscal (April 2023 to March 2024) widened its ambit to include foreign investments.

What are the New Angel Tax Rules?

• As per the changes in Rule 11UA of I-T rules, the Central Board of Direct Taxes (CBDT) provides that the valuation of compulsorily convertible preference shares (CCPS) and equity shares issued by unlisted startups can be based on the fair market value.
• The amended rules also retain the five new valuation methods proposed in the draft rules for consideration received from the non-residents:
  • Comparable Company Multiple Method,
  • Probability Weighted Expected Return Method
  • Option Pricing Method
  • Milestone Analysis Method
  • Replacement Cost Method.
• Significance: The amended rule brings in more clarity for both investor and investee basis that an appropriate valuation method can be adopted, thereby, reducing the chances of any future litigation.

What is an Angel tax?

Angel tax is the tax levied on the capital raised via the issue of shares by unlisted companies if the share price of issued shares is seen in excess of the fair market value of the company.

• For example: If a startup receives 50 crores of investment by issuing 1 lakh shares at Rs.5000 each to an Indian investor and the fair market value is Rs.2000 per share i.e. Rs.20 crore only, then the startup will have to pay angel tax on the amount in excess of the fair market value i.e Rs. 30 crores.
• When an angel investor funds the new business ventures, the startup is obliged to pay a part of their investment as tax to the government under Section 56 (2) (vii) (b) of the  Income Tax Act of 1961.
• Earlier, it was imposed only on investments made by a resident investor. However, the Finance Act 2023 proposed to extend angel tax even to non-resident investors from April 1, 2024.
• It is levied at a rate of 30.9% on net investments in excess of the fair market value.

Rationale Behind Angel Tax

• The government introduced the Angel Tax to curb money laundering and make it easier for businesses to comply with the tax norms.

Criticism

Startups tend to lose a significant amount of money in the form of taxes as angel tax requires them to share a significant part of the investment.

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Context:

• GDP estimates based on an outdated base would not adequately capture new activities being undertaken in the economy.

What is India’s GDP Estimates for the Q1 of 2023?

• On August 31st, 2023 the National Statistical Office (NSO) released the economic growth data for the first quarter (April, May, June) of the current financial year which showed that India’s GDP grew by 7.8% in Q1.

What is India’s GDP?

• India’s GDP is the total valuation of final goods and services produced within the geographical borders of a country during a specified period (usually a year).
• The GDP is a statistical indicator that defines the economic progress and development of a country.
• Percentage growth in the GDP during a quarter is considered as the standard of economic growth.
• In 2015, the Central Statistics Office (CSO) moved away with GDP at factor cost and adopted the international practice of GDP at market price and the Gross Value Addition (GVA) measure to better estimate economic activity.
  • GDP at market price = GDP at factor cost + Indirect Taxes – Subsidies

What is the base year?

• The base year is a benchmark with reference to which the national account figures such as gross domestic product (GDP), gross domestic saving, and gross capital formation are calculated. 
• In India, the first estimates of national income were published by the Central Statistical Organisation (CSO) in 1956 taking 1948-49 as the base year.

Why has there been demand to revise the base year for calculation of GDP?

• The base year has to be revised periodically in order to reflect the structural changes taking place within an economy, such as increasing the share of services in GDP.
  • The more frequently the base year can be updated, the more accurate the statistics will be.
• The India’s GDP is presently computed with the base year of 2011-12 which is now more than 10 years old.
  • Under normal circumstances, the base should have been revised after five years in 2016-17, with the readiness for another revision for 2021-22.

Types of India’s GDP Measurements

• Real GDP: India’s real GDP is the gross domestic product and is measured with respect to a base year. It is adjusted to inflation and hence is also known as inflation-corrected GDP or current price.
  • For example, since 2015, the current base year for the determination of India’s GDP (real) is 2011-12. Earlier, it was 2004-05.
• Nominal GDP: It is measured based on prevailing current market prices, without taking into account the effects of inflation or deflation.
  • It depicts the monetary value of goods and services produced in a country in one financial year.

What are the limitations of India’s GDP?

• Exclusions of non-market transactions: Non-market transactions like voluntary, domestic, or other work that have a positive impact on the productivity of workers are excluded from GDP.
• Does not account for the standard of living: The standard of living of a country cannot be determined by considering its GDP. India is one of the best examples of a country with a high GDP but a relatively low standard of living.

Does not account for externalities: India’s GDP does not consider the impact of industries on the environment and social welfare. Environmental experts have argued for the inclusion of such damage to the GDP.

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Over 70% of India Reports Drought-like Conditions

Context: Over 500 of India’s 718 districts are currently reporting meteorological drought conditions, indicating a Standardised Precipitation Index (SPI).

Analysis of Data:

• SPI is a probabilistic tool deployed by IMD for monitoring drought. Negative values mean drought-like conditions, while positive values mean wetter conditions.
• Over 70% of the District reported Negative SIP values indicating (drought-like, ranging from mildly dry to extremely dry) data from August 20, 2023 to September 24, 2023, maintained by the India Meteorological Department (IMD).
• Most of India — 53 percent of the districts — was found to be in the ‘mildly dry’ category. 
• Almost the whole of Northeast India, pockets of eastern India, Jammu and Kashmir and large parts of the Southern Peninsula, stretching from Maharashtra, Karnataka to Andhra Pradesh in the eastern coast were in the ‘moderately dry’ or ‘extremely dry’ categories. 

Reasons for Drought

• Skewed temporal-spatial rainfall distribution, prolonged monsoonal breaks driving factors, say experts.
• Climatologically, a monsoonal break is declared when the normalized rainfall anomaly index or deviation from the long-term rainfall average over the core monsoon zone.

Impact: Nearly two-thirds of the country is vulnerable to drought. There is an upward trajectory in the duration of droughts and the severity of impacts, not only affecting human societies but also the ecological systems.

• Agriculture:
  • Production of all the agricultural commodities is expected to be lower than last year. Despite an increase in the sowing area.
• Indian Economy:
  •  Droughts reduced India’s GDP by up to 5% in 20 years (UNCCD)
• Other Impacts include Water Scarcity and Shortage, Land Degradation and Desertification. Etc

News Source: Down To Earth

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Context:

• This article is based on a news “Judiciary is losing talent as government sits on names: Supreme Court” which was published in the Hindu. The Supreme Court expressed concern that the judiciary is experiencing an unprecedented loss of fresh talent due to prolonged delays in government decisions. 

Concerns regarding the appointment of Judges in higher Judiciary

• Favoritism in Appointments: The lawyers who left their law practices to become judges have been affected by the government’s favoritism in the selection process without clear reasons.
• Segregation of names: The government continues to segregate names with impunity despite the Collegium forbidding the practice.
  • There are 70 names recommended by High Court Collegiums for judgeships, and these names have been waiting for government approval for over 10 months.
  • The government has not responded to the Supreme Court (SC) Collegium’s recommendation for 26 transfers.

• Additionally, there are nine new recommendations for High Court appointments from the Collegium that the government hasn’t acted upon or returned. Pending Government Approval: Seven other names, which the Collegium has recommended again for High Court positions, are still awaiting government action, causing uncertainty.
• The Collegium’s recommendation to appoint the Chief Justice of the Delhi High Court as the Chief Justice of the Manipur High Court is still awaiting government approval.

Procedure of Appointment of Judges

• For Supreme Court Judges
  • Recommendations by collegium: All appointments must be recommended by the collegium.
  • Government approval: This recommendation is then sent to the Central government via the law minister and then the prime minister before ending up at the President’s desk  for approval and appointment.
• For High Court Judges
• Recommendations of Collegium: High Court collegium – the chief justice of the High Court along with its two senior-most judges – must send a recommendation to the chief minister and the governor of the state.
• Recommendations of state executive: The governor, based on the advice received from the chief minister, will send the recommendation to the Union Minister of Law and Justice, who after consideration will forward the recommendation to the CJI.
• Government’s approval:  The CJI, after being informed by the two senior-most judges of the Supreme Court, should send the recommendation to the Union Minister of Law and Justice.
  • He then puts the recommendations before the Prime Minister who will advise the President about the appointment.

What is the collegium system for the appointment of Judges?

• Appointment of judges in higher judiciary are being done through collegium system through which judges are appointed and transferred in the Supreme Court and high courts across the country.
  • The collegium system is a forum including the Chief Justice of India and four senior-most judges of the SC, which recommends appointments and transfers of judges.
• These appointments include the elevation of high court judges to the apex court and direct appointments of senior advocates as apex court judges.
  • Judges of the higher judiciary are appointed only through the collegium system, and the government has a role only after names have been decided by the collegium.
• Significance: It provides a structured method for the appointment and transfer of judges in higher courts.
  • It seeks to preserve the independence of the judiciary from the executive branch by endowing judges with substantial influence in the appointment of judges.

Evolution of Collegium system for the Appointment of Judges

• The word Collegium is nowhere mentioned in the Constitution.
• It has evolved through the Supreme Court’s own three judgments, known collectively as the Three Judges Cases (1981, 1993, and 1998).
• Earlier, the appointment of judges was made by the President in consultation with the Chief Justice and other judges.
• First Judges Case (S.P. Gupta vs Union of India) 1982
  • The Executive has the ultimate and final say in the appointment of judges.
  • It emphasized that “consultation” of the Judiciary should not be seen as a “concurrence”.
  • The Supreme Court ruled that the President can turn down the recommendations of the CJI.
• Second Judges Case (Supreme Court Advocates-on-Record Association vs Union of India),1993
  • The primacy in the matter of appointment of judges to the higher judiciary was transferred from the executive to the Chief Justice of India
  •  CJI only needed to consult a collegium of two senior-most judges.
• Third Judges Case
  • The Supreme Court expanded the strength of the collegium which included the CJI and four senior most Supreme Court judges in case of a Supreme Court Judge appointment.
  • In case of a appointment of judges in High court, it included a High Court Justice and two senior most Supreme Court judges.
• Fourth Judges Case (Supreme Court Advocates on Record Association And Anr. v. Union of India) 2016

• The Supreme Court held the 99th Constitutional Amendment Act, 2014 and the National Judicial Appointments Commission (NJAC) Act, 2014 unconstitutional and void.
• Citing the independence of the judiciary, and veto powers of these two eminent powers, the act was held unconstitutional by the Supreme Court and it restored the collegium system for the appointment of judges in India.

Challenges with the Collegium system for the appointment of judges in higher judiciary:

• Lack of statutory timeframe limit: The SC in 2021 set a maximum of 18 weeks for the government to review the names submitted by the High Courts, after which they should be forwarded to the Supreme Court Collegium for final approval.
  • Since, the guideline is not mandatory, it is rarely followed.
• Opaque Functioning: The system of collegium for the appointment of judges operates largely behind closed doors, with limited public disclosure of the reasons behind the selection or rejection of candidates.
  • This lack of transparency has led to accusations of favoritism, nepotism and a lack of accountability.For instance: Justice Soumitra Sen was appointed to the Calcutta High Court.
• Lack of Merit-based selection: The collegium has not established clear criteria for appointing or elevating judges to constitutional courts, making these appointments appear arbitrary.
  • For Instance: Justice Akil Kureshi and Justice S Muralidhar  were not elevated to th SC.
• Overemphasis on seniority: The collegium system’s heavy reliance on seniority has been a subject of criticism.
  • It hinders the selection of younger, talented, and diverse candidates, limiting opportunities for fresh perspectives and innovation within the judiciary.
• Poor Social Representation: Despite existing for three decades, the system has failed to remedy the lack of social diversity in the higher judiciary.
  • Out of 537 appointments to high courts in the five-year period, 424 (79%) were from the general category (upper caste), 57 (11%) were from Other Backward Castes (OBCs), 15 (2.8%) were from Scheduled Castes (SCs) and 7 (1.3%) were from Scheduled Tribes (STs).
• No legal backing: Appointment of judges in higher judiciary through collegium system is not legally mandated but derives its existence from Supreme Court precedents, which diminishes its credibility in the eyes of the public.
• Failure to fill huge backlog: Huge pending cases per judge at the high court level of the failure of the collegium to fill up the vacancies over several years.
• Absence of institutional support for the collegium: It remains an ad hoc body with little constitutional or statutory backing.
  • There is no permanent secretariat and support staff dedicated to the task of helping the collegium with the complicated appointments procedure and ensuring timely meetings.
•  Huge attrition rate: Judges typically serve as collegium members for no more than two years at a stretch leading to the efficient operation of the collegium.

What alternative proposals has the government suggested for the appointment of judges?

• The government has suggested a three-step process of appointments based on justice Madan B. Lokur’s part of the 16 October ruling.
  • Appointment of judges by way of applications or nominations:  Apex court nominations should be made not just by the collegium, but also other judges of the court, the prime minister, president and the attorney general.
  • Committee of eminent citizens: A participatory appointment process is needed which must seek inputs from a committee of eminent citizens, which would not be restricted to the legal fraternity.
    • All shortlisted applications and nominations should be forwarded to this committee.
    • A member of this panel ought to be a part of the panel that will interview would-be judges in the last stage of the selection.
  • Submission of Written file to the executive: The entire file with all views recorded in writing must be sent to the executive for its views on the antecedents, character, integrity and relevant facets” to determine if the candidate was suitable for the post of a senior judge.

What are the way forward for the appointment of judges in the higher judiciary?

• Statutory backing to MOP: This will streamline the process and procedure of appointment of judges
• External oversight mechanism: It will provide checks and balances on the collegium system.

• It could involve the involvement of external stakeholders, such as members of the legal profession, civil society, or the executive branch, in the appointment process.
• The inclusion of diverse perspectives can enhance the accountability and democratic legitimacy of the system.

• Strengthening the role of the executive in the appointment of judges: This could involve a collaborative approach where the executive and judiciary work together to select and appoint judges, ensuring a balance of power and diverse inputs.
• Search and evaluation committee:  As recommended by the union law ministry, it should have representation from the central and the state governments in the selection of judges for the Supreme Court and the High Courts respectively.
• Reservation for  marginalized communities: Provision for reservation for marginalised communities to ensure social diversity.
• Establish a Comprehensive Regulatory Framework: It should clearly define the criteria, qualifications, and procedures for appointment of judges in higher judiciary.
  • It should incorporate provisions for transparency in decision-making, merit-based selection, and performance evaluations including the disclosure of reasons for appointments and transfers.
• Strengthen Public Participation: It can be achieved through public consultations, open hearings, or the establishment of a judicial appointments commission that includes representatives from civil society.
  • It will incorporate diverse perspectives and promote a more inclusive judiciary that reflects the aspirations and values of society.

Conclusion

To remain an Independent and fair judiciary, it is important to address all current challenges related to the appointment of judges in the higher judiciary in India. To avoid this conflict the Government and Courts should work together to safeguard the integrity and independence of the Indian judiciary, ultimately in delivering speedy justice that reflects the hopes and values of our society.

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