- Pakistan and FATF Grey List
- The four phases of constitutional interpretation
- The hype over hyper-sonic : Race of Missile
- Steering fiscal ship back to consolidation
- The convergence of rich nations with the rest has gone off track
PAKISTAN AND FATF GREY LIST
Why in news?
The deliberations, in Beijing, of the Asia-Pacific joint group of the global watchdog on terror financing and money laundering, the Financial Action Task Force (FATF) provided Pakistan some encouraging news that it had progressed in its efforts to avoid a blacklisting
A final decision will be taken at a plenary meeting of the body, expected in Paris in near future whether to:
- keep Pakistan on the current “grey list”
- downgrade it to a “black list”,
- let it off altogether for the moment
The actions entailed a sustained effort to bring legal action against these groups, and also called for changes to Pakistani law in line with global standards for measures against money laundering and financing terrorism.
Geo political effect
New Delhi need to focus upon politics behind Pakistan’s FATF “progress”.
Pakistan’s role in ensuring Taliban talks are brought to a successful conclusion soon may have weighed with the U.S. and its allies in the grouping. Support by malaysia and Turkey under the presidency of China can be the reason behind Pakistan getting off the hook.
THE FOUR PHASES OF CONSTITUTIONAL INTERPRETATION
The judiciary is beginning to interpret the Constitution in line with its revolutionary and transformative potential.
A.K. Gopalan v. State of Madras (1950)
In this case Court was called upon to interpret the fundamental rights under Part III. The leader of the Communist Party of India claimed that preventive detention legislation under which he was detained was inconsistent with Articles 19 (the right to freedom), 21 (the right to life) and 22 (the protection against arbitrary arrest and detention).
The Supreme Court decided that each of those articles covered entirely different subject matter, and were to be read as separate codes rather than being read together
In early years, it was said that, there was no limitation on parliament to amend the constitution.
Kesavananda Bharati v. State of Kerala (1973)
Court concluded that Parliament’s power to amend the Constitution did not extend to altering its “basic structure”an open-ended catalogue of features that lies within the exclusive control of the Court.
When Parliament attempted to overturn this decision by amending the Constitution yet again, the Court, relying on structuralist justifications, decisively rejected that attempt
In Maneka Gandhi v. Union of India (1978) case, Court conceived of the fundamental rights as a cohesive bill of rights rather than a miscellaneous grouping of constitutional guarantees.
The right to life was incrementally interpreted to include a wide range of rights such as clean air, speedy trial, and free legal aid.
Changing structure of the Court, which at its inception began with eight judges, grew to a sanctioned strength of 31 it is currently 34 is the feature of 3rd phase. It began to sit in panels of two or three judges, effectively transforming it into a “polyvocal” group of about a dozen sub-Supreme Courts.
We are currently in the midst of transitioning from the third phase of constitutional interpretation to the fourth.
In the fourth phase, the Court has acknowledged as critical to its interpretive exercise the purpose for which the Constitution has been enacted.
THE HYPE OVER HYPERSONICS
FOCUS: GS3: Technology, GS2: IR, Pre: S&T
Why in news?
On December 27, 2019, Russia announced that its new hypersonic glide vehicle (HGV), Avangard, launched atop an intercontinental ballistic missile, had been made operational
Russian military might
Russia claims that this nuclear-armed HGV can fly at over 20 times the speed of sound and is capable of such maneuvering as to be “invulnerable to interception by any existing and prospective missile defence means of the potential adversary”. With this induction, it appears that Russia has beaten the U.S. and China in deploying the HGV
What is HGV
A hypersonic delivery system is essentially a ballistic or cruise missile that can fly for long distances and at speeds higher than 5 Mach at lower altitudes. This allows it to evade interception from current Ballistic Missile Defence (BMD
Risk of Missiles
- Missiles are being added to the military capabilities of countries that possess nuclear weapons.
- Induction of hyper sonics would lead to an offence-defence spiral. According to reports, the U.S. has begun finding ways of either strengthening its BMD or looking for countermeasures to defeat hypersonic, besides having an arsenal of its own of the same kind
- Offence-defence developments into outer space. Counter-measures to hypersonics have been envisaged through placement of sensors and interceptors in outer space
More about anti-ballistic missile treaty
- The Anti-Ballistic Missile Treaty (1972—2002) was an arms control treaty between the United States and the Soviet Union on the limitation of the anti-ballistic missile (ABM) systems used in defending areas against ballistic missile-delivered nuclear weapons.
- Under the terms of the treaty, each party was limited to two ABM complexes, each of which was to be limited to 100 anti-ballistic missiles
- In 1997, five years after the dissolution of the Soviet Union, four former Soviet republics agreed with the United States to succeed the USSR’s role in the treaty.
- In June 2002 the United States withdrew from the treaty, leading to its termination.
STEERING FISCAL SHIP BACK TO CONSOLIDATION
The government may miss its FY20 fiscal target of 3.3% by 0.4pp due to a combination of sharply lower nominal growth (7.5% vs budgeted 11%); slowdown in tax revenues compounded by a corporate tax cut; and lower-than anticipated disinvestment proceeds (0.24%)
Fiscal aid available to govt to address this strain
- Additional RBI dividend and asking for advance dividend
- SC ruling on Telecom companies may give it additional revenue
- Saving on expenditure
With the growth outlook still subdued and any recovery likely to be sub-par, the government has two options to choose from for the FY 21 fiscal trajectory.
- It can either decide to further delay its consolidation to stimulate the economy.
- It can clarify that the FY20 fiscal slip was ‘inadvertent’ due to the unanticipated slowdown, and that the consolidation is back on track, especially with expectations of improving nominal growth.
Impacted areas in economy and way out
- On the real economy side,
real estate has been a key sector affected and is likely to find mention.
- Proposals being discussed include measures to clear unsold inventory
- A one-time GST exemption for first-time buyers
- Tax holidays for new projects
- Incentives to take on distressed projects
- Increased outlay for last-mile funding of stuck projects
- A roadmap for inclusion in global bond indices may be outlined.
- Manufacturing sectors concerns should be addressed.
- It may also consider increasing custom duties on items like paper, footwear, rubber items and toys
- Government will need to reiterate its commitment to medium-term growth consolidation.
THE CONVERGENCE OF RICH NATIONS WITH THE REST HAS GONE OFF TRACK
Recent evidence suggests that convergence of emerging economy with advanced economies is faltering:
- A recent World Bank report documents a worrying slowdown in productivity growth in emerging economies, significantly retarding convergence.
- Not only has convergence been faltering between nations, it has been faltering between the richer and poorer regions of large nations such as India
- The report’s calculations suggest that emerging economies have 14% lower productivity than they would have had if previous trends of high productivity growth were maintained
- According to WB, the main driver of falling productivity in emerging economies is not flagging adoption of new technology, but insufficient investment in physical and human capital, and insufficient mobility of machines and workers from less productive to more productive sectors of the economy
- In the case of India as well, languishing investment and unfinished productivity-enhancing reforms, especially in the country’s labour market, being the key culprits behind the sharp slowdown in growth
What needs to be done?
- Governments need to do the heavy lifting of repairing damaged financial systems overladen with bad debt
- Restore fiscal rectitude, ensure that monetary policy remains focused on stable inflation rather than being excessively loose as a risky substitute for structural reforms
- Pressing ahead with unfinished reforms to capital, land and labour markets.
- The pursuit of sensible and conventional sound economic policies ought to put emerging economies as a group back on a higher growth trajectory
- While suitable “place-based” policies must work to ameliorate regional inequalities within large economies such as India