14-03-2024 CARE mains practice

Topic- Free Trade Agreements of India:

Introduction:

India recently signed a trade agreement with the four-nation European Free Trade Association (EFTA), an intergovernmental grouping of Iceland, Liechtenstein, Norway and Switzerland. The deal brings in $100 billion in investment over 15 years, with the EFTA looking at joint ventures that will help India diversify imports away from China. India and the EFTA also agreed to largely keep “sensitive” farm products and gold imports out of the pact.

Body :

• Background
• Importance of the deal
• Commercial benefits to India
• Limitations
• Status of India’s free trade pact negotiations

Conclusion :                                                                                                                                                                                                                                       

The EFTA deal assumes greater symbolic significance than the size of trade flows involved. It signals that India’s apparent aversion to such trade pacts since 2014, capped by its walkout from the Regional Comprehensive Economic Partnership in 2019, is likely a thing of the past. A country that has often been criticised for its high import tariffs and protectionist approach, now seems willing and able to walk the talk on free trade when many nations are turning protectionist.

UPSC Syllabus Free Trade Agreements of India:

 

Why was this question asked?

Q. How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India? (UPSC Main 2018)

Introduction

India recently signed a trade agreement with the four-nation European Free Trade Association (EFTA), an intergovernmental grouping of Iceland, Liechtenstein, Norway and Switzerland. The deal brings in $100 billion in investment over 15 years, with the EFTA looking at joint ventures that will help India diversify imports away from China. India and the EFTA also agreed to largely keep “sensitive” farm products and gold imports out of the pact.

Body Status : 

Background

• India is EFTA’s fifth-largest trading partner after the EU, the United States, the UK and China
• India signed a Trade and Economic Partnership Agreement (TEPA) with a bloc of four European countries — Iceland, Liechtenstein, Norway and Switzerland, formally known as the European Free Trade Association (EFTA).
• The pact has been in the works since 2008 but slipped off India’s to-do list after the UPA government’s exit.
• The EFTA pact, is expected to be ratified by the end of 2024.
• The two-way trade between India and EFTA was $18.65 billion in 2022-23, compared to $27.23 billion in the previous fiscal year, with a trade deficit of $14.8 billion. Switzerland is currently India’s largest trading partner in the EFTA bloc, followed by Norway.

Importance of the deal

• For India, the speed with which the EFTA deal has been dusted off and sealed within months of resuming negotiations is creditable.
• It constitutes the second major trade pact in recent years since the deal with the United Arab Emirates, and the first such arrangement with a western nations’ grouping.

Commercial benefits to India

• The funds from the EFTA region include Norway’s $1.6 trillion sovereign wealth fund, the world’s largest such ‘pension’ fund, which posted a record profit of $213 billion in 2023 on the back of strong returns on its investments in technology stocks.
• India could see investment flow into the pharma, chemical sectors, food processing and engineering sectors.
• In market access terms, the deal offers more room for Indian services firms, with easier visa rules, so that they can also tap other European markets using these countries as a base.
• Professionals (architects, accountants and nurses), can also expect more opportunities.
• Most goods exports already get duty-free treatment in Switzerland, India’s largest EFTA trade partner, so the lynchpin in this deal is the in-built goal to nudge $100 billion of fresh foreign direct investment into India and create a million jobs over 15 years.
• Indian consumers can expect cheaper wines and chocolates, while producers may access cheaper machinery.

Limitations

• It is first time that India has agreed to include non-trade issues such as labour, human rights, environment and gender in an economic agreement.
• Think tank Global Trade Research Initiative (GTRI) said that exporting agricultural produce to Switzerland remains challenging due to the complex web of tariffs, quality standards, and approval requirements.
• Switzerland’s policy of tariff-free entry for all industrial goods from any country, with effect from January 1, would affect benefits to Indian companies

Status of India’s free trade pact negotiations

• An interim deal with Australia that kicked in late 2022, is yet to be followed through to a comprehensive agreement.
• Parleys for a deal with the Gulf Cooperation Council, mooted since 2004, are yet to take off.
• A deal with Canada has been waylaid by political frictions.
• Talks are on with the European Union (EU) and the United Kingdom, with the latter likely in the last mile.

Conclusion

The EFTA deal assumes greater symbolic significance than the size of trade flows involved. It signals that India’s apparent aversion to such trade pacts since 2014, capped by its walkout from the Regional Comprehensive Economic Partnership in 2019, is likely a thing of the past. A country that has often been criticised for its high import tariffs and protectionist approach, now seems willing and able to walk the talk on free trade when many nations are turning protectionist.

Topic- Election Reforms in India :

Introduction

The high-level committee on ‘’one nation one election”, headed by former President Ram Nath Kovind, submitted its report on simultaneous polls to President Droupadi Murmu on March 14. The committee met the Honourable President of India at Rashtrapati Bhavan. The panel recommended simultaneous elections for Lok Sabha and state assemblies as the first step followed by synchronised local body polls within 100 days.

Body

• • • Concept
    • Composition of Committee
    • Benefits of simultaneous elections
    • One-time transitionary measure
    • Mechanism to implement
    • Amendments

Conclusion

Majority of political parties should agree on the scheme of one nation, one poll, so that expenditures incurred on continuous elections can be curtailed, but balance of federal polity and effective governance should also be ensured. The outcome of ‘One Nation, One Election has the potential to alter the fundamentals of democratic set-up and reset the federal structure, it is necessary to examine the legal issues at the earliest juncture. The 22nd Law Commission, that has examined the issue in detail, had also suggested holding simultaneous polls from the general election of 2029.

 

UPSC Syllabus Election Reforms in India:

 

Why was this question asked?

Q. ‘Simultaneous election to the Lok Sabha and the State Assemblies will limit the amount of time and money spent in electioneering but it will reduce the government’s accountability to the people’ Discuss.  (UPSC Main 2017)

Introduction:

The high-level committee on ‘’one nation one election”, headed by former President Ram Nath Kovind, submitted its report on simultaneous polls to President Droupadi Murmu on March 14. The committee met the Honourable President of India at Rashtrapati Bhavan. The panel recommended simultaneous elections for Lok Sabha and state assemblies as the first step followed by synchronised local body polls within 100 days.

Body Status

Concept

• Simultaneous elections, popularly referred to as “One Nation, One Election”, means holding elections to Lok Sabha, all state Legislative Assemblies, and urban and rural local bodies (municipalities and panchayats) at the same time.
• Currently, all these elections are held independently of one another, following timelines dictated by the terms of every individual elected body.
• Simultaneous elections were by and large in vogue until the fourth general elections of 1967.
• However, as successive central governments used constitutional provisions to dismiss state governments before the end of their term, and as coalition governments in the states and the Centre kept collapsing, a country came to see elections at different times through the year.
• The country now sees five to six elections in a year — if municipalities and panchayat elections are also included, the number of elections will increase manifold.

Composition of Committee

• The committee on One Nation, One Poll, was set up on September 2, 2023 under Chairmanship of former President, Ram Nath Kovind
• Committee included Home Minister Amit Shah, former Leader of Opposition in the Rajya Sabha Ghulam Nabi Azad, former Finance Commission chairperson N K Singh, former Lok Sabha secretary-general Subhash C Kashyap, senior advocate Harish Salve and former Chief Vigilance Commissioner Sanjay Kothari.

Benefits of simultaneous elections

• Frequent elections burden the government exchequer with additional expenditure. If the expenditure incurred by political parties is also added, these figures will be even higher.
• Asynchronous elections cause uncertainty and instability, thwarting supply chains, business investments and economic growth.
• Disruption of government machinery due to asynchronous elections causes hardship to citizens.
• Frequent use of government officials and security forces adversely affect discharge of their duties.
• Frequent imposition of the Model Code of Conduct (MCC) causes policy paralysis and slows down the pace of the developmental programmes.
• Staggered elections induce ‘voters’ fatigue’ and present a significant challenge in ensuring their participation.

 

One-time transitionary measure

• As the first step to holding simultaneous elections in the country, the high-level committee headed by former President Ram Nath Kovind has recommended that the government take a “one-time transitory measure”, which would require the Union government to identify an “appointed date” immediately after a Lok Sabha election and all state assemblies that go to poll after the said date would have their terms expire with the Parliament.
• This would synchronise the electoral cycles of the central and state governments and bring back simultaneous elections.
• Then, as the second step, municipality and panchayat elections should be held within 100 days of the Lok Sabha and state elections.

Mechanism to implement

• To ensure that synchronicity is not disrupted due to the premature dissolution of the Parliament or a state assembly due to a no-confidence motion, a hung House or any other event, the committee has suggested that fresh elections should be conducted only for the remainder of the term, or the “unexpired term”, until the next cycle of simultaneous polls is due.

Amendments

• The committee recommended that Article 325 of the Constitution be amended to enable preparation of a single electoral roll and single Elector’s Photo Identity Card (EPIC) by the Election Commission of India, in consultation with the State Election Commissions.
• To enable municipal and panchayat elections to be held simultaneously with the others, the committee recommended an article 324A, which states that Parliament may make a law to ensure that elections to municipalities and panchayats be held together with General Elections

Conclusion

Majority of political parties should agree on the scheme of one nation, one poll, so that expenditures incurred on continuous elections can be curtailed, but balance of federal polity and effective governance should also be ensured. The outcome of ‘One Nation, One Election has the potential to alter the fundamentals of democratic set-up and reset the federal structure, it is necessary to examine the legal issues at the earliest juncture. The 22nd Law Commission, that has examined the issue in detail, had also suggested holding simultaneous polls from the general election of 2029.