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Prime Minister Narendra Modi will “virtually host” Russian President Vladimir Putin, Chinese President Xi Jinping, Pakistan Prime Minister Shehbaz Sharif and Central Asian Presidents as India chairs the Shanghai Cooperation Organisation’s Council of Heads of State (SCO-CHS), for the first time. Sources say four outcomes will be adopted at the summit, including the “New Delhi Declaration”, and two joint statements on countering radicalism and on digital transformation.
An agreement on an economic cooperation initiative is being negotiated, though it is unclear whether all countries, especially India, will sign it, given past differences with China over the Belt and Road Initiative (BRI).
The virtual summit, originally planned as an in-person summit for the leaders in Delhi, has now been truncated to a single session via videoconferencing. Much of the time will be taken up by pre-drafted opening remarks and final statements.
States
J&K govt. approves plan for allotment of land to the landless (Page no. 4)
(GS Paper 2, Governance)
The Jammu and Kashmir Lieutenant Governor’s (L-G) administration has approved a proposal for allotment of five marlas (.031 acre) of land each to the landless living in the Union Territory under the Pradhan Mantri Awas Yojana-Gramin (PMAY-G).
“It is a historic day for Jammu & Kashmir and a new beginning for thousands of landless families. This historic decision will prove to be a golden chapter in the administration’s effort for social justice, equality, respect, and equal opportunities to all,” L-G Manoj Sinha said.
Describing it as “a path-breaking decision”, Mr. Sinha said, “It will not only entitle the landless poor to own a piece of land and have a house but will also provide them with livelihood, raise their living standards and realise their dreams and aspirations.”
The land will be given to the landless and to those occupying State and forest or any other land, where construction is not permitted.
The spokesman said the present allotment was restricted to only the left out cases from the Permanent Waiting List (PWL) 2018-19, which may later, at the time of launch of next phase of the PMAY(G) scheme in 2024-25 be extended to the same categories of landless beneficiaries, who otherwise become eligible for getting housing assistance under the PMAY(G) Phase-III.
Deputy Commissioners have been asked to consider cases for allotment of land under revenue laws.
Earlier,the Ministry of Rural Development on May 30, 2023 allocated an additional target of 1,99,550 houses to the Union Territory for the Financial Year 2023-24 for saturation of the Awaas plus list (PWL 2018-19).
Tamil Nadu flags shortage in its share of Cauvery water (Page no. 4)
(GS Paper 2, Governance)
Objecting to the deficit in its share of water received from Karnataka, the Tamil Nadu government on Monday wrote to the Cauvery Water Management Authority (CWMA) flagging the issue and seeking directions to the neighbouring State to release Tamil Nadu’s actual share for July as per the schedule.
Tamil Nadu Secretary for Water Resources Department wrote the letter to the CWMA on July 3, Minister for Water Resources Duraimurugan said in a statement.
Wondering why Karnataka kept bringing up the Mekedatu issue every now and then and whether it was due to “political compulsion”, he reiterated that Tamil Nadu “would never permit” a dam at the site.
The Tamil Nadu government would block the efforts to construct a dam across the Cauvery at Mekedatu by placing strong arguments when the cases relating to this issue come up for hearing in the Supreme Court.
The Tamil Nadu government will take all necessary steps to protect the rights of the State and provide uninterrupted water supply for agriculture.
Contending that the Tamil Nadu government was taking necessary efforts “at all levels” to receive its share of Cauvery water in line with the judgment of the Supreme Court, Tamil Nadu had urged the CWMA during its 21st meeting held on June 16 to issue a direction to Karnataka to provide Tamil Nadu’s due share.
The deficit in Tamil Nadu’s share for June was also flagged during a meeting of the Cauvery Water Regulation Committee (CWRC) held on June 30.
Editorial
In short mutiny, the tarnishing of Putin’s aura of power (Page no. 6)
(GS Paper 2, International Relation)
Hotel Moskva, near the Red Square in the Russian capital, was one of the most powerful architectural symbols of the Stalinist era.
Designed by the legendary Alexey Shchusev and opened in 1935, it had two different facades: one wing was straight-laced with small windows and simpler details, while the other was ornate and decorative with larger windows.
The story behind the twin design is that Shchusev had submitted two designs on the same sheet of paper. Stalin affixed his signature in between the two designs and sent it back.
Afraid of checking with his boss about which one he had selected, Shchusev combined both designs into one structure, which stood tall in Moscow as a symbol of power and fear until 2004 when it was demolished. The Four Seasons Moscow stands in its place today.
This story is often told to show how Stalin was feared even by the most famous architect of Soviet Russia. Historically, the rulers of Russia followed the axiom that it is better to be feared than loved, and commanded absolute loyalty from both their subordinates and the public.
Russian President Vladimir Putin’s reign has not been entirely different, even though Mr. Putin has always emphasised “the constitutional order” and legitimacy. He maintained a tight grip over the system he presided over.
As American academic Walter Russell Mead wrote recently, the man in the Kremlin can afford to do anything except being seen as weak.
But this aura of power and invincibility was dented on June 24, 2023 when an armed column of Wagner mercenaries launched a march towards Moscow after seizing a critical regional military headquarters in southern Russia.
In a country where public criticism of the war can land a citizen in jail, Yevgeny Prigozhin, the former Putin confidant and the chief of Wagner, did not just launch an open mutiny against the state but also walked free.
Worse, this was a drama that unfolded at a time when Russia was engaged “in an existential battle” with the “collective West” in Ukraine.
Before the Ukraine war began on February 24, 2022, Mr. Putin had made a host of risky geopolitical moves that helped him shore up his support at home and expand Russia’s influence abroad.
He neutralised Georgia through a short but powerful intervention in 2008. He took Crimea in 2014 without a fight and backed Russian-speaking Ukrainian rebels in the Donbas.
In 2015, he sent troops to Syria, which hosts Russia’s only naval base outside the former Soviet territory, and turned around the civil war.
India should refuse America’s ‘NATO Plus’ bait (Page no. 6)
(GS Paper 2, International Organisation)
It was during a virtual press briefing in March 2023 on the North Atlantic Treaty Organization’s (NATO) focus on South Asia and the Indo-Pacific region that the United States Permanent Representative to NATO, Julianne Smith, was quoted as saying that “the NATO alliance is open to more engagement, should India seek that”.
Reflecting the same sentiment, the U.S. House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party (CCP), in May 2023, recommended strengthening the ‘NATO-Plus’ framework by including India in the grouping.
India’s External Affairs Minister S. Jaishankar had rejected this idea by saying that “NATO template does not apply to India”. Yet on the eve of Prime Minister Narendra Modi’s visit to the U.S., in June, Senate India Caucus Co-Chair Mark Warner shared his plans to table a bill to bring India into the NATO Plus fold.
NATO is a transatlantic military alliance of 31 countries, with the majority of members from Europe. After the dissolution of the Soviet Union and the end of the Cold War, many thought that NATO would lose its relevance.
On the contrary, NATO has not only survived but also expanded, with Finland joining as its 31st member (April 2023), and Sweden waiting in the wings.
NATO appears to be getting the much-needed ground for survival, thanks to Russia’s tirade against it and the invasion of Ukraine. With NATO swelling its expanse, some analysts even see the onset of Cold War 2.0.
“NATO plus” refers to a security arrangement of NATO and the five treaty allies of the U.S. — Australia, New Zealand, Japan, Israel, and South Korea as members — to enhance “global defence cooperation” and win the “strategic competition with the Chinese Communist Party”.
Interestingly, the term ‘NATO Plus’ is not an officially recognised or established concept within NATO itself, but has been used in discussions and debates regarding the potential expansion of the alliance.
The inclusion of these countries as members would require a complex process of negotiation and assessment of their compatibility with NATO’s principles, obligations, and defence commitments.
Opinion
A stocktake before the Global Stocktake (Page no. 7)
(GS Paper 3, Environment)
The Bonn Climate Change Conference was the last big milestone in climate negotiations before the first Global Stocktake under the Paris Agreement at COP28 (Conference of the Parties 28) in Dubai in December.
The Global Stocktake is mandated under Article 14 (1) of the Paris Agreement to assess collective progress towards long-term global goals.
This includes progress on greenhouse gas reduction, building resilience to climate impacts, and securing finance to address climate crisis. The outcome of the Global Stocktake will inform countries on how to update and enhance their actions.
In 2015, under the Paris Agreement, countries had agreed to “pursue efforts” to limit global temperature rise to 1.5°C. That the Bonn Conference was held in the context of overweening emphasis on restricting global average temperature below 1.5°C as compared to pre-industrial levels was reflected in the negotiations.
The two agenda items — mitigation pathways compatible with the temperature goal, and climate finance flows from developed countries to developing countries to enable them to mitigate greenhouse gas emissions (in line with Article 4.5 of the Paris Agreement) — remained points of contention between the developing countries and the Environmental Integrity Group represented by the European Union and others.
The signal from the Bonn Conference was that developing countries too need to be more ambitious in their emission reduction if the world is to limit rising global average temperatures in the context of adequate finance being provided by the developed north.
On June 14, climate change negotiators arrived on a compromise on one of the aspects, which relates to the work programme on just transition pathways.
The subsidiary body adopted the draft text aimed at working on ‘just transition pathways’, and the output will be placed at COP28.
Explainer
The legality of the Delhi Ordinance (Page no. 8)
(GS Paper 2, Governance)
The Ordinance promulgated by the President on May 19, 2023 amending the Government of National Capital Territory of Delhi Act 1991(GNCTD Act) took away the services from the jurisdiction of the Delhi government.
The services had been earlier restored to the Delhi government by the Supreme Court in a landmark judgment delivered on May 11, 2023. The Ordinance nullifies that judgment of the Supreme Court.
The Court had found that if a government does not have control over its officers it would paralyse governance which cannot be the intention of the Constitution makers while incorporating Article 239AA, which gives a special constitutional status to Delhi.
So the Court held that “legislative and executive power over services such as the Indian Administrative Services or Joint Cadre Services which are relevant for the implementation of policies and vision of NCTD [National Capital Territory of Delhi] in terms of day-to-day administration of the region shall lie with the NCTD.”
The Ordinance which has nullified the court’s decision raises serious legal and constitutional questions. The first question which arises is whether an Ordinance promulgated by the President or a Bill passed by Parliament can nullify the Court’s decision.
The Supreme Court has held in a large number of cases that since Parliament does not possess judicial powers, it cannot negate the decision of the Court without changing the basis of that decision. The Ordinance does not furnish any ground for nullifying the Court’s decision.
The Supreme Court based its decision to bring the services within the jurisdiction of the Delhi Assembly and the government on the constitutional mandate contained in Article 239AA (3)(a) which states that Delhi’s Legislative Assembly shall have the power to make laws with respect to any of the matters enumerated in the State list or the concurrent list except the three excluded items such as police, public order and land.
Since the executive power is co-extensive with the legislative power the Government of NCTD gets all the powers to deal with the services.
This position was affirmed by the Constitution Bench in 2018 and is now reaffirmed by another Constitution Bench of the Supreme Court in its latest judgment.
Text
Greedflation and its counter arguments: how consumers ultimately decide prices (Page no. 9)
(GS Paper 3, Economy)
Greedflation refers to price inflation caused by corporate greed for high profits. Progressives in the United States have accused corporate greed as a major reason for the historically high price inflation in the U.S. since the pandemic.
The proponents of the idea of greedflation argue that corporate profit margins have risen significantly since the pandemic even though the larger economy has struggled and that this has contributed to high inflation.
They contend that the U.S. corporations have allegedly increased the prices of their goods by more than what was necessary to compensate for higher input costs caused by supply-chain bottlenecks.
Proponents of the greedflation theory of inflation see this as a sign of increased market dominance by corporations, and have called for efforts to rein in market power of large corporations and some have even advocated for a ban on price hikes to prevent “profiteering”.
Many economists, however, have questioned the validity of the argument that corporate thirst for higher profits is the cause behind inflation.
They see greedflation as a political narrative built around the issue of inflation rather than as a serious economic explanation of high inflation since the pandemic.
Economists who disagree with the greedflation narrative argue that businesses, whether they are large corporations or small companies, cannot arbitrarily set prices as many people seem to erroneously believe.
Businesses set prices for their products based on what consumers would be willing to pay for these products. In other words, businesses cannot force consumers to pay a certain price for their goods; they can only try to gauge the maximum price that consumers would be willing to pay and set prices accordingly in order to maximise their profits.
If a business sets the price of its product too high, this would cause its goods to go unsold and the business would have no choice but to lower the price of its product to clear its unsold stock.
In short, while businesses have the freedom to raise or lower the prices of their products, it is ultimately consumers who determine the price of any product in the market. So be the case, it may not be sound to argue that corporate greed is behind the rise in inflation.
Business
‘Manufacturing growth eased in June’ (Page no. 14)
(GS Paper 3, Economy)
Manufacturing growth eased slightly in June, the survey-based S&P Global India Manufacturing Purchasing Managers’ Index (PMI) signalled, with the index easing to 57.8 from 58.7 in May.
New orders, however, grew at a fast clip, compelling firms to ramp up output at a pace that was among the fastest in 18 months even as they raised output charges at the quickest pace since May 2022.
Reacting to strong demand and the uptick in output, firms hired more workers, albeit at a ‘moderate’ pace similar to May, even as overall business confidence rose to a six-month high, S&P Global Market Intelligence said.
While the increase in factory orders last month was among the strongest since February 2021, “positive demand dynamics and greater labour costs pushed charge inflation to a 13-month high”.
Growth in export orders, however, slowed from May’s levels.
Though manufacturers raised prices for their buyers, their own input costs increased at a rate that was one of the lowest in three years, prompting them to purchase fresh raw materials at the second-strongest pace in more than 12 years, the firm said in a release.
The surge in input buying underscored the optimism and proactive stance of manufacturers, as they sought to capitalise on favourable market conditions and obtain resources to support production growth.
The latest increase in output charges reflected firms’ ability to pass on higher cost burdens... while maintaining a competitive edge.