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Over two months after the Reserve Bank of India (RBI) allowed the opening of nine “Vostro” accounts in two Indian banks to facilitate overseas trade in the rupee with sanctions-hit Russia, Moscow has flagged concerns over lack of “progress” and proposed radical new initiatives to deepen financial co-operation.
Most significantly, it has proposed the setting up of an “India-based financial institution with Russian ownership” that would not be subject to third-party sanctions.
And an India-based specialised financial technology company that would enable Indian credit institutions to use Bank of Russia’s Financial Messaging System (SPFS) — the Russian financial messaging system which replaced the sanctioned SWIFT.
These proposals were fleshed out in a communication last month from First Deputy Governor of the Bank of Russia Vladimir Chistyukhin to his RBI counterpart Deputy Governor T Rabi Sankar.
Chistyukhin’s note also mentioned that Russia’s MTS Bank, which was not subject to third-party sanctions, was “willing to discuss its possible involvement” in such a project.
The RBI has been requested to arrange a meeting between its representatives, those of the Bank of Russia, and MTS Bank where legal and regulatory issues could be discussed.
Incidentally, Chistyukhin will chair the meeting of the Russian-Indian Working Group on Banking and Finance scheduled to be held in India from February 10-12.
Chistyukhin underlined that during consultations between the two central banks in New Delhi in June 2022, the RBI had noted that it had no objection to “direct” talks between Indian Banks’ Association (IBA) and the Bank of Russia on the subject of use of SPFS but this has not happened in practice.
Govt & Politics
Agniveer recruitment process changed, candidates to sit for entrance test first (Page no. 7)
(GS Paper 3, Defence)
The Army has announced a change in its recruitment process for Agniveers: candidates wanting to join the force will first have to undergo an online common entrance examination (CEE) at nominated centres, followed by physical fitness tests during recruitment rallies and then medical tests before the selection.
An advertisement issued by the Army detailed the three steps for recruitment of soldiers to the force. Earlier, the recruitment process for Agniveers followed a different order.
The candidates had to first undergo the physical fitness test, which was followed by their medical tests. They had to qualify the CEE as the last step.
So far, 19,000 Agniveers have joined the Army and 21,000 will join the force from the first week of March. The new recruitment rules will apply to around 40,000 candidates willing to join the Army from the next recruitment cycle of 2023-24.
The number of candidates who attended the recruitment rallies earlier varied from 5,000 in smaller towns to 1.5 lakh in bigger cities.
Army officers told The Indian Express that the change in the recruitment process has been made considering the enormous administrative costs and logistical arrangements required to tackle the thousands of candidates who come to the recruitment rallies.
The earlier process led to screening of a large number of candidates, which stressed administrative resources. A large number of security personnel had to be deployed to tackle law and order situation, and a substantial medical staff had to be committed for the rallies.
The officer added that the new recruitment process will substantially reduce the costs involved in organising the rallies and ease out the administrative and logistical burden.
Explained
Two years after Myanmar’s mess and India’s headache (Page no. 13)
(GS Paper 2, International Relations)
It is exactly two years since the Myanmar army seized power. The coup took place in the pre-dawn hours of February 1, 2021, the day on which new Members of Parliament were scheduled to meet in an inaugural session to take the oath of office.
The National League for Democracy (NLD) led by Aung San Suu Kyi had won a landslide victory. The army, which contested the election through its proxy party, the United Solidarity and Development Party, had fared poorly.
To justify the coup, the generals alleged rigging by the NLD, the ruling party of the previous five years in a hybrid civil-military arrangement with the army, though it appears to have been driven by the fear that Suu Kyi, backed by the democratic parties in Parliament would rewrite the 2008 Constitution and write the military out of it.
Within a few hours, the military erased 10 years of a so-called “transition to democracy” and returned the country to 1990.
But how the coup unfolded after 2021 is quite different from the 1990s. The present leadership of the army led by Senior General Min Aung Hlaing, who heads the junta regime named the State Administration Council, has failed to bring the country under its control.
On the ground, hundreds of armed pro-democracy civilian resistance groups (People’s Defence Forces) are fighting the junta and turning swathes of the country into no-go areas for the army.
In addition some among the two dozen ethnic armed organisations (EAOs) that have been fighting the Myanmar state for autonomy for the last seven decades, have joined hands with the PDFs.
At the political level, a National Unity Government comprising many of the elected parliamentarians, has fashioned itself as a government in exile, and has been lobbying foreign governments for diplomatic recognition.
The junta’s has given a tough military response against the pro-democracy fighters on the ground and EAOs that back them, with land forces and air power. So far, it has failed to force them into submission.
Supreme Court income tax order on Sikkim, and the protests it has triggered (Page no. 13)
(GS Paper 2, Governments Policies and Interventions)
A review petition has been filed in the Supreme Court for rectification of the court’s observation on Sikkimese Nepalis, Sikkim’s Chief Minister Prem Singh Tamang announced on Twitter.
Political parties in Sikkim, including the ruling Sikkim Krantikari Morcha (SKM), have been protesting against the court’s observation that Sikkimese Nepalis were immigrants while allowing exemption from income tax to all old settlers cutting across ethnic lines.
In its judgment delivered on January 13, the apex court said that under the Sikkim Income Tax Manual, 1948, “all persons engaged in business were subjected to tax irrespective of their origin.
Therefore, there was no difference made out between the original inhabitants of Sikkim, namely, the Bhutia-Lepchas, and the persons of foreign origin settled in Sikkim like the Nepalis or persons of Indian origin who had settled down in Sikkim generations back.
The judgment also recorded the petitioner’s contention that migrants from other countries or erstwhile kingdoms like “Nepalese migrants”, who “migrated to and settled in Sikkim at the same time or even after migrants/settlers of Indian origin”, were benefiting from Section 10(26AAA) of the IT Act, 1961, “while arbitrarily excluding settlers of Indian origin such as the petitioners herein”.
On February 2, state Health Minister Mani Kumar Sharma resigned in protest against the government’s failure to respond to the court’s observation.
A day previously, Additional Advocate General Sudesh Joshi had resigned in the face of allegations — which Joshi denied — that he had not briefed the court adequately about the distinction between the Sikkimese Nepali population and other old settlers, which had led to the observation.
On January 13, the Supreme Court held that the benefit of tax exemption provided in Section 10 (26AAA) shall be extended to all Sikkimese people. (Association of Old Settlers of Sikkim vs Union of India).
Before this judgment, the tax exemption excluded “old Indian settlers”, who had permanently settled in Sikkim before the merger of the state into the Indian union on April 26, 1975, even if their names were recorded in the register maintained under the Sikkim Subjects Regulations, 1961, read with the Sikkim Subject Rules, 1961 (also referred to as the “Register of Sikkim Subjects”).
Paris Club (Page no. 13)
(GS Paper 2, International Groupings)
The Paris Club, an informal group of creditor nations, will provide financial assurances to the International Monetary Fund on Sri Lanka’s debt, Reuters has reported quoting two unnamed sources.
An assurance from the Paris Club, as well as other bilateral creditors, is one of the conditions that Sri Lanka has to fulfil for the IMF to begin disbursing a $2.9 bn bailout package to the beleaguered nation that all but collapsed last year under a severe economic crisis.
The Paris Club is a group of mostly western creditor countries that grew from a 1956 meeting in which Argentina agreed to meet its public creditors in Paris.
Their objective is to find sustainable debt-relief solutions for countries that are unable to repay their bilateral loans.
It describes itself as a forum where official creditors meet to solve payment difficulties faced by debtor countries.
All 22 are members of the group called Organisation for Economic Co-operation and Development (OECD).
The members are: Australia, Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Japan, Netherlands, Norway, Russia, South Korea, Spain, Sweden, Switzerland, the United Kingdom and the United States.
According to the information on its website, since its beginnings, the Paris Club has reached 478 agreements with 102 different debtor countries. Since 1956, the debt treated in the framework of Paris Club agreements amounts to $ 614 billion.
Ideas page
Chat chatty bot next door (Page no. 15)
(GS Paper 3, Science and Technology
Over the past few months, a chatty bot has become a sensation. A chatty what, you say? A chatbot, or a bot into which you can type questions and receive written answers, rather aptly called ChatGPT, is the rage.
As ABC News tells us, it is a generative AI or algorithm that can be used to make content. It generates text responses to text prompts like a very advanced chatbot. Released by OpenAI, it can communicate in plain English and users can see the bot typing the answers to their questions in real-time.
Ethan Mollick writes in the Harvard Business Review that what sets ChatGPT apart is that it’s open to the general public, can communicate in plain English (or whatever other language you choose), and can generate content very quickly.
ChatGPT and other similar AI tools enable the human-machine hybrid work mode that is slowly becoming popular. Let me illustrate by typing in questions to ChatGPT within my domain of the law.
As a lawyer, I asked Chat GPT to answer a question in an area I practice — money laundering law. I typed the question: What is the offence of money laundering in India? ChatGPT not only identified the relevant statute — the Prevention of Money Laundering Act, 2002 — but also proceeded quickly to list the important ingredients of the offence, “proceeds of crime”, “knowledge”, “concealment”, “possession” and “projecting as legitimate”. It provided a few explanatory lines about each ingredient.
I thought I should ask something more complex and introduce a subjective element to the question. I asked, “Who is the best judge of the Supreme Court of India?” Here’s where the bot pleasantly surprised me. ChatGPT gave me a reasoned and institutionally appropriate response by saying, “It is not appropriate to designate a single judge as the ‘best’ judge of the Supreme Court of India.
The Supreme Court is comprised of a bench of highly experienced and knowledgeable judges who work to uphold the Constitution and ensure justice for all citizens.
The quality of their work is evaluated based on their judicial opinion, decisions and overall impact on the legal system. It is important to respect the impartiality and integrity of the judicial process and avoid making subjective judgements about individual judges.”
Health in Amrit Kaal (Page no. 15)
(GS Paper 2, Health)
India stands on the brink of a massive opportunity. Quality education and health for the 26 million children born each year and the 65 per cent of the population under the age of 35 could help provide a workforce that would propel India forward.
India is one of the few middle-income countries with a growing working-age population. It can harness this demographic dividend and potentially become a developed country within a generation. However, the window of opportunity is narrow and urgent actions are needed to achieve this goal.
In her 2023-24 Union Budget speech, the finance minister announced that the total central government budget for health (not including research) will be roughly Rs 86,175 crore ($10 billion) — that is, roughly Rs 615 for every citizen.
This is a 2.7 per cent increase from the previous fiscal year and lower than the rate of inflation. In real terms, the central government’s health spending has declined. Vaccinating a single child against all childhood illnesses costs at least Rs 1,600.
A day of hospitalisation at a public hospital is estimated at Rs 2,800. At a private hospital, it is Rs 6,800.
Add to these the expenses for supporting women through deliveries, control of infectious disease, primary healthcare, and much more, and the Ministry of Health is being asked to carry out a heroic effort on a shoestring.
It is, therefore, no surprise that the system fails the most vulnerable and they are forced to turn to the expensive private sector.