GS Analyst: Daily Current Affairs

Recently, the Basic Structure Doctrine will observe its 50th anniversary and let discuss its origins, arguments supporting it, and concerns about judicial arbitrariness, proposing solutions for relevance.

Origin of Basic Structure Doctrine

• Contributions of Dietrich Conrad: Conrad's 1965 lecture influenced the Basic Structure Doctrine in KesavanandaBharati case.
• Judicial interventions: Urged limitations on amending power to prevent extreme constitutional changes.
• Significance: Emphasized the need for checks and balances on institutional powers.

Arguments in Support of Basic Structure Doctrine

• Importance of Limitations: Doctrine recognizes the need for limitations on all institutional powers. Safeguards against legislative excesses, as seen during the Emergency.
• Supremacy of Constitution: Constitution is supreme; judiciary interprets its meaning. Judiciary uniquely positioned to define Basic Structure.
• Supporting Judiciary: Judiciary's role in constitutional protection is crucial in the information age.Addresses concerns of potential abuse of power by the government.

Strengthening the Doctrine

• Concerns and Solutions: Acknowledges the ongoing debate on judicial arbitrariness in Basic Structure interpretation. A doctoral dissertation suggests ways to reduce risks of arbitrariness.
• Need to Understand:Emphasizes the need for a reimagined, transparent, and legitimate Basic Structure Doctrine.
• Temporal Relevance: Trust in judiciary requires legitimacy and transparency.Formulating Basic Structure in clear terms prevents reduced legitimacy.

Context:

Recently released Consumer Confidence survey by RBI has highlighted the consumers’ thought process and glooming economic slowdown with future concerns.

MPC's Decision on Interest Rates

• GDP Growth Forecast: MPC holds benchmark interest rates steady despite warning of food price shocks.Raises full-year GDP growth forecast but acknowledges inflation risks.
• Concerns raised: about policymakers potentially falling behind the curve on anchoring inflation expectations.
• Future Concerns: Retail inflation softens, but MPC anticipates acceleration in November-December. RBI's inflation expectations survey indicates households expect higher inflation, challenging the anchoring of price gains.

Consumption Challenges

• Causes of rise:Despite interest rate hikes, consumption struggles, attributed to high inflation affecting discretionary spending.
• Rising Discontent:Consumer confidence survey shows negative sentiments on current and future price conditions.
• Policy challenges: MPC faces the challenge of balancing price stability with sustaining GDP growth and employment.

Role of the MPC

• Balancing Economic Growth: MPC's task is to balance economic growth and price stability amid inflation risks.
• Highlight concerns: that erosion of purchasing power could offset benefits of GDP and employment expansion.
• Way forward: The dissonance in interest rate decisions and growth projections raises questions about the effectiveness of current policies.

Context:

Raising the savings and investment rates, improving the skill acquisition of young entrants to the labour market and adopting an employment-friendly technology mix must be the focus areas.

Economic Growth Projections

• Global Trends: RBI projects India's 2023-24 growth at 7%, while IMF and World Bank estimate 6.3%.
• Factors contributing: Deglobalization trends due to geopolitical conflicts impact supply chains and international settlements.
• Future estimates:India needs to recalibrate its growth strategy in light of changing global conditions.

Domestic Growth Drivers

• Dependency on Domestic Growth: India's export-led growth strategy may no longer be viable; focus on domestic growth.Concerns about the fall in household sector savings, critical for government and corporate investment.
• Employment Growth Challenges:India faces unique challenges with a potentially employable population amid labor-saving technologies.The working-age population share peaks in 2030; resources need to be allocated for training and skilling.
• Non-agricultural growth must absorb labor released from agriculture and address the impact of new technology.

Way forward

• Climate Initiatives and Growth Impact: India commits to carbon reduction targets, emphasizing green initiatives and climate-friendly technologies.
• One Escape out: Service sector growth could mitigate the adverse impact of climate-promoting technological changes.
• Fiscal Responsibility for Growth: Adhering to fiscal responsibility targets is critical for sustained growth.Achieving fiscal deficit and debt to GDP ratios of 6% and 60%, respectively, is essential.