GS Analyst: Daily Current Affairs

Context

The renewed protest by farmers over legal status of MSP has put the focus back on MSP. The government is reluctant to provide the legal status citing high fiscal cost and other reasons such as WTO norms adherence.

1. Exaggerated Cost of Legal MSP:
• Lack of Clarity on Demand: Farmers demand a legal guarantee for Minimum Support Prices (MSP) amid misconceptions about fiscal costs and market implications such as large figures to the tune of Rs 10-18 lakh crore have been floated as the cost of the guarantee.
• Misconceptions on Fiscal Costs: Assumptions of Rs 10-18 lakh crore costs stem from misunderstanding agricultural markets and MSP's role in price stabilization.
• Market Dynamics and MSP: Misconceptions persist regarding the extent of government intervention required, overlooking market dynamics and consumer subsidies.
2. Market Intervention and Procurement:
• Limited Implementation of MSP: Despite yearly announcements, MSP interventions are primarily limited to rice and wheat, often for fulfilling statutory obligations  and subsidy to consumers rather than supporting farmers.
• Government Reluctance: Successive governments hesitate to legalize MSP due to concerns over excessive fiscal requirements, driven by inflated cost estimations.
• Procurement Dynamics: Government intervention in procurement is necessary only when market prices fall below MSP, with actual procurement often lower than speculated figures.
3. Economic Implications and Reform Opportunities:
• Cost-Benefit Analysis: The cost of implementing legal MSP is likely overstated, with benefits including price stability, consumer protection, and rural economic revival outweighing fiscal concerns.
• Diversification and Expansion: Legalizing MSP provides an opportunity to rectify existing imbalances by diversifying and expanding MSP coverage to bridge regional agricultural productivity gaps.
• Addressing Agrarian Neglect: Farmer demands reflect years of agrarian neglect, necessitating reforms to improve real incomes, wages, and overall rural economic stability.

Context:

The significant developments in the bilateral relationship between India and Greece, which is evident in  Greek port of Piraeus being one of the important port in IMEC(India- Middle East Economic Corridor) and Greek Prime Minister KyriakosMitsotakis will be the chief guest at the annual Raisina Dialogue held in New Delhi.

Background

• Historical Ties: India and Greece, both ancient civilizations, share a rich history of cultural and economic exchanges dating back to antiquity, despite limited contemporary bilateral engagement.
• Modi Government's Initiatives: Prime Minister Narendra Modi's proactive approach has elevated the bilateral relationship to a strategic partnership, bridging historical gaps and emphasizing shared cultural heritage.
• Strategic Partnership: Modi's visit to Greece in 2023 and subsequent groundwork laid by External Affairs Minister S Jaishankar have facilitated the upgrade to a strategic partnership, bolstering cooperation in various sectors including trade, military exercises, and connectivity projects.

Geopolitics beyond connectivity:

• Regional Dynamics: India's support for a bicommunal, bizonal federation in Cyprus aligns with Greece's stance, strengthening bilateral ties amid regional tensions in the Eastern Mediterranean.
• Counterbalancing Strategies: India's deepened engagement with Greece and Cyprus serves as a strategic counterbalance to Turkey's support for Pakistan, particularly concerning issues like Kashmir, while also addressing China's economic dominance in the region.
• Economic Realignment: Greece's efforts to diversify trade away from Chinese overinvestments align with India's economic interests, presenting opportunities for enhanced economic cooperation and trade diversification.

Defence and security vectors:

• Strengthened Defence Ties: Defence cooperation between India and Greece has intensified, with joint military exercises, training programs, and visits enhancing mutual understanding and interoperability.
• Potential for Defence Industry Cooperation: Greece's plans for significant investments in defence procurement present opportunities for collaboration with India's vibrant defence industry, including joint production and export of defence equipment.
• Maritime Cooperation: Greece's substantial merchant fleet offers potential for cooperation in maritime security, contributing to India's engagements in upholding freedom of navigation in the Indo-Pacific region.

Context:

The Supreme Court of India's recent ruling on February 15, 2024, striking down the electoral bonds scheme marks a significant moment in upholding transparency and democracy in the country's electoral process.

Funding limits removed:

• Transparency Concerns: The electoral bonds scheme lacked transparency, denying voters knowledge of political party funding sources and amounts contributed, contrary to established practices in leading democracies.
• Influence of Corporate Funding: The judgment highlights concerns regarding corporate funding's potential to unduly influence the political process and legislative decisions, emphasizing the need for limits on corporate contributions to prevent such influence.
• Risk of Shell Companies: Electoral bonds removed previous limits on corporate donations and allowed even loss-making companies to contribute, raising the risk of shell companies being used to channel funds to political parties, a concern acknowledged by the Election Commission of India.

A well thought-out plan:

• Legislative Amendments: The introduction of the electoral bonds scheme involved amendments to several laws, including the RBI Act, the Representation of the People Act, the Income Tax Act, and the Companies Act, bypassing transparency requirements mandated by the Central Information Commission.
• Lack of Public Consultation: The scheme's implementation bypassed processes for public consultation and parliamentary discussions, raising questions about democratic decision-making and transparency in legislative processes.
• Violation of Fundamental Rights: The Supreme Court's judgment emphasizes violations of Articles 19 and 14 of the Constitution, safeguarding the right to information and equality, respectively, highlighting the scheme's arbitrariness and constitutional inconsistencies.

The essence of the judgment:

• Striking Down of Electoral Bonds Scheme: The Supreme Court has invalidated the electoral bonds scheme and declared associated amendments to various acts as violative of fundamental rights enshrined in the Constitution.
• Directives to State Bank of India (SBI) and Election Commission of India (ECI): The SBI, the sole issuer of electoral bonds, is directed to cease issuance and provide detailed information on all previously issued bonds to the ECI by March 6, 2024, for public disclosure on the ECI's website.
• Upholding Democracy: The judgment underscores the importance of judicial review in safeguarding democracy and applauds the role of constitutional bodies like the ECI and the Supreme Court in upholding democratic principles.