The Hindu Today News & Editorials – 02 March 2021

1) The vital but delicate task of reviving the Iran deal.

Time is running out for the Joe Biden administration, but there is an opportunity for Brussels to take a lead role.

GS-2: Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora.

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Context:

1. The challenges facing in foreign policy by Joe Biden administration, none is more critical than salvaging the Joint Comprehensive Plan of Action (JCPOA, or the Iran nuclear deal), as a step toward reviving the 2015 Iran nuclear deal abandoned by former President Donald Trump.

2 Iran has always reiterated its commitment to the JCPOA, and yet, it is complicated and time is running out as both Iran and the U.S. struggle to overcome the impasse. Because it’s have global geo-political consequences.

 

 What is JCPOA?

1. JCPOA is an agreement signed by Iran and the P5+1+1 (China, France, Germany, Russia, the United Kingdom, the United States and EU) on July 14, 2015.
2. This nuclear deal or JCPOA seeks to prevent Iran from producing a nuclear weapon — something Iran insists it does not want to do — by putting curbs on its atomic programme in exchange for economic incentives.
3. As per the deal, Iran reduced the number of its centrifuges used for enriching uranium by two-thirds, restricted its uranium enrichment to 3.67%, and removed the core of its heavy water facility in Arak.
4. The nuclear deal was endorsed by UN Security Council Resolution 2231, adopted on July 20, 2015.
5. Iran’s compliance with the nuclear-related provisions of the JCPOA is verified by the International Atomic Energy Agency (IAEA) according to certain requirements set forth in the agreement.
6. Following the issuance of an IAEA report verifying implementation by Iran of the nuclear-related measures, the UN sanctions against Iran and some EU sanctions will terminate and some will be suspended.
7. 15-year term: After the 15 years, the treaty will come to its term; then the extraordinary restrictions will no longer be applicable.

 

U.S. policy reversal:

1. The JCPOA obliged Iran to accept constraints on its enrichment programme verified by an intrusive inspection regime in return for a partial lifting of economic sanctions.

2.  Mr. Trump had never hidden his dislike for the JCPOA calling it a “horrible, and he finally pulled the plug on it in May 2018 and embarked on a policy of ‘maximum pressure’ to coerce Iran back to the negotiating table.

1.  The U.S. decision was criticized by all other parties to the JCPOA (including the European allies) because Iran was in compliance with its obligations, as certified by the International Atomic Energy Agency (IAEA).

2. For the first year after the U.S. withdrawal, Iran’s response was muted as the E-3 (France, Germany, and the U.K.) and the EU promised to find ways to mitigate the U.S. decision.

 

 

The unraveling of the JCPOA:

1. In May 2019, Iran began to move away from JCPOA’s constraints incrementally: exceeding the ceilings of 300kg on low-enriched uranium and 130 MT on heavy-water; raising enrichment levels from 3.67% to 4.5%;

1.  Finally, in January 2020, following the drone strike on Islamic Revolutionary Guard Corps commander Gen. Qasem Soleiman, Tehran announced that it would no longer observe the JCPOA’s restraints, though its cooperation with the IAEA would continue.

 

Events in Iran:

1. This came on top of COVID-19 that affected Iran badly, which had over 1.6 million infections and more than 60,000 deaths. The Iranian economy contracted by 7% in 2019 and another 6% in 2020.

2. In mid-2020, Iran was shaken by a series of unexplained fires and blasts at a number of sensitive sites including one at the Natanz nuclear facility and another at Khojir, a missile fuel fabrication unit.

3.  Mohsen Fakhrizadeh, a senior nuclear scientist and head of the Research and Innovation Organisation in the Iranian Defence Ministry was killed outside Tehran in a terrorist attack in Last November.

 

No appetite for talks:

1.  Mr. Trump’s policy may have provided comfort to Israel’s leader Benjamin Netanyahu and Saudi Crown Prince Mohammed bin Salman, but it failed to bring Iran back to the negotiating table.

2. Iran has suffered and there is no appetite for more negotiations. The E-3’s promised relief Instrument in Support of Trade Exchanges (INSTEX), created in 2019 to facilitate limited trade with Iran has been a disappointment; its first transaction only took place in March 2020.

3. EU-Iran trade fell from €18 billion in 2018 to less than a third in 2019 and dropped further last year.

 

Overcoming the impasse (Confidence measure):

1. Positive steps along multiple tracks are necessary for creating a conducive atmosphere, Release of European and American nationals currently in custody in Iran would help.

2. Clearing Iran’s applications to the International Monetary Fund for COVID-19 relief and for supply of vaccines under the international COVAX facility can be done relatively easily.

1. Oman’s quiet facilitation helped create a positive environment for the JCPOA. After the Al Ula summit, Qatar and Kuwait too are well placed to play a diplomatic role and together,

2.  The E-3/EU need to fast track deals worth several hundred million euros stuck in the INSTEX pipeline, with a visible nod from the U.S.. Not all U.S. sanctions can be lifted instantly,

3.  If not with Iran, the U.S. should share with the E-3/EU a 45-60 day time frame for progressive restoration of sanctions relief. Meanwhile, Iran needs to refrain from any further nuclear brinkmanship.

6. The IAEA and the E-3/EU should work on a parallel reversal of steps taken by Iran to ensure full compliance with the JCPOA

 

Regional prosperity for India in JCPOA deal:

1. India imported 226.5 mt of crude during FY19, up 2.7 per cent from 220.4 mt in FY18. The country’s crude import bill during the period increased from $87.8 billion in FY18 to $111.9 billion in FY19.

2. If the USA Re-imposed sanctions on Iran its lid to reduce Iran’s crude oil export to zero, the US pressurized India not to buy oil from Iran.

1. The trade between India and Iran has increased during the fiscal year 2018-19 which was $17.03 billion as compared to $13.76 billion in 2017-18; an increase of 23.8% may be impacted.

2. In 2016, India signed a deal with Iran entailing $8 billion investment in Chabahar port and industries in Chabar Special Economic Zone, a transit route to Afghanistan and central Asia. For successes of JCPOA safeguard India investment in Iran.

 

Conclusion:

1. The must be de-escalation of the crisis the Trump administration escalated.  The Biden administration prioritizes rejoining the JCPOA, followed by “incremental progress” against Iran’s aggressive activities in the region.

2.  If the U.S. waits for Iran to return to full compliance before lifting sanctions or Iran waits for the U.S. to restore sanctions relief before returning to full compliance, it can only lead to one outcome  the collapse of the JCPOA with Iran going nuclear like North Korea.

 

2) A loan waiver rain and a State fiscal capacity drought .

In Tamil Nadu, politicians seem oblivious to the lack of fiscal space and the opportunity cost of expenditure profligacy.

GS-3: Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System-objectives, functioning, limitations, revamping.

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Context:

1. The Government of Tamil Nadu on Friday announced waiver of Rs 12,110 crore farm loans availed by 16.43 lakh farmers from cooperative banks.  May have consequence on  fiscal space and the opportunity cost.

1.  It could likely to help series of loan waivers for weavers and small traders, interest subvention, subsidised electricity and a host of open ended subsidies in the election manifestos.

 

Tamil Nadu farmer’s welfare budget provision:

1. In addition to Rs.5, 000 crore has been made in the Interim Budget Estimates 2021-22 for the crop loan waiver scheme.

2. The Government of Tamil Nadu took on the additional burden of premium subsidy and adopted a new co-insurance model on a 80:20 (Center-State) proportionate sharing basis to ensure that the farmers have adequate risk coverage in the current year under Pradhan Mantri Fasal Bima Yojana (RPMFBY).

3. To improve farmers’ income across the State, the Tamil Nadu Mission for Sustainable Dry Land Development has been relaunched to cover a further 25 lakh acres over three years.

4. To honour the services of renowned farmer leaders, the ‘Thiru C.Narayanasamy Naidu Paddy Productivity Award’ is given from this year onwards

 

No support to PSUs

1. The fiscal indicators and finding out the fiscal capacity of the Government of Tamil Nadu to finance subsidies in the ensuing years are apt.

2. The opportunity cost of squeezing the Budget to finance subsidy is the lack of direct budgetary support to public sector undertakings (PSUs) that provide public utilities.

3. Subsidies increase revenue expenditure, and without corresponding increase in tax and non-tax revenue for the government, the revenue deficit should naturally increase.

1. Though every year the government claims that the revenue deficit ratio and fiscal deficit ratio are within statutory limits, the desirability and sustainability of debt have yet to be examined.

 

Revenue deficit ratio:

1. The farm loan waiver announced in 2016 has been provided the funds in the subsequent five Budgets. In spite of this, the revenue deficit ratio was around 1.5 in the three-year period, 2017-20.

2.  During the 2017-20 period, the all States’ average revenue deficit ratio was around 0.4, it was a near revenue balance in Karnataka and Telangana, and it was more than 2 in Kerala and Andhra Pradesh.

 

Cause of concern (Deficit):

1. The cause for the elevated revenue deficit ratio in Tamil Nadu has been the increasing primary deficit ratio from 0.9 to 1.3.

2. Primary deficit is the revenue deficit net of interest payments and the implication is that the government is unable to contain recurring expenditure such as subsidies and other discretionary expenditures within the limits of recurring non-debt revenue.

1. as per the revised Budget estimates, the fiscal deficit is expected to widen to ?96,889.97 crore in 2020-21, which is 4.99% of the Gross State Domestic Product (GSDP).

 

Extra-budgetary transactions for PSU:

1. The PSUs offer public utilities, which otherwise should be directly provided by the government. It is important that the government provide adequate direct budgetary support to PSUs if they price the public utilities below the unit cost.

2. The adequacy and quality of public utilities depend on the financial health of these PSUs. But in the absence of direct budgetary support, we can fix the financial sickness of PSUs to be a symptom of a fiscal tumour.

1. Almost all the PSUs should have incurred massive losses and amassed unserviceable debt during the COVID-19 period and this will accelerate in the couple of years to come.

 

Conclusion:

1. The possibility for increasing the recurring revenue,in a rule-based fiscal policy, The solution lies in “harmonisation of commodity taxation and restriction of deficit ratios, higher economic growth and tax elasticity” can help.

2. The lack of fiscal space and opportunity cost of expenditure profligacy of the State show that politicians only think ‘in the long run we are all dead’ and ‘let us achieve short-run electoral victories by showing the low hanging fruits of subsidies’ modes.

 

3) Master and the roster

The collegium system has failed to keep executive interference at bay.

GS-1: Social empowerment.

GS-2: Separation of powers between various organs dispute redressal mechanisms and institutions.

 

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Context:

1. SC closes case to probe sexual harassment allegations against ex-CJI Gogoi judgment says nearly two years have passed and the possibility of retrieving electronic records is very little.

1. The conspiracy against judiciary is threaten to the independence of the judiciary on the basis of sexual harassment allegations against the former Chief Justice of India (CJI), Ranjan Gogoi.

 

Singular power:

1. This is the singular power of office of the CJI as the Master of the Roster i.e., the vesting of exclusive discretion in the Chief Justice to constitute benches and allocate cases.

2. This power lad at the heart of the controversy surrounding the proceedings the Court has now closed. It enabled Justice Gogoi to institute suo motu proceedings despite being an accused.

3. It makes the CJI the sole point of defence of the Court against executive interference.

4. This power is predicated upon the CJI’s seniority in the top court and the resultant presumption of propriety.

 

The Master of the Roster:

1. B.R. Ambedkar had forewarned the Constituent Assembly: “…after all, the Chief Justice is a man with all the failings, all the sentiments and all the prejudices which we as common people have”. Yet, the Supreme Court has been reluctant to dilute this power.

1. In Asok Pande v. Supreme Court of India (2018), a three-judge bench of the Court held that Master of the Roster is the CJI’s exclusive power.

2. After two-judge bench in Shanti Bhushan v. Supreme Court of India (2018) rejected the plea that the Master of the Roster should be interpreted as the collegium.

4. The CJI’s other powers, such as recommending appointments to constitutional courts are shared with other senior judges, the power of Master of the Roster is enjoyed without scrutiny.

5. Justice Gogoi finds himself in a unique position of being both a vocal critic of this power and also championing its execution.

 

Judicial reforms:

1. Reforms is continuing project, mostly responding to crises of the time. Hence, when Indira Gandhi as Prime Minister ordered punitive transfers of High Court judges and superseded judges to appoint the CJI, the Supreme Court formulated the collegium system in response.

2. However, this system has failed to keep executive interferences at bay from the Supreme Court. This is for two reasons: first, as Justice Gogoi’s case shows, there is an attractive lure of post-retirement jobs; and second, as the privilege of Master of the Roster shows, the CJI’s allocation of cases is an unchecked power.

 

Judicial reforms most address these two issues:

1. A cooling-off period between retirement and a post-retirement appointment has often been suggested as a way to deal with the first problem.

1.  The power of Master of the Roster needs to be diversified beyond the CJI’s exclusive and untrammeled discretion.

 

Way Forward:  

1. The question of judicial reforms in judicial appointments has provoked a wide ranging debate both within and outside the judiciary. Representation, merit and selection process are all key aspects in the making of a robust judiciary.

2. In appointing a Chief Justice merit basis, rather than seniority, should be the criteria. He should have administrative and leadership qualities. This is also recommended by the Law Commission.

1. The Collegium System has no constitutional basis. It was created in the Supreme Court Advocate Association-On-Record Association Vs Union of India, in the guise of interpretation, must abolish