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- After engaging with China in Wuhan and Qingdao, India appeared to be rebalancing its ties with Pakistan in order to build bridges with Eurasia, within the framework of the eight-nation SCO.
- The relations between India and Pakistan have been strained after an attack on an Army camp in Uri in Jammu and Kashmir by Pakistan-based terror organisations in 2016.
- The SCO has been working on connectivity among its member countries. Now that India and Pakistan are both members, it provides New Delhi with a fresh opportunity to reach out to Central Asia across the Pakistani corridor.The result is an evolving policy towards Eurasia, with a Central Asia core
- Asserting India’s continued opposition to China’s ambitious Belt and Road Initiative, PM said mega connectivity projects must respect the sovereignty and territorial integrity of the countries. However, New Delhi, he said, would support initiatives which ensure inclusivity.
SCO is a Eurasian political, economic,and military organisation which was founded by the leaders of China,Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. India and Pakistan has recently
become members of SCO in its 2017 meeting held at Astana, Kazhakhstan.
Projected as Chinese President Xi Jinping’s ambitious project, the One Belt One Road initiative focuses on improving connectivity and cooperation among Asian countries, Africa, China and Europe. The emphasis is on enhancing land as well as maritime routes. The policy is significant for China since it aims to boost domestic growth in the country. Experts have noted that OBOR is also a part of China’s strategy for economic diplomacy. Considering China’s exclusion from G7, OBOR policy might just provide China an opportunity to continue its economic development. The initiative comprises of the Silk Road Economic Belt and 21 Century Maritime Silk Road.
Why is India opposed to OBOR?
The main reason behind India’s opposition towards the policy is the China-Pakistan Economic Corridor (CPEC), which is a part of OBOR.
We are of firm belief that connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency and equality. Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities; balanced ecological and environmental protection and preservation standards; transparent assessment of project costs; and skill and technology transfer to help long term running and maintenance of the assets created by local communities. Connectivity projects must be pursued in a manner that respects sovereignty and territorial integrity.
- Regarding the so-called ‘China-Pakistan Economic Corridor’, which is being projected as the flagship project of the BRI/OBOR, the international community is well aware of India’s position. No country can accept a project that ignores its core concerns on sovereignty and territorial integrity.
- A group of Indian pesticide manufacturers says that the proposed Pesticides Management Bill, will harm both farmers and the domestic industry by not making it mandatory for the active ingredients of pesticides to be revealed in the registration process.
- The draft Bill will allow importers to register readymade products without registering the active ingredients.
- Recently MPC raised repo rate by 25 basis points, and there is ahardly any reaction from various stakeholders.
- The MPC’s recent rate decision has turned out be a non-event because India’s financial markets had already pre-empted it.
- Consider bond markets first ,in the last 10 months, the yield on the 10-year government bond, the benchmark for market interest rates, has shot up by 120 basis points from 6.60% to 7.83%.
- Several factors have propelled market interest rates in this period. The most important one is the demand-supply mismatch in government securities (g-secs).
- Normally, the g-sec supply released by the Centre’s borrowings is promptly absorbed by banks to fulfil their 19.5% SLR (statutory liquidity ratio) requirement.
- But post-demonetisation, domestic banks were flush with funds and took to parking these surpluses in g-secs, resulting in them holding as much as 30% in SLR securities.
- With credit offtake picking up in recent few months, banks have gone slow with their g-sec purchases, to ensure that they had funds to lend. With the largest buyers in the market stepping back, excess g-sec supply has swamped the market, quelling prices and raising yields.
- With global interest rates firming up lately, foreign portfolio investors, key players in the bond market, have been in sell mode, withdrawing a massive $6.7 billion between April 1 and June 6, 2018, as per the MPC.
- Looming inflation risks have impacted rates too.This has also prompted market players to pre-empt the MPC.
- With all the above factors propping up market interest rates by over 120 basis points in the past year, the mild 25-basis point hike by the MPC proved underwhelming.
Sovereign bond rates set the floor for all other borrowers in the market. Therefore, this upward spiral in g-sec yields in the last 10 months has been faithfully mirrored by corporate bonds and commercial paper.
As a result, India Inc has already seen a 100-120 basis point escalation in its borrowing costs from the market in the last 10 months.
- Banks: With deposit flows slowing down and credit offtake picking up, banks have had to hike their retail and bulk deposit rates by 25-50 basis points over the last six months to woo new depositors.
- Given that the RBI requires banks to peg their lending rates to their incremental cost of funds, higher deposit rates have automatically fed into higher lending rates. The SBI’s MCLR (marginal cost of funds based lending rate) for one-year loans bottomed out at 7.95% in November 2017, but is now at 8.25%.
- If the markets regularly pre-empt MPC moves, its policy rates lose their benchmark status and become a less effective tool to rein in inflation, stimulate growth or stabilise an unruly exchange rate.
what can the MPC do
- For one, it can improve its forecasting skills.
- It should be considered that if MPC should go back to a multiple-indicator approach to decide on its rate actions.
- Earlier, the RBI used incoming data on a whole host of factors — inflation, GDP numbers, deficit indicators, foreign flows — as inputs to its rate-setting decisions, so as to balance inflation, growth and stability objectives. As the RBI would assign different weights to these factors at different times, the markets were often kept guessing about RBI actions.
- Way Forward: Restoring this flexibility may give the MPC a fighting chance at staying ahead of the market.
The Statutory Liquidity Ratio (SLR) is a prudential measure under which (as per the Banking Regulations Act 1949) all Scheduled Commercial Banks in India must maintain an amount in one of the following forms as a percentage of their total Demand and Time Liabilities (DTL) / Net DTL (NDTL);
[ii] Gold; or
[iii] Investments in un-encumbered Instruments that include;
(a) Treasury-Bills of the Government of India.
(b) Dated securities including those issued by the Government of India from time to time under the market borrowings programme and the Market Stabilization Scheme (MSS).
(c) State Development Loans (SDLs) issued by State Governments under their market borrowings programme.
(d) Other instruments as notified by the RBI.
A 6-member monetary policy committee is to be setup to decide key policy rates. The panel will have three members from RBI. They are the governor, deputy governor and another officer. The other three members will be decided by the centre based on the
recommendations of a panel headed by the Cabinet Secretary. Under MPC, the RBI governor has a casting vote and doesn’t enjoy veto power,decisions will be taken on the basis of majority vote. The decision of the Committee would be binding on the RBI.
- Under the Monetary Policy Framework Agreement, the RBI will be responsible for containing inflation targets at 4% (with a standard deviation of 2%). 2%-4%-6%
- RBI would have to give an explanation in the form of a report to the Central Government, if it failed to reach the specified inflation targets. It shall, in the report, give reasons for failure, remedial actions as well as estimated time within which the inflation target shall be achieved.
- MPC decides the changes to be made to the policy rate (repo rate) so as to contain the inflation within the target level specified to it by the Central Government.
- Each Member of the Monetary Policy Committee has to write a statement specifying the reasons for voting in favour of, or against the proposed resolution, and the same alongwith the resolution adopted by the MPC.
Please refer Ramesh Singh for Indian Economy .
- When Artificial Intelligence is coupled with open data, a real paradigm shift begins. With choice and information-sharing now redefining consumer behaviour, every company is looking to embrace or at least look like it is embracing the new paradigm of data-driven innovation.
- The new wave of a technological revolution will not be from pure data or access to consumer behaviour. The application of data and their assimilation with solving social problems, enabling better governance and powering elected governments to serve their citizens better is ushering in a new revolution.
- Privacy and consent: The “Datafication” of businesses has also brought to the fore the criticality of developing data management, storage and privacy laws.
- The European Union with its General Data Protection Regulation has been a front-runner and other countries, including India, have also adopted a collaborative model to develop privacy laws, which includes deliberations with creators of data (the consumer) and users (corporates).
Open government data:
- Open government data means publishing information collected by the government in its entirety, such as government budgets, spending records, health-care measures, climate records, and farming and agricultural produce statistics.
- Over 100 governments have already signed a charter to proactively share data collected by various government departments, for public consumption. Fostering collaboration, enabling creative innovations and collective problem-solving are giving accountability and transparency a shot in the arm.
- The potential of Open government data is being grossly under utilised. We need to act on it without further delay for three basic reasons.
- One, such data collected by governments are for citizen welfare; hence they have an implicit right to benefit from the information.
- Two, data sets such as government budget usage, welfare schemes and subsidies increase transparency and thereby build trust.
- Third, it paves the way to develop technology-led innovations which can unlock massive economic value, thereby benefitting even the poorest of poor, the under-represented and the marginalised.
- Agriculture: availability of data on yearly produce of crops, soil data health cards and meteorological data sets can help companies develop customised crop insurance solutions with specific risk-based pricing.
- Local self government: Data points around progress in literacy rates, demographic data and density of educators can help develop customised solutions for villages.
- Health care: information on availability of facilities in public hospitals, current occupancy rates, hospital and demographic data can pave the way for curated health-care applications.
- Monetary Benefits: Research by PwC in Australia estimated that open data can add an additional 1.5% to the country’s GDP. In the Indian context, this could conservatively translate to about $22 billion.
- Government’s role: The Ministry of Electronics and Information Technology has made some laudable efforts, including a policy around open data.
- India currently houses more than 1.6 lakh data resources and has published over 4,015 application programme interfaces (APIs) from across 100-plus departments. As a result, India’s global ranking by the Global Open Data Barometer has increased.
- Issue: while India publishes data points, very little of it is getting utilised by data consumers, scientists and corporates. Naturally, the socio-economic impact is limited.
- Ensure completeness of data stacks opened for use either through machine-readable formats or direct APIs. Completeness would imply a data set.
- Comprehensiveness of a data stack or various data sets is essential.
- Clustering of relevant data sets and APIs would be the next step. This would mean combining data sets which can lead to the creation of applications.
- Building anchor cases or use-cases to encourage data usage. A case in point is Aadhaar/identity data which has seen exponential growth (post identification in e-KYC).
- setting up a comprehensive governance framework which includes an open data council with cross-sector representation to monitor, regulate and build usage after proportionate oversight.
- The Taliban’s announcement of a three-day ceasefire with Afghan government troops for Eid, two days after Afghanistan President Ashraf Ghani declared an unconditional week-long ceasefire, is a glimmer of hope for a breakthrough in the long-struggling peace process.
- This is the first time the Taliban has announced a ceasefire in the 17 years since it was removed from power in Kabul. Though it has not acknowledged the government ceasefire, the timing and the public declaration unmistakably point to the reciprocity of the decision.
- The war has long entered a stalemate, and something needs to give. The Taliban has made enormous military gains in recent years. It now controls vast swathes of rural, mountainous Afghanistan, while the government retains its grip on the more populated urban centres.
- The Taliban doesn’t seem to be in a position to capture power by overthrowing the government as long as the U.S. and its allies remain committed to the regime’s security. Equally, Afghan forces are unable to defeat or even check the Taliban’s momentum in rural areas.
- Demands: The Taliban insists that foreign troops be withdrawn, while the government demands that the group accept the Afghan constitution.
- Way forward: The U.S. could put pressure on the Taliban through Pakistan to bring them to the table. If not, the war will carry on, with neither side gaining a decisive edge and leaving millions of Afghans in unending misery.
The idea of a ‘bad bank’ is not new.
- Finance Ministry, has announced the formation of a committee to assess the idea of special asset reconstruction companies or asset management companies to take over bad loans from banks.
- The bankers’ panel has been given two weeks to revert.
- Chief Economic Adviser Arvind Subramanian had suggested the creation of a Public Sector Asset Rehabilitation Agency (PARA) to deal with what he described as India’s “festering twin balance sheet problem”.
- By this he meant over-leveraged corporates unable to service debt or invest afresh,
- and banks hit by non-performing assets (NPAs) cagey about fresh lending.
- This hurts new investments and continues to dent India’s medium-term growth and job creation prospects.
- A professionally-run PARA, or the so-called ‘bad bank’, could assume custody of the largest and most difficult-to-resolve NPAs from lenders’ balance sheets. This would allow banks to focus on extending fresh credit and supporting the pick-up in growth. More importantly, a bad bank taking tough decisions on borrowers-gone-bad, it was argued, could free bankers from the risks entailed in large loan write-downs.
Whys it’s not a great idea?
- The new entity would need a lot of capital support, just as banks do. Some of this was envisaged as coming from the Reserve Bank of India through a complicated transaction.
- After a long debate within government, it was noted that setting up a new institution would be very time-consuming and there would be challenges on its ownership structure as well as the pricing of bad loans taken over from banks.
- A PARA by itself would not be able to deploy dramatically different tools to extract better value from underlying assets and would, at best, amount to window-dressing bank books to attract investors.
- The government is clearly under pressure to demonstrate fresh intent to investors as India Inc believes bank loans are likely to remain sluggish for the next two-three years.
Way forward: The government should focus on other reforms as well.
- One, amend the Prevention of Corruption Act to shield bankers and officers from investigative witch-hunts.
- Two, back bankers to take demonstrable action against wilful defaulters.
- And three, take a hard look at what ails the Insolvency and Bankruptcy Code.
- Speakers and Governors, acting independently of each other or in concert, can navigate the destiny of State governments.
- Refer Laxmikanth for Powers of speakers and Governors.
- This is because Speakers and Governors, even after their appointments, continue to be guided by their respective parties’ best interests.
- The result is that those holding these exalted constitutional offices enjoy little public trust or credibility. Constitutional values are made subservient to political outcomes.
- The provisions of the 10th Schedule of the Constitution, meant to root out defection, are now being misused to protect those who defect. When defections are engineered either to install a government or protect its longevity, the role of the Speaker is critical.
Value addition: One need to have basic understanding of 10th schedule via PRS
The 52nd amendment to the Constitution added the Tenth Schedule which laid down the process by which legislators may be disqualified on grounds of defection.
- A member of parliament or state legislature was deemed to have defected if he either voluntarily resigned from his party or
- Disobeyed the directives of the party leadership on a vote. That is, they may not vote on any issue in contravention to the party’s whip.
- Independent members would be disqualified if they joined a political party.
- Nominated members who were not members of a party could choose to join a party within six months; after that period, they were treated as a party member or independent member.
- In Tamil Nadu, the Chief Minister owes his continuance in office to the Speaker’s indefensible machinations when dealing with pending proceedings under the 10th Schedule. A petition was presented against the present Deputy Chief Minister and 10 other MLAs of the All India Anna Dravida Munnetra Kazhagam in March 2017 for violating the party whip during the floor test held in February 2017. However, till date the Speaker has not even issued notice to the defecting MLAs.
- The Speaker is more loyal to his party and the government than to the Constitution. Both the inaction of the Speaker in one case and the disqualifications of the 18 MLAs in the other case were challenged in the High Court in writ proceedings
- In Andhra Pradesh, of the 67 legislators belonging to the YSR Congress Party, 21 have defected, making Chief Minister Chandrababu Naidu’s position unassailable. Some of the defectors are Cabinet Ministers. Despite pending petitions questioning the Speaker for not proceeding against the defectors, the Speaker has chosen not to act for obvious reasons.
- In Telangana, 12 of 15 Telugu Desam Party (TDP) MLAs defected to the Telangana Rashtra Samithi. Apparently, eight TDP MLAs had initially crossed over, after which four others followed suit. Despite a petition seeking disqualification, the status quo prevails.
- In the past too, partisan Speakers have extended the tenure of illegitimate cut-and-paste majorities. The Samajwadi Party did it by creeping defections from the Bahujan Samaj Party to reach the magic 1/3 figure under the unamended 10th Schedule in the early 2000s. That gave legitimacy to the defections.
- The recommendations of the Sarkaria Commission, and later the Punchhi Commission, had clear guidelines for Governors to act when inviting leaders to be sworn in after the electoral verdict is out. But time and again we see Governors flouting these guidelines. A challenge in courts takes time while the constitutional indiscretions of Governors play havoc with democracy.
- Way forward:
- Radical amendment in the law is one way out, especially by amending the 10th Schedule qua the office of the Speaker and the fate of those who defect. We need amendments to the Constitution to circumscribe the Governor’s powers in areas of abuse of discretion. But most of all, we need political consensus to combat subversion of democracy.
- In an apparent bid to bring in expertise from the private sector and infuse talent into the country’s bureaucracy, the Union government has invited “outstanding individuals” to join the government at the level of Joint Secretary at the Centre.
- For starters, the Department of Personnel and Training (DoPT) has invited applications for 10 senior-level positions in the departments of Economic Affairs, Revenue, Commerce and Highways and others.
- The notification invites individuals working at comparable levels in private sector companies, consultancy organisations, international/multinational organisations with a minimum of 15 years’ experience, besides those working in central public sector undertakings, autonomous bodies, statutory organisations, research bodies and universities.
- Though the idea of lateral entry into the administrative framework has been under discussion for some years now, this is the first move towards implementing the idea, which is generating curious debate on the pros and cons of the move.
- Bankim Chandra Chattopadhyay, who wrote the national song Vande Mataram
- The 19th century author’s novel Anandamath — which was set in the background of the Sanyashi Bidroho (rebellion of monks in late 18th century) — is considered to be one of key works on Bengal’s nationalism.
- Refer Spectrum Modern Indian History.
- India is instituting a series of bilateral and multilateral naval exercises with Association of South East Asian Nations (ASEAN) countries as part of the increasing military-to-military cooperation. This is in addition to assisting the countries in capacity-building and sale of military hardware.
- Later this month, the Navies of India and Indonesia will hold their first bilateral exercise in the Java Sea. India will stage a new trilateral exercise with Thailand and Singapore soon.
- The bilateral with Indonesia is in addition to the Coordinated Patrol (CORPAT) that the two sides conduct.
- The Navy recently conducted maiden bilateral exercises with Myanmar, Thailand and Vietnam.
- The Indian Navy has had extensive interactions with Vietnam People’s Navy, particularly in training, repairs, maintenance and logistics support aimed at capacity building.
- The Association of Southeast Asian Nations is a regional intergovernmental organization comprising ten Southeast Asian countries which promotes intergovernmental cooperation and facilitates economic, political, security, military, educational and socio-cultural integration amongst its members and other Asian countries, and globally.
- Since its formation on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand the organisation’s membership has expanded to include Brunei, Cambodia, Laos, Myanmar and Vietnam.
- The Shanghai Cooperation Organisation (SCO) has resolved to fight against “the three evils” terrorism, separatism and extremism with a renewed vigour in the next three years, and called for a unified global counter-terrorism front under the coordination of the UN.
- The declaration said all the member countries were for reaching a consensus on adopting the UN Comprehensive Convention on International Terrorism, and emphasised the importance of comprehensive measures to reach a peaceful settlement of international and regional conflicts.
- The declaration said the SCO would work to stop the spread of terrorist ideology and eliminate factors and conditions that facilitated terrorism and extremism, acknowledging that there can be no justification to any act of terrorism or extremism.
- The member states note that the interference in the domestic affairs of other states under the pretence of combating terrorism and extremism is unacceptable, as well as the use of terrorist, extremist and radical groups for one’s own purposes.
- The SCO called for “effectively fulfilling” the requirements of specialised UN Security Council resolutions to counter any forms of financing of terrorism and providing material and technical support to it.
- The member states will work to improve the information exchange mechanisms regarding these people and their movements, and speed up procedures to extradite foreign terrorists in accordance with the national legislation of the SCO member states and boost international cooperation both on the political level and between the security services
- The leaders advocate the strengthening of the international legal framework to counter this threat and support the initiative to draft an international convention against chemical and biological terrorist attacks at the Conference on Disarmament.
- A petition has been filed in the Supreme Court to direct the government to make electoral offences cognisable with a punishment of minimum two years in jail. The offences listed are bribery, undue influence, impersonation, false statement, illegal payments and non-filing of accounts.
- The petetions said that successive governments did not act on the Election Commission’s recommendations since 1992 for harsher punishment. The result was the erosion of public trust in the electoral system. Parties and candidates used bribery not only in the Lok Sabha and Assembly elections but also in byelections.
- Cognizable offence means an offence for which, and `cognizable case’ means a case in which, a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without warrant.
- Cognizable offenses are those offenses which are serious in nature. Example- Murder, Rape, Dowry Death, Kidnapping, Theft, Criminal Breach of Trust, Unnatural Offenses.
- Section 154 of CrPc provides, that under a Cognizable offense or case, The Police Officer has to receive the First Information Report (FIR) relating to the cognizable offense, which can be without the Magistrate’s permission and enter it in the General Diary and immediately start the investigation.
- If a Cognizable offense has been committed, a Police Officer can investigate without the Magistrate’s permission.
Non Cognizable Offence
- A non-cognizable offence has been defined in Criminal Procedure Code as follows, “`non-cognizable offence’ means an offence for which, and `non-cognizable case’ means a case in which, a police officer has no authority to arrest without warrant”.
- Non-Cognizable offenses are those which are not much serious in nature. Example- Assault, Cheating, Forgery, Defamation.
- Section 155 of CrPc provides that in a non-cognizable offense or case, the police officer cannot receive or record the FIR unless he obtains prior permission from the Magistrate.
- Under a Non-Cognizable offense/case, in order to start the investigation, it is important for the police officer to obtain the permission from the Magistrate. Via Lawrato
- Last week, President gave his nod to promulgate the Insolvency and Bankruptcy code (Amendment) Ordinance 2018.
- Homebuyers as financial creditors: Homebuyers would now be treated as financial creditors or, in other words, on par with banks. The amendment enables homebuyers (either as an individual or group) to initiate insolvency proceedings against errant builders. Homebuyers shall have the right to be represented in the committee of creditors (CoC), which takes the key decision regarding revival of the company or its liquidation.
- The amendment now defines related party in relation to an individual running the firm and they would be barred from bidding for the firm under the resolution process.
- Changes in voting share of committee of CoC: The amendment has changed the voting share required in CoC meetings. For extending the insolvency process beyond 180 days till 270 days and for appointment of the resolution professional (who oversees the process), now a voting share of 66% is sufficient, compared with earlier requirement of 75%. Unless a specific approval is required in the Code, all other decisions of the CoC can be taken with 51% voting share against the earlier norm of 75%. Withdrawal from the insolvency process is permitted with the approval of 90% of voting share of the CoC (the norms for which would be prescribed).
- Insolvency Code: what’s new
- Rafael Nadal claimed an 11th French Open title on Sunday with a 6-4, 6-3, 6-2 demolition of Dominic Thiem despite a worrying injury scare in the closing stages of the final. The 32-year-old World No.1 now has 17 Grand Slam titles, just three behind great rival Roger Federer.
- The French Open (French: Championnats Internationaux de France de Tennis), officially called Roland-Garros , is a major tennis tournament held over two weeks between late May and early June at the Stade Roland-Garros in Paris, France.
- After it completed four years in office, the BJP-led NDA government launched a major media campaign that claimed, “48 months of transforming India”
- the Indian economy (GDP) grew at an average rate of about 7.2 per cent but its agriculture sector (agri-GDP) grew at a mere 2.5 per cent per annum according to the CSO figures.
- It is this below-normal performance in agriculture that has resulted in farmers’ protests. Their basic demands are two-fold: First, deliver on the promise of “50 per cent profitability over costs”, and second, ensure complete loan-waiver.
- The promise of remunerative prices was based on the 2006 M S Swaminathan Committee Report that recommended fixing MSP at cost plus 50 per cent.
- An efficient and sustainable solution for better prices really lies in “getting the markets right” by overhauling the agri-marketing infrastructure and its associated laws. Agriculture is a state subject.
- Farm loan-waivers,the total bill of farm loan-waivers, from 2017 till 2019, we are afraid, may touch Rs 3,00,000 crore. This might give temporary relief to farmers but agriculture is unlikely be revitalised. Attaining 4 per cent growth in agri-GDP on a sustainable basis remains a challenge.
- Goverment must focus on effective and timely implementation of its programmes — the PM’s Fasal Bima Yojana, Krishi Sinchayee Yojana and the National Agriculture Market.
- In news: Media reported the widespread rejection of forest rights claims by Mahrarashtra’s Tribal Development Department.
- Such rejection, though not uncommon, is against the spirit of The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (FRA).
- The Act vests a number of rights with forest-dwelling communities, including rights over forest land for habitation and cultivation, right of ownership, access to collect, use, and dispose of minor forest produce, right to govern and manage any community forest resource which they have been traditionally conserving for sustainable use.
- Historically, during the colonial and post-colonial periods, forest management and access to forest resources like non-timber forest products (NTFPs) was largely driven by the principles of centralisation, exclusion and exploitation.
- The FRA envisages to change this and ensure that the economic benefits of NTFPs accrue to tribal people — this is one reason that claims on forest resources should be addressed without bias.
- The report of the sub-group on NTFPs and their sustainable management in the 12th Five Year Plan highlighted that NTFPs constitute one of the largest unorganised sectors in India.
- Almost 275 million people depend on NTFPs with a turnover of at least Rs 6,000 crore per annum.
- There is a strong potential to scale up NTFP collection and processing.
- NTFPs potential as a source of development and poverty alleviation has been deeply neglected.
- Prior to the enactment of the FRA in 2006, forest laws nationalised non-timber forest produce and regulated the market process, creating severe inefficiencies.
Impact of the Act:
- It has remarkable impact of ownership rights over these forest products in terms of incomes and empowerment.
- The FRA provides the legal basis of ownership rights over NTFPs to forest dwellers.
- Example: Maharashtra’s Vidarbha region, information from 247 villages which reveals how ownership over minor forest produce, specially tendu leaves and bamboo, has improved the economic condition of forest dwellers. These villages earned a total of nearly Rs 35 crore in 2017 by selling NTFPs.
- Discussions with villagers in the region suggest that there is a significant change in their socio-economic condition due to the additional income from NTFPs.
- Migration has reduced and in some areas, reverse migration has started.
- The FRA also fosters democratic control over customary forests by forest-dependent communities, ensuring more effective, sustainable and people-oriented forest conservation, management and restoration.
- Given that most of the NTFPs are collected, used and sold by women, it would also lead to financial and social empowerment for millions of women.
Unfortunately, such positive developments have been largely confined to some areas only :
- In the rest of the country, state governments continue to resist and create hurdles in the implementation of community rights over NTFPs and forests.
- Despite several orders from the nodal agency, the Union Ministry of Tribal Affairs, the implementation of the provision of collective rights over NTFPs under the FRA has been weak and ineffective.
- The failure to recognise access rights of forest dwellers over NTFPs is a perpetuation of the historical injustice on India’s forest-dwelling communities and a missed opportunity to democratise forest governance and improve the economic condition of marginalised forest communities.