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Title 1. L-G overrules Delhi govt. order to restrict COVID-19 treatment (Page Number 01)

Syllabus Mains: GS Paper II: Polity & GovernanceTheme Power distribution among Delhi CM & LGHighlights Context: Delhi’s Lieutenant-Governor Anil Baijal in his capacity as Chairperson of

the Delhi Disaster Management Authority has overruled two decisions of Delhi government related to COCID-19 treatment.The decisions which have been overruled

1. The first decision

SL. NO. TOPICS THE HINDU

PAGE NO.1 L-G overrules Delhi govt. order to restrict COVID-19

treatment01

2 Who’s afraid of monetisation of the deficit? 06

3 The critical role of decentralised responses 06

4 The E-Diplomacy experiment 07

5 GEP Report - World Bank 15

Dated: 09. June. 2020DNS Notes - Revision

of Delhi Government allowed only residents of Delhi to be treated and admitted in government and private hospitals of Delhi. LG has overruled this decision of the Delhi Government thereby allowing even non-residents of Delhi to be treated in hospitals of Delhi.In his order, the L-G made it clear that the Supreme Court had “invariably held in several successive judgments that ‘Right to Health’ is an integral part of ‘Right to Life’ under Article 21 of the Constitution”. He directed all departments and authorities concerned to ensure that monitoring/treatment is not denied to any COVID-19 patient on the ground of not being a resident of NCT of Delhi.

2. Delhi Government had ordered COVID-19 Test only for symptomatic patients. However, this order of delhi government has also been overruled. LG has ordered to follow ICMR guidelines without deviation regarding testing of contacts of patients for COVID-19.

Right to health as part of Article 21 The Supreme Court in Bandhua Mukti Morcha vs. Union of India has

held that the right to live with human dignity, enshrined in art 21, is derived from the directive principles of state policy and therefore includes protection to health.

Consumer Education and Resource Centre Vs Union of India - Supreme Court has held that the right to health and Medical care is a fundamental right under Article 21 of the constitution as it is essential for making the life of the workman meaningful and purposeful with dignity of person. “Right to life” in Article 21 includes protection of the health and strength of the worker. The expression ‘life’ in Article 21 does not connote mere animal existence. It has a much wider meaning which includes right to livelihood, better standard of life, hygienic conditions on workplace and leisure. The right to life with human dignity encompasses within its fold, some of the finer facets of human civilization which makes life worth living.

Supreme Court in a landmark judgment the case of Common Cause v. Union of India and Another in March 2018, has laid down broad legal framework to protect the dignity of a terminally ill patient or those in Persistent Vegetative State (PVS) with no hope of cure or recovery and in the process has allowed 1. Passive Euthanasia 2. Right to give Advance Medical Directives or a valid ‘Living Wills’ to smoothen the dying process as a part of fundamental right to live with dignity.

UNDERSTANDING THE CONSTITUTIONAL PROVISIONS

Article 239

Article 239 provides for Administration of Union Territories.As per Article 239 (1).... Union territory shall be administered by the President through an Administrator to be appointed by the President.Article 239 (2) says that...President may appoint the Governor of a State as the administrator of an adjoining Union Territory, and where a Governor is so appointed, he shall exercise his functions as such administrator independently of his Council of Ministers.

Article 239A

Article 239A provides for Creation of local Legislatures or Council of Ministers or both for certain Union Territories. This article was added by Constitution (Fourteenth


Amendment) Act, 1962.Clause 2 of Article 239A mentions that any law which provides for creation of local legislatures or Council of Ministers or both for certain Union Territories shall not be deemed to be an amendment of this Constitution for the purpose of Article 368 even though certain provisions of the Constitution are amended.

Article 239AA

Article 239AA of the Indian Constitution was added by Constitution (Sixty-ninth Amendment) Act, 1991. It says that Union Territory of Delhi shall be called the National Capital Territory of Delhi and the Administrator thereof appointed under Article 239 shall be designated as the Lieutenant Governor.There shall be a Legislative Assembly for the National Capital Territory (NCT) of Delhi and the seats in such Assembly shall be filled by members chosen by Direct Election from territorial constituencies in the NCT.The Legislative Assembly of Delhi shall have power to make laws for the whole or any part of NCT with respect to any matters enumerated in State List or in the Concurrent List. However, Legislative Assembly of Delhi cannot make laws on the following entries under the State List –

Entry 1: Public Order; Entry 2: Police (including railway and village police); Entry 18: Land, that is to say any right in or over land,

land tenures including the relation of landlord and tenant, and the collection of rents, transfer and alienation of agricultural land, land improvement and agricultural loans and colonization.

They also cannot legislate on Entries 64, 65 and 66 of State List so far as they relate to the above entries – 1, 2 and 18.

Thus, the government of Delhi does not enjoy all the powers with respect to law making which are enjoyed by other states. Moreover, NCT is primarily a Union Territory which has a legislative assembly

-------------------------------------------------------------------------------------------------------------------There shall be a Council of Ministers consisting of not more than ten percent, of the total number of members in the Legislative Assembly. The Chief Minister at the head to aid and advise the Lieutenant Governor in the exercise to his functions in relation to matters with respect to which the Legislative Assembly has power to make laws, except in so far as he is, by or under any law, required to act in his discretion.If there is any difference of opinion between the Lieutenant Governor and his Ministers on any matter, the Lieutenant Governor shall refer it to the President for decision and act according to the decision given thereon by the President.However, if the matter sent to the President is pending before the President, then the Lieutenant Governor can take


immediate action or give such direction if he thinks the matter is of urgency or importance.

Five Judge Constitution Bench of Supreme Court has clarified that an elected government of Delhi cannot be undermined by an unelected Administrator. This has effectively restored the primary role played by the “representative government” in the National Capital Territory of Delhi which was earlier restricted by the Delhi High Court judgment.Supreme Court held that apart from subjects that are not in the Delhi government’s jurisdiction (police, land and public order), the Lieutenant-Governor’s (LG) consent is not required for every decision. It also held that the LG could, in the event of disagreement with the council of ministers, refer a decision to the President, but would be bound by the President’s decision on the matter.

Backdrop of the Judgment

The recent controversies over routine administrative issues between the LG of Delhi and Delhi’s Chief Minister had led to paralysis of work due to use of discretionary power by the LG in administrative decisions.

Earlier in 2016, the Delhi High Court in its judgment held that

the Lieutenant Governor is the administrative head of the National Capital Territory and not the Chief Minister of Delhi and

Delhi continues to be a Union Territory rather than a full-fledged state.

High Court of Delhi further declared that LG enjoys discretionary power as per the Constitution and has greater role to play in the administration of National Capital Territory of Delhi.

In response to the above judgment, the Government of Delhi filed an appeal to the Supreme Court and asked whether the LG can unilaterally administer the National Capital without being bound by the “aid and advice” of the elected government in all matters of daily governance.

The Delhi government also asked the Constitution Bench to specify those areas where LG can use his discretionary power so that both the LG and the government of Delhi can work in a harmonious manner.

Judgment of Supreme Court

SC On Aid & Advice

The Court held that insertion of Article 239AA by 69th

Constitution Amendment has envisaged a representative form of Government for the NCT of Delhi.

The said provision intends to provide for the Capital a directly elected Legislative Assembly which shall have legislative powers over matters falling within the State List and the Concurrent List, (except police, land


and public order). It further provides a mandate upon the Lieutenant

Governor to act on the aid and advice of the Council of Ministers except when he decides to refer the matter to the President for final decision.

Thus, the Lieutenant-Governor has no independent decision-making power. He has to -

either act on the ‘aid and advice’ of the Council of Ministers or

he is bound to implement the decision taken by the President on a reference being made by him

In case of difference of opinion, the LG should straightaway refer the dispute to the President for a final decision without sitting over it or stultifying the governance in the National Capital.

The Lieutenant Governor must, by a process of dialogue and discussion, seek to resolve any difference of opinion with a Minister. If it is not possible to resolve the dispute, then LG must approach the Council of Ministers for resolution of dispute on any matter.

A reference to the President is contemplated by the Transaction of Business Rules only when the above modalities fail to yield a solution. In such situations the matter may be referred to the President.

SC on Role of Lieutenant Governor

Supreme Court held that the word “any matter” referred in the proviso to clause (4) of Article 239AA cannot be inferred to mean “every matter” by the LG.

Thus, the power of the LG under the said proviso represents the exception and not the general rule which has to be exercised in exceptional circumstances.

Supreme Court held that governance of Delhi cannot rest upon the whims of one functionary namely the Lieutenant-Governor as he cannot refer every matter of the Delhi Government to the President. This will create work paralysis.

The Bench further cautioned the LG against sending every “trivial” dispute with the government to the President and suggested that “LG must work harmoniously with his Ministers”.

The Bench advised both CM & LG of Delhi holding constitutional posts to work in a collaborative manner so as to fulfill the concept of “Collaborative Federalism” as envisaged in our Constitution.

Such co-operation will strengthen the concept of constitutional governance and will help in cultivating the idea of respect for representative government.

On demand of statehood

The Court did not agree on the demand of full statehood of Arvind Kejrival Government and the critical powers over

Police, Land and Public order


Still remain vested with the Centre.

The Supreme Court took reference from the 1987 Balakrishnan Committee report to conclude that Delhi is not a State.

Court’s emphasis on Collaborative Federalism

It refers to the collaborative nature of functioning of Union along with states so as to ensure development and progress.

The concept of collaborative federalism applies to Delhi owing to its special status under the Constitution.

The Bench said - The Union government and the State governments should endeavour to address the common problems with the intention of arriving at a solution by showing statesmanship, combined action and sincere cooperation. In collaborative federalism, the Union and the State governments should express their readiness to achieve the common objective and work together for it.

SC on Sovereignty of People

The Court held that it is the people who are sovereign in a democracy and the decisions of the elected government in Delhi represent public will, perception and popular sentiment.

Supreme Court observed that a well-deliberated legitimate decision of the Council of Ministers cannot be stymied by the negative attitude of the LG. As the Council represents members elected by the people.

The negative attitude of LG impacts the concept of collective responsibility as mandated in the Constitution of India.

It is emphatically submitted that if the collective responsibility of the Council of Ministers is not given the expected weightage, then there will be corrosion of the essential feature of representative government.

Balakrishnan Committee was formed in 1987. It recommended that Delhi should continue to be a Union Territory but should be provided with a Legislative Assembly and a Council of Ministers responsible to such Assembly with appropriate powers to deal with matters of concern to the common man.

The Committee also recommended that with a view to ensuring stability and permanence, the arrangements should be incorporated in the constitution to give the National Capital a special status among the Union Territories.

Hence as per Constitution (69thAmendment) Act, 1991, Article 239AA and Article 239AB were added to the Constitution to give constitutional status to the National Capital Territory of Delhi.


Personal Notes


Title 2. Who’s afraid of monetisation of the deficit? (Page Number 06)Syllabus Mains: GS Paper III: Indian EconomyTheme Financing the deficitHighlights Context: The Indian Economy was facing economic slowdown prior to COVID-19.

The lockdown imposed due to COVID-19 has further accentuated the slowdown in the economy. The RBI expects that the Indian Economy would contract in 2020-21. The combined Fiscal deficit of the Centre and States is expected to be around 12% of India's GDP. The NPAs of the Indian Banks is expected to rise even further leading to contagion impact on other sectors. Against this backdrop, the Government has announced the Economic Stimulus package to revive the Indian Economy. However, the Stimulus package in India costs the Government only 2% of its GDP as compared to around 20% of GDP in other countries. Clearly, the reluctance of the Government to announce higher package is on account of the need to maintain Fiscal Deficit and Public Debt in control. Higher Government borrowings may have an adverse impact on the economy.

Debate among Economists have started

In this regard, some of the economists have pointed out that the Government must resort to direct monetization of its deficit to revive the Indian Economy. On the other hand, direct monetization of deficit has been opposed on the grounds that it may have an adverse impact on macro-economic stability of India.

In this regard, the author of this article argues as to Why the Indian Government must resort to direct monetization of its Deficit. The author has also taken the support of Modern Monetary theory in order to substantiate his point of view.

Conventional Macro-economics

According to this view, the Government should impose the taxes and use the same taxes in order to meet its various expenses such as Education, Health, Infrastructure etc.

The Government should try to meet its expenses entirely from its taxes. It should not unnecessarily resort to borrowings. Even if it has to borrow money, it has to borrow money from the Market and not the Central Bank.

At the same time, there should be limit on the overall borrowings of the Government. The higher borrowings can have an adverse impact on the economy in the following manner:

1. Higher Borrowings--> Increase in Fiscal Deficit and Public Debt--> Inability of Government to repay the higher Debt

2. Higher borrowings--> Increase in the Money Supply--> Higher Demand--> Higher Inflation

3. Higher Borrowings of Government from Banks--> Less money available for private sector to borrow from Banks--> Increase in the interest rates--> Crowding out Effect

4. Increase in rate of Inflation--> Central Bank increases the policy rates--> Increase in rate of interest on loans--> Decline in Investment expenditure--> Slowdown in GDP and Increase in Unemployment.

5. Higher Inflation and Slowdown in GDP--> Downgrade in Credit Ratings--> Outflow of FPIs--> Rupee Depreciation--> Depletion of


Forex Reserves.

Thus, as seen above, the Government must try to meet its expenditure from the taxes completely. Even if the Government has to borrow money, there has to limit on the Government's borrowings.

Excessive borrowings can have an adverse impact on the economy. Hence, the Government has to keep its Fiscal Deficit and Public Debt under control.

Modern Monetary Theory (MMT)

The households and Private sector face constraints in their expenditure. They can only spend the money that they earn. Now, according to the conventional macro-economics, the same constraint is applicable even to the Governments.

The Government should only spend what it earns from taxes. But should there be a constraint on the Government which needs to spend huge amount of money on its development expenditure. Will the Government be able to rely only on taxes and limited borrowings to undertake development expenditure?? Obviously not.

The Modern Monetary theory seeks to answer these questions. This theory says that households and private sector cannot create their own money and hence there is a possibility that they can run out of money and default on their loan obligations. But, Government is a sovereign entity. It has the power of printing currency notes i.e. it has the power of creating its own money. Since, it can create money whenever it wants to, it can never default on its repayment obligation.

So, this theory suggests that the Central Bank of the Country should print the currency notes whenever the Government needs money. The Government should then use this borrowed money to spend on certain productive assets which can lead to increase in employment opportunities and GDP growth rate.

But wait!! Won’t the increase in the money supply, Inflation and public debt affect the economy as put forward by the conventional economics??

To answer this question, the MMT argues the following:

1. Increase in the Public Debt should not be a cause of concern since the Central Bank can print the currency notes and repay back its debt obligations. For example, post the 2008 Global Financial crisis, some of the developed economies have continued to borrow money in order to fund their stimulus packages without worrying about the higher Public Debt. A case in point is Japan. The Public debt in Japan has increased to almost 250% of its GDP. Yet, the higher borrowings have not led to higher inflation rates.

2. The borrowed money should be used in the productive assets such as creation of infrastructure, boosting employment opportunities etc. This would ensure that the increased demand in the economy is met by increased supply. In order words, the money should be spent in such a way that it leads to increase in both demand and supply.

3. The Government has to use the tool of tax rates in order to keep inflation under control. For example, the tax rates should be reduced during the recession. While, the tax rates should be increased during higher rate of


Inflation.

Monetization of Deficit in India Presently, the Government borrows money from the market (Banks,

Financial Institutions etc.) through the issuance of Government securities (G-Secs) such as Treasury Bills and dated Securities.

However, if the Government borrows the same money from the RBI by issuing the G-Secs, it is referred to as Monetization of Deficit.

Presently, such monetization of deficit is taking place in India indirectly through the Open Market Operations.

Arguments put forward by Author Irrespective of whether the Deficit is monetized directly or indirectly, the total

money supply in the economy increases. The RBI is already monetizing the Government's deficit indirectly through Open Market Operations (OMOs). Hence, the Government should not be afraid of Direct Monetization.

As long as the Inflation is under control, the Direct monetization of Deficit would have not have an adverse impact on the economy.

The Government need not be worried about higher Fiscal deficit. As put forward by the MMT, direct monetization of deficit can help revive the Indian Economy and boost employment creation.


Personal Notes


Title 3. The critical role of decentralised responses (Page Number 06)Syllabus GS Paper II: Polity & GovernanceTheme Decentralization of PowerHighlights

Context: This article makes some suggestions to improve local finance and argues that the extant fiscal illusion is a great deterrent to mobilization.

COVID-19 has raised home four major challenges of economic, health, welfare/livelihood and resource mobilization. These challenges must be addressed at all levels of government our federal polity as envisaged by the Constitution.

So, in this regard, individual revenue at each tier of governance becomes important to deal with situations of pandemic or emergency. In this regard, the author has tried to suggest certain measures of resource mobilization at three level: Local Finance, MPLADS Scheme and Disaster Management

1. Local Finance

The author has highlighted the yawning gap in tax collections between Urban Local Bodies and Rural Local Governments. In fact, local tax collection at Panchayat level in poor states like UP, Bihar Jharkhand is close to nil.

So, author has suggested levying tax on property including land and in this regard, land monetization and betterment levy may be tried in the context of COVID-19 in India.

Municipalities and even suburban panchayat can issue a Corona Containment Bond for a period of say 10 years, on a coupon rate below market rate but significantly above the reverse repo rate to attract banks.

2. MPLADS Scheme

Funds allocated under MPLADS must be assigned to local governments, preferably to panchayat on the basis of well-defined criteria.

15th Finance Commission can allocate special COVID-19 containment grant to the Local Governments which should be distributed on the basis of criteria laid down by State Finance Commission. This will augment the grant of Rs. 90,000 crore to local governments made by 15th FC for the year 2020-21.

This fund can also be utilised by the local government to enhance health infrastructure in each Panchayats.

The ratio of basic to tied grant is fixed at 50:50 by the commission. So, as of now, all grants must be untied for freely evolving proper COVID-19 containment strategies locally.

Further the 13th Finance Commission’s recommendation to tie local grants to the union divisible pool of taxes to ensure an increased and predictable source of revenue to LGs must be restored by the Finance commission.

3. Disaster Management

The new pandemic is a public health challenge of an unprecedented nature along with livelihood and welfare challenges.

The 2005 Act may have to be modified to accommodate the emerging situation.


Personal Notes


Title 4. The E-Diplomacy experiment (Page Number 07)Syllabus Mains: GS Paper III: Science & TechnologyTheme E- GovernanceHighlights Context:

The first India-Australia virtual leaders’ summit was recently conducted on June 4 where the two nations discussed issues ranging from military interoperability to jointly tackling COVID-19.

The two countries upgraded their relations to a ‘comprehensive strategic partnership’.

The summit was noteworthy because Prime Minister Narendra Modi and the Indian delegation were on a video conference call with Prime Minister Scott Morrison and the Australian delegation.

Adapting to the COVID times

Earlier modes of conducting diplomacy:o The formal negotiations during summits, the closed-door restricted

sessions, the fireside chats, the walks in the woods, the photo-ops and the outreach to live audiences in the host and home countries are all part of the package.

Now, the scenario has changed:o Nation states are left with no choice but to adapt: as E-summits are

physically safer for leaders and also time-saving and economising events where costly physical journeys with entourages can be avoided.

Few notable examples:

Mr. Modi has engaged in a few multilateral ‘e-diplomacy’ rounds since the COVID-19 outbreak.

o He convened the SAARC leaders’ video conference on March 15.o Joined the Extraordinary G20 Leaders’ Summit via video link on

March 26.o Made his maiden appearance at the Non-Aligned Movement virtual

summit on May 4.o Recently conducted India-Australia summit was elaborate and

involved the exchange of multiple agreements.

But there are issues:

Without personal interactions behind closed door, it is doubtful if anything meaningful will come out:

o But now without all the protocols and structured dialogues in cozy settings, it is doubtful if major breakthroughs or deals requiring direct intervention of leaders can happen.

o There is a danger that ‘e-diplomacy’ will become less productive in terms of deliverables, especially where crucial sticking points need ironing out.

o While the backroom legwork and minutiae of agreements can be hashed out by lower-level bureaucrats communicating remotely, online summits will simply not satisfy the broader political goals and bigger objectives that heads of state carry with them.

Threat to cyber security

o Another threat to virtual summits comes from cyber insecurity.


In pre-COVID-19 times, summit venues used to be thoroughly sanitised and debugged to prevent sensitive foreign policy content from being spied upon or leaked.

E-diplomacy is riskier and could be subject to hacking of classified content, making the leaders warier.

This could reduce the spontaneity and candour of their conversations. It is arguable whether new ideas or proposals which entail geo-strategic alignments can emanate out of e-summits.

Hence, In-person summits will restart one day. But the online interlude has to go on because diplomacy has to go on.

Personal Notes


Title 5. GEP Report - World Bank (Page Number 15)Syllabus Mains: GS Paper III: EconomyTheme Global economyHighlights Context: The Indian economy is expected to contract by 3.2% in this fiscal year as

a result of the COVID-19 pandemic and its associated restrictions, the World Bank said in its Global EconomicProspects (GEP) June 2020 Report. Growth is forecast at 3.1% next year.

India’s growth is estimated to have slowed to 4.2% in FY 2019-20 (year ended March 31, 2020). Output is expected to contract by 3.2% (so growth is -3.2%) in FY2020-21, as the impact of the pandemic (the restrictions on activity) will largely fall in this year, despite the fiscal and monetary stimulus.

The world economy, as a whole, is set to witness its deepest recession since World War II, with a forecasted contraction of 5.2% this year and as per certain estimate, some 70-100 million people could be pushed into extreme poverty.

Emerging market and developing economies (EMDEs) are expected to contract by 2.5% this year, and economic activity in advanced economies is forecast to shrink by 7%, as domestic supply and demand, finance and trade have been disrupted due to the pandemic.

Countries most reliant on global trade, tourism, external financing and commodity exports are likely to be hit the hardest.

Personal Notes

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