Current Affairs – 11th July 2023

DAILY ENRICHMENT PROGRAMME

Today Topics List:

1. Challenges to Changes in J&K status – The story so far – Explained

2. Solomon Island and China

3. Rafales, Scorpenes and Jet Engines – PM’s France trip

4. Foxconn – Vedanta Chip dream

5. India Pips China as best emerging market

POLITY, GOVERNANCE & LAWS AND SCHEMES

Challenges to Changes in J&K status – The story so far – Explained

• • A five- judge bench of Supreme Court will begin hearing petitions challenging the changes to Article 370 and downgrading of Jammu and Kashmir state into two Union Territories.

Road to the changes:

• In 2018, BJP withdrew support to the coalition government led by CM Mehabooba Mufti. Governor’s rule was imposed in J&K on June 19, 2018.
  • According to J&K’s constitution, Under Article 92, 6 months of Governor’s rule is mandatory before the state could be put under President’s rule.
• The Legislative assembly was dissolved on November 21
• On December 12, before the end of six months President’s rule was imposed, which was subsequently approved by both the houses of the Parliament.
  • President’s rule was extended 6 months with effect from July 3^rd, 2019.

Change in Constitution:

• On August 5, 2019, Centre issued an order amending the Constitution (Application to Jammu and Kashmir) Order, 1954; superseding it with the Constitution (Application to Jammu and Kashmir) Order, 2019.
  • This new order made all the provisions of the Constitution applicable to J&K state.
  • Government also amended Article 367 to add new clause (4), making the constitution of India directly applicable to J&K.
• On August 6^th, the President issued a declaration under Article 370(3) making all its clauses inoperative except the provision that all articles of the Constitution shall apply to J&K.

Changes to 370 and its Challenges

• Article 370 provided for application of only Article 1 and Article 370 to Jammu & Kashmir.
  • OtherprovisionsoftheConstitution did not automatically extend to J&K, but,
  • clause (1)(d) of Article 370 empowered the President of India to extend them through an executive order with the concurrence of the government ofJ&K.
• Clause 3 of Article 370 empowered the President to “declare that this article shall ceasetobe operative” completely orpartially but only if the ConstituentAssembly of J&K recommended such an action.
  • Since the Constituent Assembly of J&K no longer existed, having dispersed in 1957, this power of the President had ceased, unless a new Constituent Assembly came into being
• Article 370 explained that “for the purpose of this article”, the state government meanttheMaharaja (later changedtoSadr-e-Riya sat) ofJ&K, acting ontheadviceofthe council of ministers.
  • But there was no state government either in J&K, so the President hadnoway toacquire theconcurrenceofthe state government.
• The Centre, however, used the President’s powers under Article 370(1)(d) to amend Article 367, which provides guidelines to interpret the Constitution.
  • A new clause was added toArticle367, replacing“Constituent Assembly of the State” referred to in Article 370(3) by “Legislative Assembly of the State”
  • Thus,the presidential order route under Article 370 (1)(d) was used to amend Article 370 itself, whereas Article 370 could have been amended only upon there commendation of the Constituent Assembly under Article370(3),not through Article370(1)(d).

Is Parliament equal to State Government?

• The President,while imposing hisdirect rulein J&K, had assumed all functions of the J&K government, taken over all the powers of the Governor under both the Indian Constitution and the J&K Constitution, and extended the powers of the state legislature to Parliament.
  • This meant that the President of India was in effect the J&K state government, and Parliament was ineffect the state legislature.
  • The powers of J&K Constituent assembly were passed on to the state legislature.
  • In such scheme of things, when the state government gave its concurrence to these modifications, it was in fact president giving concurrence to his own decision.
  • Ithas beenargued that since President’s Rule in a state is in the nature of an interimarrangementuntilanelectedgovernmentis put in place, the administration under President’s Rule cannot take decisions that change the very constitutional structure of the state

J&K Constitution:

• The move has been challenged as legislative assembly of J&K had no power under the J&K Constitution to recommend any amendment to any provisions of the Constitution of India.
  • Article 147 of J& K Constitution barred this.
  • Hence, it has been argued that even the J&K legislative assembly wasn’t legally competent to give consent to the President’s order.

Downgrading to UT:

• The Centre’s decision has been challenged on the ground thatit violatesArticle 3.
  • The Jammu and Kashmir (Reorganisation) Act, 2019 bifurcated J&K into two Union Territories — J&K was an UT with a Legislative Assembly; Ladakh was without anAssembly.
  • There is no other instance inIndia’s constitutionalhistoryofastatebeingdemotedto a UT, even though Parliament can under Article 3 createanew state by carving out territory from anystate,unitingtwoormore states, or portions of different states.
• Parliamentisalsoempowered toaddareato an existing state, or change the existing boundariesof a state.
  • Also,theprovisontothisarticlemakesitincumbent on the President to refer any Bill proposingthereorganisationof a statetoits legislature if theBill“affects thearea,boundariesornameof any of the states”
• It is argued that the view of Parliament onsuchaBill cannot replace the view of the statelegislature.
  • UnderPresident’sRule,only thosepowersofastatelegislaturecanbeexercised asareessentialtoruntheday-to-day affairs of the state.
  • Parliament cannot providetheviewof aparticularstatelegislature which in essence is the opinion of the peopleofthat state.

Colourable legislation:

• The challenge is also based on the argument that the constitutional changes are “colourablelegislation”and thus legallyuntenable
• The doctrine of colourable legislationisthelegalprinciple that says what cannot be done directly cannot be done indirectly.
• This doctrine has been reiterated by the Supreme Court, as well as constitutional courts inother countries.

INTERNATIONAL RELATIONS

Solomon Island and China

• • Prime Minister Manasseh Sogavare met Chines leader Xi Jinping, where both presided over the signing of agreements on Police, economic and technical cooperation.

Solomon Islands:

• They are 2000 kilometres north east of Australia.
• They have been biggest success to China in a campaign to expand its presence in the South Pacific.
  • In 2019, Solomon Islands government switched official recognition to Beijing from Taiwan, the self-Governed Island democracy claimed by the mainland’s ruling communist party as part of its territory.
• They have signed a secretive security agreement with China that might have allowed Chinese military forces in the South Pacific.
  • Chinese President also wants to expand relations and trade through Belt and Road initiative to build ports and other infrastructure from the Pacific across Asia and Africa.

INTERNAL SECURITY, DEFENCE & DEFENCE TECHNOLOGY

Rafales, Scorpenes and Jet Engines – PM’s France trip

• • Prime Minister Modi is visiting France this week as chief Guest at the Bastille Day Parade.
    • On agenda are deals for Rafale – M fighters, three more Scorpene-class submarines for the navy and co-development of a fighter jet engine.
  • Defence Acquisition council (DAC) is likely to meet to take a call on the procurement of 26 Rafael – M fighters for the Navy’s aircraft carriers and the proposal for additional Scorpene submarines that is in the pipeline.
    • Rafale- M proposal has been cleared by the Defence Procurement Board (DPB) for the Navy’s carrier jet race in which Boeing F/A-18 Super Hornet has also competed.
    • DPB’s clearance gives the way to DAC, the highest decision making body in the Defence ministry.
    • A long process of price negotiations follows after which finally it goes to Cabinet committee on Security for the approval before the deal can be signed.
  • While both Boeing’s F/A-18 E/F Super Hornet and Dassault Aviation’s Rafael – m fighters meet the requirements of the Navy. It is Government’s decision to finalise one among them.
    • Rafale – M has commonality with the Air force in terms of spares and support.
    • Airforce operate 36 Rafale jets customised for Indian requirements under a €7.87 billion deal signed in April 2016.
    • An indigenous Twin Engine Deck based fighter is under development by Aeronautical development Agency under DRDO.

ECONOMY

Foxconn – Vedanta Chip dream

• • Vedanta and Foxconn has signed an MOU to set up a semiconductor manufacturing plant in Gujarat in September 2022. Less than a year later, the partnership between the two companies has come to an abrupt halt.
    • Foxconn announced that it is pulling out of the Joint Venture with Vedanta, a deal worth $19.5 billion.
    • It is working on removing the name from the entity which is now fully owned by Vedanta.
  • Reasons:
  • While Foxconn has given no reason, it is understood that Vedanta’s debt burden and its ability to pay for acquiring technology for chip making played a key role.
    • Vedanta has the licence for production grade technology for 40 nm from a prominent Integrated Device manufacturer and will shortly acquire a licence for production grade 28 nm as well.

Is this the only case?

• Two other proposals for India’s $10 billion chip incentive scheme too remain uncertain.
  • ISMC, backed by Abu Dhabi based Next Orbit and Israel’s Tower Semiconductor, has asked centre not to consider its proposal owing to a pending merger between Intel and Tower Semiconductor.
• While, the merger was announced more than a year ago, it has not moved ahead.
• The Consortium had initially said it would set up a $3 billion semiconductor fab in Karnataka.
  • The Other proposal by Singapore based IGSS venture, was not found upto the mark by the advisory committee of the government.

Chip Making in India:

• India has identified electronics manufacturing as a key sector in the coming years – both to produce goods for domestic market and exports.
• Prime Minister wants India to usher in  a new era in electronics manufacturing by getting global companies to come to India.
  • While Some manufacturing schemes for smartphones have taken off ( with apple in the lead), the process is largely centred around assembling various components imported from elsewhere.
• Building semiconductors in India is crucial for government’s vision to develop domestic electronic supply chain and eventually reduce imports.
  • China, despite some challenges remain the number one destination for such manufacturing.
• All electronic items have semi conductor chips in them, and more companies are trying to diversify their bases from China.
  • Here lies India’s opportunity to emerge as a reliable destination.
• US passed the CHIPS Act last August, providing $280 billion subsidy for manufacturing chips in the country.
  • It has also imposed additional restrictions and sanctions that impact China’s semi conductor Industry and India has the potential to turn this opportunity to its advantage.

The Business environment as the ease of doing business plays an important aspect when it comes to large scale investment attraction into the country. India is essentially moving in the correct direction with some bottlenecks still persisting in its policy actions. To tap to the efficient resources, government policy needs to be proactive in nature to capture the losing opportunities to other emerging economies such as Vietnam and Bangladesh.

India Pips China as best emerging market.

• • In the report published by Invesco Global Sovereign Asset management , it was revealed that India has overtakn China as the most attractive emerging market for investing in 2023.
    • It is mostly owing to India’s soild demographics, political stability and proactive regulation.
  • It has captured the views of 142 chief investment officers, heads of asset classes and senior portfolio strategists from 85 Sovereign Wealth funds and 57 Central banks.
    • These institutions collectively manage about $21 trillion, in assets.
  • The report says that India is a better story now in terms of business and political stability.
    • Fast growing demographics, good regulation initiatives and friendly environment for sovereign investors are positives for the country.
    • India is benefiting from increased foreign corporate investment and India and South Korea continue to be best destinations for an increasing exposure.