26 December, 2020 - Daily Current Affairs Analysis & MCQs - The Daily News Simplified from The Hindu

  • Governor not sending Bills for Presidential assent, says Gehlot polity
  • The fallout of keying in the wrong labour codes Economy
  • Recharging DTH economy
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    UPSC Current Affairs: Governor not sending Bills for Presidential assent, says Gehlot | Page 04

    UPSC Syllabus: | Mains – GS Paper II – Polity & Governance

    Sub Theme:| Constitutional Position of the governor | Discretionary power of the Governor

    GOVERNOR

    Constitutional Position / Relation with Council of Ministers

    The relation between the governor and his Council of Ministers is similar to that between President and the Union CoM, i.e. he has to act on the aid and advice given by the CoM except in all the cases where the Constitution authorizes the Governor to exercise powers ‘in his discretion’.

    • Article 163(1) says there will be Council of Ministers to aid and advice the Governor except in the cases he has to act in his discretion.
    • Article 163(2) then says if any questions arises with respect to whether a matter falls under Governors’ discretionary power or not, the decision of the Governor with regards to the question shall be final and anything done by the governor in his discretion will not be called into question.
    • Article 163(3) does not allow the courts to inquire into what advice was tendered by the CoM to the Governor.

    The Constitution makers conferred explicit and far wide discretionary power on the Governor because as the representative of the Centre governor has to serve as eye and ears of the Centre and so needs independence and discretion in certain matters and also because he is an important link between the centre and state to maintain unity and integrity of India.

    Constitutional position of governor is different from that of the President as firstly, constitution explicitly provides for governor to act in his discretion but no such possibility has been envisaged for the President, secondly while the President can ask the Union CoM to reconsider any advice, no such provision is there with respect to Governor and thirdly, 42nd Constitutional Amendment Act , 1976 made ministerial advice binding on President  but with respect to Governor no such provision is there. But this hardly makes difference in reality because the position is similar to what existed prior to the amendment. 

    Though various articles of the Constitution expressly require Governors discretion but in all other matters he has to act in harmony (on advice) with his CoM  because constitution does not aim to provide parallel administration within the state by allowing governor to go against the advice of CoM.

    Discretionary power of the Governor

    The Governor has to discharge certain functions in his discretion ‘by or under’ the constitution. This means that his discretionary power need not be always express but may be necessarily implied.

    In the following cases governor has Constitutional discretion i.e. constitution mentions governor to exercise these functions in his discretion/opinion/ independently of the CoM.

    Reserving a bill for President’s consideration u/a 200.

    Governor’s report recommending imposition of governor’s rule in the State u/a 356.

    While exercising his functions as the administrator of an adjoining Union Territory u/a 239(2).

    Determining the amount payable by the Government of Assam to the district councils as royalty accruing from licenses of mineral exploration.

    In addition to the above the Governor has certain ‘special responsibilities’ to discharge u/a 371, which practically means his discretion and though he is, in case of special responsibility, to consult CoM but the final decision will be his individual judgement. These include establishing separate development boards of certain areas in Gujrat and Maharashtra, administration of tribal areas in Assam, hill area in Manipur, law and order in Arunachal Pradesh, Nagaland etc.

    There are also certain implied and situational discretion of the Governor which is similar to that of the President. These are –

    Appointment of the Chief minister u/a 164(1): When no party has achieved a clear cut majority in the elections or when the chief Minister suddenly dies and there is no obvious successor , in those situations governor can call any person to form the government who he thinks can command majority.

    Dismissal of Ministry when it cannot prove the majority in the house:

    • Since CoM u/s 164(2) is collectively responsible to the state legislative assembly hence if a ministry has lost confidence of the house but refuses to resign, in that case Governor can dissolve the Ministry

    Dissolution of the state legislative assembly:

    • Various Governors have adopted different approaches in similar situations in regard to dissolution of the Legislative Assembly.
    • The advice of a Chief Minister enjoying majority support in the Assembly to dissolve the house is normally binding on the Governor.
    • However, where the Chief Minister had lost such support, some Governors refused to dissolve the Legislative Assembly on his advice, while others in similar situations, accepted his advice, and dissolved the Assembly.

     

    UPSC Current Affairs:The fallout of keying in the wrong labour codes | Page 06

    UPSC Syllabus: GS Mains Paper II – Polity & Governance

    Sub Theme: Fixed Term Employment | Industrial Relations Code 2020

    Context:

    The opening of Wistron Production Facility in Karnataka, which manufactures various components for global tech majors such as Apple, was considered to be major thrust to Make in India and Aatma Nirbhar Bharat. However, the recent large-scale violence and labor unrest in its production facility has affected Investor sentiment and thus India's ability to attract global MNCs from China.

    It has also highlighted as to how the inequitable labour-capital relations could lead to exploitative labour practices. In this regard, there is a need to provide sufficient safeguards for the working class in the newly introduced labour codes. The labour codes must strike a right balance between the need to attract foreign capital and the need to protect the rights of the working class.

    What factors led to Industrial Unrest in Wistron Production Facility?

    Higher Share of Contractual Workers: The Wistron Company employed around 1,300 regular workers and 8,500 contract workers. These contract workers were hired through an intermediary (contractor) and are not on the payrolls of the company. Under such arrangement, the contractor is responsible for the payment of wages and these workers are not entitled to social security benefits such as Insurance, Provident Fund etc. The recent incident was attributed to non-payment of wages for the over-time work as well as delay in the payment of wages.

    Increase in the number of working hours from 8 hours to 12 hours without any additional compensation to the workers.

    Absence of Labour Union to address the grievances of the workers.

    What has been the response so far?

    • Wistron has taken a number of measures to address the Industrial unrest. It has rendered an apology to the workers, removed its Vice-President and also has also promised to initiate corrective measures to address the grievances of the workers.
    • On the other hand, the Apple company has decided not to give additional orders to Wistron, until it addresses the grievances of the workers. It has also come out with the "Code of Conduct" to be followed by all its suppliers to follow labour rules and regulations.

    Understanding the Core Problem

    The Core problem of the recent Industrial unrest has been attributed to the higher share of Contractual employees in the Wistron's Production unit. Wistron claims that it had already deposited the money in the account of the contractor (staffing firms) and hence it was failure on the part of staffing firms in not paying the wages to the Workers. This clearly shows lack of coordination between employers and staffing firms in the payment of wages and ensuring safety and health of the workers. Morever, it is a clear case of abdication of responsibility by both employers and staffing firms.

    Over a period of time, the share of contractual workers in the registered manufacturing has increased to 36% in 2018. Hence, the recent incident at Wistron production unit is just a tip of iceberg. Lack of sufficient safeguards for the contract workers could worsen the Industrial relations even further.

    How to address this problem?

    The Industrial Relations Code 2020 has introduced the concept of fixed term employment. Fixed term employment refers to workers employed for a fixed duration based on a contract signed between the worker and the employer.

    Benefits of Fixed Term Employment:

    • Allow employers the flexibility to hire workers for a fixed duration and for work that may not be permanent in nature
    • Fixed term contracts are negotiated directly between the employer and employee and reduce the role of a middleman such as an agency or contractor.  
    • Benefit the worker since the Code entitles fixed term employees to the same benefits (such as medical insurance and pension) and conditions of work as are available to permanent employees.  
    • Improve the conditions of temporary workers in comparison with contract workers who may not be provided with such benefits.   

    Why are firms continuing to hire Contract workers instead of Fixed Term employees?

    • Ideally, to encourage a shift away from contract workers to fixed-term employees, the government should have completely prohibited the use of contract labour in core activities, that is, those activities for which the establishment is set up and includes any activity which is essential or necessary to the core activity. However, the Labour Code on Occupational Safety and Health has allowed for use of contract workers in core activities under certain conditions such as a sudden increase of volume of work in the core activity which needs to be accomplished in a specified time. Such a provision encourages the use of contract workers and undermines the initiative of introducing fixed-term employment.
    • The cost of hiring contract workers continues to remain lower than the cost of hiring fixed-term employees. This is so because the Fixed-term employees need to be provided with benefits such as medical insurance, pension, provident fund etc.
    • Reduced compliance cost for hiring Contract workers since it is the staffing companies that are required to incur monitoring and litigation costs.
    • Rapid growth of Staffing companies

    Way forward

    Addressing the constraints faced by Fixed-Term Employees:

    Constraints:

    The Industrial Relations Code does not specify a minimum or maximum tenure for hiring fixed-term employees. It does not specify the number of times the contract can be renewed. Also, it does not restrict the type of work in which fixed term workers may be hired. The absence of such safeguards can, in fact, lead to an erosion of permanent jobs.

    How this could be improved upon?

    The Second National Commission on Labour (2002) had recommended that no worker should be kept continuously as a casual or temporary worker against a permanent job for more than two years. The International Labour Organisation (ILO) has highlighted that several countries restrict the use of fixed term contracts by: (i) limiting renewal of employment contracts (Example- Vietnam, Brazil and China allow two successive fixed term contracts), (ii) limiting the duration of contract (Example- Philippines limits it up to a year), or (iii) limiting the proportion of fixed term workers in the overall workforce.

    These recommendations of the Second National Commission on Labour and ILO need to be incorporated.

     

    UPSC Current Affairs:Recharging DTH | Page 06

    UPSC Syllabus: GS Mains Paper II – Polity & Governance

    Sub Theme: Direct to Home (DTH) broadcasting services | Foreign Direct Investment

    Context:

    The Union Cabinet has recently approved revised guidelines for Direct to Home (DTH) broadcasting services. The salient features of the revised guidelines are:

    • License for the DTH will be issued for a period of 20 years in place of present 10 years. Further the period of License may be renewed by 10 years at a time.
    • License fee has been revised from 10% of Gross Revenue (GR) to 8% of Adjusted Gross Revenue (AGR). The AGR will be calculated by deducting GST from Gross revenue.
    • FDI Cap in DTH has been increased to 100% (from existing FDI cap of 49%).

    Understanding Foreign Direct Investment

    According to the guidelines issued by the Government, foreign investment of less10% in a listed Indian Company is considered as Portfolio Investment. Foreign Investment of 10% or more in a listed Indian company is considered as Foreign Direct Investment.

    FDI leads to both ownership and management control of a company, while FPI provides for only ownership in accordance with the shareholding.

    Present FDI Policy

    Since, the 1991 LPG Reforms, the Government of India has opened up FDI in almost all the sectors of Indian Economy as shown below:

    Sl. No

    Sector

    FDI Limit

    Route

    1

    Agriculture and allied activities:

    ·         Floriculture, Horticulture, and Cultivation of Vegetables & Mushrooms under controlled conditions;

    ·         Development and Production of seeds and planting material;

    ·         Animal Husbandry, Pisciculture, Aquaculture, Apiculture; and

    ·         Services related to agro and allied sectors

    100%

    Automatic

    2

    Coal Mining

    100%

    Automatic

    3

    Defence

    100%

    Automatic up to 49%

    Government Route beyond 49%

    4

    Print Media

    26%

    Government Route

    5

    Airports

    100%

    Automatic

    6

    Telecom

    100%

    Automatic up to 49%

    Government Route beyond 49%

    7

    Single Brand Retail

    100%

    Automatic up to 49%

    Government Route beyond 49%

    8

    Private Sector Banks

    74%

    Automatic up to 49% Government route beyond 49%

    9

    Public Sector Banks

    20%

    Government Route

    10

    Insurance and Pension

    49%

    Automatic Route


    FDI under sectors is permitted either through Automatic route or Government route. Under the Automatic route, the non-resident or Indian company does not require any approval from Government of India. Whereas, under the Government route, approval form the Government of India is required prior to investment. Proposals for foreign investment under the Government route are considered by the respective Administrative Ministry/Department.

    Sectors where FDI is prohibited:

    • Lottery Business including Government/private lottery, online lotteries, etc.
    • Gambling and Betting including casinos etc.
    • Chit funds and Nidhi company
    • Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
    • Activities/sectors not open to private sector investment such as Atomic Energy and Railway operations.
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