11 Aug 2023 : The Indian Express

Editorial 1: The EC’s guardrails

Recent Context:

• Recently, government tabled the Chief Election Commissioner and other Election Commissioners (Appointments, Conditions of Service, Term of Office) Bill in the Rajya Sabha
• The proposed Bill effectively stands to dilute the SC verdict and many of the concerns that the SC verdict had warned against

SC judgment related to appointment of CEC and ECs

• In a unanimous verdict, a five-judge constitution bench headed by Justice K M Joseph ruled that a panel comprising the Prime Minister (PM), the Leader of the Opposition (LoP), and the Chief Justice of India shall appoint CEC and ECs until Parliament brings a law, underlining that the independence of the Election Commission requires a collegium.
• The court had said that the purity of the election process must be maintained to preserve democracy, else it “would lead to disastrous consequences”.
• The presence of the CJI was required to usher in impartiality and insulate the appointment process from the Executive’s interference.

Significance of SC ruling for bringing reform in Election process

• The SC verdict was important is because it addressed the issue of partisanship and institutional autonomy.
  • As The current selection process — by the President on the advice of the PM and the Cabinet does a grave disservice to newly appointed ECs
• Therefore, collegium improves the public perception of the Commission’s neutrality and independence.
• The SC verdict had maintained that the CJI’s presence could quell the executive’s unchecked and unaccounted-for hold over appointments
  •  But the government, while proposing the Bill, called it a “fallacious” and “constitutionally impermissible” suggestion that the executive cannot make an honest selection without the help of the judiciary.
• The selection committee will strengthen the trust of people in electoral process
  • Maintaining the EC’s institutional autonomy is urgent in the current national and international context.
  • As, over the past few years, the EC’s credibility is increasingly being called into question, with allegations of bias in the scheduling of elections and arbitrary deletion of names of registered voters, ignoring blatant violations of the model code. 

Changes made in recently introduced Bill

• The Bill now proposed by the Union government, seeks to replace the CJI with a cabinet minister nominated by the Prime Minister.
• However, it proposes addition — a search committee, headed by the Cabinet Secretary, with two other members not below the rank of secretary to the governmentv to prepare a panel of five members for the consideration of the Selection Committee.
• Another positive feature of the Bill is that the CEC and other ECs will be appointed from
  • “Amongst persons who are holding or have held a post equivalent to the rank of secretary and shall be persons of integrity, who have knowledge of and experience in the management and conduct of elections”.
  • However, a clause mentions that the Selection Committee can choose anyone from outside the shortlist
• Earlier, there was no rule prescribing the qualifications for appointment to the posts, which was a major matter of concern with the risk of appointment from some other catchment area.
• Bill also seeks to protect the two Election Commissioners from removal, bringing them on par with the CEC. They can be removed through a process of impeachment like a SC judge

Conclusion

• The Election Commission of India has for long been a shining symbol of democracy all over the world. To consolidate this reputation, we must ensure all the safeguards are in place to quell the possibility of any question mark on its credibility and status.

Editorial 2: Shoring up resistance

Recent Context:

• Recently, Monetary policy committee of the Reserve Bank of India has voted unanimously in its August meeting to keep the policy repo rate unchanged at 6.5 per cent.
• Alongside, the committee members voted 5-1 to keep the stance unchanged, focusing on the withdrawal of accommodation to ensure that “inflation progressively aligns with the target

Reason for maintaining the status quo of repo rate:

• It will help in reaffirming the monetary policy objective of aligning inflation with the central bank’s target of 4 per cent Consumer Price Index (CPI) inflation with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent.
• However, considering that the requirement for a policy response at this juncture is curtailed due to a supply-side induced spurt in food inflation and a moderation in core inflation, it would seem that the MPC is likely to maintain status quo on rates in the near term.

What is the Inflation target?

• Under the Under Section 45ZA of RBI act1934, the Central Government, in consultation with the RBI, determines the inflation target in terms of the Consumer Price Index (CPI), once in five years and notifies it in the Official Gazette
• Under which Central Government notified in the Official Gazette 4 per cent Consumer Price Index (CPI) inflation as the target for the period from August 5, 2016 to March 31, 2021 with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent.
• On March 31, 2021, the Central Government retained the inflation target and the tolerance band for the next 5-year period – April 1, 2021 to March 31, 2026.
• Section 45ZB of the RBI Act provides for the constitution of a six-member Monetary Policy Committee (MPC) (which is headed by RBI governor) determine the policy rate required to achieve the inflation target.
• Therefore, Inflation target is set by central government and it is maintained by RBI through monetary policy tools.

However, The trajectory of inflation unpredictable.

• In its June policy, the RBI had projected it at 5.2 per cent in the second quarter. In its August meeting, it substantially revised its projection upwards to 6.2 per cent as prices of vegetables have soared in July and August.
•  While this surge is likely to be temporary — the commentary from the RBI does suggest that the central bank believes that vegetable prices will correct in the near term there remains considerable ambiguity over food prices on account of uncertainty over the distribution of monsoon and impact of El Nino.
•  During such periods, as the RBI Governor has underlined, “supply side interventions” can limit the “severity and duration of such shocks”
• Recently, Union food ministry announced that it was offloading 50 lakh metric tonnes of wheat in the open market in a phased manner. This could have a moderating influence on prices
• However, other factors, such as higher crude oil prices, also pose risks to the trajectory of inflation. The central bank has now revised upwards its full year inflation forecast to 5.4 per cent, from 5.1 per cent earlier.
• Alongside, it has also taken steps to absorb the surplus liquidity generated by the return of the Rs 2,000 notes to the banking system by imposing an incremental cash reserve ratio of 10 per cent.

It is necessary to maintain growth while controlling the inflation:

• On the growth front, the RBI remains optimistic, expecting the economic momentum to continue.
• The central bank has retained its forecast for GDP growth this year at 6.5 per cent, even as external demand weakens and the cumulative rate hikes of 250 basis points are still working their way through the system.
•  However, considering the uncertainty in the global economy, the central bank must remain vigilant on all fronts. While it has done well to look through this spurt in inflation, it must be cautious.
  • As the governor’s statement also acknowledges, “frequent incidences of recurring food price shocks, however, pose a risk to anchoring of inflation expectations”.
•  The future course of monetary policy will be influenced by how growth and inflation evolve over the coming quarters.

Conclusion:

• Therefore, while consider the global economic situation and food-based inflation, the stand of Monetary policy committee to unchanged repo rate will help in controlling inflation along with maintaining the economic growth.