Topic 1 : A new Maharashtra model
Introduction: Speaker Rahul Narwekar’s decision to recognize Chief Minister Eknath Shinde, who left the Uddhav Thackeray-led group, as the leader of the actual Shiv Sena might be used as a textbook example of disregard for the legislative procedure and regulations.
Why Speaker’s decision was against the law and spirit of the Anti-Defection Law?
At the time of the defection, the Shinde faction did not have a majority
- Shinde enjoyed a majority when he left Shiv Sena, says the Speaker.
- However, defection is a one-time act and not an ongoing process.
- The fact is that Shinde had 16 MLAs with him, out of 55, when he left for Surat en route to Guwahati.
- He went on to mop up another 21.
- That Shinde had not had enough members with him initially was the reason that the Uddhav Thackeray-led Shiv Sena filed a disqualification petition against only these 16 MLAs, including Shinde.
Appointment of the whip by the Shinde faction was illegal
- While rejecting the demand to disqualify Shinde and his associates, the Speaker held as valid the appointment of a new whip by the splinter group.
- But this is in clear violation of the Supreme Court which, on May 11, 2023 had found fault with the Speaker’s decision to recognise the Shinde-appointed whip.
- The apex court had categorically dubbed as illegal the Speaker’s decision to appoint an MLA of the Shinde faction as the chief whip of the Shiv Sena.
- The SC, in that order, also articulated its views on differentiating party structure from its legislative wing and their powers.
- It held that the whip being appointed by a political party is crucial for the Tenth Schedule and that the Speaker must recognise only the whip appointed by the political party.
Speaker’s decision to not disqualify the Uddhav faction’s MLAs
- This leads to yet another and bigger contradiction.
- To turn the tables on the Uddhav Thackeray camp, the Shinde faction accused it of violating the party whip, becoming liable to be disqualified.
- Accordingly, a counter-petition was filed with the Speaker by the Shinde camp demanding the disqualification of 14 MLAs belonging to the Thackeray camp.
- This group of 14 MLAs refused to join hands with Shinde and instead stayed with Thackeray.
- Neither did they obey the diktat of the Shinde camp’s whip.
- And since the Speaker considers this newly appointed whip legal, as per the law, its violation on the floor of the House should have led to the disqualification of the 14 MLAs belonging to the Thackeray camp.
- However, in this case, Speaker Narwekar admits that the Thackeray camp MLAs violated the whip, but at the same time rejects the demand to disqualify them.
Some reforms that can make Anti-defection law effective
There have been various suggestions for reform of the anti-defection law in India. Some of the reforms that have been proposed include:
- 2nd ARC: The issue of disqualification of members on the grounds of defection should be decided by the President/Governor on the advice of the Election Commission.
- Reducing the number of defections: The threshold for disqualification should be raised from one-third to two-thirds or three-fourths. This would reduce the number of defections and make it harder for political parties to split.
- Allowing defections in certain circumstances: As per the National Commission for the Review of the Constitution, ADL must be limited to crucial legislative businesses only, like non-confidence motions.
- Removing the role of the Speaker: Some have suggested that the role of the Speaker in deciding on cases of disqualification should be removed and replaced with an independent authority, such as the Election Commission or a Quassi-judicial body headed by a High court judge. (SC in Keisham Meghchadra Case)
- Allowing independents to join parties: Some have suggested that independent members should be allowed to join political parties without being disqualified.
- Providing for a grace period: Some have suggested that a grace period should be provided for members who have defected to allow them to prove their loyalty to their new party.
- Time frame: In Keisham Meghchadra Case judgments, the Supreme Court has held that the Speaker of the Legislative Assembly should decide on a petition seeking disqualification of a member under the Tenth Schedule of the Constitution within a period of three months.
Conclusion: The answer lies in how nimble-footed the judiciary is and how far it wants to go to assert “constitutional morality”. The Maharashtra Legislative Assembly Speaker’s decision could be the perfect opportunity for the courts to walk the talk.
Topic 2 : Costs of a levy
Introduction: The Indian industry has expressed concerns about the European Union’s Carbon Adjustment Mechanism (CBAM). India Inc’s immediate worries are about a CBAM clause that requires exporters to submit nearly 1,000 data points about their production methods.
What is the Carbon Border Adjustment Mechanism (CBAM)?
- The EU's Carbon Border Adjustment Mechanism (CBAM) is a new policy that aims to level the playing field for European businesses by putting a price on the carbon emissions embedded in imported goods.
- This essentially means that importers will have to pay a charge based on the amount of CO2 emitted during the production of certain goods outside the EU, similar to the price European producers pay under the EU's Emissions Trading System (ETS).
How it works:
- Applies to specific goods: Initially, the CBAM will apply to imports of six carbon-intensive goods: cement, iron and steel, aluminium, fertilizers, electricity, and hydrogen. These sectors are deemed to be at the highest risk of carbon leakage, which is when companies move production to countries with less stringent environmental regulations to avoid carbon costs.
- Charges based on embedded emissions: Importers will need to purchase CBAM certificates corresponding to the embedded emissions in their imported goods. The price of these certificates will be linked to the EU ETS carbon price.
- Phased implementation: The CBAM is being introduced in phases. The first phase, which began in October 2023, is a reporting period where importers are required to track and report the embedded emissions in their imports. The full charge will come into effect in 2026.
Concerns of Indian industries
- Brussels contends that the requirement is meant to ascertain carbon footprint-related information but Indian exporters fear that they could lose critical competitive advantage in the process.
- Industry says that besides being a burdensome process, the data-sharing exercise could compromise sensitive trade secrets.
- A more serious challenge for industry will be to navigate CBAM’s definitive phase when tariffs start getting imposed.
- In 2022, more than a fourth of India’s exports of iron, steel and aluminium were to the EU.
- According to industry estimates, the EU tariffs could raise the costs of Indian exports by 20 to 35 per cent.
- There are apprehensions that other developed economies could follow in the EU’s footsteps — the US, for instance, opposes CBAM, but conversations have already started in America about imposing a similar levy.
What India can do to protect its industries?
- A multi-pronged effort will be required.
- India will have to contest CBAM’s protectionist underpinning.
- The government has already questioned the mechanism at the WTO.
- It will also need to join hands with other affected countries to contest CBAM at climate fora.
- The measure is being imposed in an already unequal context, due to the failure of rich countries to honour commitments to make clean technologies accessible to developing countries.
- One suggestion by experts is, therefore, to impose the tariff but channel the fund to developing countries — instead of the proceeds going to the EU’s corpus.
- Given the already contentious nature of climate financing, implementing this recommendation will require tough talking.
- The government is reportedly contemplating a levy similar to CBAM to nudge industry to reduce its carbon footprint — the revenue would then be used to fund the domestic green transition.
- There are, however, imponderables, including whether the EU will play ball and withdraw its tariff.
- Big companies like Tata Steel and JSW seem to be bracing for this challenge — they have ambitious decarbonisation targets.
- However, abating emissions from the steel sector is tough.
- Technological interventions — carbon capture and storage, for example — could be costly for small companies.
- They will require handholding by governments, regulators and financial institutions.
Conclusion: The EU’s carbon tax will need to be contested. Industry concerns in effecting the green transition must be heeded. Government must stand with the industry against this non-tariff trade barrier from EU.