Governor's Powers to Call for a Floor Test

Why in News?

In Maharashtra's political crisis, the Governor's decision to call for the floor test has been in the spotlight once again.

What are the Constitutional Provisions related to the Governor in calling for a Floor Test?

• About:
  • Article 174 of the Constitution authorizes the Governor to summon, dissolve and prorogue the state legislative assembly.
    • Article 174(2)(b) of the Constitution gives powers to the Governor to dissolve the Assembly on the aid and advice of the cabinet. However, the Governor can apply his mind when the advice comes from a Chief Minister whose majority could be in doubt.
  • According to Article 175(2), the Governor can summon the House and call for a floor test to prove whether the government has the numbers.
  • However, the Governor can exercise the above only as per Article 163 of the Constitution which says that the Governor acts on the aid and advice of the Council of Ministers headed by the Chief Minister.
  • When the House is in session, it is the Speaker who can call for a floor test. But when the Assembly is not in session, the Governor’s residuary powers under Article 163 allow him to call for a floor test.
• Governor’s Discretionary Power:
  • Article 163 (1) essentially limits any discretionary power of the Governor only to cases where the Constitution expressly specifies that the Governor must act on his own and apply an independent mind.
  • The Governor can exercise his discretionary power under Article 174, when the chief minister has lost the support of the House and his strength is debatable.
  • Generally, when doubts are cast on the chief minister that he has lost the majority, the opposition and the Governor would rally for a floor test.
  • On numerous occasions, the courts have also clarified that when the majority of the ruling party is in question, a floor test must be conducted at the earliest available opportunity.

What is the Supreme Court's View on the Governor's Power in Calling the Floor Test?

• In 2016, the Supreme Court in Nabam Rebia and Bamang Felix vs Deputy Speaker case (the Arunachal Pradesh Assembly case) said that the power to summon the House is not solely vested in the Governor and should be exercised with aid and advice of Council of Ministers and not at his own.
• The Court highlighted the facts that the Governor is not an elected authority and is a mere nominee of the President, such a nominee cannot have an overriding authority over the representatives of the people, who constitute the House or Houses of the State Legislature.
• Allowing the Governor to overrule the State Legislature or the State executive would not harmoniously augur with the strong democratic principles enshrined in the provisions of the Constitution. Specially so, because the Constitution is founded on the principle of ministerial responsibility.
• In 2020, the Supreme Court, in Shivraj Singh Chouhan & Ors versus Speaker, Madhya Pradesh Legislative Assembly & Ors, upheld the powers of the Speaker to call for a floor test if there is a prima facie view that the government has lost its majority.
  • “The Governor is not denuded of the power to order a floor test where on the basis of the material available to the Governor it becomes evident that the issue as to whether the government commands the confidence of the House requires to be assessed on the basis of a floor test.

What is a Floor Test?

• It is a term used for the test of the majority. If there are doubts against the Chief Minister (CM) of a State, he/she can be asked to prove the majority in the House.
  • In case of a coalition government, the CM may be asked to move a vote of confidence and win a majority.
• In the absence of a clear majority, when there is more than one individual staking claim to form the government, the Governor may call for a special session to see who has the majority to form the government.
  • Some legislators may be absent or choose not to vote. The numbers are then considered based only on those MLAs who were present to vote.

Source:IE

Bedti-Varada River Interlinking Project

Why in News?

Environmental groups in Karnataka have criticised the project to link the Bedti and Varada rivers in Karnataka, calling it unscientific and a waste of public money.

What is the Bedti-Varada Project?

• The Bedti-Varada project was envisaged in 1992 to supply drinking water.
• The plan aims to link the Bedti, a river flowing west into the Arabian Sea, with the Varada, a tributary of the Tungabhadra River, which flows into the Krishna, which in turn flows into the Bay of Bengal.
• A massive dam will be erected at Hirevadatti in Gadag district.
• A second dam will be built on the Pattanahalla river at Menasagoda in Sirsi, Uttara Kannada district.
• Both dams will take water to the Varada via tunnels.
• The water will reach Kengre and will then go down a 6.88 km tunnel to Hakkalumane, where it will join the Varada.
• The project thus envisages taking water from the water surplus Sirsi-Yellapura region of Uttara Kannada district to the arid Raichur, Gadag and Koppal districts.
• A total of 302 million cubic metres of water from Pattanahalla and Shalmalahalla tributaries of the Bedti and Varada rivers, while 222 million cubic metres of water will be drawn from the barrage at Suremane built against the Bedti river.
• The Project would need 61 megawatts of power to pull the water all the way to Gadag. Even after this, it is unknown whether the water would reach Gadag.

What are the Issues associated with this Project?

• Difficult to Redirect:
  • It is difficult to redirect a westward-flowing river to flow eastward.
• Rain-fed Rivers:
  • In early summer, the Bedti and Varada rivers begin to dry up.
  • It is a sad irony that government scientists plan to interconnect these rivers under the pretext of providing drinking water despite knowing well that they do not flow all year.
• Project Report not Accurate:
  • The Detailed Project Report (DPR) drawn up by the irrigation department is not accurate as it was drawn without assessing the availability of water and quoting the observation of the National Water Development Agency (NWDA) report on the interconnection of the Bedti-Aghanashini and Varada rivers.
• Environmental Impact:
  • Over 500 acres of forests will be lost. The end result will be that there will still be no water.
  • Flora and fauna will also suffer due to this project.
  • The Bedti valley has been designated as an active biodiversity zone by the International Union for Conservation of Nature.
  • The area is home to 1,741 types of flowering plants as well as 420 species of birds and animals.
  • The nutrients that the river carries with it are responsible for sustaining fish stocks, especially in the Bedti’s estuary in Dedi.
  • The river valley serves as a corridor for around 35 different animal species. The Bedti is known as Gangavali in the estuary region.
• Affect Lifelines for Thousands:
  • The Bedti and Varada rivers are also lifelines for thousands of farmers in the Malenadu region, the foothills of the Western Ghats, in addition to fishing communities along the coast.

Way Forward

• Interlinking of rivers has its pros and cons, but given the economic, political, and environmental implications, it may not be a wise decision to carry out this project at a centralized national level.
• Instead, interlinking rivers may be pursued in a decentralized manner, and more sustainable ways like rainwater harvesting should be promoted to mitigate floods and droughts.

Source: DTE

Wetlands Conservation

Why in News?

According to a new report, wetland conservation should feature as an independent topic of discussion in the negotiations at the upcoming biodiversity and climate change conferences for effective carbon sequestration.

• Carbon sequestration is the long-term storage of carbon in plants, soils, geologic formations, and the ocean.
• Experts from the Wetlands International, a global non-profit, in a new white paper suggested five global, science-based conservation efforts to protect and restore wetlands.
• The suggestions come in the run up to the 15^th Conference of Parties (CoP15) to the Convention on Biological Diversity to be held in Montreal, Canada and the 27^th Conference of Parties (CoP27) to the United Nations Framework Convention on Climate Change in Egypt later this year.

What are the five suggested targets by Wetlands International to be achieved by 2030?

• The remaining, undrained peatland carbon stores should be kept intact and 10 million hectares of drained peatlands need should be restored.
• The Global mangrove cover of 20 %.
• The preservation of free-flowing rivers and floodplains, along with enhancement of restoring the floodplain ecosystem and its function in the area.
• The 10% increase of the West African river Volta in the tidal flats area.
• Identification of 50 % of the 7,000 critically important sites along the flyways to be brought under favourable management.

What are Wetlands?

• Wetlands are areas where water is the primary factor controlling the environment and the associated plant and animal life. They occur where the water table is at or near the surface of the land, or where the land is covered by water.
• Wetlands are defined as: "lands transitional between terrestrial and aquatic eco-systems where the water table is usually at or near the surface or the land is covered by shallow water".

What is the Importance of Wetlands?

• Highly Productive Ecosystems: Wetlands are highly productive ecosystems that provide the world with nearly two-third of fish harvest.
• Integral Role in the Ecology of the Watershed: The combination of shallow water, high levels of nutrients is ideal for the development of organisms that form the base of the food web and feed many species of fish, amphibians, shellfish and insects.
• Carbon Sequestration: Wetlands' microbes, plants and wildlife are part of global cycles for water, nitrogen and sulphur. Wetlands store carbon within their plant communities and soil instead of releasing it to the atmosphere as carbon dioxide.
• Lowering flood Heights and Reduces soil erosion: Wetlands function as natural barriers that trap and slowly release surface water, rain, snowmelt, groundwater and flood waters. Wetland vegetation also slow the speed of flood waters lowering flood heights and reduces soil erosion.
• Critical to Human and Planet Life: More than one billion people depend on them for a living and 40% of the world’s species live and breed in wetlands.
• Wetlands are a vital source for food, raw materials, genetic resources for medicines, and hydropower.
• They play an important role in transport, tourism and the cultural and spiritual well-being of people.
• Habitat for Animals and Plants: They provide habitat for animals and plants and many contain a wide diversity of life, supporting plants and animals that are found nowhere else.
• Areas of Natural Beauty: Many wetlands are areas of natural beauty and promote tourism and many are important to Aboriginal people.
• Important Benefits for Industry: Wetlands also provide important benefits for industry. For example, they form nurseries for fish and other freshwater and marine life and are critical to commercial and recreational fishing industries.

What are the Threats to Wetlands?

• Urbanisation: Wetlands near urban centres are under increasing developmental pressure for residential, industrial and commercial facilities. Urban wetlands are essential for preserving public water supplies.
• Agriculture: Vast stretches of wetlands have been converted to paddy fields. Construction of a large number of reservoirs, canals and dams to provide for irrigation significantly altered the hydrology of the associated wetlands.
• Pollution: Wetlands act as natural water filters. However, they can only clean up the fertilisers and pesticides from agricultural runoff but not mercury from industrial sources and other types of pollution.
  • There is growing concern about the effect of industrial pollution on drinking water supplies and the biological diversity of wetlands.
• Climate Change: Increased air temperature, shifts in precipitation, increased frequency of storms, droughts, and floods, increased atmospheric carbon dioxide concentration, and sea level rise could also affect wetlands.
• Dredging: The removal of material from a wetland or river bed. Dredging of streams lowers the surrounding water table and dries up adjacent wetlands.
• Draining: Water is drained from wetlands by cutting ditches into the ground which collect and transport water out of the wetland. This lowers the water table and dries out the wetland.
• Introduced Species: Indian wetlands are threatened by exotic introduced plant species such as water hyacinth and salvinia. They clog waterways and compete with native vegetation.
• Salinization: Over withdrawal of groundwater has led to salinisation.

What are the Efforts towards Wetlands Conservation?

• Initiatives at Global Level:
  • Ramsar Convention
  • Montreux Record
  • World Wetlands Day
• Initiatives at National Level:
  • Wetlands (Conservation and Management) Rules, 2017.
  • Action Plan of MoEFCC

Way Forward

• To counter unplanned urbanization and a growing population, management of wetlands has to be an integrated approach in terms of planning, execution and monitoring.
• Effective collaborations among academicians and professionals, including ecologists, watershed management specialists, planners and decision makers for overall management of wetlands.
• Spreading awareness by initiating awareness programs about the importance of wetlands and constant monitoring of wetlands for their water quality would provide vital inputs to safeguard the wetlands from further deterioration.

Source: DTE

Cooperative Banks

Why in News?

Recently, the Minster of Home Affairs and Cooperation has addressed a conclave, organised by the National Federation of Urban Cooperative Banks and Credit Societies (NAFCUB), emphasising the needed Reforms for Urban Cooperative Banks (UCB).

• The NAFCUB is an Apex Level Promotional body of Urban Cooperative Banks and Credit Societies Ltd. in the Country. Its objective is to promote the urban cooperative credit movement and protect the interest of the Sector.

What are the Cooperative Banks?

• About:
  • It is an institution established on a cooperative basis to deal with the ordinary banking business. Cooperative banks are founded by collecting funds through shares, accepting deposits, and granting loans.
  • They are Cooperative credit societies where members from a community group together to extend loans to each other, at favorable terms.
  • They are registered under the Cooperative Societies Act of the State concerned or the Multi-State Cooperative Societies Act, 2002.
  • The Co-operative banks are governed by the,
    • Banking Regulations Act, 1949.
    • Banking Laws (Co-operative Societies) Act, 1955.
  • They are broadly divided into Urban and Rural cooperative banks.
• Features:
  • Customer Owned Entities: Co-operative bank members are both customer and owner of the bank.
  • Democratic Member Control: These banks are owned and controlled by the members, who democratically elect a board of directors. Members usually have equal voting rights, according to the cooperative principle of “one person, one vote”.
  • Profit Allocation: A significant part of the yearly profit, benefits or surplus is usually allocated to constitute reserves and a part of this profit can also be distributed to the co-operative members, with legal and statutory limitations.
  • Financial Inclusion: They have played a significant role in the financial inclusion of unbanked rural masses. They provide cheap credit to masses in rural areas.
• Urban Cooperative banks (UCB):
  • The term Urban Cooperative Banks (UCBs) is not formally defined but refers to primary cooperative banks located in urban and semi-urban areas.
  • The Urban Cooperative Banks (UCBs), the Primary Agricultural Credit Societies (PACS), the Regional Rural Banks (RRBs), and Local Area Banks (LABs) could be considered as differentiated banks as they operate in localized areas.
  • Till 1996, these banks were allowed to lend money only for non-agricultural purposes. This distinction does not hold today.
  • These banks were traditionally centred on communities and local workgroups as they essentially lent to small borrowers and businesses. Today, their scope of operations has widened considerably.

What are the Challenges Faced by the Cooperative Banks?

• Changing Trends in Financial Sector:
  • Changes in the financial sector and evolving microfinance, FinTech companies, payment gateways, social platforms, e-commerce companies, and Non-Banking Financial Companies (NBFCs) challenge the continued presence of the UCBs, which are mostly small in size, lack professional management, and have geographically less diversified operations.
• Dual Control:
  • The UCBs were under dual regulation by the state registrar of societies and the RBI.
  • But in 2020, all UCBs and multi-state cooperatives were brought under the supervision of RBI.
• Money Laundering and Corruption:
  • Cooperatives have also become avenues for regulatory arbitrage, circumventing lending and anti-money laundering regulations.
  • Investigations into the case of Punjab and Maharashtra Cooperative (PMC) Bank scam have shown gross financial mismanagement and a complete breakdown of internal control mechanisms.
• Declining of Agricultural Lending:
  • The RBI report noted that despite a crucial role played by the sector, its share in total agricultural lending diminished considerably over the years, from as high as 64 % in 1992-93 to just 11.3 % in 2019-20.
• Unfair Audit:
  • It is well known that audits are done entirely by department officials & are neither regular nor comprehensive. Delays in the conduct of audits and submission of reports are widespread.
• Government Interference:
  • Right from the beginning the government has adopted an attitude of patronizing the movement. Cooperative institutions were treated as if these were part & parcel of the administrative set up of the government.
• Limited Coverage:
  • The size of these societies has been very small. Most of these societies are confined to a few members and their operations extended to only one or two villages. as a result their resources remain limited, which make it impossible for them to expand their means and extend their area of operations.

What are the Recent Developments?

• In January 2020, the RBI revised the Supervisory action Framework (SAF) for UCBs.
• In June 2020, the Central government approved an Ordinance to bring all urban and multi-state cooperative banks under the direct supervision of RBI.
• In 2021 RBI appointed a committee that suggested 4 tier structure for the UCBs.
  • Tier 1 with all unit UCBs and salary earner’s UCBs (irrespective of deposit size) and all other UCBs having deposits up to Rs 100 crore.
  • Tier 2 with UCBs of deposits between Rs 100 crore and Rs 1,000 crore,
  • Tier 3 with UCBs of deposits between Rs 1,000 crore and Rs 10,000 crore and
  • Tier 4 with UCBs of deposits more than Rs 10,000 crore.

Way Forward

• The establishment of the country’s dedicated Ministry of Cooperation would be a crucial moment for the history of the cooperative movement.
• The RBI should interpret the Act’s provisions so that they do not disrupt UCBs and people’s faith is restored in the cooperative banking system.
• There is a need to undertake institutional reforms like transparency in recruitment and implementation of a robust accounting system, which are necessary for their growth.
• There is a need to bring in new people, young people and professionals in managerial roles, who will take cooperative forward.
• NAFCUB needs to focus more on the Urban Credit Cooperative Societies particularly on their accounting software and their common bylaws.
• Having a good Urban Cooperative Bank in every town is the need of the hour and country. NAFCUB should not only take up the problems of cooperative banks and solve them but at the same time should also work better for Symmetrical Development.

Source: IE

Participatory Notes

Why in News?

Investment in the Indian capital markets through Participatory notes (P-notes) dropped to Rs 86,706 crore till May-end, 2022.

• However, according to experts, foreign investors will reverse their selling stance and return to the country's equities in the coming 1-2 quarters.
• In line with a decline in P-note investment, the assets under the custody of Foreign Portfolio Investors (FPIs) dropped 5% to Rs 48.23 trillion end-May, 2022 from Rs 50.74 trillion end-April,2022.
  • This was the eighth consecutive month of net pull-out by FPIs from equities.

What are the Participatory Notes?

• P-notes are Offshore Derivative Instruments (ODIs) issued by registered Foreign Portfolio Investors (FPIs) to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly.
  • P-notes have Indian stocks as their underlying assets.
  • FPIs are non-residents who invest in Indian securities like shares, government bonds, corporate bonds, etc.
• Though P-note holders have less stringent registration requirements, they have to go through a proper due diligence process of the Security and Exchange Board of India (SEBI).

What are the reasons for Declining P- Notes?

• Uncertainty around Inflation Levels:
  • There is still uncertainty around inflation levels and the US Federal Reserve’s (Fed’s) actions.
  • Decline in P-Notes is being attributed due to the tightening of monetary policy by the US Fed which has been on a rate hiking spree to control inflation.
    • Other central banks, including in Britain and the Eurozone, are following suit.
• Currency correction:
  • Currency correction has happened to a large extent.
    • A correction is a price rebound which can be observed after every trend impulse. After a correction takes place, the price returns to the trend. A correction on the currency market takes place due to the overselling or overbuying of instruments at the current moment in time.
    • A large part of this reduction to market correction in equity and debt portfolios.

What are the Expectations for P-Notes in the Future?

• Equity markets are offering some attractive valuations at these levels.
• Supply-chain and inflation issues should begin to subside in the months to come.
• Markets usually move ahead of the economic cycle.
  • It is believed that the next one/two quarters, FPIs should be coming back to allocating capital towards Indian equities.

Source: ET

Snake Island

Why in News?

Ukraine has caused significant losses to the Russian military in airstrikes on Zmiinyi Island, also known as Snake Island, in the Black Sea.

• The hit on the island is believed to be the second major military success using missiles given to Ukraine by the West.

Where is Snake Island?

• Features:
  • Zmiinyi Island, also known as Snake or Serpent Island, is a small piece of rock less than 700 metres from end to end, that has been described as being X-shaped.
• Location:
  • It is located 35 km from the coast in the Black Sea, to the east of the mouth of the Danube and roughly southwest of the port city of Odessa.
    • The Danube is the second longest river in Europe after the Volga. It rises in the Black Forest mountains of western Germany and flows for some 2,850 km to its mouth on the Black Sea.
  • The island is marked on the map by the tiny village of Bile that is located on it, belongs to Ukraine.

Where is the Black Sea?

• Surrounded by:
  • Black Sea is bound by Ukraine to the north and northwest, Russia and Georgia to the east, Turkey to the south, and Bulgaria and Romania to the west.
• Straits:
  • Black Sea links to the Sea of Marmara through the Bosphorus and then to the Aegean Sea through the Dardanelles, has traditionally been Russia’s warm water gateway to Europe.
  • The Black Sea is also connected to the Sea of Azov by the Strait of Kerch.
• Significance for Russia:
  • Strategic Buffer:
    • Black Sea is both a stepping stones to the Mediterranean as well as a strategic buffer between NATO Countries and Russia.
  • Geostrategic Significance:
    • Domination of the Black Sea region is a geostrategic imperative for Moscow, both to project Russian power in the Mediterranean and to secure the economic gateway to key markets in southern Europe.
      • Russia has been making efforts to gain complete control over the Black Sea since the Crimean crisis of 2014.
      • The domination of the Black Sea has been a major Russian objective of the ongoing war, along with the land bridge to connect Russia and Crimea.
      • Cutting Ukrainian access to the Black Sea will reduce it to a landlocked country and deal a crippling blow to its trade logistics.

Source:IE

Black Death

Why in News?

In a study published in the journal Science, researchers have claimed that the disease (black death) originated in modern day northern Kyrgyzstan around 1338-1339 – nearly 7-8 years before it ravaged large parts of the world.

What was the Black Death?

• The term Black Death refers to the bubonic plague that spread across Western Asia, Northern Africa, Middle East and Europe in 1346-53.
• Most scholars agree that the Black Death, which killed millions, was caused by bacterium Yersinia pestis and was spread by fleas that were carried by rodent hosts.
• The microorganism Y. pestis spread to human populations, who at some point transmitted it to others either through the vector of a human flea or directly through the respiratory system.
• Contemporaries who wrote about the epidemic, often described the buboes (hard, inflamed lymph nodes) as the distinguishing clinical feature.
• In the 14^th century, the epidemic was referred to as the ‘great pestilence’ or ‘great death’, due to the demographic havoc that it caused.
• Due to a lack of comprehensive historical data from that time, it is difficult to know the exact death toll.

Source: IE