1) Democracy at stake in Nepal
GS 2: International Relations
Context : Nepal is facing severe political crisis with repeated dissolution of Nepali parliament leading the country into crisis
What is the issue?
- The repeated dissolution of Parliament, is not just a manifestation of the power struggle between political parties and leaders but also dangerous for the federal republican democratic Constitution.
- Marxist-Leninist party headed by Prime Minister K.P. Sharma Oli is in collusion with Hindu monarchical forces in Nepal and the Rashtriya Swayamsevak Sangh in India.
- A section of the Janata Samajbadi Party (JSP) led by Mahanta Thakur and Rajendra Mahato have joined hands with Mr. Oli, known for anti-Madhesh tirade till the other day.
Autocratic splash
- India is being seen backing an autocratic and unconstitutional regime, surviving in ‘caretaker mode’ with the connivance of Nepal’s President Bidya Devi Bhandari and Mr. Oli.
- In helping an unpopular and illegitimate regime in Kathmandu, the game-plan seems to be to derail the Constitution and plunge the country into endless crisis.
- But these steps will not be helpful to any of the states.
- Statement by India’s External Affairs Ministry, that “political developments in Nepal are the country’s internal matters” did not help too in changing the popular perception.
- There should be a trade-off between the developmental aspirations of Nepal and the strategic concerns of India, in the light of changing geopolitical dynamics in the Himalayan region.
- India should do course correction and should not throw its weight behind an autocratic regime; it must reassure all who care for the peace and the prosperity of Nepal by reposing faith in Nepal’s democracy and due processes.
- India should start to fill the gap between promises made and delivery and also hasten vaccine delivery to Nepal as promised.
The twists and turns
Opposition alliance in Nepal filed a petition in the Supreme Court last week demanding that the Nepali Congress’s Sher Bahadur Deuba be declared the new Prime Minister and the House of Representatives be reinstated.
- Representing the Opposition alliance, Mr. Deuba had presented the signatures of 149 lawmakers to prove that he commanded the majority to lead a new government in this crisis phase.
- Mr. Oli wanted be appointed as Prime Minister, while technically still being the Prime Minister, falsely claiming to have the backing of 153 lawmakers.
- For the manner in which Ms. Bhandari has acted to keep Mr. Oli in power and undermining her constitutional role as the president she might face, impeachment.
- Ms. Bhandari and Mr. Oli are two prominent figures who have consistently disrespected and abused the President’s high office for their shared political gains — and made it subservient to the executive whims and fancies.
- Mr. Oli plans to drive Nepal to the brink of a constitutional crisis, stay as an authoritarian caretaker Prime Minister with President, and force the country into elections when even the next moment is uncertain.
Nepal at the crossroads
- The author suggests that Nepal should avail its true development potential — and stop being a ‘theatre of the absurd’ and hosting the harmful advances of neighbours involved in geostrategic rivalries”.
- On domestic front, an increased focus should be on homework, instead of leveraging on vulnerabilities and the making of unruly partners.
- In a functional democracy, statecraft is not supposed to be altruistic till it relies on progressive policy and governance — with an aim to augment the mission of ‘greater common good’.
- The task remains unfinished till the people-centric priorities are not driving the political agenda and action.
Way Ahead
Nepal should protect its democracy that is now at stake because of actions by political opportunists like Mr. Oli. However, an accomplished democracy like Nepal will rise again.
For sure, the road ahead is not easy and it is going to be one of struggle. If the Opposition alliance makes a resolve and fights back, it is likely that the new republic will gain in the long term.The big powers should take note of this.
2) Timely windfall
GS 3: Economy
Context: The Reserve Bank of India’s has decided to transfer ?99,122 crore of surplus to the Centre comes as a windfall to the government, at a moment when the ferocious second wave of the COVID-19 pandemic.
What is the issue?
- The RBI’s transfer is a much-needed buffer, but there are risks in banking on these surpluses.
- The payout is almost double the ?53,511 crore that the Finance Minister had budgeted for by way of dividend receipts, including from nationalised banks and financial institutions.
- RBI has generated a surplus that is over 73% higher than what it posted for the previous 12-month period ended June 2020, is also noteworthy when one considers that the bank just changed its accounting calendar from July-June to an April-March.
- RBI’s annual report, shows that a sharp 63% contraction in expenditure was a major factor in boosting the surplus, especially as income fell by 11%.
- The central bank, by intervening in the foreign exchange market to smoothe volatility and also recieved the record foreign direct investment inflows that exceeded $81 billion in the last financial year, as well as the sizeable portfolio investments from overseas.
- There is a 69% increase in exchange gain.
The need
- The economic disruption caused by pandemic and the lack of visibility on the costs that the economy is going to have to bear in the coming months, the RBI’s transfer surely provides a much-needed buffer to the government’s finances.
- Both the Centre and the central bank need to be cognisant of the risks in making a habit of banking on these surpluses to help central govt.
- Reserve Bank has ensured that it maintains contingency reserves at exactly 5.5% of the overall size of its balance sheet, the level of its reserves provides little wiggle room to safeguard against a sudden, unexpected financial crisis and is at the lower end of the 5.5%-6.5% band recommended by the Bimal Jalan committee.
- Given the higher spending needed to bolster vaccinations, health care and direct fiscal support, the RBI’s balance sheet could swell in size this year too.
Conclusion:
It should be kept in mind that central bank is ultimately the lender of last resort to the nation as a whole and can ill-afford to be less than adequately funded to meet every conceivable contingency
