2 August 2024, The Indian EXPRESS
Milestone after Mandal: Supreme Court allows new quotas within SC/ST quota
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GS 1: Social empowerment
- In a landmark 6-1 majority ruling Thursday, a seven-judge Constitution Bench of the Supreme Court held that Scheduled Castes do not constitute a socially homogeneous class and can be sub-classified by States for the purpose of providing reservation to the less privileged among them.
- It said there must be a “rational principle” for such differentiation and the principle must have “a nexus with the purpose of sub-classification”.
- Four of the majority ruling judges also favoured excluding the creamy layer from SCs and STs.
Use data, reason, don’t split to keep out: Apex court lays down red lines
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GS 2: Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of vulnerable sections of society.
- Empirical data, “reasonable” grounds that will be subject to judicial scrutiny, avoiding the perils of “micro-classification” — this is how the Supreme Court, in its verdict allowing sub-classification within Scheduled Castes and Scheduled Tribes quotas, has underlined the principles that will operationalise the new framework.
- “It is not sufficient if the principle underlying the classification is relevant or shares a nexus to the purpose.
- The principle underlying the classification must be reasonable and rational,” Chief Justice of India DY Chandrachud said in the 6-1 ruling.
Delhi wants Raj Bhavans pro-active, share views when states-Centre differ
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GS 2: Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure
- At a time when several Governors are locked in conflict with their respective state governments, the Centre has urged them to be more pro-active on social media, connect with the public, and promptly share their views especially when there are differences of opinion between the Centre and the states on policy, The Indian Express has learnt.
- This is one of a set of suggestions that reportedly finds mention in an official agenda note in the run-up to the two-day Conference of Governors beginning August 2.
- President Droupadi Murmu will preside over the conference at Rashtrapati Bhavan.
Unscientific work by NHAI led to Shirur landslide: Report
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GS 3: Environmental impact assessment; Disaster and disaster management
- A preliminary report by a technical team looking into the causes of the July 16 landslide in coastal Karnataka’s Uttara Kannada district has listed “unscientific” construction of National Highway (NH) 66 by the National Highway Authority of India (NHAI), combined with heavy rainfall in a short span of time, among factors responsible for the disaster.
Floods to heatwaves, cities with corporations to get own disaster management body
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GS 3: Disaster and disaster management
- AMIDST INCREASING instances of city-level disasters like urban flooding or heatwaves, the Centre has proposed to set up an Urban Disaster Management Authority (UDMA) in each of the state capitals and all other cities that have a municipal corporation.
- The UDMAs will form the third tier of the institutional framework alongside the National Disaster Management Authority (NDMA) and the State Disaster Management Authority (SDMA). In fact, the third tier, at the district level, also exists.
- But the UDMAs are meant to cater to the special needs of larger cities that often comprise of multiple districts.
Parties have tried to push sub-quota their own way for 50 years
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GS 1: Social empowerment
- The Supreme Court held Thursday that states are constitutionally empowered to make sub-classifications within Scheduled Castes (SCs) and Scheduled Tribes (STs), to help uplift castes that are more backward among them.
- However, politics responded to these fissures much earlier.
- Giani Zail Singh as the Congress Chief Minister of Punjab in 1975, Bhajan Lal as the Congress CM of Haryana in 1994, Chandrababu Naidu of the TDP as Andhra Pradesh CM in 1997, all split the SC quota into sub-groups for a share to the most deprived among Dalits.
- Later, Nitish Kumar as Bihar CM framed a Mahadalit section to reach out to the Dalits apart from the Dusadhs, who were seen as supporters of the Lok Janshakti Party of the late Ram Vilas Paswan.
Deepening Justice
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GS 2: Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of vulnerable sections of society
- Marking a milestone in the jurisprudence on affirmative action post-Mandal, the Supreme Court bench, led by Chief Justice of India D Y Chandrachud, has allowed sub-classification among Scheduled Castes and Scheduled Tribes for the purpose of reservation, holding that this does not violate the Constitution.
- Extending the principle from the OBCs to the SCs/STs, the court over-rules the 2004 verdict in the case of EV Chinnaiah vs State of Andhra Pradesh.
- That verdict had been used by high courts to strike down preferential measures designed by various state governments for the more downtrodden castes within the SCs.
- Thursday’s judgment heralds a potential widening and deepening of the constitutional guarantee of equality — sub-classification, it says, must be seen as a facet of equality, not its violation, and as a movement towards its more substantive version, by expanding the sphere and scope of reservation to ensure that its benefits reach those who need it most.
Landmark, benchmark
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GS 1: Social empowerment
- The Supreme Court has finally removed a long-standing legal obstacle to fine-tuning the existing policies of social justice.
- The seven-member bench of the apex court has allowed state governments to sub-divide the reservation quota meant for Scheduled Castes (SC) and Scheduled Tribes (ST).
- The Court has also opened the door for identification and exclusion of the “creamy layer” in the SC and ST categories from the benefits of affirmative action.
- While there can be many issues with the exact formulation and implementation of this judgment, especially the part on the creamy layer, this is a step forward in the long history of India’s rich jurisprudence on reservation.
- On balance, this judgment would help fine-tune and deepen policies and politics of social justice in an era where the very idea of affirmative action faces an onslaught.
A September Pivot
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GS 2: Effect of policies and politics of developed and developing countries on India’s interests
- In its July meeting, the US Federal Reserve decided, in line with expectations, to keep interest rates steady.
- The federal funds rate remains at 5.25 to 5.5 per cent. However, the change in the tone of the accompanying commentary indicates the possibility of a policy pivot in the near term.
- Federal Reserve chairman Jerome Powell said that if inflation moves in line with expectations, “a reduction in our policy rate could be on the table” in the September meeting.
- The Dow Jones index rose with markets seeing greater visibility on interest rate cuts.
- Other central banks in developed economies have already embarked on the path of easing policy rates.
- In its June meeting, the European Central Bank had cut interest rates as price pressures weakened in the Euro region.
- In July, the Bank of Canada had also reduced interest rates, its second straight rate cut. And on Thursday, the Bank of England also lowered interest rates by 25 basis points to 5 per cent.
Sub-classification of SC, ST
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GS 2: Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of vulnerable sections of society
- In a landmark judgement, a seven-judge Bench of the Supreme Court on Thursday (August 1) reframed how the Scheduled Castes (SC) and Scheduled Tribes (ST) quota may operate — for the very first time since reservations were introduced in the Constitution in 1950.
- In a 6:1 ruling, the Bench headed by Chief Justice of India D Y Chandrachud permitted states to create sub-classifications within the SC and ST categories for the purpose of according wider protections — through fixed sub-quotas — to the most backward communities within these categories.
- This overturns the apex court’s 2004 decision in E V Chinnaiah v State of Andhra Pradesh, in which it had held that the SC/ST list is a “homogenous group” that cannot be divided further.
Identifying the ‘creamy layer’: model of OBC reservation
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GS 1: Social empowerment
- The Supreme Court on Thursday (August 1) permitted sub-classification of Scheduled Castes and Scheduled Tribes for the purpose of granting separate quotas for those more backward within these communities.
- Justice B R Gavai, in his opinion, wrote that “the State must evolve a policy for identifying the creamy layer even from the Scheduled Castes and Scheduled Tribes so as to exclude them from the benefit of affirmative action”.
After import duty cut on gold, govt to decide future of SGB scheme in September
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GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment
- Following the Budget announcement to cut the import duty on gold, the government plans to make a final decision regarding the future of the Sovereign Gold Bonds (SGB) scheme in September.
- Sources indicate that the cost of financing the fiscal deficit through SGBs is quite high and does not align with the benefits accruing to investors from the scheme.
- This disparity may lead the government to decide on discontinuing the scheme at the upcoming meeting next month, which will also determine the official borrowing amount for the second half of the financial year.
Indexation withdrawal on grandfathered debt MFs has investors worried
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GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment
- The changes in the long-term capital gains (LTCG) tax regime announced in the Union Budget 2024-25, mainly the removal of the indexation benefit from tax computation, has triggered some heartburn among long-term investors of debt mutual funds.
- While the likely impact of the changes on asset classes like property and gold has been in focus, returns on earlier investments in debt mutual funds—which offer relatively low but more secure returns—could also get impacted significantly, investors and industry insiders say.
- The new LTCG tax regime does away with the indexation benefit available for calculation of LTCG on unlisted assets, while reducing the LTCG tax rate to 12.5 per cent from 20 per cent.
- Specifically in the case of debt mutual funds, the changes appear to be more complicated than for other affected asset classes.
Sensex, Nifty end at fresh high on US Fed rate cut expectation next month
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GS 2: Effect of policies and politics of developed and developing countries on India’s interests
- Domestic benchmark stock market indices closed at fresh record highs on Thursday buoyed by an expectation of interest rate cut by the US Federal Reserve in September this year.
- The BSE’s 30-share Sensex jumped 126.21 points, or 0.15 per cent, to close at record high of 81,867.55. During the intra-day trades, the index touched 82,129.49 – also a record high.
- The broader Nifty ended at lifetime high of 25,010.9, after it rose 59.75 points, or 0.24 per cent. The 50-share index touched a high of 25,078.3 in intraday trades.
