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1. Amnesty International India Shuts Down, Blames Government's

'Reprisal'

Relevant for GS Prelims & Mains Paper II; Polity & Governance

After a successful eight-year run in India addressing several crucial human rights violations amid growing hostility and the government’s clampdown on civil liberties, Amnesty International (AI) India has decided to shut its operations in the country. The decision,

which will see close to 150 employees lose their jobs, came after the recent move by the Enforcement Directorate to freeze the organisation’s accounts.

The ED, following an FIR by the Central Bureau of Investigation (CBI), filed on November 5,

2019, on charges of an alleged violation of the Foreign Contribution Regulation Act (FCRA),

had initiated a separate probe last year. The ED has now converted the preliminary inquiry

into an ECIR (the equivalent of an FIR) alleging money laundering charges and froze all of AI India’s bank accounts. The ED has invoked the Prevention of Money Laundering Act this time.

Freezing of bank accounts In a press statement, AI’s India office has said, “On 10 September 2020, Amnesty International India came to know that all its bank accounts were completely frozen by the

Enforcement Directorate bringing most of the work of the human rights organization to a grinding halt.”

It blamed ‘reprisal’ from the government for winding down its operations, adding, “This is latest in the incessant witch-hunt of human rights organizations by the Government of India over unfounded and motivated allegations.”

In July, last year, the ED had served a show-cause notice for alleged contravention of

funding to the tune of Rs 51.72 crore. Although the FCRA law, whose provisions were

invoked by the CBI in its case, is not listed in the schedule of predicate offences under the

PMLA, Section 120-B (criminal conspiracy) of the Indian Penal Code was invoked. And

since section 120-B of the IPC is invoked as an alleged offence in the CBI FIR, it enables the

ED to initiate a money-laundering investigation.

‘Saw it coming’ The organisation in recent years have been working on five crucial projects—business and

human rights, individuals at risk, gender-based violence, human rights education, and

access to justice in Jammu and Kashmir. Besides these full-fledged projects, AI India has

also issued statements from time to time on issues involving human rights violations.

Their most recent contribution were two exhaustive reports on the situation in Jammu and

Kashmir and the riots in Northeast Delhi. On August 5, 2020, marking the first anniversary

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of the dilution of Article 370 of the Constitution of India, the organisation released an

update on the situation of human rights in Jammu and Kashmir. And within days, on August

28, 2020, six-months after the riots in Delhi, AI India released an investigative brief on the

complicity of Delhi police in the violence, which claimed the lives of at least 53 people,

mostly from the minority Muslim community. The release of the two publications, the organisation says, “Has provided fresh impetus to the establishment to harass and intimidate Amnesty International India through its investigative agencies.”

Not just the ED, the Department of Income Tax was roped in too. In early 2019, the IT department began sending “investigative letters” to more than 30 small regular donors. While the department did not find any irregularities, the investigating agencies’ move adversely affected the fundraising campaigns, AI India has said.

Source: The Wire

2. What the delay in RBI panel MPC meet means

Relevant for GS Prelims & Mains Paper III; Economics

On October 1, the Reserve Bank of India’s Monetary Policy Committee (MPC) was supposed to announce the country’s key interest rates and the monetary policy for the next two months. This will have to wait as the government is yet to appoint three new members at a

time when the pandemic is raging, GDP growth is floundering and borrowers are bracing

for a mega loan restructuring process.

Why did the RBI postpone the MPC meeting?

The bi-monthly meeting was scheduled for September 29 to October 1. The RBI postponed

it as it failed to nominate its three members to the six-member panel. The tenure of the

three members appointed by the government in 2016 expired after the previous policy on

August 6. MPC is the statutory committee that fixes the key policy interest rate and

monetary policy stance of the country as well as the inflation target.

How are MPC members selected?

RBI Governor Shaktikanta Das is the head of the MPC, while the Deputy Governor in charge

of the Monetary Policy Department (Michael Patra) and the Executive Director looking

after the monetary policy are members from the RBI side. The three government nominees

are selected by a committee formed by the government for a four-year term. The three

members whose tenure ended in August are: Dr Chetan Ghate, Professor, Indian Statistical

Institute; Dr Pami Dua, Director, Delhi School of Economics; and Dr Ravindra H Dholakia,

former Professor, IIM Ahmedabad.

As per the RBI Act, the quorum for an MPC meeting is four, and in effect the committee

cannot meet until at least one external member is present, in addition to the three RBI

representatives. If there’s a tie on any proposal, the RBI Governor holds the casting vote.









What did the MPC do in the last four years?

The bi-monthly MPC meeting discusses the domestic and international scenario before

finalising the repo and reverse repo rates. If there is no consensus on the rate or policy,

there will be voting process. MPC members differed on a couple of occasions on the

quantum of repo rate changes but eventually went by the majority decision. Although the

MPC slashed the key policy rate — repo rate — by 250 basis points to four per cent, the

rate cut transmission has been rather slow with banks taking their time to pass on the

benefits.

What does the delay in announcing the new monetary policy mean?

Interest rates play a crucial role in the economy. Any delay in changing the rates will

impact the economy as MPC sets the repo rate (the rate at which RBI lends funds to banks)

and reverse repo rate (the rate at which the RBI borrows funds from banks). The pandemic

is still evolving and credit offtake has been sluggish. “The economy is facing a serious challenge and the RBI has been leading from the front with quick responses through rate

cuts, injecting liquidity through open market operations and long-term repo operations

and a variety of innovative tools to manage and ensure financial stability. In this hour of

economic emergency, the MPC has to be in place to formulate policy. This delay could have been avoided,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Why was MPC created?

Prior to October 2016, the RBI Governor used to decide on policy rate. Even though he was

assisted by a team of officials from the central bank, the ultimate decision rested with the

Governor. India joined a growing band of countries that, beginning in 1990, adopted

flexible inflation targeting as their framework for monetary policy.

In 2016, the government had provided statutory backing to the MPC by notifying

amendments to the RBI Act, 1934. The inflation target and tolerance band around it, and

accountability with respect to failure to achieve the target, were notified by the

government during May-August 2016. It was for the first time that an explicit inflation

target was given to the RBI, along with failure level.

Rate-setting decisions were now made through voting in the MPC rather than the Governor

alone taking a call on these matters. The RBI now releases both MPC resolutions and

minutes of the minutes (with a lag) — providing a detailed review of the analysis and

individual assessment of the members that went into framing of the policy.

Has it been effective in framing the monetary policy?

The first MPC meeting was held on October 4, 2016 when Urjit Patel was the RBI Governor.

The MPC has since then slashed the repo rate by 250 basis points to 4% in the last four

years with 115 bps reduction in the last nine months. With retail inflation picking up in

recent months, the MPC in its last policy review in August kept the repo rate unchanged at

4% while deciding to continue with the accommodative stance. The current inflation target









is 4% — within a band of 2-6% — which the RBI is expected to maintain. The retail

inflation level is now above the target of 6% with the August reading at 6.69%, and it has

been above the medium-term target of 4% for nearly a year now. The amended RBI Act

defines failure as average inflation breaching the tolerance band for three consecutive

quarters, not instantly.

Source: The Indian Express

3. SNC-Lavalin case Explained: How Pinarayi Vijayan came to be

prosecuted, discharged

Relevant for GS Prelims & Mains Paper II; Polity & Governance

The decades-old SNC-Lavalin corruption case is back in the limelight with the Supreme

Court on Wednesday deferring till next week the hearing of the CBI appeal challenging the

Kerala High Court verdict upholding a special court’s decision to allow the discharge petition of Chief Minister Pinarayi Vijayan, one of the accused in the case. The CBI appeal

has been pending in the apex court since 2017.

What is the SNC-Lavalin case?

The incidents that led to the case date back to 1996-97 period when Pinarayi Vijayan was

electricity minister in the then LDF government in Kerala. The case is about an agreement

between Kerala State Electricity Board (KSEB) and Canadian firm SNC-Lavalin for

renovation of three hydel power projects in Kerala. Although the MoU for a consultancy

was signed between the two entities during the final lap of Congress regime from 1991-96,

it was during the term of Vijayan in 1997 that the MoU was converted into an into a fixed

price deal for supply of equipment and engineering services for the renovation of the

projects at a cost of Rs 239.81 crore.

Outcome of the KSEB-Lavalin deal

Though renovations of the hydel stations were to be completed by September 2001, they

were done only in February 2003, after exhausting Rs 250.40 crore, apart from a financing

liability of Rs 69.83 crore. There was a failure on the part of the KSEB in getting technology

transfer and training of personnel as envisaged in the contract with Lavalin. The equipment

supplied by Lavalin turned out to be defective, and some of it was unusable.

Lavalin had agreed to mobilise funds for the construction of a hospital, the Malabar Cancer

Centre (MCC), in north Kerala. For this, Rs 98.30 crore was to be mobilised by Lavalin. But

the actual contribution made up to February 2001 was only Rs 8.98 crore. The government

did not receive the rest of the grant. Funds for the MCC was an integral part of the

agreement awarding the project.

Trouble begins









The Assembly Subject Committee in 2001 found the deal with Lavalin had led to huge

losses for the government. CPI (M) leader Kodiyeri Balakrishnan, now party state secretary

and a member of the Politburo, was a member of that panel. A year later, back in power, the

Congress government ordered a Vigilance probe, but it failed to make any headway.

CAG report changes course of scandal

The 2005 CAG report said the state had lost Rs 374.5 crore in the deal. The audit report

finding changed the course of the scam and subsequently the Vigilance probe was revived.

Early 2006, the Vigilance submitted its preliminary report in court, arraigning eight people

as accused. The Vigilance bid to file the FIR in court, without informing the then Congress

government, kicked up a controversy. Only KSEB officials were in the list of the accused.

Towards the end of the Congress rule in 2006, then Chief Minister Oommen Chandy

announced that the case will be handed over to the CBI, amid allegations that the police had

let politicians off the hook.

CBI probe begins, Vijayan made accused

In May 2006, the LDF government led by V S Achuthanandan assumed office. The

government was not keen to hand over the probe to CBI. Vijayan was party state secretary

then. A public interest litigation was moved in the high court, where the state government

objected to the probe by the central agency. But in 2007, the high court allowed the CBI to

probe the case. There was a delay in the probe, which again invited high court intervention.

In January 2008, the CBI submitted the final report in the high court, arraigning Vijayan as an accused. CBI sought Kerala governor’s sanction to prosecute Vijayan as he had been the minister. In June 2009, Governor R S Gavai accorded the sanction to prosecute Vijayan. It

was also the first time a Poliburo member was being prosecuted for corruption.

Charges against Vijayan

Vijayan emerged as an accused when the CBI submitted the final report. There had been 11

persons as accused. Except Vijayan and a senior executive of SNC-Lavalin, all the other

accused were bureaucrats then associated with KSEB and the power department. All of

them retired over years then and a few even died as years elapsed.

Vijayan was charged under Sections 120B, 420 of the IPC and with Sections 13(1) and

13(2) of the Prevention of Corruption Act. The CBI found that Vijayan had shown unusual

enthusiasm in the deal. CBI, in its report on Vijayan, said, “the final contract with Lavalin was entered into without Cabinet consent; he held direct discussions with a senior

manager of the SBI to get exemption of bank guarantee for the amount promised to the

MCC; he finalised the contract without the formal approval of the KSEB; and that he had been keen to retain the Malabar Cancer Centre under the KSEB.”

CBI court allows discharge petition

In 2013, the CBI trial court in Thiruvananthapuram allowed the discharge petitions of

Vijayan and six other accused in the case. But the CBI challenged the decision in the High









Court. The High Court partially allowed the agency’s revision petition, as Justice Ubaid set aside the discharge of three accused, including Vijayan, in the case.

High Court uphold trial court allowing discharge petition

On August 24, 2017, the Kerala High Court upheld the verdict of the CBI court, which had allowed Chief Minister Pinarayi Vijayan’s discharge in the case. The HC then observed that the prosecution does not have sufficient and satisfactory material to work out a prima facie case against the accused. Justice Ubaid said, “I find that despite material showing failure and inaction on part of many ministers who succeeded him (Vijayan), the CBI wrongly

picked and chose the seventh accused for prosecution on an allegation of conspiracy without the support of any material.’’ The CBI had moved the petition in the Supreme Court in 2017 itself.

Adds fuel to intra-party feud

The Lavalin case has been extensively debated in Kerala politics and media mainly because of Vijayan’s naming as an alleged accused. Vijayan’s rival V S Achuthanandan, who had been the chief minister from 2006-2011, did not subscribe to the party view that the case was

politically motivated. Achuthanandan had been reprimanded more than once for adopting

an anti-party stand on the issue. He kept raking up the issue often, until Vijayan assumed

office in 2016.

Outcome of CBI petition in SC

The outcome of the CBI petition in the SC would be another crucial moment for Vijayan.

The CPI (M) has always adopted the stand that the case was used to besmirch the image of

Vijayan as well as the party.


4. Armenia vs Azerbaijan: An old regional conflict, interested neighbours

Relevant for GS Prelims & Mains Paper II; IOBR

Armenia and Azerbaijan, has resulted in the death of at least 100 civilians and Armenian

combatants. While the two countries have fought over the region for decades, the current

conflict is being seen as one of the most serious in recent years. Azerbaijan has not released

information on its casualties.

What is Nagorno-Karabakh?

Straddling western Asia and Eastern Europe, Nagorno-Karabakh is internationally

recognised as part of Azerbaijan, but most of the region is controlled by Armenian

separatists. Nagorno-Karabakh has been part of Azerbaijan territory since the Soviet era. When the Soviet Union began to collapse in the late 1980s, Armenia’s regional parliament voted for the region’s transfer to Armenia; the Soviet authorities turned down the demand.









Years of clashes followed between Azerbaijan forces and Armenian separatists. The

violence lasted into the 1990s, leaving tens and thousands dead and displacing hundreds of

thousands. In 1994, Russia brokered a ceasefire, by which time ethnic Armenians had taken

control of the region.

While the area remains in Azerbaijan, it is today governed by separatist Armenians who have declared it a republic called the “Nagorno-Karabakh Autonomous Oblast”. While the Armenian government does not recognise Nagorno-Karabakh as independent, it supports

the region politically and militarily.

Even after the 1994 peace deal, the region has been marked by regular exchanges of fire. In

2016, it saw a Four-Day War before Russia mediated peace. The Organization for Security

and Co-operation in Europe (OSCE) Minsk Group, chaired by France, Russia and the US, has

tried to get the two countries to reach a peace agreement for several years.

What is the fresh conflict about?

It began on the morning of September 27, since when each country has claimed to have inflicted serious loss on its opponent. What’s different about the current flare-up is that this

is the first time that both countries have proclaimed martial law.

According to the Warsaw-based Centre for Eastern Studies (OSW), the current escalation was “most likely” initiated by Azerbaijan. Media reports have noted that the clashes were possibly a fallout of Azerbaijan’s bid to reclaim some territories occupied by separatist Armenians.

The chairman of Azerbaijan’s National Council has said in a statement that the “military operation of the Azerbaijani army continues to clear the territories occupied by the enemy for almost 30 years”. He said September 27 was a “day of exhaustion” and alleged Armenia has occupied regions around Nagorono-Karabakh with the “direct support” of Russia to create a “security zone”.

What are the stakes for Russia, and other countries?

The conflict is getting worldwide attention because of the involvement of regional rivals

Turkey and Russia. Muslim-majority Turkey backs Azerbaijan, and recently condemned

Christian-majority Armenia for not resolving the issue through peaceful negotiations.

Turkey recently declared unconditional support to Muslim-majority Azerbaijan.

Russia and Turkey also back opposite sides in the civil wars playing out in Syria and Libya and Turkey’s support for Azerbaijan may be seen as an attempt to counter Russia’s influence in the region of South Caucasus.

Russia’s role is somewhat opaque since it supplies arms to both countries and is in a military alliance with Armenia called the Collective Security Treaty Organisation. In a

statement released on Monday, Dmitry Peskov, the Press Secretary of the President of the









Russian Federation, said Russia “has always taken a balanced position” on the matter and has “traditionally good relations” with both countries. He added that Russia is in contact with Turkey regarding the situation in Nagorno-Karabakh.

Other countries, including the US, have limited their participation to appeals for

maintaining peace so far. For all countries, the region is an important transit route for the

supply of oil and natural gas to the European Union.

What next?

As of now, both sides are standing their ground. The Russian state news agency TASS

quoted Azerbaijan President Ikhlam Aliyev as saying that for the fighting to stop, Armenia

must unconditionally leave Nagorno-Karabakh.

On Monday, the Armenian government lodged a request with the European Court of

Human Rights (ECHR) for an interim measure (applicable only when there is imminent risk

of irreparable harm) against Azerbaijan. It requested the court to indicate to the Azerbaijani government to “cease the military attacks towards the civilian settlements along the entire line of contact of the armed forces of Armenia and Artsakh”.







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WhatsApp No. 88986-30000 · The bi-monthly meeting was scheduled for September 29 to October 1. The...

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