Daily Current Affairs
02 December 2021

1. Point of disorder: Disruption of proceedings, suspension of MPs undermine parliamentary democracy equally

  • Page 6/EGS 2: Legislature

 Expected Question: Enlist the importance of the Parliamentary proceedings, what role does the disruptions play in this regard. (250 words)


Context: Twelve Opposition members of the Rajya Sabha were suspended for the entire winter session on Monday for “unprecedented acts of misconduct”, “unruly and violent behaviour” and “intentional attacks on security personnel” on August 11, the last day of the previous monsoon session.

    • Following the decision, the Opposition was mulling several options including boycotting the entire winter session of Parliament.


An unprecedented step:

    • It is evidently an extreme step by Chairman M. Venkaiah Naidu, that has turned the spotlight on the use of disruption of proceedings as a parliamentary tactic.

    • The Government and the Opposition should try and work a way out of this situation, but that may not resolve the underlying affliction of perennial conflict between the two sides.

    • A guiding principle of parliamentary proceedings is that the majority, i.e. the Government, will have its way, and the minority, the Opposition, will have its say. This principle has been observed in its violation in India for several years now. As the principal Opposition in the years leading up to 2014, the Bharatiya Janata Party (BJP) so disrupted Parliament that a majority government was rendered dysfunctional for years;


Tinkering with Parliamentary Procedures: Since 2014, in power, the BJP has tinkered with parliamentary processes in a way that the Opposition has been pinned down.

    • Bills are passed in a hurry and even amidst din;

    • The scrutiny of Bills by committees and debates are few and far between.

    • Also, the decision to suspend Members for their conduct in the previous monsoon session at the beginning of a new session seems excessively punitive.

    • The trend of weakening that process in the name of efficiency is not merely undermining the spirit of democracy; it is also landing the Government itself in a difficult spot as the mayhem that followed the hurried passage of three controversial farm laws last year shows


The Role of Parliament:

    1. Legislative Function: Law making.

    2. Executive is held accountable to the representatives of the people. The absence of the Opposition will only leave the Government even more unchecked.

      • Through Parliamentary committees

      • Question Hour

    3. Financial functions: pass the budget or financial statement. Control over Consolidated fund of India.

    4. Debating: There is no limitation on its power of discussion. Members are free to speak on any matter without fear.

      • It is a platform for the people’s representatives raise matters of public concern and seek the Government’s attention.

      • Parliamentary debates should not be viewed as a distraction or waste of time; they are a barometer of public mood and must be respected as such, by both the ruling side and the Opposition.

  1. 5.Representation: different region, profession, social, economic backgrounds.
  3. 6.Constituent function: constitutional amendment by special majority.
  5. 7.Electoral function: elect the President and the vice President.
  7. 8. Judicial function: Impeachment of the President, judges of the supreme court and the High courts in the country.


The Philosophy of disruption:

    • It was the BJP’s Arun Jaitley who theorised on the legitimacy of disruptions as a parliamentary instrument.

    • It is time to shun that idea: Disruption as a brief, momentary reaction to a situation that demands debate is understandable, but as a sustained strategy, it is self-defeating.


Way forward: The Government must make amends to restore the function of Parliament by deferring to parliamentary mechanisms, and also through informal channels of communication with the Opposition.



2. The long awaited investment cycle in here

  • Source: IE - Page 12/Editorial - Another Variant to Growth

  • GS 3: Investments 

Context: At 8.4%, GDP growth in the second quarter this fiscal, read along with high-frequency indicators, point to a faster-than-anticipated recovery amid rising commodity prices and supply-side bottlenecks.

    • And higher retail and wholesale inflation meant nominal GDP rose 17.5% in the second quarter. This is also borne out by data from CRISIL Ratings — upgrades outpaced downgrades 2.26 times in April-September.

    • We maintain our GDP growth outlook at 9.5% for this fiscal. But we expect a deceleration in the second half to 6.2% from 13.7% in the first as the low-base effect wanes.


Gross Domestic Product(GDP) can be expressed as a sum of following expenditure

    • Final consumption expenditure(Ci) on the goods and services produced by the firm.

      • Mostly, households undertake consumption expenditure, but, there may be exceptions when firms buy consumables.

    • Final investment expenditure(Ii) incurred by other firms on the capital goods produced by firm i.

      • Expenditure on investments is included in calculation of GDP(but not intermediate goods). Why? investment goods remain with the firm, whereas intermediate goods are consumed in the process of production.

    1. Final Expenditure incurred by govt.(Gi) on the final goods and services produced by firm i.

      • It includes both the consumption and investment expenditure.

    2. The export revenues(Xi) that firm i earns by selling its goods and services abroad.

    • The sum of total revenue earned by the all such firms  is given by:

Description: Machine generated alternative text: + + 1G1 +


The Current Drivers and the Draggers of the Economy:

    • The Drivers:

      • The swift pace of vaccination and low viral caseload triggered a gradual broad-basing of economic activity in the second quarter, with the gradual opening of the services sector.

      • Agriculture, which accounts for about 15% of the GDP, grew 4.5% on-year in the second quarter, maintaining its stellar run through the pandemic.

      • Growth in real government consumption has trailed GDP growth — it has contracted 14.2% in the second quarter on-year. Central government revenue collection has been exceptional this fiscal, buoyed by strong GST mop-up and high taxes on petroleum products.

      • Turn of the investment cycle, both public and private. The second-quarter data shows that investment momentum is picking up faster than consumption. Fixed investments as a percentage of GDP rose between the first and the second quarters of this fiscal, while private consumption fell.

    • The Draggers:

      • Weakness is crept into manufacturing owing to supply-chain bottlenecks, notably in the automobile and electronics sectors.

      • Lower than potential government expenditure: By the end of the first half, the Centre had already collected 60% of its targeted revenue for the full fiscal, but had spent only 47%. Data from 16 major states, however, shows that both revenue and spending trailed versus the Centre’s performance.


The Revival of the Investment cycle:

    • The government has been focusing on reviving the investment cycle through high infrastructure spending and incentives to private investment, such as the PLI scheme. This fiscal, investments through the scheme have been to set up factories for pharmaceuticals, mobile phones and information technology hardware.

    • Building Infrastructure: Central government investments, especially to build roads and highways, are broadly on track, while state investments are lagging. Private sector capex is also showing signs of stirring.

    • Large corporates in sectors such as steel and cement have printed healthy capacity utilisation data. 

    • Deleveraging of the Private sector for a long time: They have also deleveraged in the recent past, which has provided a buffer in uncertain times and improved their financial profiles.

    • Brownfield investments have begun kicking in.

    • CRISIL estimates the PLI scheme could see Rs 2-2.5 lakh crore investments between fiscals 2022 and 2026, which would bolster overall capex.


Challenges in the investment uptick:

    • The success of the PLI scheme and infrastructure plan will be crucial to driving private investments as well as the overall cycle.

    • Risk of over-leveraging: The private corporate sector, after having over-invested during the boom of 2003-08, and recovery post the global financial crisis, will take a calibrated approach.


Challenges in Private consumption

    • Private consumption, accounting for over 55% of GDP, is showing a mixed run. It grew 8.6%on-year in the second quarter but trailed the investment momentum.

      • As a Percentage of GDP, it fell between the first and second quarters this fiscal.

      • While demand for high-ticket items — such as cars and utility vehicles — remains strong and is expected to cross the pre-pandemic level this year, for two-wheelers and some white goods it remains relatively weak.

    • Income Inequality: This consumption pattern broadly mirrors the widening income inequality spawned by the pandemic. It is also in line with the consumer confidence survey of the RBI published in October, which showed that despite improvement, consumer confidence continues to lag pre-pandemic levels.

    • But the cascading of input costs to end-consumers and the spike in vegetable inflation are consumption-negative.

    • Ways to revive Consumption expenditure:

      • Utilize MGNREGA: An offset here would be additional spending through the National Rural Employment Guarantee Act, which can support rural consumption and be a cushion for the poor for whom the free supply of foodgrains — introduced during the pandemic — would end soon.

      • Promote Exports: riding on high global growth, exports have provided extraordinary support from last fiscal. In both real and nominal terms, exports crossed the pre-pandemic levels last fiscal itself.

      • Relying on  labour-intensive services.

      • Lowering of fuel inflation, could support private consumption in the third and fourth quarters this fiscal.


Conclusion: Risks to growth are transitioning from pandemic-related to recovery-related, and many economies have begun pulling back the policy accommodation extended during in the recent past. The Omicron variant, by bringing pandemic-related risks to the fore, has reminded us that the virus is yet to be defeated. How it festers, or is quelled, and how policymakers react, or don’t, will determine how bumpy, or smooth, the ride from here will be.