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1 February 2017 Question Bank


1st FEBRUARY 2017 


(3 Questions)

Answer questions in NOT MORE than 200 words each. Content of the answer is more important than its length.

Links are provided for reference. You can also use the Internet fruitfully to further enhance and strengthen your answers.


1.      Many multinational companies have been fined for their corrupt practices by their home countries. What is the impact of such acts on India? What steps have been taken by India to seek domestic remedy?


Multinationals pay fines for corrupt practices :

  • It is almost an annual feature in the U.S. to see an American corporation admitting to have violated the Foreign Corrupt Practices Act (FCPA) in its Indian operations, and agreeing to pay huge penalties.
  • These could range from bribing government officials to misleading accounting practices in order to hide slush funds.
  • FCPA in the U.S. came into being in the post-Watergate period in the 1970s.
  • A similar parallel can also be occasionally seen in the U.K., as the Rolls-Royce case illustrates.

1.      British engineering giant Rolls-Royce recently agreed to pay a $809-million fine (over ?5,500 crore) for its corrupt practices in India, Russia, China, Thailand, Nigeria and Malaysia.

2.      In the U.S., on January 6, Mondelez International, formerly known as Kraft Foods and of which Cadbury is now a part, agreed to pay $13 million to the U.S. authorities for paying an Indian agent, who in turn may have bribed government officials, for obtaining 30 different licences for phase II of its chocolate factory in Baddi, Himachal Pradesh.

3.      In October 2016, Cognizant admitted to possible violations governing anti-bribery laws of the U.S. in its operations in India.

4.      In September 2016, Anheuser-Busch InBev paid $6 million to settle corruption charges against one of its Indian companies where it had only a minority stake — the Indian company in question allegedly tried to buy off an employee who had turned whistle-blower and was informing U.S. authorities about its practice of using third-party sales promoters to pay bribes to Indian government officials.

5.      In 2012, Oracle paid a $2 million civil penalty in the U.S. to settle charges arising from a slush fund in India used to pay bribes.

  • To be fair, it is the effective implementation of anti-corruption laws in the U.S., the U.K. and most other developed economies that are forcing global business giants to pay huge fines for their questionable practices.
  • It is a demonstration of the effective implementation of laws of their homelands, and caution to anyone from those economies against bribing someone in countries like India.

Payments a burden on ordinary Indians:

  • A scan of global anti-corruption jurisprudence and its impact on ordinary Indians inevitably throws up a ‘robbing Peter to pay Paul’ scenario.
  • An aggressive global firm enters the Indian market, realises that it is deeply corrupt, engages middlemen to pay bribes to bureaucrats and politicians, secures huge businesses and swells its balance sheet.
  • If caught, it apologises for the ‘mistake’, and offers to pay financial penalties to offset possible criminal trial and long jail terms for its officials — all in the home country, not India.
  • An average Indian pays either by way of taxes into government coffers that go into official purchases made from that company, or from his personal finances to buy its product. In those purchases, the ordinary Indian pays more than the legitimate market price because of corruption, contributing a part of the kickback paid to the middlemen who facilitate the company’s business in the Indian market.
  • Worse, when the company offers to pay a fine to offset criminal proceedings, that average Indian consumer would also partially contribute to it, because it is from markets like India that such foreign companies make their profits, part of which would be used to pay off their governments that uphold law.

Indian government’s response:

  • What is worrying is the attitude of the Indian government and its anti-corruption bodies to this by-now-well-established global phenomenon.
  • There is nothing on record to show that in the long history of FCPA in the U.S., which came into being in the post-Watergate period in the 1970s, the Indian government has evolved any mechanism to regularly follow FCPA filings, and seek domestic remedy here in India.
  • Nor is there any assurance that agencies such as the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) would take evidence from those filings to pursue cases here against those involved.
  • The last significant reforms in the administration of CBI and ED were ordered by the Supreme Court in the Vineet Narain case of 1997, by which it tried to bring some amount of autonomy to the agencies, especially bringing in supervision by the Central Vigilance Commission.
  • However, the agencies have remained caged parrots, as the Supreme Court observed later.
  • It is no more just about autonomy of anti-corruption agencies or enactment of the long-pending Lokpal act.
  • It is troubling that Indian agencies fail, especially in exploiting the digital databases across the world, celebrating whistle-blowers and enforcing the law with impartiality.


2.       What are the major changes that the proposed Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 make to the LARR Act, 2013. Critically analyze these changes in the context of the recent Supreme Court judgement in the Singur Case.

(Repeat Question from 2 Sept 2016 Question Bank




Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement

  • Currently land acquisition is governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 which came into force on January 1, 2014.  Prior to this, the Land Acquisition Act, 1894 governed land acquisition. 
  •  The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 seeking to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act, 2013). 
  • The Bill replaces the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014. 
  • The LARR Act, 2013 outlines the process to be followed when land is acquired for a public purpose. 

Key changes proposed by the 2015 Amendment Bill :

1.      Provisions of other laws in consonance with the LARR 2013:


  • The LARR Act, 2013 exempted 13 laws (such as the National Highways Act, 1956 and the Railways Act, 1989) from its purview
  • However, the LARR Act, 2013 required that the compensation, rehabilitation, and resettlement provisions of these 13 laws be brought in consonance with the LARR Act, 2013, within a year of its enactment (that is, by January 1, 2015), through a notification. 
  • The Bill brings the compensation, rehabilitation, and resettlement provisions of these 13 laws in consonance with the LARR Act, 2013.


2.      Exemption of five categories of land use from certain provisions:


  • The Bill creates five special categories of land use:


(i)    defence,

(ii)  rural infrastructure,

(iii)affordable housing,

(iv)industrial corridors, and

(v)  infrastructure projects including Public Private Partnership (PPP) projects where the government owns the land.


  • The LARR Act, 2013 requires that the consent of 80% of land owners is obtained for private projects and that the consent of 70% of land owners be obtained for PPP projects.  The Bill exempts the five categories mentioned above from this provision of the Act.
  • In addition, the Bill permits the government to exempt projects in these five categories from the following provisions, through a notification:


(i)          The LARR Act, 2013 requires that a Social Impact Assessment be conducted to identify affected families and calculate the social impact when land is acquired.

(ii)        The LARR Act, 2013 imposes certain restrictions on the acquisition of irrigated multi-cropped land and other agricultural land.  For example, irrigated multi-cropped land cannot be acquired beyond the limit specified by the appropriate government.

3.      Return of unutilised land:

§  The LARR Act, 2013 required land acquired under it which remained unutilised for five years, to be returned to the original owners or the land bank

§  The Bill states that the period after which unutilised land will need to be returned will be:

(i)    five years, or

(ii)  any period specified at the time of setting up the project, whichever is later.

4.      Time period for retrospective application:


  • The LARR Act, 2013 states that the Land Acquisition Act, 1894 will continue to apply in certain cases, where an award has been made under the 1894 Act
  • However, if such an award was made five years or more before the enactment of the LARR Act, 2013, and the physical possession of land has not been taken or compensation has not been paid, the LARR Act, 2013 will apply.
  • The Bill states that in calculating this time period, any period during which the proceedings of acquisition were held up: (i) due to a stay order of a court, or (ii) a period specified in the award of a Tribunal for taking possession, or (iii) any period where possession has been taken but the compensation is lying deposited in a court or any account, will not be counted.


5.     Private hospitals and private educational institutions included:


  • The LARR Act, 2013 excluded the acquisition of land for private hospitals and private educational institutions from its purview.  The Bill removes this restriction.


6.     Private companies replaced by private entities


  • While the LARR Act, 2013 was applicable for the acquisition of land for private companies, the Bill changes this to acquisition for ‘private entities’. 
  • A private entity is an entity other than a government entity, and could include a proprietorship, partnership, company, corporation, non-profit organisation, or other entity under any other law.


7.      Responsibility of government officer:


  • The LARR Act, 2013 stated that if an offence is committed by the government, the head of the department would be deemed guilty unless he could show that the offence was committed without his knowledge, or that he had exercised due diligence to prevent the commission of the offence
  • The Bill replaces this provision and states that if an offence is committed by a government official, he cannot be prosecuted without the prior sanction of the government.


Recent Supreme Court Judgement in the Singur Case

·         The Supreme Court’s verdict on the Singur land acquisition issue is a re-statement of first principles relating to the limitations of ‘eminent domain’.

·         By quashing the entire land acquisition process done by the erstwhile Left Front government in West Bengal, the court has reiterated that the term ‘public purpose’ cannot be arbitrarily invoked to acquire land and hand it over to a private party.

·         One of the two judges has categorically held that there was no ‘public purpose’ in the land acquisition as it was solely for the benefit of Tata Motors.

·         The other judge has conceded that given the government’s policy of industrialisation and the potential for employment generation, the acquisition was indeed for a public purpose. But he also ruled that the failure to hold a proper inquiry into objections from the public, and the fact that the State Cabinet had decided to acquire land for the project even before the acquisition was notified as per law, rendered the entire process void.

·         The ruling is undoubtedly a political victory for West Bengal Chief Minister Mamata Banerjee, who took up the cause of those whose lands were taken away in Singur, making it a key election issue of the pivotal Assembly election of 2011, when she wrested power from the long-serving Left Front.

·         The order calls for farmers to get back their land, and the court allows them to keep the compensation they had earlier received or claim it now if they are yet to get it.

The judgement in context of the Land Acquisition laws:

·         The judgment does not lay down any new law. The dispute over whether the Singur land was acquired for a ‘public purpose’ or not is largely academic, now that the outdated Land Acquisition Act, 1894, has been repealed and replaced by legislation that aims at transparency in acquisition and makes fair compensation and resettlement a statutory right of those who lose their land.

·         The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act sets out the categories of projects that would fall under public purpose, and allows acquisition for private companies subject to provisions related to consent, compensation and rehabilitation.

·         There may be some apprehension that the judgment will deter fresh investment by the private sector, inasmuch as it may preclude land acquisition for major projects. However, courts have by and large interpreted ‘public purpose’ liberally, often allowing the government’s view to prevail.

·         The lesson from Singur is that thoughtless and fast-tracked acquisition, often to the detriment of due process and the interests of those deprived of land and livelihood, is the real issue — and not promotion of industrialisation.


3.   Protests by people affected by land acquisition have grown over the years. What is the government’s response on the same? How far has the Land Acquisition Act of 2013 succeeded in upholding rights of land owners?


Protests by people affected by land acquisition:


  • The recent Bhangar violence in West Bengal recalls yet again the intensity of conflicts over the acquisition of land for infrastructure projects.
  • These conflicts continue despite the new and ostensibly improved land acquisition law of 2013, with its higher terms of compensation, social impact assessments, and prior informed consent for projects involving the private sector.
  • In the violence in Bhangar, the Trinamool Congress that agitated against the high-handedness of the Communist Party of India (Marxist) in Nandigram and Singur claims the people first agreed to part with 14 acres of land and then outsiders created unrest. Agitations have left two dead, several arrested and many injured since November 2016.


The government’s response:


  • Agitators are portrayed by ruling governments as being under the influence of “outsiders” when, in fact, infrastructure paradigms, investors and beneficiaries are always the outsiders.
  • The state asserts its sovereignty as the sole authentic “insider” and moves in police troops to protect its sovereign right from agitating locals.


Narmada Bachao Andolan (NBA) agitation:


  • Dating from the struggles of the Narmada Bachao Andolan (NBA) in the 1980s against the Sardar Sarovar Project (SSP), the quality of state intervention and discourse outlined above remains uncannily familiar. This is despite the 2013 land acquisition law, and extends across parties.
  • Thousands affected by the SSP were in fact on dharna during the monsoon of 2016, marking 31 years of the NBA’s struggle for justice for those dispossessed by the project.
  • At a height of 138.68 m now, only the reservoir gates of the SSP dam remain pending before full submergence of the upstream areas.
  • The 2016 agitations saw relay fasts by those already dispossessed and woefully short of promised rehabilitation, and satyagraha by thousands more facing submergence — some without promised resettlement and others not even recognised as adversely affected.
  • The year passed with yet another assurance of just rehabilitation, and the 2017 monsoon already looms ahead.


Dholera denotification case:


  • In bitter irony further downstream, residents from 22 villages affected by the Dholera Smart City project protested against the ‘denotification’ of agrarian lands from the SSP’s promised irrigation canals in Ahmedabad district, Gujarat.
  • The water that was promised to peasants in Gujarat by the construction of the SSP is now to be officially diverted to supply real estate and infrastructure projects for a city that, if developed, will destroy the existing agrarian infrastructure and socio-cultural and ecological lifeworld of the area.


Agitations against SEZs


  • The agitations over Special Economic Zones (SEZs) are other recent reminders.
  • POSCO’s inability to set up a plant in Jagatsinghpur, Odisha, as it had not yet obtained forest and other clearances is a case in point.
  • This came after 11 years of tenacious struggle by local residents against the project.
  • Similar agitations have unfolded in Nandigram, Mangaluru, Maharashtra and Goa, stalling projects or eventually pushing out SEZS developed by corporate giants and backed by state forces.


Land Acquisition Act, 2013 fails in action:


  • Infrastructure projects are initiated for the “greater common good”, but the people dispossessed by them of their land, livelihood, and environment rarely benefit from all their goodness.
  • The scale of the projects keeps growing.
  • The information regarding them is little or often not accessible at all, and those affected discover the project’s full implications either by accident or by doggedly exercising their right to information.
  • Prior informed consent remains a farce. There are no clear procedures for establishing consent in the case of private sector involvement and there is complete exemption for state-led projects.
  • Compensation is often the proverbial fish bone — the inadequateness of compensating security of land, livelihoods, socio-cultural lifeworlds, not to mention the loss of environment and biodiversity, have been discussed ad nauseam.
  • The impoverishment of large numbers of small and marginal farmers and the landless is inevitable, but the insecurity faced by large farmers once compensation money dries up in conspicuous consumption has also been documented widely. 


Food Security and Universal Basic Income



  • With the Kerala government’s decision to implement the National Food Security Act (NFSA) from April 2017, the whole country will be covered by the legislation.
  • Use of the public distribution system (PDS) expanded sharply with proportion of households getting PDS subsidy rising from about 25% in 2004-05 to 50% in 2011-12. However, decline in child malnutrition has been far more modest.
  • Critiques of the PDS may point to leakages and suggest that perhaps these subsidies are not reaching the target beneficiaries. However, a large number of studies have recorded improving performance of the PDS and suggest this may be an overly cynical assumption.
  • A study suggests that access to PDS subsidies changes the way people allocate their household resources. When rice, wheat and other cereals are available cheaply, households try to get more of their required calories from cereals and less from milk, fruits and vegetables.
  • The so-called “lifestyle” diseases are exacerbated by excessive consumption of carbohydrates, amply available in cereals.
  • Cash transfers may be one way of dealing with this challenge. They would allow households to invest in better diets without circumscribing what they consume.
  • Current debates on Universal Basic Income tend to see it as an additional component of social safety nets. But if the mechanisms for effective administration of the UBI are in place, it is possible to make a case for replacing PDS by cash transfers on nutritional grounds and this is well within the framework laid down by the NFSA.


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