Daily Current Affairs : 11 September 2020

1. Agitation and Politics of Maratha Quota 

Recently, the Supreme Court has referred to an 11 judge Constitution Bench the question of whether states can exceed the 50% limit on quotas.

What is the case in Supreme Court regarding Maratha Quota?

• The apex court bench heard a batch of petitions challenging reservations for Marathas in education and jobs in Maharashtra.

• The petitions appealed a 2019 Bombay High Court decision that upheld the constitutional validity of the Maratha quota under the Socially and Educationally Backward Classes (SEBC) Act, 2018.

• The Bench also heard a petition challenging admission to postgraduate medical and dental courses under the quota in the state.

Bombay High Court ruling on Maratha Quota

• A Division Bench of the High Court ruled in 2019 that the 16% quota granted by the state was not “justifiable”, and reduced it to 12% in education and 13% in government jobs.

  • The provisions for reservation were recommended by the Maharashtra State Backward Class Commission (MSBCC).

• The High Court ruled that “the limit of reservation should not exceed 50%”.

• The limit can be crossed in exceptional circumstances and extraordinary situations subject to availability of quantifiable and contemporaneous data reflecting backwardness, inadequacy of representation and without affecting the efficiency in administration.

• The court relied heavily on the findings of the 11-member MSBCC, which submitted its report in 2018 and provided that the Maratha community is socially, economically and educationally backward.

Existing provisions of Reservations in India

• The reservation in Maharashtra was 52% which followed the 2001 State Reservation Act.

  • The division of reservation was Scheduled Castes (13%), Scheduled Tribes (7%), Other Backward Classes (19%), Special Backward Class (2%), Vimukti Jati (3%), Nomadic Tribe B (2.5%), Nomadic Tribe C-Dhangar (3.5%) and Nomadic Tribe D-Vanjari (2%).

• The quotas for Nomadic Tribes and Special Backward Classes have been carved out of the total OBC quota.

• The total reservation in the state went up to 64-65% with the addition of 12-13% Maratha quota.

• The 10% quota for Economically Weaker Sections (EWS) announced by the Centre in 2019 is also effective in the state.

Legacy of the Marathas

• The Marathas are a politically dominant community who make up 32% of Maharashtra’s population.

• The Marathas have historically been identified as a ‘warrior’ caste with large landholdings.

• The division of land and agrarian problems over the years has led to a decline of prosperity among middle- and lower middle-class Marathas.

Politics associated with Maratha Quota

• All three parties in the ruling coalition, the Congress, NCP, and Shiv Sena, are in favour of the Maratha quota.

• The sub-committee for Maratha reservation headed by Ashok Chavan has maintained they had recruited the best lawyers to plead their case in the SC.

• The opposition BJP has seen a political opportunity, and would be gearing up to use the developments to consolidate its political base amongst the Maratha community.

Source: The Indian Express

2.Impact of Falling US Tech Stocks on Indian Market

Amid the coronavirus pandemic and disruption to economy has led to sharp decline in technology stocks that include some of the biggest companies in world, had a ripple effect on global markets too and has kept the markets in Asia and Europe under stress.

Background

• The liquidity enhancing measures introduced by the Central Banks around the globe to support their respective economies from the duress caused by the Covid-19 pandemic and imposition of lockdowns.

• The huge surplus liquidity found its way into the stock markets with large investors pumping big money into large companies.

• The rise in share prices attracted smaller retail investors too into the markets leading to further gains.

Why US Tech Stocks fell after a rise?

• The sharp rally in a number of US Tech stocks moved their prices much ahead of the fundamentals.

• The economic realities amidst the Covid-19 pandemic have started bothering a number of investors to invest their money in US Tech giants.

• The US markets have been on a surge on account of the developed world central bank unleashed bull market, supported by record low interest rate with hardly any alternative.

• The US market valuation was at all-time highs and the market to GDP had crossed all the peaks.

Impact of Falling US Tech Stocks on Indian Market

• A rise or fall in the US markets typically results in a rise/ decline in the stock markets worldwide because of the presence of US-based institutional investors in stock markets worldwide and the influence of liquidity in US over world markets.

• It is important to note that the surge in liquidity in the US also played a role in the rise in Indian stock markets over the last five months.

• The fall in US markets over the last three trading sessions put pressure on Indian markets too and the benchmark Sensex at BSE lost 893 points or 2.3 per cent over the last five days.

• The concern in the markets is that if the decline in the US markets spreads beyond the technology stocks, then it may lead to deeper impact in Indian markets.

• The US Tech markets are likely to remain volatile in the foreseeable future and that would hurt the markets worldwide including the Indian market.

Source: The Indian Express

3.Indo-Pacific Trilateral Dialogue

Recently, the first Indo-Pacific Trilateral Dialogue was held between India, France and Australia.

Importance of Indo-Pacific Trilateral Dialogue

• It is focussed on enhancing cooperation in the Indo-Pacific region and coordinated efforts towards economic and geostrategic challenges and cooperation.

• The three countries had an exchange on the priorities, challenges and trends in regional and global multilateral institutions along with the best ways to strengthen and reform multilateralism.

• It will help underscore the goal of guaranteeing peace, security and adherence to international law in the Indo-Pacific.

• It will focus on areas for practical cooperation at the trilateral and regional level, including through regional organisations such as the Association of Southeast Asian Nations (ASEAN) and the Indian Ocean Rim Association (IORA).

• It is aimed at enhancing maritime security cooperation between the three countries, including in the areas of humanitarian assistance and disaster relief, mutual logistics support and capacity-building of friendly countries in the Indo-Pacific region.

Significance of Australia and France for India in Indo-Pacific Region

• Australia and France have emerged as a major strategic partner for India in the Indo-Pacific and Indian Ocean Region (IOR) and cooperation.

• India has logistics agreements with both countries and there is significant cooperation in information exchange for Maritime Domain Awareness.

• India also conducted its first joint patrols with France from Reunion Island in February 2020.

Indian Ocean Rim Association (IORA)

It is a dynamic inter-governmental organisation aimed at strengthening regional cooperation and sustainable development within the Indian Ocean region.

The members of the bloc include Australia, Bangladesh, Comoros, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Maldives, Mauritius, Somalia, Mozambique, Oman, Seychelles, Singapore, South Africa, Sri Lanka, Tanzania, Thailand, United Arab Emirates and Yemen.

The United Arab Emirates (UAE) assumed the role of Chair since November 2019 - November 2021, followed by the People's Republic of Bangladesh.

Source: The Hindu