Chilika Lake was a part of the Bay of Bengal: Study

According to a study by the National Institute of Oceanography(NIO), Chilika lake was once a part of the Bay of Bengal.

Evidences-

• Archeological Studies: The marine archaeological studies clearly show that the Chilika once was a safe harbour for cargo ships going to Southeast Asia and other parts of the world.
• Palur Port: Greek geographer Claudius Ptolemy(150 CE) described Palur as an important port of Kalinga and referred to it as ‘Paloura’. This port was situated close to Chilika lake from where ships used to sail directly to Southeast Asia.
• Stone anchors and hero stones (memorial stones commemorating ancient heroes) from Manikapatna, Palur and the adjoining onshore regions of the Chilika lake also suggest the same.
• Chinese pilgrim Xuanzang (7th century CE) recorded ‘Che-li-ta-lo-Ching’ as a flourishing port. This port was located at Chhatargarh on the banks of the Chilika.
• The Brahmanda Purana (10th century CE approximately) says the Chilika was an important centre of trade and commerce with ships sailing to Java, Malaya and Ceylon.

Separation from the Bay of Bengal

• The process of the formation of the Chilika began around 20,000 years ago.
• India’s peninsular river Mahanadi carried a heavy load of silt and dumped part of it at its delta. As the sediment-laden river met the Bay of Bengal, sandbars were formed near its mouth.
• It created a backflow of the seawater into the sluggish fresh water at the estuary. It resulted in the huge brackish water Chilika Lake.

About Chilika Lake

• Chilika Lake is a brackish water lagoon, spread over the Puri, Khurda and Ganjam districts of Odisha state on the east coast of India, at the mouth of the Daya River, flowing into the Bay of Bengal.
• It is the largest coastal lagoon in India and the second largest coastal lagoon in the world.
• It is the largest wintering ground for migratory birds on the Indian sub-continent. The lake is home to a number of threatened species of plants and animals. Chilika Lake is an important habitat and breeding ground for both resident and migratory and aquatic birds, most notably flamingos.
• The Nalaban Island within the lagoon is classified as a Bird Sanctuary under the wildlife protection act.
• In 1981, Chilika Lake was designated the first Indian wetland of international importance under the Ramsar Convention.
• The lagoon is also home to 14 types of raptors. Around 152 rare and endangered Irrawaddy dolphins have also been reported. Plus, the lagoon supports about 37 species of reptiles and amphibians.
• Microalgae, marine seaweeds, sea grasses, fish and crab also flourish in the brackish water of the Chilika Lagoon.

Global Minimum Corporate Income Tax

The US Treasury Secretary has urged the world’s 20 advanced nations to move in the direction of adopting a global minimum corporate income tax.

What is the Global Minimum Corporate Tax Rate?

• It is a type of corporate tax.
• Under this, If a company moves some of its operations to another country having low-tax jurisdiction, then the company have to pay the difference between that minimum rate and whatever the firm paid on its overseas earnings.
• For example, assume Country A has a corporate tax rate of 20 per cent and Country B has a corporate tax rate of 11 per cent. If the global minimum tax rate is 15 per cent. Consider a situation, where Company X is headquartered in Country A, but it reports income in Country B. Then Country A will increase the taxes paid by Company X. This is equal to the percentage-point difference between Country B’s rate and the global minimum rate(15 per cent).
• In short, Company X will have to pay an additional 4 per cent of the tax to Country A

Why this appeal by US Treasury?

• The goal of a global Corporate minimum tax is to end a 30-year race to the corporate tax rates.
• Over the past decades, a number of countries have enacted tax policies specifically aimed at attracting multinational businesses. These countries attract investment by lowering corporate tax rates. This, in turn, has pushed other countries to lower their rates as well to remain competitive.
• Responding to the incentives created by these laws, many multinational corporations have moved their assets to low tax countries. Particularly their ownership of the intellectual property to countries offering them low or even no-tax treatment for the assets they produce.
• This has impacted countries around the world. As they lose out on an estimated $100 billion per year in tax revenue. India’s annual tax loss due to corporate tax abuse is estimated at over $10 billion.

US proposal

• The US has proposed a 21% Global minimum corporate tax rate.
• Further, the US also suggest cancelling exemptions on income from countries that do not legislate a minimum tax.
• This is aimed to discourage the shifting of multinational operations and profits overseas.

India’s Stand on Global Minimum Corporate Tax Rate:

• The Indian Government has said that it is open to participating and engaging in discussions about the Global Minimum corporate tax structure.
• It said that the government will look into the pros and cons of the new proposal and take a view thereafter.

Meeting of Education Ministers of E9 Countries

Recently, a consultation meeting of Education Ministers of E9 countries was held on the theme ‘E9 initiative: Scaling up digital learning to accelerate progress towards SDG4’.

Major Highlights

• The United Nations (UN) is spearheading a global initiative on digital learning and skills for all, targeting marginalized children and youth and aiming to close the digital divide and drive rapid change in education systems.
• This initiative focuses on three of the five priorities of the 2020 Global Education Meeting (GEM) Declaration: supporting teachers; investing in skills, and narrowing the digital divide.
• E9 countries offer a starting gate to accelerate progress on digital learning and skills in the immediate term and ultimately on the SDG4 agenda in the longer term.

2020 Global Education Meeting Declaration

• As part of the Decade of Action to accelerate progress on SDG4 and in response to Covid-19, the 2020 GEM Declaration identified five priorities for urgent action:
  1. Education financing;
  2. Safe school reopening;
  3. Supporting teachers as frontline workers;
  4. Investment in skills; and
  5. Narrowing the digital divide.
• The Covid-19 crisis revealed the weakness and unpreparedness of the current education systems worldwide, prompting the deployment of digital learning during mass school closures across almost all countries.

Navigating the Rupee depreciation

The rupee has been falling and recently, the rupee fell sharply by 105 paise. It is considered as one of the biggest single-session falls in 20 months. Currently, the rupee stands at 74.47 against the US dollar.

Reasons for Rupee Depreciation

A combination of factors are responsible for rupee depreciation, such as

• Concerns over Covid-19 has created uncertainty in the market. This affected the FDI(Foreign Direct Investment) and FII(Foreign Institutional Investment). So the rupee weakens further.
• RBI’s Government Securities Acquisition Programme (G-SAP) that seeks to buy bonds worth Rs 1 lakh crore might be one of the reasons. It is a quantitative easing policy followed by RBI. The policy supported the government’s increased borrowing Programme through the infusion of liquidity.
• The strengthening of the dollar against the euro also contributed to rupee depreciation.
• RBI’s status-quo on policy rates is not helping to increase demand in the local economy. This will further impact the rupee.
• The value of the rupee will also be impacted by the high bond yields in the US and the inflow of dollars into the US.

Impacts of Rupee Depreciation

It has both positive and negative impacts. For instance,

• Depreciation has a positive impact for an NRI. As they are sending money back home they will get more rupees per dollar.
• Similarly, Depreciation will have negative impacts on fuel costs and education cost in abroad. For example,
  1. One, A depreciating rupee increases the cost of crude import. A rise in cost of crude raises fuel prices and inflation. Crude import accounts for almost 20% of India’s imports.
  2. Two, higher education in the US might cost an annual fee of US$ 50,000. A 5% depreciation in the rupee (For example, from 72.5 to 76.125) will raise the cost for one year from Rs 36.26 lakh to Rs 38.06 lakh (Net loss Rs 1.8 lakh)

Recovering from the Rupee Depreciation

There are multiple options to cover the currency volatility risk. They are,

• Investing in international funds that invest in global markets through fund of funds. While the Indian investors invest in rupees, in the fund of funds the money gets invested in dollars at the current exchange rate. In case of rupee depreciation, this fund will fully protect against the currency depreciation risk.
• In this case, if a person planning for a quick investment (4-5 months) in foreign currency, there are two options to eliminate currency risk.
  1. Creating a deposit account in the US and transferring the fund abroad.
  2. Going for a currency hedge in the exchanges by investing in future contracts that will mature in 4-5 months.
• For example,
  1. A future contract worth $50,000, maturing in July at the rate of 74.5, will pay Rs 37.25 lakh.
  2. If in December, the rupee depreciates to $77, Then the contract will yield a profit of Rs 1.25 lakh.

Online Dispute Resolution in India

NITI Aayog recently released a handbook on the Online Dispute Resolution mechanism. ODR has the potential to decentralize, diversify, democratize, and disentangle the justice delivery mechanism in India’s courts.

Present Scenario in India’s Courts & Associated Issues

• The pendency of over 40 million cases in our judicial system remains a focal point for reform and reduction.
• This pendency makes a strong case for online dispute resolution (ODR).
• Nearly a third of these cases have been pending for 3 to 30 years.
• They are pending due to resource-dwindling litigation, case adjudication and difficulty in consensus resolution.
• There are barriers to conflict resolution for the common man, because,
  1. Lack of access to courts and representation, or
  2. Entry-level barriers such as linguistic or technology challenges.
• All of this is routinely brought up by those who are impacted by it.
• With the pandemic disrupting basic services delivery, the discussion is only going to expand in scope and volume.

Online Dispute Resolution During COVID

• Around 40 million cases are pending cases at the Supreme Court, High Courts and district courts.
• This seems more than significant, except that the courts are performing in an exemplary fashion to dispose of cases.
• Around 25 lakh cases were heard virtually by courts across the country in the wake of the Covid-19 pandemic.
• However, the key statistic is that the number of cases filed surpassed the disposal capacity.
• The pandemic has, of course, accelerated this trend.
• Given the escalating pendency, it is important that alternative methods for avoiding, containing and resolving disputes are adopted.
• Access to justice isn’t just about having the means to resolve disputes but also ensuring that the means are efficacious and expeditious.
• Keeping this context in mind, the growing focus on ODR in India is not without reason.

Significance of Online Dispute Resolution and Associated Benefits

• Cost-Effective – ODR has the potential to reduce legal costs. First, by way of reduced time for resolution and second, by doing away with the need for legal advice in the select category of cases
• Convenient and quick dispute resolution – ODR eliminates the need for travel and synchronisation of schedules
• Increased access to justice – As part of India’s commitment and leadership to attain the Sustainable Development Goals adopted by the UN General Assembly in 2015, India is committed to ensuring equal access to justice for all. Since ODR tools such as online negotiation and mediation are premised on mutually arriving at an agreement, they make the dispute resolution process less adversarial and complicated for the parties
• Removes unconscious bias – ODR processes lessen the unconscious bias of the neutral while resolving disputes
• Exploring the massive potential of Online Dispute Resolution (ODR) can enhance the Ease of Doing Business in India
• ODR aligns with the current socio-economic setting.
• It has a global precedent of being extremely successful, and above all, has principles of natural justice in its essence.
• The foundational pillars of any successful ODR regime are trust, convenience and expertise.
• India now has a long legacy of citizens trusting technology, whether in e-payments or in education and healthcare.
• To augment dispute resolution mechanisms, Lok Adalats and Gram Nyalayas have been created as alternative options for affordable justice.
• ODR has significantly large-scale potential for innovation.

Online Dispute Resolution in India

• The origins of ODR can be traced to the evolution of the Internet in the 1990s, which increased online transactions, and thereby disputes related to such transactions.

• The United Nations Commission on International Trade Law (UNCITRAL) adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985 and the UNCITRAL Conciliation Rules in 1980. In the context of international commercial relations, this Model Law has been recommended by the United Nations General Assembly (UNGA).
• India incorporated these uniform principles of ADR in the Arbitration and Conciliation Act, 1996.

Online Dispute Resolution in India Post COVID-19

• During the ongoing Covid-19 pandemic, the target is to look into Covid-related disputes (most notably in lending, credit, property, commerce and retail) through ODR, which is an important part of the economic revival.
• It will set into motion the use of technology towards efficient and affordable access to justice, especially in post-pandemic times.

Recent Initiatives

Challenges in ensuring Online Dispute Resolution

• Digital literacy – ODR requires a basic level of digital literacy as a prerequisite. In India, digital literacy often varies across age, ethnicity and geography. This digital divide needs to be addressed to ensure that ODR is adopted by society at large and not remain limited to urban areas
• Digital infrastructure – A broad base adoption of ODR will require essential technology infrastructure across the country
• Lack of trust in ODR services – A lot of people in the country do not trust the emerging technology which is a major challenge for the people of India
• Privacy and confidentiality concerns – Greater integration of technology and reduced face-to-face interactions create new challenges for privacy and confidentiality, especially in dispute resolution

Way Forward

• ODR has the potential to raise equity, fairness, access in the dispute resolution ecosystem in India.
• The convenience brought by ODR has been exhibited by e-Lok Adalats conducted in several states, where disputes were resolved simply over WhatsApp audio/video calls.
• Supply-side capabilities could also be enhanced through a relatively large and competent services pool for adjudication and representation.
• ODR has the potential to be an effective alternative that utilises technology to bridge barriers and access in resolution.
• Through facilitating low-cost, technology-augmented, linguistically- friendly and incentivised dispute avoidance, containment and resolution, ODR could enhance justice delivery to all.