Context:

The Credit Suisse Group, a Switzerland-based multinational investment bank, has released the 10th edition of its annual Global Wealth Report.

How is wealth defined and calculated?

Wealth is defined in terms of “net worth” of an individual. This, in turn, is calculated by adding up the value of financial assets (such as money) and real assets (such as houses) and then subtracting any debts an individual may have.

Key points:

China has overtaken the United States this year to become “the country with most people in the top 10% of global wealth distribution ”.

44% of total wealth with 0.9%: 47 million people – accounting for merely 0.9% of the world’s adult population – owned $158.3 trillion.

Bottom half of wealth holders collectively accounted for less than 1% of total global wealth in mid-2019, while the richest 10% own 82% of global wealth and the top 1% alone own 45%.

Global financial crisis of 2008-09 has hurt those at the bottom of the pyramid more than the wealthiest as inequalities within countries grew in the wake of the GFC. As a result, the top 1% of wealth holders increased their share of world wealth.

India specific points:

India remains one of the fastest wealth creators in the world, with household wealth in dollar terms growing faster than any other region.

Wealth per Indian adult is at $14,569 ( ?10.31 lakh as on 21 October). However, the average number is skewed heavily by a few wealthy individuals.

India accounts for 2% of the world’s millionaires.

What are the drivers of the wealth of nations?

Overall size of the population: A country with a huge population, in terms of final calculation, this factor reduces the wealth per adult. Also, a big population provides a huge domestic market and this creates more opportunities for economic growth and wealth creation.

Country’s saving behaviour: A higher savings rate translates into higher wealth. Overall, a percentage point rise in the savings rate raises the growth rate of wealth per adult by 0.13% each year on average.

General level of economic activity as represented by aggregate income, aggregate consumption or GDP: The expansion of economic activity increases savings and investment by households and businesses, and raises the value of household-owned assets, both financial and non-financial.

Section 11 of the Representation of the People Act

Context:

Delhi High Court has sought a response from the Centre and the Election Commission (EC) on a petition challenging the EC’s decision to reduce the disqualification period of Sikkim Chief Minister Prem Singh Tamang from six years to 13 months.

This was done in accordance with the Section 11 of Representation of the People Act.

Background:

Mr. Tamang was convicted of the charge of misappropriation of public funds. His disqualification period of 6 years, which began on August 10, 2018, was to end on August 10, 2024.

Claims of Tamang :

It is based on Mr. Tamang’s main argumen that, the law prevailing at the time of his offence entailed disqualification only if the sentence was for a term of two years or more; and that the amendment in 2003, under which any conviction under the anti-corruption law would attract the six-year disqualification norm, should not be applied to him.

Section 11 of the RPA Act:

The Election Commission may, for reasons to be recorded, remove any disqualification under this Chapter 1 (except under section 8A) or reduce the period of any such disqualification.

Issues :

The fact that condonation was granted just before the fresh state elections were to be held, demonstrates arbitrariness. The only inference from the period condoned, that is, four years 11 months, seems to be for the specific purposes of allowing the candidate to contest the state elections.

Therefore, it is also argued that Section 11 of the Representation of the People Act, 1951, was unconstitutional since it provided uncanalised, uncontrolled, and arbitrary power to the Election Commission to remove or reduce the disqualification period.

Analysis:

This is morally wrong and a dangerous precedent that may end up reversing the trend towards decriminalising politics.

Under Section 11 of the Representation of the People Act, 1951, the EC indeed has the power to remove or reduce the disqualification attached to a conviction. However, this has been used rarely, and seldom in a case involving a conviction for corruption.

Its because Disqualification from contest is a civil disability created by electoral law to keep those convicted by criminal courts from entering elected offices. It is not a second punishment in a criminal sense.

The EC decision also goes against the grain of a series of legislative and judicial measures to strengthen the legal framework against corruption in recent years.

Solutions:

The apex court has already described corruption as a serious malady and one impinging on the economy. In 2013, the protection given to sitting legislators from immediate disqualification was removed.

Now, disqualification should be more strictly applied to those convicted for corruption. Legislators handle public funds, and there is good reason to keep out those guilty of misusing them.

LOOKING AT THE LARGER PICTURE

Context :

India should not let the contentious issues dictate the overall tenor of bilateral relations

Background:

India's decision to put off PM Modi's visit to Turkey on the basis of Tukey's criticism over dilution of Article 370.
This decision over foreign policy is a sign of knee-jerk diplomacy and also demonstrates a lack of familiarity with the Turkey's historical record on Kashmir.

Relations between Pakistan and Turkey:

1. Both are members of Central Treaty Organisation (CENTO).
2. Both are members of ORCD ( Organisation for Regional Cooperation And Development) and also in Organisation of Islamic Countries (OIC).


Importance of Turkey :

1. Pivotal and a stable power in West Asia.
2. Ability to attain nuclear power and also a NATO ally.
3. Access to West Asia and European market.
4. Its geostrategic location in the Mediterranean sea, Black sea , Aegean sea and its proximity to the Caspian sea and Sinai peninsula.

India's foreign policies should not be based on contentious issues but on the bilateral ties.

ORCD:

Regional Cooperation for Development (RCD) or Organization for Regional Cooperation and Development (ORCD) was a multi-governmental organization which was originally established on the 21st of July 1964 by Iran, Pakistan and Turkey, regional members of the Central Treaty Organization(CENTO), to allow socio-economic development of the member states. In 1979, this organization was dissolved.

It was replaced by Economic Cooperation Organization (ECO) in 1985. Seven new members were added: Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan.

CENTO:

The Central Treaty Organization (CENTO), originally known as the Baghdad Pact or the Middle East Treaty Organization (METO), was a military alliance of the Cold War. It was formed in 1955 by Iran, Iraq, Pakistan, Turkey and the United Kingdom and dissolved in 1979.

OIC:

The Organisation of Islamic Cooperation (OIC) is the second largest inter-governmental organisation after the United Nations, with the membership of 57 states, covering four continents. The OIC is the collective voice of the Muslim world to ensure and safeguard their interest on economic socio and political areas. The OIC has Institutions, which implement its programmes. Its Headquarters is in Jeddah, Kingdom of Saudi Arabia.