Promotion is Not a Fundamental Right

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Why in the News?

The Supreme Court recently confirmed that government employees in India do not have a guaranteed right to promotions. The Constitution doesn't set any rules for promotions, so it is up to the legislature and executive to decide.

 

What are the Constitutional Provisions Related to Reservation?

Here is a simpler version of the provided text:

Article 15 (6): This allows the government to create special measures for helping economically weaker sections of citizens, including reserving seats in educational institutions. These reservations can be in any educational institution, both private and government-aided, except for minority institutions under Article 30 (1).

Article 16 (4): This permits the government to reserve jobs for any backward class of citizens who are not adequately represented in government services.

Article 16 (4A): This allows the government to reserve promotions in government jobs for Scheduled Castes (SC) and Scheduled Tribes (ST) if they are not adequately represented.

Article 16 (4B): This lets the unfilled SC/ST quota from a particular year be carried forward to the next year. Both Articles 16 (4A) and 16 (4B) were added by the 77th Constitutional Amendment Act in 1995.

Article 16 (6): This allows the government to reserve up to 10% of jobs for economically weaker sections, in addition to existing reservations.

Article 335: This acknowledges the need for special measures to consider the claims of SCs and STs for jobs and promotions, to bring them to the same level as others.

82nd Constitutional Amendment Act, 2000: This added a condition to Article 335, allowing the government to relax qualifying marks for SC/ST candidates in exams.

 

What are the Pros and Cons of Reservation in Promotion?

Here is a simplified version of the pros and cons of reservation:

 

Pros of Reservation

Social Justice & Inclusion: Helps ensure that historically disadvantaged groups (SC, ST, OBC) are represented in higher positions.

Breaks Caste & Social Barriers: Promotes diversity in leadership, leading to a better understanding of societal issues.

Empowerment & Upliftment: Provides opportunities for marginalized communities to advance and compete at higher levels.

Positive Discrimination: Helps overcome past social and economic discrimination by giving disadvantaged groups a better chance.

 

Cons of Reservation

Merit vs Reservation: May overlook the most qualified candidates for promotion.

Demotivation & Frustration: This can cause frustration among general category candidates who feel they are being passed over.

Creamy Layer Issue: The more advantaged individuals within reserved categories might benefit the most, which can undermine the goal of upliftment.

Seniority & Efficiency: This can disrupt seniority-based promotion systems and affect overall efficiency.

 

What are the Reservation Developments in India?

Here is a simpler version of the summary of the Indra Sawhney Judgment, 1992:

In the Indra Sawhney Judgment of 1992, a nine-judge bench made these key decisions:

Promotion Reservations: Article 16(4) of the Constitution allows reservation in appointments but not in promotions.

27% Reservation: The court upheld the 27% reservation for OBCs but set a limit of 50% for total reservations unless there are exceptional circumstances.

Carry Forward Rule: This rule is valid but must also stay within the 50% limit. No reservations should be applied to promotions.

Relationship Between Articles 16(1) and 16(4): Article 16(4) does not override Article 16(1). Article 16(1) guarantees equality of opportunity as a fundamental right, while Article 16(4) is an enabling provision for reservations.

Exclusion of Creamy Layer: The court directed that the economically well-off (creamy layer) within OBCs should not receive reservation benefits. This exclusion does not apply to SCs and STs.

 

Article 16(1): Ensures equality of opportunity for all citizens in employment or appointment to any state office.

 

Way Forward

Here is a simplified version of the provided text:

Data-Driven Approach: Collect data on the current representation of SC/ST/OBCs in various levels and departments. Use this information to set clear targets for filling reservation quotas.

Focus on Merit with Relaxation: Promote a system that focuses on merit but allows some relaxation in qualifying marks for SC/ST/OBC candidates in promotions. This ensures qualified candidates from these communities have better opportunities while maintaining competency.

Addressing Concerns: Recognize worries about unqualified candidates being promoted due to reservations. Propose solutions like rigorous training and mentorship programs for promoted SC/ST/OBC employees to help them excel in their new roles.

Long-Term Vision: Highlight that reservations are a temporary measure to achieve long-term social justice and equal opportunity in promotions. Support parallel initiatives that improve education and access to resources for these communities, aiming for a future where reservations are no longer needed.

 

Conclusion

The Supreme Court's stance on reservation in promotions has evolved to balance equality and affirmative action. The Court permits states to offer such reservations but imposes conditions to ensure administrative efficiency and safeguard the public interest.

 

 

Increased Recovery Under IBC

Why in the News?

Recent data from the Insolvency and Bankruptcy Board of India (IBBI) indicates that creditors in India have recovered nearly half of their claims under the Insolvency and Bankruptcy Code (IBC), 2016 when resolutions are completed within the 330-day deadline. However, delays in the process have reduced the amount of money recovered.

 

What are the Key Highlights of the Latest Data?

Recovery Rates and Timeliness

 

Total Recoveries: Since the inception of the Insolvency and Bankruptcy Code (IBC) in 2016, the resolution of 947 financially stressed companies has resulted in creditors receiving ₹3.36 lakh crore, which is 32.1% of their claims.

Trends in Recovery Rates:

• FY18 and FY19: Recoveries were at 54%.
• FY21: Recoveries dropped to 22% due to the pandemic.
• FY22: Recoveries slightly increased to 23%.
• FY23: Recoveries improved to 36%.
• FY24: Recoveries declined again to 27%.

 

Number of Resolutions:

• FY22: 144 resolutions.
• FY23: 189 resolutions.
• FY24: Reached a record of 269 resolutions, largely due to the government filling vacancies in the National Company Law Tribunal (NCLT) over the past two years.

 

Cumulative Recoveries:

• Compared to the fair value of stressed companies at the time of insolvency admission, creditors have experienced stronger cumulative recoveries, reaching 85%.
• In terms of liquidation value, the recovery rate has reached 161.8% of the assets.

 

• Impact of Delays: Delays in the resolution process, averaging 679 days, have significantly reduced recovery rates to 26%, negatively affecting asset value and debt recovery. Experts emphasize the importance of timely initiation of the IBC for effective stress resolution.

 

What are the Proposed Measures to Strengthen IBC?

Strategies to Improve Insolvency Resolution and Recovery Rates

Reduce Delays

Streamline Processes: Resolve insolvency cases within the IBC's 330-day deadline. The current average duration of 679 days highlights the need to streamline procedures and reduce litigation.

 

Improve Recovery Rates

Enhanced Efficiency at NCLT: Ensure sufficient judges and staff at the National Company Law Tribunal (NCLT) to handle cases efficiently, expediting processing and reducing delays caused by backlogs.

Simplify Procedures: Review and simplify IBC procedures to eliminate unnecessary steps and standardize processes, speeding up approvals.

 

Sector-Specific Regimes

Specialized Insolvency Frameworks: Develop specialized insolvency regimes for sectors like real estate, which face unique challenges compared to other industries.

 

Cross-Border Insolvency Framework

Legal Framework: Establish an effective legal framework based on the UNCITRAL (United Nations Commission on International Trade Law) guidelines to handle insolvency cases involving companies with assets in multiple countries.

 

Review Timelines

Re-evaluate Timelines: Reassess the timelines mandated by the IBC to ensure they are efficient and minimize unnecessary delays.

 

Formal Prepack for All Companies

Pre-packaged Insolvency Process: Allow a formal pre-packaged insolvency process for all companies, not just Micro, Small, and Medium Enterprises (MSMEs). This involves agreeing on a resolution plan before initiating formal bankruptcy proceedings.

 

What are the Key Highlights of the Insolvency and Bankruptcy Code, 2016?

Overview of the Insolvency and Bankruptcy Code (IBC), 2016

Purpose: The IBC, 2016, provides a structured framework for resolving bankruptcy and insolvency for companies, individuals, and partnerships promptly.

 

Key Concepts:

Insolvency: This occurs when an individual or organization's liabilities exceed its assets, making it unable to raise sufficient cash to meet its debts as they become due.

Bankruptcy: A legal declaration that a person or company cannot pay their due and payable bills.

 

Amendment Act, 2021: This amendment aimed to provide a more efficient insolvency resolution framework for Micro, Small, and Medium Enterprises (MSMEs), ensuring quicker, cost-effective, and value-maximizing outcomes for all stakeholders.

 

Insolvency and Bankruptcy Board of India (IBBI)

Role: The IBBI serves as the regulatory authority overseeing insolvency proceedings in India.

Composition: The IBBI is led by a chairperson and three full-time members, appointed by the government, who are experts in finance, law, and insolvency. It also includes ex-officio members.

 

Adjudication of Proceedings

National Companies Law Tribunal (NCLT): Handles insolvency proceedings for companies.

Debt Recovery Tribunal (DRT): Manages proceedings for individuals.

 

These bodies play a crucial role in approving the initiation of the resolution process, appointing professionals, and endorsing the final decisions of creditors.

 

Insolvency Resolution Procedure

Initiation: The process can be initiated by either the debtor or the creditor upon default.

Management: Insolvency professionals are appointed to manage financial information and the debtor's assets.

Prohibition Period: There is a 180-day prohibition on legal action against the debtor during the resolution process.

 

Committee of Creditors (CoC)

Formation: Comprising financial creditors, the CoC is formed by insolvency professionals.

Responsibilities: The CoC decides on the resolution of outstanding debts, which may include debt revival, changes to the repayment schedule, or asset liquidation.

Deadline: The CoC must decide within 180 days, after which the debtor's assets may be liquidated if no resolution is found.

 

Liquidation Process

 

Proceeds from the sale of the debtor’s assets are distributed in the following order:

• Insolvency resolution costs
• Secured creditors
• Dues for workers and employees
• Unsecured creditors

 

This structured approach aims to ensure an efficient and fair resolution of insolvency and bankruptcy cases, maintaining a balance between creditor recovery and debtor rehabilitation.

 

Pandemic Treaty

Why in the News?

During the recent annual meeting, the World Health Assembly (WHA) made significant amendments to the International Health Regulations (2005) (IHR). These changes aim to enhance global preparedness, surveillance, and responses to public health emergencies, particularly pandemics.

Additionally, the WHA committed to finalizing negotiations on a global pandemic agreement by 2025. These developments mark a crucial step towards improving international cooperation in addressing health crises worldwide.

 

What are the Key Amendments Agreed to IHR?

Definition:

Introduction of a definition of pandemic emergency to enhance international collaboration in response to potential pandemics.

Criteria include wide geographical spread, exceeding health system capacity, causing social and economic disruption, and requiring rapid international action.

 

Commitment to Solidarity and Equity:

Establishment of a Coordinating Financial Mechanism to support the identification and access to financing needed for developing countries.

Development and strengthening of core capacities and other pandemic emergency prevention, preparedness, and response-related capacities.

 

Cooperation for Effective Implementation:

Creation of a States Parties Committee to promote cooperation and effective implementation of the amended regulations.

Establishment of National IHR Authorities to improve coordination of implementation within and among countries.

 

Need for Global Health Cooperation:

Curbing Infectious Diseases:

Global cooperation is crucial in curbing pandemics like Covid-19, which can rapidly spread across borders.

Early detection and sharing of disease outbreaks enable a faster global response, as seen with the WHO's role in identifying and tracking COVID-19 variants.

Collaboration accelerates the development of vaccines, diagnostics, and treatments.

 

Addressing Antibiotic Resistance:

Global cooperation is essential to combat antibiotic resistance, a global health threat.

Establishing common guidelines for antibiotic use in humans and animals helps slow resistance.

The WHO warns that antimicrobial resistance could lead to millions of deaths annually if not addressed collaboratively.

 

Chronic Disease Management:

Non-communicable diseases like heart disease and diabetes are a growing global concern.

Knowledge sharing in prevention, treatment, and lifestyle interventions allows countries to learn from each other, as seen with initiatives like the Global Alliance for Chronic Diseases (GACD).

 

Health Equity and Access:

Global cooperation promotes technology transfer to address healthcare challenges in resource-limited countries.

Sharing knowledge and technology allows developing countries to improve their healthcare systems, as seen with initiatives like the Medicines Patent Pool facilitating access to affordable generic drugs.

 

What is the Existing Framework for Global Health Cooperation?

Multilateral Agencies:

Various multilateral organizations like WHO, UNICEF, UNFPA, and UNAIDS play crucial roles in specific health areas such as child health, reproductive health, and HIV/AIDS.

The WHO serves as the central coordinating authority on global health within the United Nations system. It sets international health standards, provides technical assistance to countries, and coordinates the global response to health emergencies.

 

International Health Regulations (IHR):

A legally binding agreement between 196 countries outlining their rights and obligations regarding public health events with international implications.

 

Global Health Initiatives:

Targeted programs addressing specific health challenges, such as the Global Fund to Fight AIDS, Tuberculosis, and Malaria, and Gavi, the Vaccine Alliance.

 

Public-Private Partnerships:

Collaboration between governments, NGOs, and the private sector to leverage resources and expertise. An example is the Bill & Melinda Gates Foundation.

 

Regional Organizations:

Regional bodies like the Pan American Health Organization (PAHO) and the African Union coordinate health efforts within their respective regions.

 

Conclusion

The recent amendments made by the World Health Assembly (WHA) to the International Health Regulations (IHR) and the commitment to establish a global pandemic agreement by 2025 represent a significant advancement in global health security.

These changes, which include introducing a definition for pandemic emergencies, emphasizing equity and financing, and enhancing national and international cooperation, are designed to better equip the world to detect, prevent, and respond to future health threats.