Table of Contents
Analysis of The Indian Express Editorial 1 : A special right
Introduction
The Supreme Court’s recent decision has officially recognized Aligarh Muslim University (AMU) as a minority institution in India, finally settling a long-standing debate. On Friday, the Court delivered a 4:3 judgment, granting AMU minority status, a topic that has sparked legal and social controversy for decades. This ruling not only has significant implications for AMU but also opens the door for a broader interpretation of Article 30 of the Indian Constitution, which provides special rights to religious and linguistic minorities.
The AMU Debate and Article 30
Revisiting the Azeez Basha Verdict
This recent judgment overturned a crucial 1967 Supreme Court decision in the S. Azeez Basha v. Union of India case. In that earlier case, the Court used a technical reading of Article 30 to determine that AMU was neither “established nor administered” by Muslims. Even though the university evolved from the Muhammadan Anglo-Oriental College, founded by Sir Syed Ahmed Khan in 1877, the Court had ruled that the Aligarh Muslim University Act of 1920 was the defining legal foundation for AMU.
The Court’s stance in 1967 was that the university had been formally established by a colonial government act and was therefore not a minority institution under Article 30. This position denied AMU the constitutional protections offered to minority institutions in India. Furthermore, the verdict stated that AMU had effectively “surrendered” its minority status to the state by allowing government regulation.
The Struggle Over AMU’s Minority Status
In 1981, Parliament amended the AMU Act to negate the 1967 ruling, restoring the university’s minority status. This led AMU to reserve 50% of seats in its postgraduate medical programs for Muslim students in 2005, a decision that was soon challenged in court. The Allahabad High Court, relying on the earlier Supreme Court verdict, struck down the reservation, ruling that AMU was not a minority institution. This decision was challenged by both the UPA government and AMU’s governing body, but the challenge was later dropped by the NDA government in 2016, keeping the status of AMU in legal limbo.
A Broader, More Inclusive Reading of Article 30
SC’s Expansive Interpretation of Minority Rights
In contrast to the restrictive interpretation of 1967, the Supreme Court’s recent ruling takes a more expansive and inclusive approach to Article 30. Chief Justice D.Y. Chandrachud, who authored the majority judgment, emphasized that the mere conferring of legal status by the government does not nullify an institution’s minority status. According to the judgment, the essence of Article 30 is to guarantee religious and linguistic minorities the “special right” to establish and administer their educational institutions with limited government interference.
CJI Chandrachud stated that the state must grant these institutions sufficient autonomy to protect their minority character, including the freedom to frame recruitment and academic policies that align with their cultural identity. The verdict effectively reinstates AMU’s right to function as a minority institution with the autonomy to uphold its unique identity and values.
| Article 30 Interpretation: Then vs. Now | 1967 Verdict | 2024 Verdict |
|---|---|---|
| Minority Status of AMU | Denied; AMU seen as a state-established institution under the AMU Act 1920. | Affirmed; AMU retains minority status despite government regulation. |
| Article 30 Scope | Narrow interpretation, limited rights for minority institutions. | Broader, inclusive interpretation, ensuring autonomy for minority institutions. |
| State Regulation | Full state control over administration and policies. | Limited regulation, allowing autonomy in recruitment and academic matters. |
Broader Implications: Uniform Civil Code vs. Minority Rights
The timing of this ruling is significant, as India is currently engaged in a national conversation about the Uniform Civil Code (UCC), which aims to standardize personal laws across communities. While both the central and some state governments are pushing for the UCC, the Supreme Court’s verdict serves as a reminder of the importance of safeguarding the unique identities of religious and linguistic minorities.
The Court’s emphasis on protecting the rights of minority institutions could play a pivotal role in how India navigates its rich diversity while pursuing legal uniformity. As some states begin implementing the UCC, the protection of cultural and religious identity must remain central to any policy changes. AMU’s case provides a valuable lens through which to view this delicate balancing act.
Conclusion
The Supreme Court’s interpretation of Article 30 in the context of Aligarh Muslim University reaffirms the importance of providing religious and linguistic minorities with the autonomy to preserve their unique cultural identities. In an era where the Uniform Civil Code is gaining momentum, this ruling highlights the need for a nuanced approach that respects diversity while fostering legal and social harmony. For AMU, this judgment restores its right to self-govern and maintain its minority status, which has been at the heart of its identity for over a century.
The Court’s decision stands as a reminder that while legal uniformity is essential, the protection of cultural diversity is equally crucial in a country as diverse as India. Going forward, this judgment could serve as a guiding principle for how minority institutions can operate within a framework of autonomy and inclusivity.
Analysis of The Indian Express Editorial 2 : Unshackle the rupee
Introduction
At first glance, the recent stability of the Indian rupee against the US dollar seems like a positive sign for the economy. Many experts have praised this steadiness, seeing it as a signal of resilience. However, beneath the surface lies a different story. This apparent stability is not the result of natural market forces, but rather the outcome of heavy intervention by the Reserve Bank of India (RBI) to manage currency movements. This strategy, while effective in the short term, raises significant concerns about long-term economic health.
RBI’s History of Currency Intervention
The RBI has a history of stepping into the foreign exchange (forex) market to smooth out fluctuations in the rupee’s value. Historically, these interventions were moderate, aimed at reducing volatility during times of economic stress.
- For two decades leading up to 2020, the INR-USD volatility averaged around 5%.
- However, between April 2023 and August 2024, this volatility dropped to an unusually low 1.9%, thanks to the RBI’s significant market interventions.
This low volatility may seem favorable, but it is important to note that such stability should ideally come from market-driven forces, not from a central bank’s intervention. For example, the Euro-dollar exchange rate stability arises naturally from market forces, without the need for constant intervention by central banks.
Recent Changes in RBI’s Currency Policy
Since late 2022, the RBI has taken a more aggressive stance, intervening on both sides of the forex market to manage the rupee’s value. The central bank has:
- Bought dollars to prevent the rupee from appreciating too much.
- Sold dollars to prevent excessive depreciation.
This has effectively created an informal dollar peg without any formal announcement. By constantly managing the exchange rate, the RBI has artificially maintained a tight range for the rupee-dollar exchange rate, deviating from its long-standing practice of allowing market forces to play a more significant role.
The Problems with India’s New Currency Policy
1. Contradicts Economic Principles
The fundamental issue with this policy is that it contradicts basic free-market principles. In a healthy economy, prices, including exchange rates, should be determined by the forces of supply and demand, not by state intervention. Market prices carry crucial information about economic conditions, helping businesses and investors make informed decisions. When the state controls prices, it distorts these signals, leading to inefficiencies.
2. Historical Lessons on Pegged Rates
History has shown the dangers of pegged exchange rates and excessive government control over currency. Pre-1991 India had controlled prices and pegged exchange rates, leading to severe shortages in foreign exchange and, eventually, the 1991 economic crisis. Many countries, including Argentina, Brazil, Mexico, Russia, and Turkey, have faced similar issues when attempting to control exchange rates artificially. These examples serve as cautionary tales, highlighting the risks of excessive intervention.
| Key Lessons from History | Country | Outcome |
|---|---|---|
| Foreign Exchange Crisis | India (Pre-1991) | Severe shortages and economic crisis |
| Pegged Exchange Rate Issues | Argentina, Brazil, Mexico | Economic instability and currency crises |
| Excessive Control | Russia, South Korea, Turkey | Loss of investor confidence, inflation |
3. Undermines Practical Advantages of a Flexible Exchange Rate
India’s previous policy of maintaining a flexible exchange rate had several advantages that are now being undermined by the RBI’s new strategy.
a. Smoothing Out Business Cycle Fluctuations
Under a flexible exchange rate regime, the rupee would naturally appreciate during periods of economic growth and depreciate during downturns. This cyclical movement helped to smooth out the economy’s performance over time:
- Rupee appreciation during periods of high growth prevented the economy from overheating by making exports more expensive and reducing foreign capital inflows.
- Rupee depreciation during economic slowdowns helped boost exports, making Indian goods and services more attractive to foreign buyers, thereby supporting an export-led recovery.
By tightly managing the rupee’s value, the RBI is disrupting this natural balancing mechanism.
b. Long-term Stability in Real Exchange Rates
Another benefit of a flexible exchange rate system was the long-term stability it provided in the real exchange rate—that is, the exchange rate adjusted for differences in inflation between India and its trading partners. Over time, the ups and downs of the nominal exchange rate balanced out, maintaining a steady real exchange rate. The current interventionist approach, however, has led to a significant appreciation of the real exchange rate, making Indian exports more expensive in global markets. This trend threatens to undermine initiatives like Make in India, which aims to boost domestic manufacturing and exports.
4. Lack of Transparency
One of the major concerns surrounding the RBI’s current policy is the lack of transparency. The central bank has not clearly communicated its reasoning behind this shift in strategy. As a result, there is confusion in the market about whether this intervention is temporary or a more permanent policy change. Without clear guidance from the RBI, businesses and investors are left uncertain about the future trajectory of the rupee, which can lead to reduced confidence in the market.
Conclusion: Let Market Forces Decide
In any market-driven system, the value of a currency relative to others serves as a critical economic indicator. For India to progress towards becoming an advanced economy, it is essential that the value of the rupee be determined by natural market forces, rather than being artificially controlled. Market-driven exchange rates provide accurate economic signals that help investors and traders make informed decisions. Over-managing the rupee’s value for the sake of short-term stability could have long-term consequences, including stifling India’s competitiveness in global markets and hampering economic growth.
India must move towards a policy that respects market dynamics, allowing the rupee to fluctuate based on real economic conditions. Only then can the currency provide the vital signals needed for a healthy, thriving economy.