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  • [8th August 2024] The Hindu Op-ed:  The leader who lost touch with Bangladesh

    [8th August 2024] The Hindu Op-ed:  The leader who lost touch with Bangladesh

    PYQ Relevance:

    Q. The protests in Shahbag Square in Dhaka in Bangladesh reveal a fundamental split in society between the nationalists and Islamic forces. What is its significance for India? (UPSC IAS/2013)

    Q. Critically examine the compulsions which prompted India to play a decisive roles in the emergence of Bangladesh. (UPSC IAS/2013)

    Mentors’ comment: The political crisis in Bangladesh escalated dramatically following Prime Minister Sheikh Hasina’s resignation amid widespread protests against a controversial government job quota system. The unrest has led to significant violence, particularly against Hindu minorities, with reports of targeted attacks and rising casualties. The military has since established an interim government, raising concerns over regional stability and India’s strategic interests. The crisis threatens to disrupt bilateral trade, which reached $13 billion in FY 2023-24, and could impact ongoing infrastructure projects vital for connectivity between India and Bangladesh.

    Let’s learn!

    __

    Why in the news?

    Bangladesh is engulfed in chaos following Prime Minister Sheikh Hasina’s abrupt resignation amid escalating student protests over job quotas.

    Why Hasina’s fall was not a surprise?

    • Long-standing Discontent: Widespread protests against Sheikh Hasina’s government had been brewing over issues like a controversial quota system for government jobs, indicating significant public discontent.
    • Authoritarian Drift: Hasina’s government has been accused of suppressing opposition and civil society through measures like the Digital Security Act, which has been used to arrest critics and journalists.
    • Historical Context: Since gaining independence in 1971, Bangladesh has experienced several military coups, political assassinations, and periods of military rule, including the killing of Hasina’s father, Mujibur Rahman, in 1975.

    Impact on India-Bangladesh relations: 

    • Loss of a Trusted Ally
      • Hasina’s leadership enabled India to work closely with Bangladesh on security matters, countering terrorism and strengthening bilateral ties. Her resignation jeopardises India-Bangladesh’s relationship as political dynamics shift in Bangladesh.
    • Disruption of Trade and Economic Ties
      • India-Bangladesh bilateral trade reached $13 billion in FY 2023-24, making Bangladesh India’s largest trade partner in South Asia. Hasina’s exit could disrupt these gains, affecting the movement of goods and people.
      • Discussions for a potential India-Bangladesh Free Trade Agreement (FTA) initiated in October 2023 aimed to boost trade. However, the future of these talks remains uncertain with the interim government in place.
      • India had a $9.2 billion trade surplus with Bangladesh in FY24. The ongoing unrest has already caused issues like internet disruptions affecting banking and issuing letters of credit, concerning exporters.
    • Uncertainty over Infrastructure Projects
      • India has extended $8 billion in credit since 2016 for developing Bangladesh’s road, rail, shipping and port infrastructure. Projects like the Akhaura-Agartala rail link and Khulna-Mongla Port rail line, inaugurated in 2023, could face disruption.
      • A breakdown in ties could restrict India’s access to the Northeast, currently connected through narrow land corridors. 
      • Existing bus routes and port usage agreements also face potential risks.

    Way forward: 

    • Engagement with All Political Factions: India must proactively engage with a broader spectrum of Bangladeshi political parties, including the opposition parties like the Bangladesh National Party (BNP) and Jamaat-e-Islami (JI). 
    • Strengthening Economic Ties and Infrastructure Projects: India should prioritize the continuity of trade and infrastructure projects established under Hasina’s government. This includes reaffirming commitments to the $8 billion credit extended for infrastructure development and ensuring that transit arrangements remain intact.  

  • Court shifts the tide on stray dog policy  

    Why in the news?

    The Supreme Court ended the 15-year-old (Animal Welfare Board of India & Anr Versus People for Elimination of Stray Troubles & Ors) AWBI vs. PEST case on July 12, after the final hearing on May 9, sparking mixed reactions.

    The Prevention of Cruelty to Animals (PCA) Act, 1960, and the Animal Birth Control (ABC) Rules are:

    • The PCA Act, 1960 was enacted by the Parliament of India to prevent the infliction of unnecessary pain or suffering on animals and to amend the laws relating to the prevention of cruelty to animals.
      • The PCA Act, 1960 and ABC Rules, 2001 prohibit the killing of stray dogs and mandate sterilization as the only scientific and humane method of controlling stray dog populations.
      • The new ABC Rules, 2023 notified under the PCA Act, 1960 also prohibit wanton killing of stray dogs by municipalities and require them to follow sterilization.
    • The Act defines “animal” as any living creature other than a human being. It establishes the Animal Welfare Board of India to promote animal welfare.
    • Chapter III of the Act lists different forms of cruelty to animals that are banned, including those related to work animals, captivity, ownership, abuse, mutilation or killing.
    • Chapter IV deals with experiments on animals. While it does not make experiments unlawful for the advancement of knowledge, it allows the Board to advise the government to create a committee to control and supervise such experiments.
    • Chapter V outlines restrictions, procedures and offences related to performing animals. The Central Government can prohibit any animal from exhibition or training through notification.

    Note: In 2022, the Ministry of Fisheries, Animal Husbandry and Dairying submitted a draft Prevention of Cruelty to Animals (Amendment) Bill 2022 for public comment. The draft includes 61 amendments to further clarify the law and make punishments more stringent.

    The Supreme Court stated that the Central law (PCA Act 1960 and ABC Rules, 2023) which prohibits killing of stray dogs by local authorities remains the governing law of the land.

    What the Supreme Court said on the ‘Duty of every Citizen’:

    • The Supreme Court capped off the judgment with the lines: “Compassion to all living beings, is the enshrined Constitutional value and mandate, and cast obligation on the authorities to maintain.”
      • This refers to Article 51A(g) of the Constitution of India which states: “It shall be the duty of every citizen of India to protect and improve the natural environment including forests, lakes, rivers, and wildlife and to have compassion for living creatures.”
    • The court emphasized that Citizens should avoid unscientific and cruel methods like killing stray dogs and instead choose the scientific and humane method of sterilization.

    Issues due to stray dogs in India: 

    • Population: India has an estimated 60 million stray dogs, making it the country with the highest number of stray dogs globally.
    • Rabies Incidence: India accounts for 36% of global rabies deaths and 65% of rabies deaths in the South-East Asia region.
      • Between 2012 and 2022, the National Rabies Control Program reported 6,644 clinically suspected cases of rabies in humans.
    • Dog Bite Cases: Reports indicate that major cities have seen alarming numbers of dog bite incidents. For example, Delhi’s Safdarjung Hospital and Ram Manohar Lohia Hospital recorded nearly 48,000 dog bite cases in just six months. In Kerala alone, there were over 1.9 lakh dog bite cases last year, with 21 deaths attributed to rabies.

    Way forward:

    • Enhanced Public Awareness and Education: Need to implement nationwide campaigns to educate the public on responsible pet ownership, the importance of sterilization, and the humane treatment of stray dogs.
    • Strengthening Enforcement of Existing Laws: Need to ensure that municipalities and local authorities are adequately trained and funded to implement the ABC Rules effectively.

  • Supreme Court to review PMLA verdict     

    Why in the news?

    The Supreme Court has postponed its review of the decision to uphold key provisions of the Prevention of Money Laundering Act, 2002 (PMLA) to August 28.

    Prevention of Money Laundering Act, 2002 (PMLA)

    • The Prevention of Money Laundering Act, 2002 (PMLA) is a crucial legislative framework in India aimed at combating money laundering and related financial crimes.
    • The PMLA was enacted by the Parliament of India and came into force on July 1, 2005. It was introduced to prevent money laundering and provide for the confiscation of property derived from or involved in money laundering.
    • The main objectives of the PMLA are:
      • To prevent and control money laundering.
      • To confiscate and seize property obtained from laundered money.
      • To address issues connected with money laundering in India.

    What is the Case?

    •  On July 27, 2022, the Supreme Court upheld key provisions of the Prevention of Money Laundering Act, 2002 (PMLA) in the case of “Vijay Madanlal Choudhary v. Union of India”.
      • The 540-page ruling accepted the government’s arguments on all challenged aspects, including reversing the presumption of innocence for bail, passing amendments as a Money Bill, and defining the Enforcement Directorate’s (ED) powers.
    • On August 25, 2022, a different three-judge bench agreed to hear a review petition filed by Congress MP Karti Chidambaram. The petition raised concerns about at least two issues from the Madanlal decision.

    What are the Grounds for Review?

    • The Supreme Court’s verdict in Madanlal upheld stringent bail conditions for economic offences, imposing a reverse burden of proof on the accused.
    • Petitioners argue that, without essential documents like an FIR, charge sheet, case diary, and prosecution documents, an accused cannot adequately present their case.
    • The Madanlal verdict upheld Section 50 of the PMLA, allowing ED officials to record statements under oath, admissible in court. It distinguished ED officers from police officers, classifying their investigations as “inquiries.” Petitioners argue that the verdict overlooked provisions granting penal powers to the ED.

    How is a Judgment Reviewed?

    • The Supreme Court can review its judgments or orders under Article 137 of the Constitution.
    • A review petition must be filed within 30 days of the judgment. Typically, review petitions are heard through written submissions (“circulation”) by the same judges who passed the original verdict, rather than in open court.
    • Reviews are granted on narrow grounds to correct grave errors causing a miscarriage of justice. One common ground is “a mistake apparent on the face of the record,” which must be glaring and obvious, such as reliance on invalid case law.

    Way forward: 

    • Enhanced Transparency and Documentation: To address concerns about the adequacy of case presentation by the accused, there should be a mandate for providing all essential documents such as FIRs, charge sheets, case diaries, and prosecution documents to ensure a fair trial process.
    • Clarification of ED’s Powers and Procedures: Amendments to the PMLA should clearly define the scope and limits of the Enforcement Directorate’s powers, ensuring that ED officers are given appropriate procedural guidelines and oversight mechanisms to prevent misuse of penal powers and uphold due process.

  • [pib] Nandini Sahakar Yojana

    Why in the News?

    • The Minister of Cooperation has provided some information about the Nandini Sahakar Yojana.
      • NCDC has cumulatively disbursed financial assistance amounting to Rs. 6426.36 crore for the development of cooperative societies exclusively promoted by women across the country.

    About Nandini Sahakar Yojana

    • The Nandini Sahakar Scheme was initiated by the National Cooperative Development Corporation (NCDC) in 2010.
    • It is a women-focused framework providing financial assistance, project formulation, hand-holding, and capacity development.
    • The scheme aims to assist women cooperatives in undertaking business model-based activities under the purview of NCDC.

    Features of the Scheme

    • Any cooperative society with at least 50% women as primary members and a minimum of three months in operation is eligible to apply.
    • Assistance is provided in the form of credit linkage for infrastructure term loans and working capital, along with subsidies or interest subvention from other government schemes.
    • There is no minimum or maximum limit on financial assistance for projects by women cooperatives.
    • NCDC offers a 2% interest subvention on its rate of interest on term loans for new and innovative activities.
    • A 1% interest subvention is provided on term loans for all other activities, resulting in lower borrowing costs for women cooperatives.

  • A shift in the US to autocratic trends   

    Why in the news?

    Since WWII, U.S. foreign policy framed democracies vs. dictatorships, but this binary blurs with recent domestic political trends and shifting allegiances.

    The binary between democracy and autocracy in the USA  

    Difference between Democracy and Autocracy

    • Democracy is defined as a system of government where the population, typically through elected representatives, exercises power. It emphasizes freedom, constitutional governance, and the protection of fundamental rights.
    • In contrast, autocracy is characterized by absolute power held by a single ruler, where the will of the ruler supersedes the rights and freedoms of individuals. Autocracies suppress dissent and limit political pluralism, often relying on force and coercion to maintain control.

    • Current Political Climate

        • The political landscape in the U.S. has shifted towards a more autocratic style of governance, particularly among factions within the Republican Party. This shift is marked by a growing acceptance of strongman leadership, which seeks to undermine traditional democratic norms and institutions.
        • Trump’s rhetoric and actions have often reflected a disdain for the checks and balances that are foundational to American democracy. His assertion of broad presidential powers and his attempts to consolidate authority signal a move away from democratic principles toward a more autocratic governance model.

    • Implications of the Shift

      • This trend raises concerns about the future of democracy in the U.S. Supporters of Trump and similar populist leaders often view the federal government as an adversary, promoting a narrative that pits “the people” against a corrupt establishment. 

    What are the different phases of transformation?  

    • Rise of the Administrative State: The first phase was the rise of the administrative state under Theodore Roosevelt, Woodrow Wilson, Franklin Roosevelt, Lyndon Johnson and Richard Nixon.
        • This broadened the scope of government intervention and generated a complex bureaucracy to address social problems and welfare.
    • Centralizing Executive Power: As the administrative state grew, presidents needed to bring it under their direct control. During the 1980 transition, Ronald Reagan’s team employed a large staff to centralize control over policy, budgeting, and appointments. This led to the centralized apparatus that now resides in the Executive Office of the President.
    • In 2024, embracing autocratic tendencies: The populist faction of the Republican Party, concentrated among less educated, blue-collar, white, rural, and religious populations disadvantaged by globalization, embraces a strongman vision of leadership that operates beyond democratic norms.  
      • Trump waged a campaign against norms and institutions of two-party politics, culminating in his efforts to overturn the 2020 election. The Supreme Court’s ruling granting Trump immunity from prosecution for official acts has significantly blurred the line between democracy and autocracy.

    The present new normal

    • Erosion of Democratic Norms and Institutions: Trump showed disdain for legal limitations on presidential power and waged a campaign against democratic norms and institutions. His attempts to overturn the 2020 election results despite losing to Biden exemplified this authoritarian tendency.
    • Conservatism and Nationalism: Trumpism embraced conservative values like opposition to abortion, support for gun rights, and backing law enforcement.
      • Trump reshaped U.S. foreign policy to prioritize American interests over global cooperation and multilateralism.

    Way forward: 

    • Strengthen Democratic Institutions: Need to reinforce checks and balances to prevent executive overreach, enhance judicial independence, and protect electoral integrity to ensure democratic principles are upheld.
    • Promote Civic Education and Engagement: Need to educate citizens on democratic values, the importance of pluralism, and the dangers of autocracy to foster informed and active participation in the democratic process.

  • How India needs to deal with the new Bangladesh?  

    Why in the News?

    India will require significant political and diplomatic acumen to navigate the fallout from Sheikh Hasina’s fall, which could destabilize and potentially reshape the geopolitics of the subcontinent.

    Why Hasina’s fall was not a surprise?

    • Long-standing Discontent: Widespread protests against Sheikh Hasina’s government had been brewing over issues like a controversial quota system for government jobs, indicating significant public discontent.
    • Authoritarian Drift: Hasina’s government has been accused of suppressing opposition and civil society through measures like the Digital Security Act, which has been used to arrest critics and journalists.
    • Historical Context: Since gaining independence in 1971, Bangladesh has experienced several military coups, political assassinations, and periods of military rule, including the killing of Hasina’s father, Mujibur Rahman, in 1975.

    Five Challenges Beyond 1971

    • Engagement with Opposition: Due to prevailing political uncertainity, India need to distance itself from Hasina and engage with her opponents to maintain credibility and influence in Bangladesh.
    • Managing Regional Rivalries: India needs to prepare for potential exploitation of the situation by Pakistan and China, which may seek to influence the new government against Indian interests.
    • Historical Narratives: India needs to navigate the complex historical narratives surrounding the 1971 liberation of Bangladesh, recognizing that many in Bangladesh do not share the same interpretation.
    • Economic Stability: Ensuring economic stabilization in Bangladesh will be crucial, requiring collaboration with regional partners to prevent extremism and maintain stability.
    • Recognition of Local Agency: India must acknowledge that Bangladesh has its own political dynamics and agency, which cannot be solely dictated by Indian interests or actions.

    What India must prepare for now? (Way forward)

    • Diplomatic Strategy: India needs to develop a proactive diplomatic strategy to engage with the new government in Bangladesh while avoiding perceptions of interference.
    • Security Concerns: India must be vigilant about border security and the potential resurgence of anti-India activities, especially if the new government leans towards Pakistan or China.
    • Economic Engagement: Strengthening economic ties and leveraging people-to-people connections will be essential for maintaining a positive relationship with Bangladesh, regardless of political changes.
    • Learning from Past Experiences: India should draw lessons from its past experiences with political transitions in the region, such as in Afghanistan, to navigate the current situation effectively.
    • Collaborative Approach: Working with international partners, including the US and Gulf nations, will be important to address the challenges posed by the political shift in Bangladesh and to ensure regional stability.

    Mains PYQ: 

    Q Critically examine the compulsions which prompted India to play a decisive role in the emergence of Bangladesh. (2013)

  • On UP’s stringent Anti-conversion law     

    Why in the news?

    The UP Assembly’s amendments to its regressive ‘Anti-conversion’ law appear aimed at facilitating misuse, with over 400 cases registered since the original 2021 law.

    What is UP’s ‘Anti-conversion’ law?

    • Uttar Pradesh’s “Anti-conversion” law, officially known as the Uttar Pradesh Prohibition of Unlawful Conversion of Religion Act, 2021, prohibits religious conversion through unlawful means such as misrepresentation, force, undue influence, coercion, allurement, or fraudulent means.

    Why was the Original 2021 Anti-Conversion Law Amended by UP?

    • Increased Stringency: The amendments aim to make the original law more stringent, responding to claims of rising cases of forced conversions and the alleged involvement of foreign and anti-national elements in demographic changes.
    • Response to Public Discontent: The government cited the need to enhance penalties and legal measures to prevent unlawful conversions, particularly concerning vulnerable groups such as minors and women.
    • Legitimacy of Complaints: The amendment allows third parties to file complaints about alleged unlawful conversions, expanding the scope of the law and potentially increasing its application against inter-faith marriages.

    What are Its concerning features?

    • Harsh Penalties: The amended law introduces severe penalties, including imprisonment of up to 20 years or life for targeting minors, women, or certain communities through coercion or force.
    • Bail Conditions: The law imposes stringent bail conditions that make it difficult for accused individuals to secure bail, requiring public prosecutor consent and a presumption of guilt.
    • Third-Party Complaints: The provision allowing anyone to file complaints against alleged conversions opens the door for misuse by communal organizations and individuals with vested interests, potentially targeting inter-faith couples.

    What does it state about bail conditions and ‘foreign funding’?

    • Bail conditions: The amended law states that an accused individual cannot be granted bail unless the public prosecutor has the opportunity to oppose it, and there is reason to believe the accused is not guilty and unlikely to repeat the offence.
    • Foreign funding: The law prescribes stiff penalties for receiving funds from foreign organizations for unlawful conversion, with fines and imprisonment aimed at deterring financial support for conversion activities.

    How is it different from other states?

    • Comparison with Other States: While several states like Odisha and Madhya Pradesh have anti-conversion laws, Uttar Pradesh’s amendments are notably harsher, including provisions for life imprisonment, which are not present in other states.
    • Bail and Proof Burden: Other states may not impose such severe bail conditions or the reverse burden of proof required in Uttar Pradesh, making it easier for accused individuals in those states to secure bail.
    • Scope of Complaints: In many states, only aggrieved individuals or their close relatives can file complaints, whereas Uttar Pradesh’s amendments allow for broader third-party complaints, increasing the potential for misuse.

    Way forward:

    • Promote Awareness of Rights: Implement comprehensive public awareness campaigns to educate citizens about their legal rights concerning religious conversion and inter-faith marriages.
    • Legal and Constitutional Review: Stakeholders, including civil society organizations and legal experts, should actively pursue legal challenges against the amended law in the Supreme Court of India.

  • Anti-Defection Law: Features, limitations and reforms

    Why in the News?

    • Numerous examples in recent time exist in the history of Parliament and State Assemblies where MPs or MLAs have defected from their party.
      • These activities often led to the frequent falling of governments.

    What is Anti-Defection Law?

    • The 52nd Constitutional Amendment introduced the anti-defection law through the Tenth Schedule in 1985.
    • It aimed at tackling political defections destabilizing governments, especially after the 1967 general elections.
    • According to this Schedule, a member of the State Legislature or the House of Parliament who voluntarily resigns from their political party or abstains from voting in the House contrary to the party’s instruction may be removed from the House.
    • This voting instruction is issued by the party whip, a member of the parliamentary party nominated by the political party in the House.

    Process of Disqualification under Anti-Defection Law

    • Petition:
      • Any member of the House can initiate the process by filing a petition/complaint with the Speaker (Lok Sabha) or Chairman (Rajya Sabha) alleging defection by another member.
      • The Presiding Officer CANNOT initiate disqualification proceedings suo moto and can only act upon a formal complaint.
    • Deciding Authority:
      • The Speaker of Lok Sabha, the Chairman of Rajya Sabha, or the State Legislative Assembly decides disqualification petitions under the anti-defection law.
    • Timeframe:
      • The law does not specify a strict timeline for the decision, which has led to criticism due to potential delays.
    • Judicial Review:
      • The decision can be challenged in courts, ensuring a system of checks and balances.
      • The landmark judgment in Kihoto Hollohan vs. Zachillhu and Others (1992) upheld the constitutionality of the anti-defection law and affirmed that decisions regarding disqualification are subject to judicial review.
    • Exceptions:
      • No disqualification if 1/3rd members of the legislature party split to form a separate group (provision DELETED by the 91st Amendment in 2003).
      • Mergers of political parties are allowed when 2/3rd of the members of a legislative party agree to merge with another party.

    Three-Test Formula of the Supreme Court:

    • The Supreme Court in Sadiq Ali versus Election Commission of India (1971) laid down the three-test formula for recognizing the original political party:
    1. Test of Aims and Objectives of the party.
    2. Test of Party Constitution, which reflects inner-party democracy.
    3. Test of Majority in the legislative and organizational wings.

    Limitations of the Anti-Defection Law

    • Dictatorship of Party: The law has been criticized for undermining democratic principles by restricting legislators’ freedom of speech and making them more accountable to party leaders than their constituents.
    • Limited Political Choice: The law discriminates against independent members, disqualifying them immediately if they join a political party, while nominated members have a six-month grace period.
    • Partial Law: The law needs a more precise timeline for resolving defection cases. It allows large-group defections, fostering opportunistic mergers and “horse-trading”, destabilizing the political system.
    • Promotes Defection: It fails to address root causes like intra-party democracy, corruption, and electoral malpractices.

    Recommendations on Reforming the Law

    • Dinesh Goswami Committee (1990):
      • Disqualification should be limited to cases of voluntarily giving up membership or voting/abstention contrary to the party direction only in specific motions.
      • Decision on disqualification should be made by the President or Governor based on the advice of the Election Commission.
    • Law Commission of India (2015):
      • Proposed shifting the power to decide disqualification petitions from the Presiding Officer to the President or Governor based on the advice of the Election Commission.
    • Supreme Court in K. M. Singh v. Speaker of Manipur (2020):
      • Recommended transferring the Speaker’s decision-making authority over disqualification petitions to an independent tribunal presided over by judges.
    • Committee Led by Rahul Narwekar:
      • Announced by Lok Sabha Speaker Om Birla to review the nation’s anti-defection law.

    PYQ:

    [2022] With reference to anti-defection law in India, consider the following statements:

    1. The law specifies that a nominated legislator cannot join any political party within six months of being appointed to the House.
    2. The law does not provide any time-frame within which the presiding officer has to decide a defection case.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    [2013] The role of individual MPs (Members of Parliament) has diminished over the years and as a result healthy constructive debates on policy issues are not usually witnessed. How far can this be attributed to the anti-defection law, which was legislated but with a different intention?

  • The Waqf Board Amendment Bill 2024

    Why in the News?

    The government has introduced the Waqf Act Amendment Bill 2024, in order to improve administration and management of the Waqf properties.

    Aim: To address existing issues in the management and administration of Waqf properties, ensuring better transparency and efficiency.

    • It also seeks to improve the legal framework governing Waqf boards and their operations across India.

    Background:

    • The Waqf Board Amendment Bill 2024 proposes changes to the Waqf Act of 1995.
    • The Waqf Board Act, initially enacted in 1995, is a legal framework governing the administration of Waqf properties in India.
    • Waqf refers to the endowment of property for religious or charitable purposes, and the act outlines the structure, functions, and powers of Waqf boards responsible for managing these properties.
    • The Central Waqf Council is a statutory body that advises and oversees the functioning of state-level Waqf Boards in India, established under the Waqf Act.
    • Wakf board’s income is exempt from Income Tax but revenue generated from leasing of properties can be taxed under the service tax and GST laws.

     Features of the Proposed Bill:

    • Waqf Board will mandatorily have two Non-Muslim members.
    • District magistrates may be involved in overseeing waqf properties to ensure proper management. The survey is to be carried out by the district collector, not by Waqf.
    • Properties are to be registered through a Centralized Portal for better scrutiny. Properties already claimed by boards will undergo new verification processes to resolve disputes and prevent misuse.
    • Waqf will lose the right to decide whether any property is a Waqf Asset or not.

    Present Composition of Waqf Board
    Chairperson Leads the Board
    State government nominees Representatives appointed by the state. (The Waqf Board operates under the supervision of the state government as per the provision of the Wakf Act 1995).
    Legislators and parliamentarians State representatives from the Muslim community
    State Bar Council members Muslim Legal experts providing guidance
    Mutawalis Managers of waqf with an annual income of Rs 1 lakh and above
    Islamic scholars Religious experts contributing to decision-making

     

    Significance of the Waqf Board Amendment Bill 2024:

    The bill seeks to bring about significant administrative reforms and ensure more inclusive and efficient management of Waqf assets. Here are some of the significances of the Waqf Board Amendment Bill 2024:

    • Enhanced Transparency: The bill includes provisions to digitize records and create a centralized database. This will make it easier to track and manage Waqf properties, reducing the potential for fraud and mismanagement.
    • Improved Governance: Administrative reforms proposed in the bill by the government will lead to more professional and efficient management of Waqf properties. This could result in better utilization of these resources for charitable and religious purposes​.
    • Protection of Waqf Properties: The bill aims to protect Waqf properties by regulating leasing and preventing encroachments. Unauthorized use and exploitation of these properties will be prevented, ensuring they are used for their intended religious and charitable purposes.
    • Inclusion and Representation: Including Muslim women and non-Muslims in Waqf Boards is a step toward more inclusive governance, ensuring diverse perspectives in decision-making.
    • Efficient Dispute Resolution: The new dispute resolution mechanism will help in resolving conflicts related to Waqf properties more effectively, reducing the burden on regular courts and ensuring quicker justice​.

     

  • [6th August 2024] The Hindu Op-ed: The social benefits of stock market speculation

    [6th August 2024] The Hindu Op-ed: The social benefits of stock market speculation

    PYQ Relevance:

    Mains:

    Q1 Comment on the important changes introduced in respect of the Long-term Capital Gains Tax (LCGT) and Dividend Distribution Tax (DDT) in the Union Budget for 2018-2019. (UPSC IAS/2018) 

    Q2 Distinguish between Capital Budget and Revenue Budget. Explain the components of both these Budgets. (UPSC IAS/2021) 

    Prelims: 

    Under which of the following circumstances may ‘capital gains’ arise? (2012)
    1. When there is an increase in the sales of a product 
    2. When there is a natural increase in the value of the property owned 
    3. When you purchase a painting and there is a growth in its value due to an increase in its popularity 
    Select the correct answer using the codes given below: 
    (a) 1 only 
    (b) 2 and 3 only 
    (c) 2 only 
    (d) 1, 2 and 3

    Note4Students: 

    Prelims: Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG);

    Mains: Impact of gambling instincts on the stock market;

    Mentor comments: In India, capital gains are classified into two categories based on the holding period of assets. Short-Term Capital Gains (STCG) apply to assets held for 12 months or less, taxed at a rate of 15% for listed equity shares. In contrast, Long-Term Capital Gains (LTCG) are applicable when assets are held for more than 12 months, taxed at 10% for gains exceeding ₹1 lakh, with no indexation benefits. This framework encourages long-term investment while imposing higher tax rates on short-term trading activities.

    Let’s learn!

    __

    Why in the News? 

    The Indian government has increased taxes on both short-term and long-term capital gains from stock market investments in its latest Budget, along with raising the securities transaction tax on derivatives trading.

    How capital gains occur

    Definition of Capital Gains: Capital gains are profits earned from the sale of an asset that has increased in value over the holding period. This occurs when the selling price exceeds the original purchase price.
    • Market Dynamics: In a perfect market where future cash flows are accurately forecasted, capital gains would not exist, as assets would be bought and sold at their fair value. However, in reality, uncertainty leads to mispricing, allowing investors to buy undervalued assets and realize gains when their true value is recognized.
    • Investor Behavior: Investors who allocate capital efficiently into undervalued businesses can earn capital gains when others recognize the fair value of those businesses. Conversely, those who misallocate capital into overvalued assets may incur capital losses.
    • Economic Implications: Efficient capital allocation is crucial for economic prosperity. Misallocation, such as investing in sectors with low demand (e.g., cruise ships during a pandemic), can lead to overall economic inefficiency and resource wastage.
    • Taxation and Incentives: A uniform tax on capital gains may help mitigate resource misallocation, but it can also impact private investment incentives and overall economic growth.  

    Impact of gambling instincts on the stock market

    • Increased Retail Participation: The Economic Survey 2023-24 highlights that the surge in retail investor participation in Futures and Options (F&O) trading is largely driven by inherent “gambling instincts.” 
      • This is evidenced by the rapid growth in trading volumes, with retail traders’ share in derivatives trading rising from 2% in 2018 to 41% in 2024.
    • Potential for High Returns: Derivatives trading offers the allure of outsized gains, which appeals to investors seeking quick profits.  
    • High Risk of Losses: Despite the appeal of quick profits, the reality is stark; a study by the Securities and Exchange Board of India (SEBI) found that 89% of individual traders in the equity F&O segment suffered losses, with average losses of ₹1.1 lakh in FY22.  

    Gambling instincts are worse for derivatives

    • Complexity and Misunderstanding: Derivatives are often misunderstood due to their complexity. This lack of understanding leads to a negative perception because many do not grasp their practical benefits and risk management functions.
    • Speculative Nature: The speculative aspect of derivatives trading can resemble gambling, especially when neither party intends to buy or sell the underlying asset. This speculative behaviour is seen as risky and irresponsible, contributing to the negative reputation of derivatives.
    • Risk Transfer: Derivatives allow for the transfer of risk from one group of investors to another. While this risk management is beneficial, the perception that some investors profit from others’ risk aversion can be seen as exploitative or opportunistic.
    • Market Impact: Just as with active trading in the cash market, speculative trading in derivatives can be socially beneficial by providing liquidity and risk management tools. However, the public often overlooks these benefits and focuses on the perceived destabilizing effects and the potential for large, rapid losses, which can harm individual investors and financial markets.

    Way forward: 

    • Investor Education: Need to implement comprehensive educational programs for investors to improve their understanding of derivatives and capital markets.  
    • Transparency in Trading: Need to increase transparency in derivatives markets by requiring more detailed disclosures about trading strategies, potential risks, and the impact of speculative trades.