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  • NGOs vs. GoI: The Conflicts and Scrutinies

    Back in news: Foreign Contribution Regulation Act (FCRA)

    Prelims Only | Economics | Mains Paper 3: Money-Laundering & Its Prevention

    The Union Home Ministry has placed a US based NGO on its watchlist following an investigation that foreign contributions it sent were being used for climate awareness campaigns, an activity not permissible under the FCRA [Foreign Contribution (Regulation) Act].

    About Foreign Contribution Regulation Act (FCRA)

    • The FCRA regulates foreign donations and ensures that such contributions do not adversely affect internal security.
    • First enacted in 1976, it was amended in 2010 when a slew of new measures was adopted to regulate foreign donations.
    • The FCRA is applicable to all associations, groups and NGOs which intend to receive foreign donations.
    • It is mandatory for all such NGOs to register themselves under the FCRA.
    • The registration is initially valid for five years and it can be renewed subsequently if they comply with all norms.

    Why was FCRA enacted?

    • The FCRA sought to consolidate the acceptance and utilisation of foreign contribution or foreign hospitality by individuals, associations or companies.
    • It sought to prohibit such contributions from being used for activities detrimental to national interest.

    What was the recent Amendment?

    • The FCRA was amended in September 2020 to introduce some new restrictions.
    • The Government says it did so because it found that many recipients were wanting in compliance with provisions relating to filing of annual returns and maintenance of accounts.
    • Many did not utilise the funds received for the intended objectives.
    • It claimed that the annual inflow as foreign contributions almost doubled between 2010 and 2019.
    • The FCRA registration of 19,000 organisations was cancelled and, in some cases, prosecution was also initiated.

    How has the law changed?

    There are at least three major changes that NGOs find too restrictive.

    • Prohibition of fund transfer: An amendment to Section 7 of the Act completely prohibits the transfer of foreign funds received by an organisation to any other individual or association.
    • Directed and single bank account: Another amendment mandates that every person (or association) granted a certificate or prior permission to receive overseas funds must open an FCRA bank account in a designated branch of the SBI in New Delhi.
    • Utilization of funds: Fund All foreign funds should be received only in this account and none other. However, the recipients are allowed to open another FCRA bank account in any scheduled bank for utilisation.
    • Shared information: The designated bank will inform authorities about any foreign remittance with details about its source and the manner in which it was received.
    • Aadhaar mandate: In addition, the Government is also authorised to take the Aadhaar numbers of all the key functionaries of any organisation that applies for FCRA registration or for prior approval for receiving foreign funds.
    • Cap on administrative expenditure: Another change is that the portion of the receipts allowed as administrative expenditure has been reduced from 50% to 20%.

    What is the criticism against these changes?

    • Arbitrary restrictions: NGOs questioning the law consider the prohibition on transfer arbitrary and too heavy a restriction.
    • Non-sharing of funds: One of its consequences is that recipients cannot fund other organisations. When foreign help is received as material, it becomes impossible to share the aid.
    • Irrationality of designated bank accounts: There is no rational link between designating a particular branch of a bank with the objective of preserving national interest.
    • Un-ease of operation: Due to Delhi based bank account, it is also inconvenient as the NGOS might be operating elsewhere.
    • Illogical narrative: ‘National security’ cannot be cited as a reason without adequate justification as observed by the Supreme Court in Pegasus Case.

    What does the Government say?

    • Zero tolerance against intervention: The amendments were necessary to prevent foreign state and non-state actors from interfering with the country’s polity and internal matters.
    • Diversion of foreign funds: The changes are also needed to prevent malpractices by NGOs and diversion of foreign funds.
    • Fund flow monitoring: The provision of having one designated bank for receiving foreign funds is aimed at making it easier to monitor the flow of funds.
    • Ease of operation: The Government clarified that there was no need for anyone to come to Delhi to open the account as it can be done remotely.

     

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  • Intellectual Property Rights in India

    Patent Rights on COVID-19 jabs may be waived

    Prelims Only | Economics | Mains Paper 3: Intellectual Property Rights

    The World Trade Organization chief has hailed a breakthrough between the EU, the United States, India and South Africa on waiving intellectual property rights on Covid-19 vaccines.

    What is a Patent?

    • A patent is an exclusive right granted for an invention.
    • In other words, a patent is an exclusive right to a product or a process that generally provides a new way of doing something, or offers a new technical solution to a problem.
    • To get a patent, technical information about the invention must be disclosed to the public in a patent application.
    • The patent owner may give permission to, or license, other parties to use the invention on mutually agreed terms.
    • The owner may also sell the right to the invention to someone else, who will then become the new owner of the patent.
    • Once a patent expires, the protection ends, and an invention enters the public domain; that is, anyone can commercially exploit the invention without infringing the patent.

    Terms of Patent

    • Patents may be granted for inventions in any field of technology, from an everyday kitchen utensil to a nanotechnology chip.
    • An invention can be a product – such as a chemical compound, or a process, for example – or a process for producing a specific chemical compound.
    • Patent protection is granted for a limited period, generally 20 years from the filing date of the application.
    • Patents are territorial rights. In general, the exclusive rights are only applicable in the country or region in which a patent has been filed and granted, in accordance with the law of that country or region.

    Back2Basics: Intellectual Properties

    • IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create.
    • By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish.

    Types of IP:

    (1) Copyright

    • Copyright is a legal term used to describe the rights that creators have over their literary and artistic works.
    • Works covered by copyright range from books, music, paintings, sculpture and films, to computer programs, databases, advertisements, maps and technical drawings.

    (2) Patents

    Discussed above

    (3) Trademarks

    • A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises.
    • Trademarks date back to ancient times when artisans used to put their signature or “mark” on their products.

    (4) Geographical Indications

    • Geographical indications and appellations of origin are signs used on goods that have a specific geographical origin and possess qualities, a reputation or characteristics that are essentially attributable to that place of origin.
    • Most commonly, a geographical indication includes the name of the place of origin of the goods.

    (5) Trade secrets

    • Trade secrets are IP rights on confidential information which may be sold or licensed.
    • The unauthorized acquisition, use or disclosure of such secret information in a manner contrary to honest commercial practices by others is regarded as an unfair practice and a violation of the trade secret protection.

     

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  • Global Geological And Climatic Events

    What is Daylight Saving Time (DST)?

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    The United States Senate unanimously passed a law making daylight saving time (DST) permanent, scrapping the biannual practice of putting clocks forward and back coinciding with the arrival and departure of winter.

    What does this imply?

    • With clocks in the US going back an hour, the time difference between New York and India will increase from the current nine and a half hours to ten and a half hours.
    • In the Southern Hemisphere, the opposite has happened, where countries have “sprung forward”, and time difference with India has reduced.

    What is DST?

    • DST is the practise of resetting clocks ahead by an hour in spring, and behind by an hour in autumn (or fall).
    • During these months, countries that follow this system get an extra hour of daylight in the evening.
    • Because the spring to fall cycle is opposite in the Northern and Southern Hemispheres, DST lasts from March to October/November in Europe and the US, and from September/October to April in New Zealand and Australia.
    • Dates for this switch, which happens twice a year (in the spring and autumn) are decided beforehand.
    • By law, the 28 member states of the EU switch together — moving forward on the last Sunday of March and falling back on the last Sunday in October.
    • In the US, clocks go back on the first Sunday of November.

    Now try this PYQ:

    Q.On 21st June, the Sun

    (a) Does not set below the horizon at the Arctic Circle

    (b) Does not set below the horizon at Antarctic Circle

    (c) Shines vertically overhead at noon on the Equator

    (d) Shines vertically overhead at the Tropic of Capricorn

    How many countries use DST?

    • DST is in practice in some 70 countries, including those in the European Union.
    • India does not follow DST; since countries near the Equator do not experience high variations in daytime hours between seasons.
    • There is, however, a separate debate around the logic of sticking with an only one-time zone in a country as large as India.

    What does this system mean to achieve?

    • The key argument is that DST is meant to save energy.
    • The rationale behind setting clocks ahead of standard time, usually by 1 hour during springtime, is to ensure that the clocks show a later sunrise and later sunset — in effect a longer evening daytime.
    • Individuals will wake an hour earlier than usual, complete their daily work routines an hour earlier, and have an extra hour of daylight at the end.

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  • Western sanctions on Russia are like none the world has seen

    | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India,Effect Of Policies & Politics Of World On India’S Interests

    Context

    Economic measures to cut Russia off from the world’s financial arteries are the most powerful implements a West unwilling to meet a nuclear adversary on the battlefield has dared wield in response to the invasion of Ukraine.

    Use of sanctions

    • The use of sanction has boomed over the past few decades.
    • Since 2000 the number of individuals and entities on America’s sanctions list has risen more than tenfold to 10,000.
    • Ever more governments, keen to punish military aggression or human-rights abuses but reluctant to go to war over them, have embraced the tactic.

    Sanctions against Russia

    •  After debating whether to make it much harder for Russian banks to process international payments by shutting them out of SWIFT—some European countries feared it would hurt their own banks, too—Western allies agreed to try targeting seven of them, though it has steered clear of Sberbank, Russia’s largest by assets, which plays a big role in processing energy payments. 
    • The most potent financial sanctions, though, have been aimed not at Russia’s commercial banks but at its central bank.
    • In the eight years since annexing Crimea made Russia the target of a first wave of sanctions, Russia has built up reserves (they now total $630bn) and shifted their composition away from dollars to help insulate the economy from further punishment.
    • But reserves become moot, whatever the currency in which they are held, if they cannot be used.
    • America, acting with Europe, has banned a range of parties from transactions with Russia’s central bank.
    • The West has also frozen most of the bank’s assets outside Russia.

    How it will affect Russian economy

    • Within hours of the sanctions taking effect, Russia’s central bank raised its main interest rate from 9.5% to 20% in an attempt to shore up the currency.
    •  Export controls will limit the components Russia can buy for its military and high-tech sectors, denying it goodies ranging from cutting-edge machinery to microchips.
    • The measures apply not just to goods made in America, but to those containing American technology that are made in and shipped from third countries, such as China.
    • For now, consumer goods dear to ordinary Russians like smartphones and home appliances are exempted from such measures.
    • But Apple is no longer selling iPhones or other kit in Russia. It is one of a fast-growing number of Western companies getting out.

    Effectiveness of sanctions

    • Measuring sanctions’ success is hard, not least because of the difficulty of disentangling their effects from other economic, and on occasion military, forces, but there have been few outright successes.
    • A recent success was the squeeze on Libya by America and allies in the 1990s and early 2000s.
    • A mix of sanctions and financial inducements persuaded Muammar Qaddafi to end his wmd programme and stop funding terrorism.
    • The apparent failures of sanctions are many.
    • Sometimes this is because they are fundamentally symbolic, or weakened by interest groups in the countries imposing them.
    • Though the point of sanctions is to exploit asymmetries, doing much more harm to the adversary than to yourself, there are always burdens to be borne by some.
    • There is also a loss to the economy as a whole.
    • The cost of compliance with sanctions for banks and companies has rocketed over the past decade.
    • Financial institutions alone spent over $50bn worldwide in 2020 on screening clients for sanctions risks, according to LexisNexis, a data firm.
    • One thing which weakens sanctions is leakiness. Despite America’s maximum-pressure measures, Iran manages to export an estimated 1m barrels of oil per day as middlemen find ways to disguise the origin of shipments.

    Risks associated with sanctions

    • Collateral damage: The more powerful sanctions are, the greater the risk of collateral damage, particularly when targeted regimes are indifferent to the suffering of citizens.
    • Work in favour of regime: Increasing the harm done can work at least in part in the government’s favour.
    • In Venezuela, a significant number of those opposed to President Nicolás Maduro and his henchmen also oppose the American sanctions putatively aimed at dislodging them.
    • Increase the closeness between countries: Sanctions can also push countries they target into each other’s arms.
    • Russia and China—hit with American sanctions over its mistreatment of Uyghurs as well as its suspected tech-spying—are enjoying their friendliest relations for decades.
    • Alternative infrastructure: It encourages those who fear them to develop alternative financial and technological infrastructures.
    • China is pushing hard in that direction.
    • As well as trying to boost its chip-making, it is creating its own version of swift, called cips, which simplifies cross-border payments in yuan, and developing a digital currency.
    • It has a long way to go.
    • Though usage of the yuan as a currency for international payments is at an all-time high, at just over 3% of the total it still pales beside the dollar, at 40%.
    • As the world economy reels from financial crises, nationalism, trade wars and a global pandemic, sanctions are aggravating existing tensions within globalisation.

    Conclusion

    When used in earnest, sanctions can inflict heavy economic costs on both sides on top of the deprivation inflicted in targeted countries. Even then, they do not always work.

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  • A missile misfiring and its trail of poor strategic stability

    | International Relations | Mains Paper 2: India & Its Neighborhood – Relations

    Context

    The accidental firing of an Indian missile into Pakistan highlights the sorry state of bilateral mechanisms for crisis management between the two nuclear adversaries where there is a missile flight time of barely a few minutes.

    Balance response from both side

    • The Pakistani response to the accidental firing of the missile was a balanced one.
    • While New Delhi maintained a silence over the issue until it was brought up on March 11, the Indian response was also far from denial.
    • In that sense then, the Indian and Pakistani responses to the missile (mis)firing were the best possible outcome under the circumstances given that there is little bilateral mechanism for crisis management.
    • The two sides do not have high commissioners on the other side, there is no structured bilateral dialogue, and, most importantly, the two sides have not held ‘Expert Level Talks on Nuclear Confidence Building Measures’ or ‘Expert Level Talks on Conventional Confidence Building Measures’ for several years now.

    Lack of strategic stability regime

    Following are the reasons why the strategic stability regime in South Asia is hardly prepared for dealing with accidents such as the one that just happened, or enhancing effective crisis management and deterrence stability.

    1] Pre-notification agreement does not include cruise missiles

    • For one, although India and Pakistan signed a ‘Pre-Notification of Flight Testing of Ballistic Missiles’ agreement in October 2005, it does not include cruise missiles.
    • Notably, the missile that was misfired by the Indian side earlier this month, suspected to be the BrahMos, was a cruise missile (even though it was a misfire, and not a flight test).
    • Way forward: Given the many sophisticated cruise missiles that are now a part of each side’s arsenal, it is important to include them in the pre-notification regime.

    2] No structured meetings on nuclear confidence-building measures (CBMs)

    • The two sides have not held their structured meetings on nuclear confidence building measures (CBMs) and conventional CBMs for several years now.
    • Given the nature of the India-Pakistan relationship — adversarial, nuclear-armed, crisis prone, and suffering from trust deficit — there is an urgent need, especially in the wake of the recent incident, to revive these two dialogue mechanisms.

    3] China has so far refused to engage in strategic stability discussions with India

    • The third state with nuclear weapons in the region, China, has so far refused to engage in strategic stability discussions with India even though China today is involved in the India-Pakistan conflict more than ever before, apart from being in a military standoff with India.

    Way forward: Mechanisms for communicating sensitive information during crisis periods

    • India and Pakistan should consider setting up mechanisms such as nuclear risk reduction centres (NRRCs), established between the U.S. and the Soviet Union during the Cold War.
    • The primary objective of NRRCs, or similar structures that can be set up on either side, is risk reduction by providing a structured mechanism for timely communication of messages and proper implementation of already agreed-upon confidence-building measures.
    • Such a body could routinely exchange messages, provide timely clarifications, and review compliance to agreements, among others.

    Consider the question “The incident of the accidental firing of a missile by India highlights the issues with the strategic stability regime in South Asia. Discuss the issues and suggest the measures needed? 

    Conclusion

    New Delhi should provide assurances to Pakistan that efforts will be made to avoid such mistakes in the future. And both sides should use risk reduction mechanisms.

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  • NPA Crisis

    Why special situation funds are necessary

    | Economics | Mains Paper 3: Indian Economy

    Context

    India suffers from a chronic bad debt problem.  To overcome this problem, banks and financial institutions were initially allowed to sell their stressed loans only to ARCs. Now they can sell to SSFs too.

    How bad debt affects the credit supply in economy?

    • Higher bad debt requires higher provisioning, locking up more capital in the banking system.
    • This reduces credit supply and hurts economic growth.
    • To overcome this problem, banks and financial institutions were initially allowed to sell their stressed loans only to ARCs. 
    •  Transfer of stressed loans would release capital locked-up in the banking system and help improve credit supply.

    Two crucial reforms in financial markets

    • Indian financial markets witnessed two crucial reforms earlier this year.
    • 1] SSF: SEBI came out with a dedicated regulatory framework for special situation funds (SSFs).
    • 2] Dual structure bad bank: The RBI approved the new dual-structure bad bank, NARCL-IDRCL.
    • While the bad bank is an upgraded version of the existing asset restructuring companies (ARCs) model, the SSF is a relatively novel concept.

    Understanding AIFs and SSF

    • SEBI has introduced SSFs as a distinct sub-category of Category I Alternative Investment Funds (AIFs). 
    • AIFs manage privately pooled funds raised from sophisticated investors with deep pockets.
    • AIFs in equity market: While AIFs have traditionally played a prominent role in equity markets, their participation in distressed debt markets has been limited.
    • No participation in secondary market for corporate loans: Regulations did not permit AIFs to participate in the secondary market for corporate loans extended by banks and NBFCs.
    • The new regulations now create a special sub-category of AIFs, namely SSFs, which are allowed to participate in the secondary market for loans extended to companies that have defaulted on their debt obligations.

    What is Syndicated lending?

    • Syndicated lending is a financial instrument where a group of lenders, known as a syndicate, work together to provide a large loan to a single borrower.
    • This collaborative approach allows lenders to share the risk of borrower default, making it more manageable for individual lenders.
    • The syndicate typically includes a lead bank or underwriter, which plays a crucial role in assembling the syndicate and managing administrative tasks.

    Why SSFs must be allowed full participation across the entire spectrum of secondary market for corporate debt

    • Default is a lagging indicator of financial stress.
    • Lesser haircut: If lenders and bond investors could offload potentially stressed assets to SSFs before defaulting in the secondary market, they would benefit from a lesser haircut.
    • SSFs would also get adequate time for debt aggregation before default, reducing the collective action problems that may arise after default during insolvency or restructuring.
    • It would improve the liquidity: Allowing SSFs to purchase investment-grade loans would also improve the liquidity in the secondary market for corporate loans.
    • Traditionally, banks originated loans and held them till maturity.
    • Over time, lending moved from involving a single lender to multiple lenders via syndicated lending.
    • As volumes in the primary syndication market increased, demand for secondary trading also developed to allow liquidity, risk and portfolio management.
    • Suggestion by RBI task force: Secondary trading of loans is now institutionalised in international financial markets.
    • The RBI task force on secondary markets for corporate loans, chaired by T N Manoharan, made this suggestion in 2019.
    • These markets are liquid precisely because they are open to a wide variety of non-bank participants including insurance companies, pension funds, hedge funds and private equity funds.
    • SSFs are unlikely to jeopardise financial stability: SSFs cannot borrow funds or engage in any leverage except for temporary funding requirements.
    • Consequently, risks associated with liquidity, credit or maturity transformation and asset-liability mismatches are unlikely to arise.
    • Given their structure, SSFs are likely to acquire sufficient debt in a distressed company to acquire control or to influence its subsequent insolvency or restructuring process to maximise its value through business turnaround or sale.

    Consider the question “What are special situation funds (SSFs)? Suggest the changes needed in the secondary trading of loans in India’s.”

    Conclusion

    Overall, the introduction of SSFs promises to usher in a modern era of distressed debt investing in India. To realise their true potential, SSFs must be allowed full participation across the entire spectrum of secondary market for corporate debt and not just be confined to the post-default stage.

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  • Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

    Wearing hijab is not essential part of religion: Karnataka HC

    SC Judgements | Polity | Mains Paper 2: Executive & Judiciary

    The Karnataka High Court has upheld the ban on the wearing of hijab (head scarf) by students in schools and colleges in the State.

    [Burning Issue] Freedom of religion and attire

    The Judgment

    • The judgment was delivered by a three-judge bench comprising Chief Justice Ritu Raj Awasthi, Justice Krishna S. Dixit and Justice J.M. Khazi.
    • It rejected all the petitions filed by girl students of pre-university colleges in Udupi district.

    Key takeaways

    • The HC held that wearing hijab is not an essential religious practice in Islam and is not, therefore, protected under by the right to freedom of religion guaranteed by Article 25 of the Constitution.
    • The court said it was a reasonable restriction that was constitutionally permissible.
    • The Bench also upheld the legality of the order prescribing guidelines for uniforms in schools and pre-university colleges under the provisions of the Karnataka Education Act, 1983.
    • The court said that school uniform will cease to be a uniform if hijab is also allowed.

    What else did the court observe?

    • The Bench also spoke about the possibility of some “unseen hands” behind the hijab row to engineer social unrest and disharmony.
    • It expressed dismay over the issue being blown out of proportion by the powers that be.

    Reactions on the Judgment

    • Some factions have said that the order is a blow to right to education for Muslim women.
    • Other see it as an empowerment of women.
    • Feminists says that it’s not about an item of clothing, it’s about the right of a woman to choose how she wants to dress.
    • The Leftists perceived it as a blow against the universal right to education without discrimination, guaranteed by the law and the Constitution of India.

     

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  • Judicial Reforms

    SC averse to ‘Sealed Cover Jurisprudence’

    | Polity | Mains Paper 2: Executive & Judiciary

    Two separate Benches of the Supreme Court tore into the “sealed cover jurisprudence” practiced by the government in courts.

    What is the news?

    • The Supreme Court has allowed the Malayalam TV news channel MediaOne to resume broadcast, nearly six weeks after the government revoked its security clearance forcing it to shut down.
    • The channel was given security clearance by the MHA in February 2011 following which it obtained a licence to operate the channel in September 2011.
    • On January 5 this year, the channel was issued notice to revoke permission on the ground of “national security and public order”.
    • In February 2020, the channel’s licence was briefly suspended by MHA following its coverage of the Delhi riots.

    What did the court observe?

    • The court was critical about how the government and its agencies file reports in sealed envelopes directly in court without sharing the contents with the opposite party.
    • Being kept in the dark about the material contained in a sealed cover report, the petitioners are crippled in mounting a defence, not knowing what they are supposed to defend against.
    • At times, their cases, mostly involving fundamental rights such as personal liberty, are dismissed on the basis of the secret contents ensconced in the sealed covers.

    What is Sealed Cover Jurisprudence?

    • It is a practice used by the Supreme Court and sometimes lower courts, of asking for or accepting information from government agencies in sealed envelopes that can only be accessed by judges.
    • A specific law does not define the doctrine of sealed cover.
    • The Supreme Court derives its power to use it from Rule 7 of order XIII of the Supreme Court Rules and Section 123 of the Indian Evidence Act of 1872.

    Nature of the power: Upholding Secrecy

    • If the Chief Justice or court directs certain information to be kept under sealed cover or considers it of confidential nature, no party would be allowed access to the contents of such information.
    • There is an exception to this if the Chief Justice himself orders that the opposite party be allowed to access it.
    • It also mentions that information can be kept confidential if its publication is not considered to be in the interest of the public.
    • As for the Evidence Act, official unpublished documents relating to state affairs are protected and a public officer cannot be compelled to disclose such documents.

    Grounds of such secrecy

    Other instances where information may be sought in secrecy or confidence is when its publication:

    1. Impedes an ongoing investigation
    2. Details which are part of the police’s case diary or
    3. Breaches the privacy of an individual

    Prominent cases of sealed jurisprudence

    Sealed cover jurisprudence has been frequently employed by courts in the recent past.

    (1) Rafale Deal

    • In the case pertaining to the controversial Rafale fighter jet deal, a Bench headed by CJI Ranjan Gogoi in 2018, had asked the Centre to submit details related to deal’s decision making and pricing in a sealed cover.
    • This was done as the Centre had contended that such details were subject to the Official Secrets Act and Secrecy clauses in the deal.

    (2) Bhim Koregaon Case

    • In the Bhima Koregaon case, in which activists were arrested under the Unlawful Activities Prevention Act.
    • The Supreme Court had relied on information submitted by the Maharashtra police in a sealed cover.

    Criticism of such acts

    • Critics of this practice contend that it is not favorable to the principles of transparency and accountability of the Indian justice system.
    • It stands in contrast to the idea of an open court, where decisions can be subjected to public scrutiny.
    • It is also said to enlarge the scope for arbitrariness in court decisions, as judges are supposed to lay down the reasoning for their decisions.
    • Besides, it is argued that not providing access to such documents to the accused parties obstructs their passage to a fair trial and adjudication.

    How has the judiciary responded to this?

    • In the 2019 judgment in the case of P Gopalakrishnan V. The State of Kerala, the Supreme Court had said that disclosure of documents to the accused is constitutionally mandated.
    • This is possible even if the investigation is ongoing and said documents may lead to breakthroughs in the investigation.

     

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  • Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.

    Draft National Policy for Medical Devices, 2022

    | Economics | Mains Paper 3: Indian Economy

    The government is proposing a new Draft National Policy for Medical Devices, 2022 to reduce India’s dependence on import of high-end medical devices.

    Key features of the policy

    Objectives: Adopting public-private partnerships to reduce the cost of healthcare, drive efficiency, and aid quality improvements in medical devices manufactured in the country

    The key proposals include:

    1. Incentivising the export of medical devices and related technology projects through tax rebates and refunds
    2. Increasing government spending in “high-risk” projects in the medical devices sector
    3. Single-window clearance system for licencing medical devices
    4. Pricing environment with no price control on newly developed innovation in the sector
    5. Allot a dedicated fund for encouraging joint research involving existing industry players, reputed academic institutions and start-ups
    6. Incorporate a framework for a coherent pricing regulation, to make available quality and effective medical devices to all citizens at affordable prices
    7. NPPA (National Pharmaceutical Pricing Authority) shall be strengthened with adequate manpower of suitable expertise to provide effective price regulation balancing patient and industry needs.
    8. Pharmaceuticals Department will also work with industry to implement a Uniform Code for Medical Device Marketing Practices (UCMDMP)

    Need for such policy

    • Policy vacuum: India’s medical devices sector has so far been regulated as per provisions under the Drugs and Cosmetics Act of 1940, and a specific policy on medical devices has been a long standing demand from the industry.
    • Meaningful expense on R&D: The policy also aims to increase India’s per capita spend on medical devices. India has one of the lowest per capita spend on medical devices at $3, compared to the global average of per capita consumption of $47.
    • Reducing import dependence: With the new policy, the government aims to reduce India’s import dependence from 80 per cent to nearly 30 per cent in the next 10 years.
    • Becoming a global hub: It aims to become one of the top five global manufacturing hubs for medical devices by 2047.
    • Domestic manufacturing of high-end products: Indian players in the space have so far typically focussed on low-cost and low-tech products, like consumables and disposables, leading to a higher value share going to foreign companies.

    Earlier attempts for such policy

    • In February 2020, the government notified changes in the Medical Devices Rules, 2017 to regulate medical devices on the same lines as drugs under the Drugs and Cosmetics Act, 1940.
    • This was necessitated after revelations about faulty hip implants marketed by Johnson & Johnson, exposing the lack of regulatory teeth when it came to medical devices.
    • The government said the transition from partial regulation of selected medical services to the complete regulation and licensing of all medical devices is underway.

     

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  • Defence Sector – DPP, Missions, Schemes, Security Forces, etc.

    India is amongst the world’s largest arms importers

    | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    India is amongst the world’s largest arms importers, accounting for 11 per cent of global imports, according to the Stockholm International Peace Research Institute (SIPRI).

    India’s arm imports

    • India’s overall imports decreased by 21% between 2012-16 and 2017-21 but that it was still the world’s biggest importer of military hardware.
    • Russia, France and the US are India’s biggest suppliers of arms, accounting for 46%, 27% and 12% of the country’s imports in the last five years.
    • India’s share of global arms imports stood at 11% during 2017-21 compared to 14% in the previous five-year period.

    Dependence on Russia is declining

    • Russia’s arms exports to India fell 47% between 2012-16 and 2017-21 even though the deliveries of several platforms including air defence systems and warships are pending.
    • Russia was the largest supplier of major weapons and systems to India during the two comparative five-year periods.

    Significance of the report

    • The report has come at a time when India’s dependence on Russian military hardware, ranging from fighter jets to rifles and submarines to shoulder-fired missiles has come into sharp focus.
    • Though India has been procuring US military hardware in growing numbers about 60% of the weapons inventory of the three services continues to be of Russian-origin.
    • It is still unclear how the new sanctions against Russia could play out and the problems they could create for the armed forces in the short and long term.
    • The possible impact of Russia’s unprecedented economic isolation on India’s military preparedness and the serviceability of weapons and equipment is threatened.

    Is it a matter of relief?

    • India has major plans for arms imports because of perceived threats from China and Pakistan, and due to significant delays in indigenous production.
    • The drop in India’s arms imports is, therefore, probably a temporary result of its slow and complex procurement process as well as its shift in suppliers.

     

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