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  • Judicial Appointments Conundrum Post-NJAC Verdict

    What is Collegium System?

    | Polity | Mains Paper 2: Executive & Judiciary

    The Supreme Court Collegium headed by Chief Justice N.V. Ramana has recommended to the Centre the names of six judicial officers for appointment as judges of the Delhi High Court.

    What is Collegium System?

    • The Collegium of judges is the Indian Supreme Court’s invention.
    • It does not figure in the Constitution, which says judges of the Supreme Court and High Courts are appointed by the President and speaks of a process of consultation.
    • In effect, it is a system under which judges are appointed by an institution comprising judges.
    • After some judges were superseded in the appointment of the CJI in the 1970s, and attempts made subsequently to effect a mass transfer of High Court judges across the country.
    • Hence there was a perception that the independence of the judiciary was under threat. This resulted in a series of cases over the years.

    Evolution: The Judges Cases

    • First Judges Case (1981) ruled that the “consultation” with the CJI in the matter of appointments must be full and effective.
    • However, it rejected the idea that the CJI’s opinion, albeit carrying great weight, should have primacy.
    • Second Judges Case (1993) introduced the Collegium system, holding that “consultation” really meant “concurrence”.
    • It added that it was not the CJI’s individual opinion, but an institutional opinion formed in consultation with the two senior-most judges in the Supreme Court.
    • Third Judges Case (1998): On a Presidential Reference for its opinion, the Supreme Court, in the Third Judges Case (1998) expanded the Collegium to a five-member body, comprising the CJI and four of his senior-most colleagues.

    The procedure followed by the Collegium

    Appointment of CJI

    • The President of India appoints the CJI and the other SC judges.
    • As far as the CJI is concerned, the outgoing CJI recommends his successor.
    • In practice, it has been strictly by seniority ever since the supersession controversy of the 1970s.
    • The Union Law Minister forwards the recommendation to the PM who, in turn, advises the President.

    Other SC Judges

    • For other judges of the top court, the proposal is initiated by the CJI.
    • The CJI consults the rest of the Collegium members, as well as the senior-most judge of the court hailing from the High Court to which the recommended person belongs.
    • The consultees must record their opinions in writing and it should form part of the file.
    • The Collegium sends the recommendation to the Law Minister, who forwards it to the Prime Minister to advise the President.

    For High Courts

    • The CJs of High Courts are appointed as per the policy of having Chief Justices from outside the respective States. The Collegium takes the call on the elevation.
    • High Court judges are recommended by a Collegium comprising the CJI and two senior-most judges.
    • The proposal, however, is initiated by the Chief Justice of the High Court concerned in consultation with two senior-most colleagues.
    • The recommendation is sent to the Chief Minister, who advises the Governor to send the proposal to the Union Law Minister.

    Does the Collegium recommend transfers too?

    • Yes, the Collegium also recommends the transfer of Chief Justices and other judges.
    • Article 222 of the Constitution provides for the transfer of a judge from one High Court to another.
    • When a CJ is transferred, a replacement must also be simultaneously found for the High Court concerned. There can be an acting CJ in a High Court for not more than a month.
    • In matters of transfers, the opinion of the CJI “is determinative”, and the consent of the judge concerned is not required.
    • However, the CJI should take into account the views of the CJ of the High Court concerned and the views of one or more SC judges who are in a position to do so.
    • All transfers must be made in the public interest, that is, “for the betterment of the administration of justice”.

    Loopholes in the Collegium system

    • Lack of Transparency: Opaqueness and a lack of transparency, and the scope for nepotism are cited often.
    • Judges appointing Judge: The attempt made to replace it with a ‘National Judicial Appointments Commission’ was struck down by the court in 2015 on the ground that it posed a threat to the independence of the judiciary.
    • Criteria: Some do not believe in full disclosure of reasons for transfers, as it may make lawyers in the destination court chary of the transferred judge.

    Way ahead

    • In respect of appointments, there has been an acknowledgment that the “zone of consideration” must be expanded to avoid criticism that many appointees hail from families of retired judges.
    • The status of a proposed new memorandum of procedure, to infuse greater accountability, is also unclear.
    • Even the majority opinions admitted the need for transparency, now Collegiums’ resolutions are now posted online, but reasons are not given.

     

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  • J&K – The issues around the state

    Jammu and Kashmir Delimitation Commission likely to get another extension

    | Polity | Mains Paper 2: Representation Of People’s Act

    The J&K Delimitation Commission is likely to get a second extension of its term this month.

    What is Delimitation and why is it needed?

    • Delimitation is the act of redrawing boundaries of an assembly or Lok Sabha seat to represent changes in population over time.
    • This exercise is carried out by a Delimitation Commission, whose orders have the force of law and cannot be questioned before any court.
    • The objective is to redraw boundaries (based on the data of the last Census) in a way so that the population of all seats, as far as practicable, be the same throughout the State.
    • Aside from changing the limits of a constituency, the process may result in a change in the number of seats in a state.

    Delimitation in J&K

    • Assembly seats in J&K were delimited in 1963, 1973 and 1995.
    • Prior to August 5, 2019, carving out of J&K’s Assembly seats was carried out under the J&K Constitution and Jammu and Kashmir Representation of the People Act, 1957.
    • Until then, the delimitation of Lok Sabha seats in J&K was governed by the Constitution of India.
    • However, the delimitation of the state’s Assembly was governed by the J&K Constitution and J&K Representation of the People Act, 1957.
    • There was no census in the state in 1991 and hence no Delimitation Commission was set up by the state until 2001 census.

    Why is it in the news again?

    • After the abrogation of J&K’s special status in 2019, the delimitation of Lok Sabha and Assembly seats in the newly-created UT would be as per the provisions of the Indian Constitution.
    • On March 6, 2020, the government set up the Delimitation Commission, headed by retired Supreme Court judge Ranjana Prakash Desai, which was tasked with winding up delimitation in J&K in a year.
    • As per the J&K Reorganization Bill, the number of Assembly seats in J&K would increase from 107 to 114, which is expected to benefit the Jammu region.

    Factors considered during Delimitation

    • The number of districts had increased from 12 to 20 and tehsils from 52 to 207 since the last delimitation.
    • The population density ranged from 29 persons a square km in Kishtwar to 3,436 persons a square km in Srinagar.
    • The remoteness of the place, inaccessibility etc are also considered during the exercise.

    Concerns raised over Delimitation

    • Jammu vs. Kashmir: Concerns had been expressed over how the delimitation process may end up favoring the Jammu region over Kashmir in terms of the seats.
    • Under-representation of Ladakh: Arguments have been made on how Ladakh has been underrepresented, with demands for statehood/sixth schedule.
    • Non-proportionate reservations: It is argued that seats for STs should’ve been divided in both Jammu province & Kashmir province, as the ST population is almost equal.

    Do not forget to answer this PYQ in the comment box:

    Q.With reference to the Delimitation Commission, consider the following statements:

    1. The orders of the Delimitation Commission cannot be challenged in a Court of Law.
    2. When the orders of the Delimitation Commission are laid before the Lok Sabha or State Legislative Assembly, they cannot affect any modifications in the orders.

    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

     

     

    Post your answers here:

     

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  • Blockchain Technology: Prospects and Challenges

    What are Virtual Digital Assets?

    Prelims Only | Economics | Mains Paper 3: Government Budgeting

    Recently, The Central Board of Direct Taxes (CBDT) issued detailed guidelines on the Tax Deducted at Source (TDS) rule for Virtual Digital Assets (VDAs) such as cryptocurrencies .

    What are Virtual Digital Assets?

    • To define the term “virtual digital asset”, a new clause (47A) is proposed to be inserted into section 2 of the Act.
    • A virtual digital asset is proposed to mean any information or code or number or token (not being Indian currency or any foreign currency):
    1. Generated through cryptographic means or otherwise
    2. Providing a digital representation of value that is exchanged with or without consideration with the promise or representation of having inherent value
    3. Functions as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, investment schemes
    4. Can be transferred, stored, or traded electronically.
    • Non-fungible token (NFT) and; any other token of similar nature are included in the definition.

    Why tax them?

    • Popularity: Virtual digital assets have gained tremendous popularity in recent times and the volumes of trading in such digital assets have increased substantially.
    • Growing market: Further, a market is emerging where payment for the transfer of a virtual digital asset can be made through another such asset.
    • Increased transactions: There has been a phenomenal rise in such transactions and the magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.
    • Prevalence of gifting: The gifting of virtual digital assets is also a popular mode of exchange.

    Key takeaways from the FM’s speech

    • The bill provides for the definition of virtual digital assets which is wide enough to cover emerging digital assets including NFT, assets in metaverse, cryptocurrencies, etc.
    • This recognition of digital assets under income tax is NOT akin to granting legal status.

     

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  • MGNREGA Scheme

    Back in news: MGNREGA

    Schemes | Governance | Mains Paper 2: Government Scheme/Policies

    Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) workers are still waiting for almost ₹3,360 crore in pending wage payments, with the largest pending payments in West Bengal, Uttar Pradesh and Rajasthan.

    What is MGNREGA?

    • The MGNREGA stands for Mahatma Gandhi National Rural Employment Guarantee Act of 2005.
    • This is labour law and social security measure that aims to guarantee the ‘Right to Work’.
    • The act was first proposed in 1991 by P.V. Narasimha Rao.

    Features of the scheme

    • MGNREGA is unique in not only ensuring at least 100 days of employment to the willing unskilled workers, but also in ensuring an enforceable commitment on the implementing machinery i.e., the State Governments, and providing a bargaining power to the labourers.
    • The failure of provision for employment within 15 days of the receipt of job application from a prospective household will result in the payment of unemployment allowance to the job seekers.
    • Employment is to be provided within 5 km of an applicant’s residence, and minimum wages are to be paid.
    • Thus, employment under MGNREGA is a legal entitlement.

     

    Tap to read more about MGNREGS:

    [Burning Issue] Reorienting MGNREGA in times of COVID

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  • Freedom of Speech – Defamation, Sedition, etc.

    India Press Freedom Report, 2021

    DOMR | Polity | Mains Paper 2: Indian Constitution – historical underpinnings, evolution, features, amendments, significant provisions and basic structure

    The India Press Freedom Report, 2021was recently released by the Rights and Risks Analysis Group (RRAG).

    India Press Freedom Report, 2021: Key Highlights

    • Jammu and Kashmir, Uttar Pradesh, Madhya Pradesh and Tripura topped the list of States and Union Territories where journalists and media houses were targeted in 2021.
    • It is followed by Delhi (8), Bihar (6), Assam (5), Haryana and Maharashtra (4 each), Goa and Manipur (3 each), Karnataka, Tamil Nadu and West Bengal (2 each), and Andhra Pradesh, Chhattisgarh and Kerala (1each).
    • While J&K recorded the maximum attacks by State actors, Tripura had the most cases of attacks by non-State actors, the analysis of data showed.

    Significance of the report

    • The widespread attacks on the press freedom are an indicator of the continuing deterioration of civic space in the country.
    • It represents the status of free speech exercised in our country.

     

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  • Wildlife Conservation Efforts

    Places in news: Sultanpur National Park

    India Mapping | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    Homestays would soon be allowed in the villages around Sultanpur National Park in Gurugram to promote tourism and provide an opportunity for the visitors to catch a glimpse of rural life in Haryana.

    Sultanpur National Park

    • Sultanpur NP is located at Sultanpur village on Gurugram-Jhajjar highway, 15 km from Gurugram, Haryana and 50 km from Delhi.
    • It was a bird sanctuary, ideal for birding and bird lookers. Its area covers approximately 142.52 hectares.
    • Migratory birds start arriving in the park in September. Birds use the park as a resting place till the following March-April.
    • During summer and monsoon months the park is inhabited by many local bird species.
    • In April 1971, the Sultanpur Jheel inside the park (an area of 1.21 sq. km.) was accorded Sanctuary status under section 8 of the Punjab Wildlife Preservation Act of 1959.
    • The status of the park was upgraded to National Park under the Wildlife (Protection) Act, 1972 in July 1991.

    Why must we remember it?

    • It is one of the few NPs in the small state of Haryana.
    • Another NP in Haryana is Kalesar National Park.

    Important Fauna at the Park

    • Mammals: Blackbuck, Nilgai, Hog deer, Sambar, Leopard etc.
    • Birds: Siberian Cranes, Greater Flamingo, Demoiselle Crane etc.

     

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  • Missed opportunity to opportunity of employment-centred and inclusive growth

    op-ed snap | Governance | Mains Paper 2: Government Scheme/Policies,Health & Education

    Context

    India continues to rank poorly in various global indices that reflect the quality of life, human capital or human development in the country. In this context, it was expected that the current Budget would see an expansion in government spending on the social sector.

    Need for greater spending on social sector

    • In Human Development Index, India ranks 131 out of 189 countries and on the Global Hunger Index, it ranks 101 out of 116 countries.
    • The pandemic over the last two years has had a severe impact on the health, education and food security of the poor and informal sector workers.
    • The country has been experiencing increasing inequality over the last couple of decades.

    Marginal increase in allocation for school education

    • In the budget, the government announced that it will expand its ‘one class, oneTVchannel’ scheme instead of announcing enhanced allocations for schools  the government announced that it will expand its ‘one class, oneTVchannel’ scheme instead of announcing enhanced allocations for schools so that they can reopen with vigour.
    •  The budget for school education at ₹63,449 crore is a slight improvement over last year’s ₹54,873 crore (2021-22 budget estimates, BE) and a mere increase of 6% in nominal terms compared to 2020-21 BE of ₹59,845 crore.
    • After rechristening the school mid-day meal scheme as Pradhan Mantri Poshan Shakti Nirman, simply called PM Poshan, the allocation for the scheme has reduced from ₹11,500 crore last year to ₹10,233 crore this year.

    Low allocation for health

    • Despite repeated statements about strengthening the public health system, the overall budget for the Department of Health and Family Welfare at ₹83,000 crore has gone up by only 16% over the BE for 2021-22 and by less than ₹1,000 crore compared to the RE for 2021-22, which is ₹82,921 crore.
    • However, by including water and sanitation in the budget for health, there is an increase being shown in health spending as a proportion of GDP.
    • Also, even though the budget for the Jal Jeevan Mission has increased from ₹50,000 crore to ₹60,000 crore, only 44% of the allocated funds to the Department of Water and Sanitation for 2021-22 has been spent as on end December 2021.

    No indication of plan to extend the PMGKAY

    • 60% of the population are covered by ration cards currently under the National Food Security Act.
    • Those who were eligible benefited from the additional free foodgrains that they have been given under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).
    • However, the food subsidy (BE) for 2022-23 at ₹2.06 lakh crore is only enough to cover the regular NFSA entitlements.
    • The indication is that there is no plan to extend the PMGKAY.
    • The food subsidy RE for 2021-22 is ₹2.86 lakh crore.

    Other schemes

    • Budgets for important schemes such as Saksham Anganwadi, maternity entitlements and social security pensions are around the same as the allocations for last year.
    • The allocation for MGNREGA at ₹73,000 crore also does not reflect the increased demand for work or thethe pending wages of ₹21,000 crore.

    Continued negligence

    • The resources allocated for crucial government schemes in the fields of health, education, nutrition, and social protection have remained stagnant or show negligent increase.
    • In fact, the budgets for these schemes have been declining in real terms since 2015.
    • The World Social Protection Report 2020-22, brought out by the International Labour Organization, shows that the spending on social protection (excluding health) in India is 1.4% of the GDP, while the average for low-middle income countries is 2.5%.

    Conclusion

    This continued negligence does not bode well for inclusive development in India.

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  • RBI Notifications

    What is the Digital Rupee?

    | Economics | Mains Paper 3: Indian Economy

    The Union Finance Minister has announced the launch of the Digital Rupee — a central bank digital currency (CBDC) — 2022-23 onwards.

    Who will launch the CBDC?

    • The Reserve Bank of India will launch the CBDC in the upcoming financial year.
    • This follows the government’s plans to launch the CBDC that will be backed by blockchain technology.

    What is a CBDC?

    • CBDC is a legal tender issued by a central bank in a digital form.
    • It is similar to a fiat currency issued in paper and is interchangeable with any other fiat currency.
    • One chief difference will be that a Digital Rupee transaction will be instantaneous as opposed to the current digital payment experience.

    Features of CBDC

    • High-security instrument: CBDC is a high-security digital instrument; like paper banknotes, it is a means of payment, a unit of account, and a store of value.
    • Uniquely identifiable: And like paper currency, each unit is uniquely identifiable to prevent counterfeit.
    • Liability of central bank: It is a liability of the central bank just as physical currency is.
    • Transferability: It’s a digital bearer instrument that can be stored, transferred, and transmitted by all kinds of digital payment systems and services.

    What is the need for CBDC?

    • Online transactions: India is a leader in digital payments, but cash remains dominant for small-value transactions.
    • High currency in circulation: India has a fairly high currency-to-GDP ratio.
    • Cost of currency management: An official digital currency would reduce the cost of currency management while enabling real-time payments without any inter-bank settlement.
    • The growth of cryptocurrencies such as Bitcoin, Ethereum, etc has raised challenges to fiat currencies.

    Key benefits offered

    • Faster system: CBDC can definitely increase the transmission of money from central banks to commercial banks and end customers much faster than the present system.
    • Financial inclusion: Specific use cases, like financial inclusion, can also be covered by CBDC that can benefit millions of citizens who need money and are currently unbanked or banked with limited banking services
    • Monetary policy facilitation: The move to bring out a CBDC could significantly improve monetary policy development in India.
    • Making of a regional currency: In the cross-border payments domain, India can take a lead by leveraging digital Rupee especially in countries such as Bhutan, Saudia Arabia, and Singapore where NPCI has existing arrangements.

    Why is CBDC preferred over Cryptocurrency?

    • Sovereign guarantee: Cryptocurrencies pose risks to consumers.  They do not have any sovereign guarantee and hence are not legal tender.
    • Market volatility: Their speculative nature also makes them highly volatile.  For instance, the value of Bitcoin fell from USD 20,000 in December 2017 to USD 3,800 in November 2018.
    • Risk in security: A user loses access to their cryptocurrency if they lose their private key (unlike traditional digital banking accounts, this password cannot be reset).
    • Malware threats: In some cases, these private keys are stored by technical service providers (cryptocurrency exchanges or wallets), which are prone to malware or hacking.
    • Money laundering: Cryptocurrencies are more vulnerable to criminal activity and money laundering.  They provide greater anonymity than other payment methods since the public keys engaging in a transaction cannot be directly linked to an individual.
    • Regulatory bypass: A central bank cannot regulate the supply of cryptocurrencies in the economy.  This could pose a risk to the financial stability of the country if their use becomes widespread.
    • Power consumption: Since validating transactions is energy-intensive, it may have adverse consequences for the country’s energy security (the total electricity use of bitcoin mining, in 2018, was equivalent to that of mid-sized economies such as Switzerland).

    Way forward

    • The launch of CBDCs may not be a smooth affair and still requires more clarity in India. There are still a lot of misconceptions about the concept of digital currency in the country.
    • The effectiveness of CBDCs will depend on aspects such as privacy design and programmability.
    • There is a huge opportunity for India to take a lead globally via a large-scale rollout and adoption of digital currencies.

     

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  • Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

    Govt. proposes new SEZ Law

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

    The government has proposed to replace the existing law governing Special Economic Zones (SEZs) with new legislation to enable States to become partners in ‘Development of Enterprise and Service Hubs’.

    Why amend SEZ Act, 2005?

    • Units in SEZs used to enjoy 100% income tax exemption on export income for the first five years, 50% for the next five years, and 50% of the ploughed back export profit for another five years.
    • SEZs now have started losing their sheen after the imposition of minimum alternate tax and the introduction of a sunset clause for the removal of tax incentives.
    • The new act will cover all large existing and new industrial enclaves to optimally utilize the available infrastructure and enhance the competitiveness of exports.
    • The government will also undertake reforms in customs administration of SEZs with a view to promote ease of doing business.

    What are SEZs?

    • A Special Economic Zone (SEZ) is an area in which the business and trade laws are different from the rest of the country.
    • SEZs are located within a country’s national borders, and their aims include increasing trade balance, employment, increased investment, job creation, and effective administration.
    • To encourage businesses to set up in the zone, financial policies are introduced.
    • These policies typically encompass investing, taxation, trading, quotas, customs, and labor regulations.
    • Additionally, companies may be offered tax holidays, where upon establishing themselves in a zone, they are granted a period of lower taxation.

    SEZs in India

    • The SEZ policy in India first came into inception on April 1, 2000.
    • The prime objective was to enhance foreign investment and provide an internationally competitive and hassle-free environment for exports.
    • The idea was to promote exports from the country and realize the need for a level playing field must be made available to the domestic enterprises and manufacturers to be competitive globally.
    • Subsequently, the SEZ Act 2005, was enacted to provide the umbrella legal framework, covering all important legal and regulatory aspects of SEZ development as well as for units operating in SEZs.

    Who can set up SEZs? Can foreign companies set up SEZs?

    • Any private/public/joint sector or state government or its agencies can set up an SEZ.
    • Yes, a foreign agency can set up SEZs in India.

    What is the role of state governments in establishing SEZs?

    • A representative of the state government, who is a member of the inter-ministerial committee on private SEZ, is consulted while considering the proposal.
    • Before recommending any proposals to the ministry of commerce and industry (department of commerce), the states must satisfy themselves that they are in a position to supply basic inputs like water, electricity, etc.

    Are SEZs controlled by the government?

    • In all SEZs, the statutory functions are controlled by the government.
    • The government also controls the operation and maintenance function in the central government-controlled SEZs. The rest of the operations and maintenance are privatized.

    Are SEZs exempt from labor laws?

    • Normal labor laws are applicable to SEZs, which are enforced by the respective state governments.
    • The state governments have been requested to simplify the procedures/returns and for the introduction of a single-window clearance mechanism by delegating appropriate powers to development commissioners of SEZs.

    Who monitors the functioning of the units in SEZ?

    • The performance of the SEZ units is monitored by a unit approval committee consisting of a development commissioner, custom, and representative of the state government on an annual basis.

    What are the special features for business units that come to the zone?

    • Business units that set up establishments in an SEZ would be entitled to a package of incentives and a simplified operating environment.
    • Besides, no license is required for imports, including second-hand machinery.

    How do SEZs help a country’s economy?

    • SEZs play a key role in the rapid economic development of a country.
    • In the early 1990s, it helped China and there were hopes that the establishment in India of similar export-processing zones could offer similar benefits – provided, however, that the zones offered attractive enough concessions.
    • Traditionally the biggest deterrents to foreign investment in India have been high tariffs and taxes, red-tapism, and strict labor laws.
    • To date, these restrictions have ensured that India has been unable to compete with China’s massively successful light-industrial export machine.

     

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  • North-East India – Security and Developmental Issues

    PM’s Development Initiative for North East (PM-DevINE)

    Schemes | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    Union Budget 2022-23 provided for a new scheme, Prime Minister’s Development Initiative for North East (PM-DevINE) will be implemented through the North-Eastern Council.

    PM-DevINE

    • It will fund infrastructure, in the spirit of PM GatiShakti, and social development projects based on felt needs of the northeast.
    • This will enable livelihood activities for youth and women, filling the gaps in various sectors.
    • While the Central Ministries may also pose their candidate projects, priority will be given to those posed by the States.

    Some of the projects to be implemented are:

    1. Dedicated Services for the Management of Paediatric and Adult Haemotolymphoid Cancers in North East India, Guwahati
    2. Construction of Aizawl bypass on western side, gap funding for passenger ropeway system for Pelling to Sanga-Choeling in West Sikkim
    3. Gap funding for eco-friendly Ropeway (Cable Car) from Dhapper to Bhaleydhunga in South Sikkim
    4. Pilot project for the construction of Bamboo Link Road at different locations in various districts in Mizoram

     

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