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Subject: Economics

  • SEBI unveils SCORES 2.0 to Strengthen Investor Redressal

    Why in the news?

    The Securities and Exchange Board of India (SEBI) unveiled the upgraded version of the SEBI Complaint Redress System (SCORES 2.0) marking a significant advancement in the investor complaint redressal mechanism in the securities market.

    About Securities and Exchange Board of India (SEBI)

     

    • SEBI is the regulatory authority overseeing India’s securities and commodity markets.
    • Established in 1988 as a non-statutory body, SEBI was granted statutory powers with the enactment of the SEBI Act 1992 by the Indian Parliament.
    • It operates under the purview of the Ministry of Finance.
    • SEBI’s structure includes a chairman nominated by the GoI, members from the Union Finance Ministry, the Reserve Bank of India, and others.
    • Its headquarters is in Mumbai, with regional offices in Ahmedabad, Kolkata, Chennai, and Delhi.

    What is SCORES 2.0?

    • SCORES 2.0 refers to the upgraded version of the SEBI Complaint Redress System (SCORES) launched by the Securities and Exchange Board of India (SEBI).
    • SCORES is an online platform designed to facilitate the lodging and resolution of complaints by investors in the securities market.
    • Complaints can be lodged for any issues covered under the:
    1. SEBI Act, 1992
    2. Securities Contract Regulation Act, 1956
    3. Depositories Act, 1966
    4. Companies Act, 2013

    Complaints on SCORES 2.0 can be launched against:

    1. Listed companies / registrar & transfer agents
    2. Brokers / stock exchanges
    3. Depository participants / depository
    4. Mutual funds
    5. Portfolio Managers
    6. Other entities (KYC Collective investment scheme, Merchant banker, Credit rating, Foreign institutional investor etc.)

    Features of SCORES 2.0:

    1. Reduced Timelines: SCORES 2.0 implements reduced and standardized timelines for addressing investor grievances, ensuring a maximum redressal period of 21 calendar days from the date of complaint receipt.
    2. Auto-Routing and Escalation: The new version incorporates an auto-routing mechanism to swiftly direct complaints to the relevant regulated entity. Additionally, it introduces a two-tier review process, with complaints undergoing review first by the designated body and subsequently by SEBI if investors remain dissatisfied with the resolution provided.
    3. Integration with KYC Database: SCORES 2.0 is seamlessly integrated with the KYC Registration Agency database, streamlining the registration process for investors onto the platform.
    4. Enhanced Efficiency: Through features such as auto-routing, auto-escalation, and stricter monitoring protocols, SCORES 2.0 aims to enhance the efficiency and effectiveness of the investor complaint redressal process.

    Significance of SCORES 2.0

    • Improved Regulatory Oversight: By introducing stricter timelines and oversight mechanisms, SEBI aims to enhance regulatory efficiency and transparency, fostering a more accountable and responsive market ecosystem.
    • Technological Advancements: The integration of advanced technological features, such as auto-routing and KYC database linkage, reflects SEBI’s proactive approach towards harnessing digital innovations to modernize regulatory processes and services.

    PYQ:

    2013:

    The product diversification of financial institutions and insurance companies, resulting in overlapping of products and services strengthens the case for the merger of the two regulatory agencies, namely SEBI and IRDA. Justify.

     

    Practice MCQ:

    Consider the following statements about the SCORES 2.0 Platform recently launched by the Securities and Exchange Board of India (SEBI):

    1.    It is an online platform designed to facilitate the lodging and resolution of complaints by investors in the securities market.

    2.    It addresses complaints pertaining to the SEBI Act, 1992 only.

    3.    It ensures a maximum redressal period of 21 calendar days.

    How many of the above statements is/are correct?

    (a) One

    (b) Two

    (c) Three

    (d) None
  • [2 April 2024] The Hindu Op-ed: The PMLA — a law that has lost its way

    [2 April 2024] The Hindu Op-ed: The PMLA — a law that has lost its way

    PYQ Relevance:Mains: 

    Q) Discuss how emerging technologies and globalisation contribute to money laundering. Elaborate measures to tackle the problem of money laundering both at national and international levels. (UPSC CSE/2021) 

    Q) Analyze the complexity and intensity of terrorism, its causes, linkages and obnoxious nexus. Also suggest measures required to be taken to eradicate the menace of terrorism. (UPSC CSE/2021) 

    Q) Money laundering poses a serious security threat to a country’s economic sovereignty. What is its significance for India and what steps are required to be taken to control this menace?  (UPSC CSE/2013) 

    Note4Students: 

    Prelims: Polity; Prevention of Money Laundering Act  of 2002;

    Mains: Polity; Internal Security; Prevention of Money Laundering Act  of 2002;

    Mentor comments: The Enormous volume of black money generated through International Drug Trafficking poses a grave threat to our Indian economy as well as many other countries too. We all are awared that the black money is generated through the flourishing of the drug trade and then it is  integrated with the legitimate and domestic economy that can destabilize the world and endanger the integrity and sovereignty of various Nations. Hence, today we are going to discuss some major ongoing issue which is aligned with same context – the issue with the Prevention of Money Laundering Act  of 2002.

    Let’s learn. 

    —

    Why in the News?

    The Prevention of Money Laundering Act (2002),  includes a large number of offenses in its schedule that have nothing to do with the original purpose of this law. So, there is an urgent need to have an effective law with the rising of newer challenges in Drug Money Laundering offenses.

    The Background of the Law:

    • Since the mid-1980s, there has been global concern over the proceeds of criminal activities such as drug trafficking being ‘laundered’ or used in financing terrorism. 
    • The UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances adopted in the Vienna Convention (1988) was the first treaty that called upon nations to adopt domestic laws to combat drug trafficking. As part of these laws, countries were asked to prohibit the conversion or transfer of property gained through dealing in narcotics to conceal its illicit origin. 
    • The Financial Action Task Force (FATF) was established at the G-7 Summit in Paris in 1989 in response to mounting concern over money laundering. The Task Force made recommendations from time to time to strengthen laws on the subject. 
    • The UN Convention against Transnational Organized Crime of 2000 (Palermo Convention) also advocated legislative and other measures to combat organized crime, and specifically called for ‘criminalizing the laundering of proceeds of crime’

    About the Prevention of Money Laundering Act (PMLA), 2002:

    • Enactment of PMLA in India:
      • Article 253: This gave the Union Parliament the exclusive power to make laws for any part of India’s territory to implement any treaty, agreement or convention involving one or more countries.
      • Seventh Schedule: Item 13 (Communication which is subject to provisions in List I and III) in the Union list of the Seventh Schedule of the Constitution is specific on this point. 
    • It was enacted in January 2003 and seeks to combat money laundering in India under three major domains:
      • Preventing and controlling Money Laundering
      • Confiscating and seizing the property obtained from the laundered money
      • Issues that are directly connected with Money Laundering in India.
    • Section 3 of the PMLA defines the offense of money laundering as whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of the offense of money-laundering.
    • The Act was amended by the Prevention of Money Laundering (Amendment) Act, 2009 and by the Prevention of Money Laundering (Amendment) Act, 2012. Recently, the PMLA was amended through the Finance Act, 2015, Finance Act, 2018 and Finance Act, 2019.

    Why PMLA has lost its way? 

    • Draconian Nature: The provisions contained are now being used in other scheduled offenses too without mitigating their rigor. 
    • Redundant Law: The various amendments made in this Act at different times bloated the schedule offenses which now contain such offenses that are either ordinary offenses listed in the IPC or for which there are special laws in force.
      • For Example, the Prevention of Corruption Act, 1988 which is aimed at curbing corruption among public servants. This Act was added to the schedule of offenses in 2009. The PMLA now applies with all its rigor to public servants also. Thus, a public servant charged with corruption and a hard-core drug trafficker are treated alike.
    • Non-aligned with Fundamental Principles: A very disturbing thing about the PMLA is that an accused under this law is presumed to be guilty until proven innocent. A fundamental principle of Anglo-Saxon jurisprudence is that a person is presumed innocent until proven guilty. 
    • Stringent Bail Provisions: An accused will be denied bail by the entire hierarchy of courts because the bail provision contained in section 45 of the PMLA says that a judge can give bail only when he is satisfied that the accused is innocent. 
    • Legislative vs. Judiciary Nexus: The bail provision is invested with a lot of political significance in present-day India. The Act originally aimed to curb the laundering of black money and to save the economy from being destabilized. But the less serious offenses are also under purview of PMLA. The learned judges nearly said that the inclusion of a particular offense in the schedule comes within the domain of the legislative policy.
    Judicial Stand on the Bail Provisions:

    Gudikanti Narasimhulu And Ors vs Public Prosecutor (1978): The judicial perspective on bail was laid out by Justice V.R. Krishna Iyer (Andhra Pradesh HC) where it said that “Personal liberty is deprived when bail is refused, which is too precious value of our constitutional system recognized under Article 21”.

    Nikesh Tarachand Shah vs Union of India (2018): The PMLA Act (Section 45) was held unconstitutional by a two-judge Bench of the Supreme Court of India as it was violating Article 14 and Article 21.  

    Vijay Madanlal Choudhary vs Union of India (2022): Parliament, with great alacrity, restored this provision with certain amendments which was upheld by a three-judge Bench headed by Justice A.M. Khanwilkar in 2022. The top court held that this provision is reasonable and has a direct nexus with the purposes and objects of the PMLA Act. 

  • Solar surge: Moving away from imported solar panels

    Why in the news? 

    The government is finally bringing into effect the policy of an Approved list of Models and Manufacturers (ALMM) that will discourage solar power project developers from relying on imported panels. 

    About Approved Models and Manufacturers of Solar Photovoltaic Modules Order, 2019:

    • Aim: To boost domestic manufacturing of solar panels by registering only those made with domestically manufactured cells, wafers, and polysilicon.
    • Compulsory Registration: The order mandates compulsory registration for solar PV module and cell manufacturers, ensuring they meet certain quality and production standards.
    • Lists: LIST-I for solar PV modules and LIST-II for solar PV cells.
      • Only listed models and manufacturers in these lists are considered approved for use in various government projects and schemes.
    • Eligibility Criteria: To be included in the lists, manufacturers must undergo inspections and meet specific criteria set by the National Institute of Solar Energy (NISE) to ensure the products are genuinely manufactured and not imported.
    • This order ensures the reliability of solar PV products used in installations, promotes domestic manufacturing, and aligns with the government’s initiatives for renewable energy adoption and energy security.

    Efforts made by the Government to promote domestic Solar Manufacturing:

    • Import Restrictions: The creation of the Approved Models and Manufacturers list was aimed at restricting imports from China, which dominates a significant portion of the global solar supply market.
    • Ambitious Renewable Energy Targets: India aims to source about 500 GW of its electricity from non-fossil fuel sources by 2030, with at least 280 GW coming from solar power. This necessitates adding at least 40 GW of solar capacity annually until 2030. So there is need to focus on indegenous solar project

    Challenges ahead:

    • Unrealistic Targets: Despite ambitious targets, India’s solar capacity additions have been relatively low in recent years, attributed in part to the COVID-19 pandemic. The country aims to ramp up installations to between 25 GW and 40 GW annually.
    • Reliance on Imports: A significant fraction of India’s solar installations is met by imports, which affects domestic panel manufacturers who must pay for government certification but lose orders to cheaper Chinese panels. For example surge in Solar panel import in  FY 24 around $1,136.28 million  from FY23 imports $943.53 million

    Conclusion: India’s ALMM policy aims to boost domestic solar manufacturing, aligning with ambitious renewable energy targets. Address challenges like meeting targets and reducing reliance on imports through strategic planning and support.

    Mains PYQ 

    Q Describe the benefits of deriving electric energy from sunlight in contrast to conventional energy generation. What are the initiatives offered by our government for this purpose? (UPSC IAS/2020)

    https://economictimes.indiatimes.com/industry/renewables/how-india-became-a-frontrunner-in-the-global-renewable-energy-market/articleshow/100271905.cms?from=mdr

    https://mnre.gov.in/approved-list-of-models-and-manufacturers-almm/

    https://pib.gov.in/PressReleasePage.aspx?PRID=1944075

    https://energy.economictimes.indiatimes.com/news/renewable/indias-solar-panel-imports-set-to-remain-higher-in-fy24/106217488#:~:text=During%20the%20initial%20six%20months,million%2C%20according%20to%20Eninrac%20Consulting

  • UNCTAD Report Highlights Shifts in India’s Trade Relations

    What is the news?

    • The United Nations Conference on Trade and Development (UNCTAD) Global Trade Report revealed an evolving trade landscape for India, marked by increased reliance on China and the European Union (EU).

    About UNCTAD

    • UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly in 1964.
    • It is part of the UN Secretariat.
    • The UNCTAD Conference ordinarily meets once in four years.
    • It reports to the UNGA and the Economic and Social Council, but has its own membership, leadership and budget.
    • It is also a part of the United Nations Development Group.
    • It supports developing countries to access the benefits of a globalized economy more fairly and effectively.
    • Reports published by the UNCTAD are-
    1. Trade and Development Report
    2. World Investment Report
    3. Technology and Innovation Report
    4. Digital Economy Report

    Membership:

    • UNCTAD’s membership consists of all 195 member states of the United Nations.
    • India is an active member. The second UNCTAD Conference took place in New Delhi, India in 1968.

    Key Highlights of the Report:

    1. Key Findings on India
    • Trade Trends: India’s trade dependence on China and the EU rose by 1.2%, while reliance on Saudi Arabia declined by 0.6%.
    • Factors: This shift occurred amidst supply chain disruptions caused by the pandemic and the Russia-Ukraine conflict, leading to record-high food and fuel prices.
    • Policy Measures: Despite efforts to reduce dependency on China through initiatives like the Production-Linked Incentive (PLI) scheme and Quality Control Orders (QCOs), India’s trade relations with China strengthened.
    1. Insights from the Report
    • Stable Proximity: Geographical proximity of international trade remained relatively constant, indicating minimal near-shoring or far-shoring trends.
    • Political Proximity: However, there was a noticeable rise in the political proximity of trade, favouring countries with similar geopolitical stances.
    • Concentration of Trade: Global trade increasingly favored major trade relationships, although this trend softened towards the end of 2023.
    • Sectoral Trends: Most sectors experienced a decline in trade value, except for pharmaceuticals, transportation equipment, and electric cars.
    • Global Forecast: Global merchandise trade is expected to contract by 5% in 2023, with services trade projected to gain 8%.
    1. Impact of Russia-Ukraine Conflict
    • Shifts in Trade: The ongoing conflict led to a surge in Russia’s trade dependence on China by 7.1% while decreasing reliance on the EU by 5.3%.
    • Oil Trade: Russian oil shifted from the EU to China and India, with China becoming a significant trade partner for Russia.
    • US Trade Dynamics: The US managed to reduce reliance on China by 1.2% in 2023, while increasing dependence on the EU and Mexico.

    PYQ:

    The Global Infrastructure Facility is a/an: (2017)

    (a) ASEAN initiative to upgrade infrastructure in Asia and financed by credit from the Asian Development Bank.

    (b) World Bank collaboration that facilitates the preparation and structuring of complex infrastructure Public-Private Partnerships (PPPs) to enable mobilization of private sector and institutional investor capital.

    (c) Collaboration among the major banks of the world working with the OECD and focused on expanding the set of infrastructure projects that have the potential to mobilize private investment.

    (d) UNCTAD-funded initiative that seeks to finance and facilitate infrastructure development in the world.

     

    Practice MCQ:

    With reference to the United Nations Conference on Trade and Development (UNCTAD), consider the following statements:

    1. It is a permanent intergovernmental body established by the United Nations General Assembly.

    2. It is part of the UN Secretariat.

    3. India has never hosted the UNCTAD Conference.

    How many of the above statements is/are correct?

    (a) One

    (b) Two

    (c) Three

    (d) None

  • Tamil Nadu accounts for 30% of India’s electronics exports

    Why in the news? 

    Nearly 40% of India’s smartphone shipments over the past two fiscal years originated from a single district Kancheepuram.

    Context 

    • In FY23, Tamil Nadu emerged as India’s foremost exporter of electronic goods, contributing 30% to the country’s total electronic goods exports in FY24.
    • Historically, the state lagged behind Uttar Pradesh and Karnataka in this sector until FY22.
    • However, in recent years, Tamil Nadu has experienced consistent growth in electronic goods exports, unlike other states where figures have either declined or remained static.

     Chart 1 shows the electronic goods exported from Tamil Nadu in $ billion, year-wise.

    • Between April 2023 and January 2024, Tamil Nadu exported electronic goods valued at over $7.4 billion.

    Chart 2 shows the exports of electronic goods of the top five States in India in $ billion, year-wise

    • In FY24, Tamil Nadu’s exports exceeded the combined exports of Uttar Pradesh and Karnataka, which totaled $6.7 billion during that period.
    • Uttar Pradesh and Karnataka were ranked second and third, respectively, in terms of electronic goods exports.
    • Gujarat and Maharashtra, also among the top five exporting states, have experienced stagnant growth in recent years.

    Chart 3 shows the commodity wise share in total exports from India for FY24 (till February) in $ billion

    • Engineering goods were the dominant category of exports from India during the specified period, with a total value of $98 billion.
    • Petroleum products followed closely behind, with exports valued at $78 billion.
    • Gems and jewellery constituted another significant export category, with a total export value of $30 billion.
    • Electronics goods were also notable, although they ranked lower compared to other categories, with exports totaling $25 billion. In FY18, electronics goods were not among the top 10 most exported commodities from India.

     Biggest markets

    • Top most importor of India’s Electronic goods: The United States and the United Arab Emirates (UAE) are the largest markets for India’s electronic goods export. In FY24 (up to February), the U.S. accounted for approximately 35% of India’s electronic goods exports, amounting to $8.7 billion, while the UAE accounted for 12% with $3 billion.
    • Other countries share:The Netherlands and the United Kingdom (U.K.) each held a share of about 5% in India’s electronic goods exports.
    • The primary destination : Since FY21, the United States has consistently been the primary destination for India’s electronics exports, with its share increasing significantly in recent years.

    Conclusion

    Tamil Nadu’s emergence as a key electronics exporter, with 30% of India’s exports, is highlighted. Kancheepuram district’s significant role, alongside Tamil Nadu’s surpassing of Uttar Pradesh and Karnataka, underscores its growth in electronic goods exports.

     

    Mains PYQ

    Q  Can the strategy of regional-resource based manufacturing help in promoting employment in India? (UPSC IAS/2019) 

    Q Account for the failure of manufacturing sector in achieving the goal of labour-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports.(UPSC IAS/2017)

  • Recently Awarded GI Tags

    Why in the news?

    What is a GI Tag?

    • A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
    • Nodal Agency: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
    • India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 w.e.f. September 2003.
    • GIs have been defined under Article 22 (1) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
    • The tag stands valid for 10 years and can be renewed.

    Various GI Tags Awarded:

    Details
    Bihu Dhol (Assam) Traditional drum used during Bihu festivals
    Jaapi (Assam) Bamboo headgear worn in rural Assam
    Sarthebari metal craft (Assam) Traditional metal craft producing utensils and artifacts
    Mishing handloom products (Assam) Handwoven textiles including shawls and sarees
    Asharikandi terracotta craft (Assam) Terracotta pottery and decorative items
    Pani Meteka craft (Assam) Brass and copper utensils adorned with intricate designs
    Bodo Dokhona (Assam) Traditional attire of Bodo women
    Bodo Eri silk (Assam) Silk fabric produced from eri silkworms, known for its soft texture and eco-friendly production
    Bodo Jwmgra (Assam) Traditional scarf worn by Bodo community members
    Bodo Gamsa (Assam) Traditional dress of Bodo men
    Bodo Thorkha (Assam) Traditional musical instrument made from bamboo or wood
    Bodo Sifung (Assam) Long flute used in traditional Bodo music
    Banaras Thandai (Uttar Pradesh) Traditional drink made from milk, nuts, seeds, and spices
    Banaras Tabla (Uttar Pradesh) Pair of drums used in classical Indian music
    Banaras Shehnai (Uttar Pradesh) Traditional wind instrument used in Indian classical music
    Banaras Lal Bharwamirch (Uttar Pradesh) Red chili grown in the Banaras region
    Banaras Lal Peda (Uttar Pradesh) Popular Indian sweet made from condensed milk and sugar
    Pachra-Rignai (Tripura) Traditional dress worn by women, consisting of a wrap-around skirt and blouse
    Matabari Peda (Tripura) Sweet delicacy made from condensed milk, sugar, and ghee
    Garo Textile weaving (Meghalaya) Traditional weaving craft practiced by the Garo tribe
    Lyrnai Pottery (Meghalaya) Traditional pottery making characterized by unique designs and techniques
    Chubitchi (Meghalaya) Traditional dish made with meat, local herbs, and spices

     

    PYQ:

    Which of the following has/have been accorded ‘Geographical Indication’ status? (2015)

    1.    Banaras Brocades and Sarees

    2.    Rajasthani Daal-Bati-Churma

    3.    Tirupathi Laddu

    Select the correct answer using the codes given below:

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 only 3 only

    (d) 1, 2 and 3

     

    India enacted The Geographical Indications of Goods (Registration and Protection) Act, 1999 in order to comply with the obligations to (2016):

    (a) ILO

    (b) IMF

    (c) UNCTAD

    (d) WTO

     

    Practice MCQ:

    Consider the following statements about the Geographical Indications (GI) Tag:

    1.    The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry is the nodal agency for GI.

    2.    A GI tag stands valid for 10 years and cannot be renewed.

    Which of the given statements is/are correct?

    (a) Only 1

    (b) Only 2

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

  • Section 120B of the Indian Penal Code (IPC)

    Why in the news?

    • The Supreme Court has rejected review petitions challenging its ruling on the initiation of proceedings under the Prevention of Money Laundering Act (PMLA).
    • The judgment clarified that Section 120B of the Indian Penal Code cannot be invoked for PMLA proceedings unless the alleged conspiracy pertains to a scheduled offence.

    Prevention of Money Laundering Act (PMLA), 2002

     

    • The PMLA was enacted in 2002 with the aim of preventing money laundering and providing for confiscation of property derived from money laundering.
    • It applies to all financial institutions, banks (including the RBI), mutual funds, insurance companies, and their financial intermediaries.
    • The Act empowers government authorities to confiscate property and/or assets earned from illegal sources and through money laundering.
    • It has been amended three times, in 2005, 2009, and 2012.
    • Under the PMLA, the burden of proof lies with the accused, who must demonstrate that the suspect property/assets have not been obtained through proceeds of crime.

     

    Penalties under PMLA:

    • Freezing or Seizure of property and records, and/or attachment of property obtained through crime proceeds.
    • Rigorous imprisonment for a minimum of 3 years and a maximum of 7 years. In cases where money laundering is linked with the Narcotic Drugs and Psychotropic Substances Act, 1985, the punishment can extend up to 10 years, along with a fine.
    • Fine imposition.

     

    Authorities for investigation under PMLA:

    1. Enforcement Directorate (ED): It is responsible for investigating offenses under the PMLA.
    2. Financial Intelligence Unit – India (FIU-IND): It is the national agency tasked with receiving, processing, analyzing, and disseminating information related to suspect financial transactions.

    What is Article 120 of Indian Penal Code (IPC)?

    • Section 120 of the Indian Penal Code (IPC) deals with the concept of “Conspiracy to commit an offense”.
    • It states that when two or more persons agree to do, or cause to be done, an illegal act, or an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy.
    • Section 120A defines “criminal conspiracy” as when two or more persons agree to do, or cause to be done, an illegal act or an act which is not illegal by illegal means.
    • Section 120B prescribes the punishment for criminal conspiracy, with death, imprisonment for life, or rigorous imprisonment for a term of two years or upwards, shall be punished in the same manner as if he had abetted such offense.

    Punishment for Criminal Conspiracy

    • Nature of Conspiracy: IPC 120B categorizes conspiracy based on the gravity of the offense and prescribes punishments accordingly.
    • Serious Offenses: Conspiracy to commit serious crimes punishable by death, life imprisonment, or rigorous imprisonment for 2 years or more warrants severe punishment equivalent to the offense committed.
    • Other Offenses: Conspiracy for illegal acts not falling under the serious category incurs imprisonment for up to six months, a fine, or both, as per Section 120B.

    Practice MCQ:

    Which of the following statements are correct regarding ‘Prevention of Money Laundering Act 2002 (PMLA)’?

    1. Enforcement Directorate (ED) is responsible for investigating offences under the PMLA

    2. The Act enables government authorities to confiscate property earned through money laundering.

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

  • UNEP Food Waste Index Report, 2024

    Why in the news?

    The Food Waste Index Report, 2024 was recently released by the United Nations Environment Programme (UNEP) and Waste & Resources Action Programme (WRAP), a UK based non-profit organization.

    Food Waste Index Report:

    • It tracks the global and national generation of food and inedible parts wasted at the retail and consumer (household and food service) levels.
    • It was first launched in 2011.
    • It was conceived as a tool to monitor progress towards international targets, such as those outlined in the SDG 12.3, which calls for halving food waste by 2030.

     

    Key Findings of the 2024 Report

    1. Total Food Waste Generation in 2022:
      • Globally, 1.05 billion tonnes of food waste were generated in 2022.
    2. Distribution of Food Waste by Sector:
      • Households accounted for 60% of the total food waste.
      • Food services were responsible for 28% of the total food waste.
      • Retail accounted for 12% of the total food waste.
    3. Per Capita Food Waste:
      • The average per capita food waste was 132 kilograms in 2022.
    4. Economic Cost of Food Waste:
      • The economic toll of food loss and waste is estimated at $1 trillion.
    5. Contribution to Greenhouse Gas Emissions:
      • Food loss and waste contribute significantly to greenhouse gas emissions, accounting for 8-10% of annual global emissions.
    6. Regional Trends:
      • Food waste levels vary minimally across income groups.
      • Hotter climates tend to generate more household food waste due to consumption patterns and infrastructure limitations.
      • Rural areas generally exhibit lower levels of food waste compared to urban areas.
    7. Policy Integration:
      • Only 21 countries, including Australia, Japan, the United Kingdom, the United States, and the European Union, have included food loss and waste reduction in their climate plans or Nationally Determined Contributions (NDCs).

    PYQ:

    2019: In India, ‘extended producer responsibility’ was introduced as an important feature in which of the following?

    (a) The Bio-medical Waste (Management and Handling) Rules, 1998

    (b) The Recycled Plastic (Manufacturing and Usage) Rules, 1999

    (c) The e-Waste (Management and Handling) Rules, 2011

    (d) The Food Safety and Standard Regulations, 2011

     

    Practice MCQ:

    Which of the following statements is correct about the Food Waste Index Report?

    (a) It tracks only the global generation of food waste at the retail level.

    (b) It was first launched in 2011 to monitor progress towards reducing food waste in households and food service sectors.

    (c) It is a tool aimed at monitoring progress towards international targets outlined in SDG 12.3 to halve food waste by 2030.

    (d) It primarily focuses on tracking inedible parts wasted at the industrial level.

     

  • [29 March 2024] The Hindu Op-ed: Understanding India’s coal imports

    [29 March 2024] The Hindu Op-ed: Understanding India’s coal imports

    PYQ Relevance:

    Mains: 

    Q) “Despite the adverse environmental impact, coal mining is still inevitable for Development”. Discuss. (UPSC CSE 2017) 

    Q) What are the consequences of Illegal mining? Discuss the Ministry of Environment and Forest’s concept of GO AND NO GO zones for the coal mining sector. (UPSC CSE 2013) 

    Prelims:

    Q) Despite having large reserves of coal, why does India import millions of tonnes of coal?
    1. It is the policy of India to save its coal reserves for the future and import it from other countries for the present use.
    2. Most of the power plants in India are coal-based and they are not able to get sufficient supplies of coal from within the country.
    3. Steel companies need large quantities of coking coal which has to be imported.

    Which of the statements given above is/are correct? (UPSC CSE 2012) 
    (a) 1 only
    (b) 2 and 3 only
    (c) 1 and 3 only
    (d) 1, 2 and 3

    Note4Students: 

    Prelims: International Organisations;

    Mains: International Organisations; Trades and Practices;

    Mentor comments: The spectre of electricity shortages rises again as hot weather descends across the country. In recent years, increasingly unpredictable weather patterns and a fast-growing economy have led to big increases in electricity demand, the meeting of which reliably becomes a challenge. But some of the discourse in this context deserves greater scrutiny.

    Let’s learn. 

    —

    Why in the News?

    The recent unpredictable Weather Discourse and increase in Energy Demands around the coal sector in India needs a course correction.

    What are the recent challenges highlighted with coal?

    • Challenge with Logistics:
      • Shortage of Domestic Thermal Coal: It is the kind of Coal used in electricity generation, which is primarily blamed for the electricity shortage. Electricity shortage last year was about 840 million units due to poor monsoon, in turn leading to increased demand and reduced supply from some sources. 
      • Shortage of Logistics: According to the Ministry of Power advisory, the core challenge is insufficient logistics to move the coal to power plants. This leads to the second conflation, that the only alternative source is imports. 
    • The issue of imports:
      • Some thermal coal imports to blend with domestic coal may be required even if auctions are used. The question then is about how much of imports for which coal plants. 
      • India has been the major demand side driver of the global coal market. The higher imports is an indication of the preparations to meet the rise in demand of power. 
      • A mandatory blending of 6% imported coal, instead of the current blending levels, can increase the variable cost of coal-based electricity by 4.5%-7.5%. 
      • Indeed, as in the report on Annual Rating of Power Distribution Utilities, power purchase costs increased by 15% in FY23 due to increases in demand, coal imports, and prices of imported coal. 
    • The Issue with Generation and Location:
      • The plants that generate the most (pit-head plants) are situated close to mines, far away from ports, and do not face coal shortages. Shortages in periods of high demand are more likely in plants far away from mines which typically do not generate as much. 

    Way Forward:

    • Reducing Coal dependency: The discourse around coal shortages in the country needs course correction. It cannot be assumed that coal imports are the default way to address shortages. 
    • Increasing Accessibility: The fundamental challenge is to overcome the logistics bottlenecks that are preventing coal from reaching the locations where required. 
    • Government Interventions needed: In the interim, regulatory commissions and distribution utilities must ensure that all coal-based plants are alert to the possibility of coal shortages and identify the cheapest alternative sources which may not be imports to bridge the gap. 

    https://www.thehindu.com/opinion/op-ed/understanding-indias-coal-imports/article68003203.ece

  • T + 0 Settlement System kick starts today

    Why in the news?

    India’s stock market will begin the with a ‘beta version’ of T+0 settlement system (same day settlement) from today. This is the world’s fastest stock settlement system.

    About T+0 Settlement Cycle

    • SEBI has planned to introduce the shorter cycle in two phases:
    1. T+0 Settlement Details: In Phase 1, trades executed until 1:30 PM will be settled by 4:30 PM on the same day.
    2. Instant Settlement Mechanics: Phase 2 envisages immediate trade-by-trade settlement, with trading continuing until 3:30 PM.

    Features of the T+0 Settlement Mechanism

    • Early Pay-In Trend: A large percentage of retail investors already make early pay-ins of funds and securities, indicating readiness for instant settlement.
    • Instant Receipt Benefits: The mechanism enables instant receipt of funds and securities, reducing settlement shortages and enhancing investor control.
    • Investor Protection: Direct crediting of funds and securities into investors’ accounts, especially for UPI clients, strengthens investor protection.

    Settlement Cycle: A Quick History  

     

    • SEBI shortened the settlement cycle from T+5 to T+3 in 2002, and then to T+2 in 2003.
    • The T+1 cycle was introduced in 2021 and fully implemented by January 2023.
    • In T+1, the settlement of funds and securities occurs on the next day after the trade.

    Scope and Implementation of T+0

    • Initially, the T+0 settlement will be available for the top 500 listed equity shares based on market capitalization, implemented in three tranches.
    • The same surveillance measures applicable in the T+1 cycle will apply to the T+0 cycle.
    • Trade-for-trade settlement securities will NOT be eligible for T+0.

    Rationale behind T+O Cycle

    • Market Growth and Efficiency: With the significant growth in market volumes and participants, SEBI aims to enhance market efficiency and safety, especially for retail investors.
    • Technological Advancements: The evolution of payment systems like UPI and the sophistication of market infrastructure support the feasibility of shorter settlement cycles.
    • Investor Attraction: Faster transactions, reliability, and low costs are key factors that attract investors, making Indian securities a more appealing asset class.

    Benefits of the New Mechanism

    • Flexibility for Clients: The new mechanism offers faster payouts of funds to sellers and securities to buyers, providing greater flexibility and control.
    • Market Ecosystem Advantages: The faster settlement cycle is expected to enhance the operational efficiency of the securities market, benefiting the entire ecosystem.

     

    PYQ:

    2017: The term ‘Digital Single Market Strategy’ seen in the news refers to

    a)    ASEAN

    b)    BRICS

    c)    EU

    d)    G20

     

    Practice MCQ:

    With reference to the T+0 Settlement Cycle, consider the following statements:

    1.    Trades executed until 1:30 PM will be settled by 4:30 PM on the same day.

    2.    Trade-for-trade settlement securities will also be eligible for T+0.

    Which of the given statements is/are correct?

    a)    Only 1

    b)    Only 2

    c)    Both 1 and 2

    d)    Neither 1 nor 2