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Subject: Governance

Important aspects of Society

  • Issue of withdrawal of Personal Data Protection Bill

    Context

    The Minister for the Ministry of Electronics and IT withdrew the Personal Data Protection Bill, 2019. The reasons for the withdrawal were circulated in a note to MPs, which stated that,“considering the report of the JPC (Joint Parliamentary Committee), a comprehensive legal framework is being worked upon
”.

    Background of Personal Data Protection Bill

    •  An expert committee headed by Justice (retd) A P Shah recommended in October, 2012,“a detailed framework that serves as the conceptual foundation for the Privacy Act”.
    • This did not come to fruition, with proposals buried by 2014 due to objections from the intelligence establishment on surveillance reforms.
    • While petitions on the constitutionality of Aadhaar and the right to privacy were pending before the Supreme Court, the Union government constituted an expert group headed by Justice (retd) B N Srikrishna in July, 2017.
    •  In August, a nine-judge bench unanimously pronounced the Puttaswamy judgment that reaffirmed the fundamental right to privacy for the autonomy, dignity and liberty for every Indian.
    • Justice D Y Chandrachud, who authored the majority opinion, noted the formation of the Srikrishna Committee as a positive obligation on the government to enact a law for informational privacy.
    • In December 2019, government introduced the Personal Data Protection Bill, 2019 in Parliament.
    • The draft law was referred to a JPC of 30 MPs that submitted a report after two years.
    • With the withdrawal in Parliament on August 3, it almost seems institutional processes, in which all three branches of government worked for years, are being jettisoned in favour of “a comprehensive legal framework”.

    Issues with reasons given for withdrawal of the Bill

    • The JPC has nowhere suggested a withdrawal in favour of a “comprehensive legal framework”.
    • The proper course was to consider the JPC’s recommendations including the dissent notes and expert analysis, redraft and introduce a new Data Protection Bill.
    • Compliance burden concern of government: With the government setting the goal of a one trillion dollar digital economy, fears of a compliance burden can impede innovation and growth.
    • Date protection is needed for innovation: Here, detailed reasoning is available in the Srikrishna Committee’s report as well as a growing international consensus suggesting that next-generation innovation in technology needs data protection.
    • Regulatory intervention will improve business practices requiring engineering decisions that focus on user trust.
    • Imperfections in law argument: With the imperfections within the Personal Data Protection Bill, 2019 and even the JPC report, there exists a reasonable argument that if passed into law, it may institutionalise bad privacy practices.
    •  Such a line of reasoning fails to recognise that institutional memory develops through reasonable due diligence and experience.
    • Legislative foresight is limited and no law is perfect, which is why there exist parliamentary amendments and judicial review.

    Conclusion

    Today, there is a relentless pace of digitisation that relies on gathering personal data in all spheres of our lives. All of this is done in a legal vacuum without any oversight or remedy. This underscores the urgent need for data protection law.

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  • Govt withdraws Data Protection Bill

    The government has withdrawn the Personal Data Protection Bill from Parliament after several amendments were proposed by the Joint-Parliamentary Committee.

    What is Personal Data?

    • Data can be broadly classified into two types: personal and non-personal data.
    • Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual.
    • Non-personal data includes aggregated data through which individuals cannot be identified.
    • For example, while an individual’s own location would constitute personal data; information derived from multiple drivers’ location, which is often used to analyse traffic flow, is non-personal data.

    What is Data Protection?

    • Data protection refers to policies and procedures seeking to minimise intrusion into the privacy of an individual caused by collection and usage of their personal data.

    Why was a bill brought for Personal Data Protection?

    • In August 2017, the Supreme Court had held that Privacy is a fundamental right under Article 21 of the Constitution.
    • The Court also observed that privacy of personal data and facts is an essential aspect of the right to privacy.
    • In July 2017, a Committee of Experts, chaired by Justice BN Srikrishna, was set up to examine various issues related to data protection in India.
    • The committee submitted its report, along with a Draft Personal Data Protection Bill, 2018 to the Ministry of Electronics and Information Technology in July 2018.

    How is personal data regulated currently?

    • Currently, the usage and transfer of personal data of citizens is regulated by the Information Technology (IT) Rules, 2011, under the IT Act, 2000.
    • The rules hold the companies using the data liable for compensating the individual, in case of any negligence in maintaining security standards while dealing with the data.

    Issues with IT Rules, 2011

    • The IT rules were a novel attempt at data protection at the time they were introduced but the pace of development of digital economy has shown its shortcomings.
    • For instance, (i) the definition of sensitive personal data under the rules is narrow, and (ii) some of the provisions can be overridden by a contract.
    • Further, the IT Act applies only to companies, not to the government.

    What the Personal Data Protection Bill sought to provide?

    • Collection and storage: The bill regulate personal data related to individuals, and the processing, collection and storage of such data.
    • Data Principal: Under the bill, a data principal is an individual whose personal data is being processed.
    • Data fiduciary: The entity or individual who decides the means and purposes of data processing is known as data fiduciary.
    • Data processing: The Bill governs the processing of personal data by both government and companies incorporated in India.
    • Data localization: It also governs foreign companies, if they deal with personal data of individuals in India.
    • General consent: The Bill provides the data principal with certain rights with respect to their personal data. Any processing of personal data can be done only on the basis of consent given by data principal.
    • Data Protection Authority: To ensure compliance with the provisions of the Bill, and provide for further regulations with respect to processing of personal data of individuals, the Bill sets up a DPA.

    Issues with the PDP Bill

    • Exemptions to the govt: Section 35 of the bill permits the Central Government to exempt any agency of the Government from the provisions of the law.
    • No reasonable exemptions: There is no sufficient reason for government agencies to be exempted from basic provisions of the Bill.
    • Easy breach: Though this would be subject to procedures, safeguards, and oversight mechanisms to be prescribed by the Government.
    • Executive hegemony: There is no scope for oversight over the executive’s decision to issue such an order.
    • Arbitrary and intrusive: As demonstrated by the Pegasus case, the current frameworks for protecting citizens from arbitrary and intrusive State action lack robustness.

    Why is the state given exemption?

    • Biggest needy of Data: The State is one of the biggest processors of data, and has a unique ability to impact the lives of individuals.
    • Welfare objectives: It has a monopoly over coercive powers as well have the obligation to provide welfare and services.

    Issues with Exemption to State

    • Grounds of expediency: the use of this provision on grounds of expediency is an extremely low bar for the Government to meet.
    • Non requirement for exemption order: There is no requirement for an exemption order to be proportionate to meeting a particular State function.
    • No oversight on executive actions: There is no scope for oversight over the executive’s decision to issue such an order or any safeguards prescribed for this process.
    • State surveillance: Section 36(a) of the Bill provides for an exception where personal data is being processed against criminal investigation. This provision could therefore encourage vigilantism or enable privatized surveillance.

    Best practices followed across the world

    • The European GDPR (General Data Protection Regulation) is commonly seen as the pinnacle of data protection regulation worldwide.
    • The EU law has in place a separate law that deals with the processing of personal data by law enforcement agencies.
    • UK’s Data Protection Act dedicates Part 3 that liberalises certain obligations while at the same time ensuring that data protection rights are also protected.

    Way forward

    • Balancing privacy interests with those of public needs (such as that of State security) is a difficult task.
    • This should undergo rigorous consultations in Parliament taking into confidence all stakeholders.
    • Once debated in Parliament, one can only hope that adequate time and attention is given to finding a better balance between competing interests.

     

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  • Making sense of the ‘freebies’ issue

    Context

    Concern over ‘freebies’ in Indian politics has recently been expressed by those in the highest offices in the country.

    Issue of irrational freebies

    • Challenge in defining freebies: There is often confusion on what constitutes ‘freebies’, with a number of services that the Government provides to meet its constitutional obligations towards citizens also being clubbed in this category.
    • Distortion of electoral process: A Bench headed by the Chief Justice of India recently heard a public interest litigation in which the petitioner argued against the promise of ‘irrational freebies’ by claiming that these distort the electoral process.
    • The bench asked the Central government to take a stand on the need to control the announcement of ‘freebies’ by political parties during election campaigns.
    • The Court also suggested that the Finance Commission could be involved to look into the matter and propose solutions.
    • The basic argument is that these are a waste of resources and place a burden on already stressed fiscal resources.
    • Discussions on ‘freebies’ not only include the free distribution of what may be considered ‘club goods’ such as televisions but also welfare schemes such as free or subsidised rations under the Public Distribution System (PDS) and work provided through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

    Can we term foodgrain distribution under PDS as freebies?

    • It ensures food security: Subsidised foodgrains distributed under the PDS not only contribute to ensuring basic food security but also act as an implicit income transfer allowing the poor to afford commodities that they otherwise could not.
    • Price support for farmers: Further, the PDS also plays an important role in our country where public procurement at minimum support prices (MSPs) is one of the main instruments of support to farmers.
    • The PDS allows foodgrains to be available for cheap for consumers while assuring remunerative prices to farmers.
    • Food security during emergency: The PMGKAY is probably what kept many away from the brink of starvation during the novel coronavirus pandemic.
    • From around the mid-2000s, the PDS increasingly became a political issue, with State governments expanding coverage and reducing prices.
    •  This ultimately led to the National Food Security Act being passed by Parliament unanimously in 2013.
    • Despite its shortcomings, it cannot be denied that the PMGKAY and the support that it provided during the pandemic would have been impossible had it not been for the NFSA which expanded the coverage of the PDS to about two thirds of the population.
    • In its absence, a much smaller number of people would have had ration cards with high errors in identification.

    Other welfare schemes

    •  At a time when there are few employment opportunities, working under MGNREGA can guarantee some assured wages; if implemented in the true spirit of the legislation this is also demand-based and, therefore, responds to as much need as there is.
    • Similarly, mid-day meals in schools have been proven to contribute to increased enrolment and retention in schools and addressing classroom hunger.
    • A number of other schemes such as old age, single women and disabled pensions, community kitchens in urban areas, free uniforms and textbooks for children in government schools, and free health-care services play a critical role in providing social security and access to basic entitlements in our country.

    Way forward

    • Building public pressure towards making welfare delivery an electoral issue is the need of the hour.
    • It is important to recognise that most welfare schemes contribute to improving human development outcomes, which also results in higher economic growth in future.
    • As suggested by the Supreme Court, the Finance Commission could be tasked with formulating the criterion to come up with the criterion for freebies.
    • Sometimes, this process throws up initiatives that seem ‘wasteful’ — while these must be discussed, one cannot deny them completely.

    Conclusion

    There are a number of lacunae in these programmes which call for expansion in coverage, allocation of greater resources, along with putting in place mechanisms for greater accountability and grievance redress.

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  • RTI Act

    Context

    Amidst renewed concern over its functioning across states, the Right to Information Act (RTI) is set to complete 17 years this October.

    Issues facing RTI

    • Backlog of appeals: Issues include a huge backlog of second appeals, lengthy wait time for hearings, hesitancy in posting penalties and increasing opacity in the working of the commissions.
    •  As on June 30, 2021, 2.56 lakh appeals were pending with 26 information commissions in the country.
    • CICs downgraded rank: Any serious RTI query or one which concerns more than one government department requires intervention by higher officials, but it is the PIOs from junior ranks who attend hearings and are often clueless.
    • Often, it requires a notice to higher authorities, in some cases, the secretary of the department, to elicit the right answer.
    •  With CICs downgraded in rank, there will be fewer and fewer notices served to the heads of departments and senior officers to appear and answer queries.
    • Vacancies: The commissions have been plagued with vacancies, poor choice of commissioners, untrained staff and a non-cooperative set of public information officers (PIOs).
    • Threat to some RTI activists: Apart from the PIOs’ general inexperience and unprofessionalism, comes the threat to some RTI activists who seek information to expose corruption.
    • According to the Commonwealth Human Rights Initiative (CHRI), across India, 99 RTI activists have lost their lives, 180 assaulted and 187 were threatened since 2006.
    • Political proclivity: The attitude of a few commissioners going public with their political proclivities is another cause for concern.

    Way forward

    • Training of officials: The Indian information law, rated as one of the strongest in the world, needs to be bolstered by raising awareness amongst the people and organising rigorous training of government officials.
    • Code of conduct: A code of conduct must be evolved for the central and state information commissioners.
    • It is imperative for the commissioners to keep a strict distance from government heads and officialdom.
    •  A strong political system is a must for the RTI regime to flourish.
    • It is imperative to ensure freedom of the press and democratic institutions, punish errant officials and maintain complete autonomy of the information commissions, in the interest of the people and the nation at large.

    Conclusion

    As India emerges as a global power, the implementation of legislation like the RTI Act will be under the constant scrutiny of the comity of nations.

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  • Corporal Punishment

    Three private school teachers in Pune have been booked under the Juvenile Justice Act over allegedly thrashing three Class 10 students, and threatening to grade them poorly in internal assessments

    What is Corporal Punishment?

    • By definition, corporal punishment means punishment that is physical in nature.
    • There is NO statutory definition of ‘corporal punishment’ targeting children in the Indian law.
    • The Right of Children to Free and Compulsory Education (RTE) Act, 2009 prohibits ‘physical punishment’ and ‘mental harassment’ under Section 17(1) and makes it a punishable offence under Section 17(2).

    Identifying corporal punishments

    • According to the Guidelines for Eliminating Corporal Punishment in Schools issued by the National Commission for Protection of Child Rights (NCPCR), physical punishment is understood as any action that causes pain, hurt/injury and discomfort to a child, however light.
    • Examples include hitting, kicking, scratching, pinching, biting, pulling the hair, boxing ears, smacking, slapping, spanking, hitting with any implement (cane, stick, shoe, chalk, dusters, belt, whip), giving electric shock and so on.
    • It includes making children assume an uncomfortable position (standing on bench, standing against the wall in a chair-like position, standing with school bag on head, holding ears through legs, kneeling, forced ingestion of anything, detention in the classroom, library, toilet or any closed space in the school.

    What else is included?

    • Mental harassment is understood as any non-physical treatment that is detrimental to the academic and psychological well-being of a child.
    • This includes sarcasm, calling names and scolding using humiliating adjectives, intimidation, using derogatory remarks for the child, ridiculing or belittling a child, shaming the child and more.

    Safeguards against corporal punishment

    • Section 17 of the Right to Education Act, 2009, imposes an absolute bar on corporal punishment.
    • Section 75 of the Juvenile Justice Act prescribes punishment for cruelty to children.
    • Violation would invite punishment of rigorous imprisonment upto five years and fine up to Rs 5 lakh.
    • If the child is physically incapacitated or develops a mental illness or is rendered mentally unfit to perform regular tasks or has risk to life or limb, then imprisonment may extend upto ten years.

    Exceptions

    • The RTE Act does not preclude the application of other legislation that relates to the violations of the rights of the child.
    • For example, booking the offenses under the IPC and the SC and ST Prevention of Atrocities Act of 1989.
    • In theory, corporal punishment is covered by all the provisions under Indian law that punish perpetrators of physical harm.

    What do NCPCR guidelines say about eliminating corporal punishment?

    The NCPCR guidelines for eliminating corporal punishment against children require every school to develop a mechanism and frame clear-cut protocols to address the grievances of students.

    • Drop boxes are to be placed where the aggrieved person may drop his complaint and anonymity is to be maintained to protect privacy.
    • Every school has to constitute a ‘Corporal Punishment Monitoring Cell’ consisting of two teachers, two parents, one doctor, and one lawyer (nominated by DLSA).

    Who is entrusted with the responsibility to ensure children are protected?

    • There are relevant authorities earmarked to ensure the protection of children in schools.
    • Under Section 31 of the RTE Act, the National Commission for Protection of Child Rights (NCPCR) and the State Commissions for Protection of Child Rights (SCPCRs) have been entrusted with the task of monitoring children’s right to education.
    • The state governments under their RTE rules have also notified block/district level grievance redressal agencies under the RTE Act.

     

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  • What rules govern Disposal of Seized Narcotics?

    The Narcotics Control Bureau (NCB) has destroyed 30,000 kg of seized drugs at four locations – Kolkata, Chennai, Delhi and Guwahati — in the virtual presence of Union Home Minister.

    Destruction of Seized Narcotic Drugs

    • Section 52-A of the Narcotics Drugs and Psychotropic Substances (NDPS) Act, 1985 allows probe agencies to destroy seized substances after collecting required samples.
    • Officials concerned must make a detailed inventory of the substance to be destroyed.
    • A five-member committee comprising the area SSP, director/superintendent or the representative of the area NCB, a local magistrate and two others linked to law enforcement and legal fraternity is constituted.
    • The substance is then destroyed in an incinerator or burnt completely leaving behind not any trace of the substance.

    Exact procedure that is followed

    • The agency first obtains permission from a local court to dispose of the seized narcotic substances.
    • These substances are then taken to the designated place of destruction under a strict vigil.
    • The presiding officer tallies the inventory made at the storeroom with that material brought to the spot.
    • The entire process is videographed and photographed.
    • Then one by one, all the packets/gunny bags of the substance/s are put in the incinerator.
    • As per rules, committee members cannot leave the place until the seized drugs have been completely destroyed.

    Which agency is authorized to carry out such an exercise?

    • Every law enforcement agency competent to seize drugs is authorized to destroy them after taking prior permission of the area magistrate.
    • These include state police forces, the CBI and the NCB among others.

    Why destroy seized drugs?

    • The hazardous nature of narcotic drugs or psychotropic substances, their vulnerability to theft, substitution, and constraints of proper storage space are among the reasons that make agencies destroy them.
    • There have been instances when seized narcotics were pilfered from the storeroom.
    • To prevent such instances, authorities try to destroy seized drugs immediately after collecting the required samples out of the seized substances.

     

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  • Better time for Sports in India: PM

    Noting that the most prestigious FIDE 44th Chess Olympiad had for the first time come to India — the home of chess — during the 75th year of freedom from colonial rule, PM Modi said there had never been a better time for sports in India.

    Sports in India

    • Physical activity is fundamental to human beings:  The report states that having a fundamental right to literacy would mean identifying the intrinsic value of physical activity to human living.
    • Part of elementary education: It would mean not seeing physical activity as an end in itself, and the establishment of physical activity/ physical education as a core component of the education curriculum.
    • Supportive to other FRs: A fundamental right to physical literacy would actualise and enhance the enjoyment of other fundamental rights. It would go a long way in enhancing the opportunities and freedom to express oneself.
    • Enhancing life quality: A physically literate individual would have a more fulfilling life of higher quality than one who is not.  Physical literacy, as a building block, would go a long way in the promotion and realisation of the right to health and the right to education.
    • Religion as a barriers: Some sports like swimming and athletics require attire that does not fully cover a woman’s body and are against the laws of some religions. They are often debated in light of modesty of the sportspersons beings violated.
    • Associated social reforms: Many women perceive sports as an opportunity to escape the confines of a highly regulated life. They use it as a tool to show their potential and tackle the patriarchal mindset. Further success of sportspersons like Mary Kom, Saina Nehwal, etc. have played a pivotal role in curbing the problems of child marriage and son meta preference.

    Issues with Sports in India

    • Poor performance in competitions: India has the worst population to medals ratio at the Olympics. We find our medal tally at the Olympics to be hopelessly out of sync with our 1.3 billion population.
    • Regressive attitude towards sports: Our attitude towards sport and physical well-being is another debilitating factor. Traditionally, India has not been a sports nation where many deserving candidates are discouraged right at the starting level.
    • Economic divide: It hard reality which we consistently refuse to acknowledge. Athletes are not generated from the comfortable classes, they invariably come often from the middle and lower economic strata.
    • Incentivization: There is more focus on post-success incentivization rather than pre-success support in India. For instance, the Haryana Government announced a 6 crore reward after Neeraj Chopra won the gold medal in Tokyo Olympics 2020.

    Significance of physical education and sports

    • Physical development: Fitness, Health
    • Mental development: It improves decision-making and collective action. It also acts as stress buster.
    • Character/ personality development: It instils confidence, team spirit, team coordination, group work)

    Benefits of augmenting sports career

    • Alternative career development: For those for whom opportunities are few, and jobs are scarce, sport becomes a powerful mobility device. A strong sports sector encourages an average/ poor academic student to make a career in sports.
    • Reaping demographic dividend: India is having a very young population and is soon going to become the world’s youngest country. In such a scenario, a robust sports sector can help in reaping the potential demographic dividend.
    • Revenue generation: Developing robust sports infrastructure in the country will allow India to host a greater number of international events. Such hosting boosts tourism in the country and results in enhancing the revenue and employment in the region. Ex. IPL
    • Promotes the spirit of Unity in Diversity: People cheer for the Indian athletes and Indian teams at international events. An improvement in sports automatically fosters the spirit of brotherhood amongst the people of diverse nations. For instance, the Pan India support enjoyed by Indian cricket team enhances belongingness between India’s north and south.

    Reasons for India’s poor performance

    India’s below-par performance in sports can be attributed to the combination of all the factors discussed below:

    • Lack of facilities: We have thousands of education centres all over the country, but there are very few schools and colleges which have adequate facilities for any sport.
    • Regional discrepancies: The spending of money is concentrated in major cities where facilities do exist, but the broad-based structure to tap and develop talent is missing. The facilities wherever they are created are confined to a few popular games like cricket, hockey, football, tennis, etc.
    • Burden of ill-health: Mother and child health is an all-time contested issue in India. This may well be attributed to weather conditions, poor economic condition generally-due to which nutrition is not available to most of our children.
    • Narrow perception: The parents are keen that their kids should do well studies to get a degree and ultimately fetch a good job. Playing for long hours regularly is considered a waste of time.
    • Lesser academia for physical education: There are few Sports Colleges which are genuinely making efforts to produce national-level sportsmen, but their number is so small that no perceptible impact is seen due to their existence.
    • Lack of training: Another reason for our poor performance in sports is the lack of required number of trainers, coaches and psychotherapists. There is also a dearth of quality coaching or the qualified coaches.
    • Non-interest: The west often accuse that Indians lack the killer’s instinct. The zest and enthusiasm necessary to win over the opponent is naturally absent in the Indian psyche.
    • Obsession for few sports: There is no doubt that cricket and hockey plays a major unifying role in India. However, other sports and sportsperson are often discouraged due to such obsessions.
    • Performance anxiety: A high degree of pressure is inflicted upon a sportsperson to perform or else be prepared to live a vulnerable life. This sometimes creates excessive mental stress in them or induces them to resort to unethical means like doping.

    Various initiatives for sports promotion

    The Ministry of Youth Affairs & Sports has formulated the following schemes to promote sports in the country, including in rural, tribal and backward areas:

    1. Khelo India Scheme
    2. Assistance to National Sports Federations
    3. Special Awards to Winners in International sports events and their Coaches
    4. National Sports Awards, Pension to Meritorious Sports Persons
    5. Pandit Deendayal Upadhyay National Sports Welfare Fund
    6. National Sports Development Fund; and
    7. Running Sports Training Centres through Sports Authority of India

    Way forward

    • Sports is a state subject and therefore uniformity in sports-specific activities of various states in India is extremely important for providing equal sporting opportunities to all the citizens of the country.
    • We have to take collective action to create a system and a proper environment whereby the young talent is spotted and developed in right earnest.
    • Integration of sports with education to introduce sports culture in India is the need of the hour.
    • The allocation of funds to sport, as a percentage of budget, can be increased for broad-basing sports in this country.
    • There is also a need to develop a culture in whole country by spreading awareness in society by telling benefit of sports in life.

     

     

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  • SC upholds powers of arrest raid under PMLA for ED

    The Supreme Court upheld the core amendments made to the Prevention of Money Laundering Act (PMLA), which gives the government and the Enforcement Directorate (ED) virtually unbridled powers of summons, arrest, and raids, and makes bail nearly impossible while shifting the burden of proof of innocence on to the accused rather than the prosecution.

    Did the judgement say?

    • The Supreme Court called the PMLA a law against the “scourge of money laundering” and not a hatchet wielded against rival politicians and dissenters.
    • Money laundering is an offence against the sovereignty and integrity of the country. It is no less a heinous offence than the offence of terrorism, the court noted.

    Why in news?

    • The verdict came on an extensive challenge raised against the amendments introduced in 2002 Act by way of Finance Acts.
    • The three-judge Bench said the method of introduction of the amendments through Money Bills would be separately examined by a larger Bench of the top court.

    What were the petitions?

    • Petitions were filed against the amendments, which the challengers claimed would violate personal liberty, procedures of law and the constitutional mandate.
    • The petitioners included many veteran politicians who all claimed that the “process itself was the punishment”.
    • There were submissions that the accused’s right against self-incrimination suffered when the ED summoned them and made them sign statements on threats of arrest.
    • But the court said these statements were recorded as part of an “inquiry” into the proceeds of crime.
    • A person cannot claim right against self-incrimination at a summons stage.

    About Enforcement Directorate (ED)

    • It goes back to May 1, 1956, when an ‘Enforcement Unit’ was formed in the Department of Economic Affairs.
    • It then aimed for handling Exchange Control Laws violations under the Foreign Exchange Regulation Act (FERA).
    • The ED today is a multi-dimensional organisation investigating economic offences under the Prevention of Money Laundering Act (PMLA), Fugitive Economic Offenders Act, Foreign Exchange Management Act and FERA.

    From where does the ED get its powers?

    • When proceeds of crime (property/money) are generated, the best way to save that money is by parking it somewhere, so one is not answerable to anyone in the country.
    • Therefore, there was a need to control and prevent the laundering of money.
    • The PMLA was brought in for this exact reason in 2002, but was enacted only in 2005.
    • The objective was to prevent parking of the money outside India and to trace out the layering and the trail of money.
    • So as per the Act, the ED got its power to investigate under Sections 48 (authorities under act) and 49 (appointment and powers of authorities and other officers).

    At what stage does the ED step in when a crime is committed?

    • Whenever any offence is registered by a local police station, which has generated proceeds of crime over and above â‚č1 crore, the investigating police officer forwards the details to the ED.
    • Alternately, if the offence comes under the knowledge of the Central agency, they can then call for the First Information Report (FIR) or the chargesheet if it has been filed directly by police officials.
    • This will be done to find out if any laundering has taken place.

    What differentiates the probe between the local police and officers of the ED?

    Case study:

    • If a theft has been committed in a nationalised bank, the local police station will first investigate the crime.
    • If it is learnt that the founder of the bank took all the money and kept it in his house, without being spent or used, then the crime is only theft and the ED won’t interfere because the amount has already been seized.
    • But if the amount which has been stolen is used after four years to purchase some properties, then the ill-gotten money is brought back in the market.
    • Or if the money is given to someone else to buy properties in different parts of the country, then there is ‘laundering’ of money.
    • Hence the ED will need to step in and look into the layering and attachment of properties to recover the money.
    • If jewellery costing â‚č1 crore is stolen, police officers will investigate the theft. The ED, however, will attach assets of the accused to recover the amount of â‚č1 crore.

    What are the other roles and functions of the ED?

    • The ED carries out search (property) and seizure (money/documents) after it has decided that the money has been laundered, under Section 16 (power of survey) and Section 17 (search and seizure) of the PMLA.
    • On the basis of that, the authorities will decide if arrest is needed as per Section 19 (power of arrest).
    • Under Section 50, the ED can also directly carry out search and seizure without calling the person for questioning.
    • It is not necessary to summon the person first and then start with the search and seizure.
    • If the person is arrested, the ED gets 60 days to file the prosecution complaint (chargesheet) as the punishment under PMLA doesn’t go beyond seven years.
    • If no one is arrested and only the property is attached, then the prosecution complaint along with attachment order is to be submitted before the adjudicating authority within 60 days.

    Can the ED investigate cases of money laundering retrospectively?

    • If an ill-gotten property is acquired before the year 2005 (when the law was brought in) and disposed off, then there is no case under PMLA.
    • But if proceeds of the crime were possessed before 2005, kept in storage, and used after 2005 by buying properties, the colour of the money is still black and the person is liable to be prosecuted under PMLA.

    Under Section 3 of PMLA, a person shall be guilty of money-laundering, if such person is found to have directly or indirectly attempted to indulge or knowingly assist a party involved in one or more of the following activities:

    • Concealment; possession; acquisition; use; or projecting as untainted property; or claiming as untainted property in any manner etc.

     

    Also read:

    [Burning Issue] Enforcement Directorate (ED): Dreaded nightmare of Indian Politicians & Businessmen

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  • Universal Service Obligation Fund (USOF)

    The Union Cabinet has approved a project for providing 4G mobile services in thousands of villages across the country under the USOF.

    What do you mean by Universal Service?

    • In the modern world, universal service refers to having a phone and affordable phone service in every home.
    • It means, providing telecommunication service with access to a defined minimum service of specified quality to all users everywhere at an affordable price.
    • In 1837, the concept was rolled on by Rowland Hill, a British educator and tax reformer, which included uniform rates across the UK and prepayment by sender via postage stamps.

    What is USOF?

    • The Universal Service Obligation Fund (USOF) was formed by an Act of Parliament, was established in April 2002 under the Indian Telegraph (Amendment) Act 2003.
    • It aims to provide financial support for the provision of telecom services in commercially unviable rural and remote areas of the country.
    • It is an attached office of the Department of Telecom, and is headed by the administrator, who is appointed by the central government.

    Scope of the USOF

    • Initially, the USOF was established with the fundamental objective of providing access to ‘basic’ telecom services to people in rural and remote areas at affordable and reasonable prices.
    • Subsequently, the scope was widened.
    • Now it aims to provide subsidy support for enabling access to all types of telecom services, including mobile services, broadband connectivity and the creation of infrastructure in rural and remote areas.

    Funding of the USOF

    • The resources for the implementation of USO are raised by way of collecting a Universal Service Levy (USL), which is 5 percent of the Adjusted Gross Revenue (AGR) of Telecom Service Providers.

    Nature of the fund

    • USOF is a non-lapsable Fund.
    • The Levy amount is credited to the Consolidated Fund of India.
    • The fund is made available to USOF after due appropriation by the Parliament.

     

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  • From freebies to welfare

    Context

    In a recent address, the prime minister shared his anguish on what he called the “revdi” or the freebies culture.

    Populist policies and its impact over the states’ finances

    • What are freebies? N K Singh defined freebies as “something that is given to you without having to pay for them, especially as a way of attracting your support for or interest in something.”
    • A recent report of the RBI on states’ finances highlighted the perilous condition of states’ finances and enhanced debt stress on account of flawed policies.
    •  Nothing undercuts more irresponsibly India’s abiding international and national commitments than the perils of this reckless populism.

    Factors that need to be considered in devising welfare policies

    1] Quest for sustainable development

    • The initiatives undertaken at COP21 in Paris, the International Solar Alliance and subsequently at the COP26 in Glasgow represent India’s national consensus to forge a path of growth geared towards intergenerational equity and to exponentially increase development.
    • Our ability to adhere to this commitment depends on two other commitments.
    • 1] An increase in the percentage of renewable energy in our energy consumption.
    • While subsidies are being promised in one form or the other by way of free electricity, the deteriorating health of state distribution companies seriously undercuts their financial viability.
    • Lowering the price for some consumers, offset through overcharging industrial and commercial contracts, reduces competitiveness, ushers slower growth both in incomes and employment.
    • 2] The inability of discoms to actively encourage solar power is stymied by their financial condition and the inability to evolve tariff structures.
    •  Regulatory capture, a fixation on unrealistic tariffs and cross-subsidy in energy utilisation prevent a credible coal plan, which is central to our energy planning.

    2] Challenges in providing basic facilities

    • The government seeks to address the challenge of inequity by ensuring access to a wide range of basic facilities.
    • These include banking, electricity, housing, insurance, water and clean cooking fuel, to mention a few.
    • Removing this inequity to access helps boost the productivity of our population.

    3] Issue of access

    • Benefits under various welfare schemes such as PM Awas Yojana, Swachh Bharat Mission and Jal Jeevan Mission have eliminated the biggest barrier for citizens — the exorbitant upfront cost of access.
    • Moreover, they are leading to irreversible empowerment and self-reliance.
    • For instance, a house built under the PM Awas Yojana is a lifelong asset for the beneficiary household that cannot be taken back by any government.

    4] Use of technology in direct benefit transfer

    • Identification of beneficiaries through the SECC and prioritisation based on deprivation criteria has enabled the government to assist those who need it the most.
    • Governments that end up taking the shortcut of universal subsidies or freebies often end up ignoring the poor and transferring public resources to the affluent.

    5] Expenditure prioritisation

    • The next issue that needs to be considered is of expenditure prioritisation being distorted away from growth-enhancing items, leading to intergenerational inequity.
    • Investors, both domestic and foreign, and credit rating agencies look to macro stability in terms of sustainable levels of debt and fiscal deficit.
    • After years of fiscal profligacy, we returned to the path of fiscal rectitude in 2014.
    • The last time such an effort was made was by enacting the first FRBM Act on August 26, 2003.

    6] Impact on future of manufacturing and employment

    • The next factor that need to be considered is the debilitating effect of freebies on the future of manufacturing and employment.
    • Freebies lower the quality and competitiveness of the manufacturing sector by detracting from efficient and competitive infrastructure.
    • They stymie growth and, therefore, gainful employment because there is no substitute for growth if we wish to increase employment.

    Conclusion

    The poor state finance position should serve as a timely reminder to those promising fiscally imprudent and unsustainable subsidies.

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