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The Supreme Court on Monday agreed to list a petition seeking a review of a July 27 judgment that upheld the core amendments made to the Prevention of Money Laundering Act (PMLA).
It 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 onto the accused rather than the prosecution.
The review petition was orally mentioned before a Bench led by Chief Justice of India N.V. Ramana.The apex court had called the PMLA a law against the “scourge of money laundering” and not a hatchet wielded against rival politicians and dissenters.
This is a sui generis (unique) legislation. The Parliament enacted the Act as a result of international commitment to sternly deal with the menace of money laundering of proceeds of crime having transnational consequences and on the financial systems of the countries.
The verdict had come on an extensive challenge raised against the amendments introduced to the 2002 Act by way of a Finance Act in 2019.
The three-judge Bench said the method of introduction of the amendments through a Money Bill would be separately examined by a larger Bench of the apex court.
Over 240 petitions were filed against the amendments which the challengers claimed to violate personal liberty, procedures of law, and the constitutional mandate.
Some of the petitioners included former Chief Minister of the erstwhile State of Jammu & Kashmir Mehbooba Mufti; former Maharashtra Minister Anil Deshmukh; and MP Karti Chidambaram, who all claimed that the “process itself was the punishment.Money laundering is an offence against the sovereignty and integrity of the country.
States
Ranganathittu Bird Sanctuary reopens (Page no. 5)
(GS Paper 3, Environment)
After a gap of nearly one month, Ranganathittu Bird Sanctuary near Mysuru has reopened for tourists and boating, one of the major attractions of the popular tourist destination, has resumed.
The sanctuary was closed for visitors after the place was flooded following heavy discharge from the KRS dam. At one point of time, the discharge into the river exceeded one lakh cusecs and most attractions at the sanctuary were under water, forcing the Forest Department to shut the place for an indefinite period.
The sanctuary was reopened four days ago. Boating has also resumed. It suffered losses due to the closure. An average of about ₹40-50 lakh loss was suffered as the place attracts a lot of tourists.
This is perhaps for the first time in recent years that the sanctuary was closed for nearly a month as heavy rains in the catchment areas filled the dam to its brim twice, forcing the authorities to release surplus water into the river that submerged places including Ranganathittu located downstream.
Mr. Karikalan said nearly 5 lakh tourists visit the sanctuary in a year. It had suffered damage in April this year due to strong winds. This time, despite heavy flooding, there was not much damage. Boats were safe, he added.
Mr. Karikalan said more boats are being added to the existing fleet ahead of the Dasara festivities. Three new boats and one battery operated vehicle are being procured in September.
OPED
Not centres of learning yet (Page no. 7)
(GS Paper 2, Government Policies and Interventions)
As we come to India@75, the Anganwadi system, part of the Integrated Child Development Scheme (ICDS) of the government which serves over 30 million children in the age group of 3-6 in 1.3 million centres across the country, should have been a triumph.
The ICDS scheme is designed to support all children under six with their health, nutrition, and education needs — done right, this would make India a leader in the next 25 years in early childhood education and deliver our delayed demographic dividend.
However, while across India over 70% of children are enrolled in Anganwadis, they are plagued by low attendance — parents simply do not perceive Anganwadi centres as centres of learning.
Parents’ perceptions of Anganwadisare shaped by how the system views them. In ICDS reports, parents are routinely addressed as “beneficiaries” — passive recipients of ration, immunisation camps, and lately, education.
But this is not how parents view themselves or their children. Education for them is a gateway to meeting their aspirations, and a pathway to social mobility so that their children can have opportunities they missed out on.
Enrolment rates for primary school reaching over 90% are a direct consequence of the link in parents’ minds that education leads to opportunities for a better life.
However, the education ecosystem, including the early childhood care & education (ECCE)/ Anganwadi system, is not willing to speak parents’ language.
Those of us in the ECCE space often claim to know what parents should want for their children better than they know themselves. But it is not a Sisyphean task to understand what parents want — we simply need to ask them.
In surveys that we have conducted repeatedly with rural and urban parents of 3-6 year old children, over 80% of parents consistently tell us that their kids’ best pathway for social mobility through education is via learning English (speaking and writing) and math skills. This is what they look for when they enrol and send their children to a learning centre.
Anganwadi systems, with the best of intentions, do not fulfil parents’ demands. The ECCE curricula for different States instead focus on local language-driven, and play-based pedagogy recommended by leading educators in India for this age group.
They prescribe free and guided play-based, activity-based learning, facilitated by a skilled educator — without much thought given to how parents might perceive learning of this sort.
Executions in Myanmar (Page no. 7)
(GS Paper 2, International Relations)
In the past few days, a Myanmar kangaroo court sentenced country’s Nobel Prize winner and civilian leader, Aung San Suu Kyi, to a further six years imprisonment in addition to the 11 already handed down.
In July, the Myanmar military (Tatmadaw) regime executed four democracy activists, including a former lawmaker. While the regime is known to deploy harsh measures, this was the first time since the 1980s that any democracy activist was executed.
The executions followed repressions by Tatmadaw that include solitary confinement of Suu Kyi, prolonged detention of Australian economist Sean Turnell, and use of heavy weaponry and air power in civilian areas against resistance groups.
In February last year, Tatmadaw arrested the entire civilian leadership, installed a State Administrative Council to govern the country, and hoped for smooth control, but the coup has met with fierce resistance.
The current draconian measures imply that the regime is seriously concerned that it cannot define the future political process.
There is much diversity among the resistance; young adults, members of political parties, civil society, and even some government officials participate in the protests.
There is a self-styled National Unity Government (NUG) of elected members of legislatures attempting to coordinate the resistance, and the People’s Defence Forces (PDFs), its armed wing, are conducting sporadic strikes on military targets.
Ethnic-based armed organisations (EAOs) have a long history of conflict with the military, and the ceasefire process has stalled after the coup. With public disillusion with military rule, many EAOs have scaled up operations against the regime and large parts of Myanmar are not under Tatmadaw’s control.
The regime reportedly mobilised armed militias to contain the uprising but the opposition is not dispirited. Despite limited resources, the EAOs and PDFs demonstrate resilience in confronting the regime.
A National Unity Consultative Council was set up to ensure they operate with a shared vision but ground level coordination is found wanting. While EAOs have relatively better command structures, the NUG fails to exercise adequate control of all PDFs.
Nevertheless, increased activity is seen among resistance groups. Singapore’s Foreign Minister Vivian Balakrishnan recently predicted that “there is a real danger that the coup is sliding into a civil war,” a formulation that reflects growing concern among ASEAN countries over its fellow-member Myanmar.
A CentreState skew further widened (Page no. 7)
(GS Paper 2, Polity and Governance)
Nearly two weeks ago, Chief Ministers expressed their concern about dwindling State revenues in a NITI Aayog meeting chaired by the Prime Minister.
They sought a higher share in the divisible pool of taxes and an extension of GST compensation, both of which have long remained a bone of contention between the Union government and the States.
States’ financial health had taken a turn for the worse with the implementation of the Ujwal DISCOM Assurance Yojana, farm loan waivers, as also the slowdown in growth in 2019-20. But, heightened expenses during the pandemic and a revenue shortfall further strained their finances.
It is in this context that it becomes important to understand who raises the revenue and who carries the bulk of expenditure.
The Constitution grants the Union government more revenue-raising powers while the States are tasked to undertake most of the development and welfare-related responsibilities.
According to the 15th Finance Commission’s report, in FY19, the Union government raised 62.7% of the total resources raised by the Union government and States, while States had borne 62.4% of the aggregate expenditure.
This allocation of taxation powers and expenditure responsibilities results in an imbalance, and hence the Constitution provides for sharing of the Union government’s revenue with the States.
Successive Finance Commissions (FC) have attempted to reduce the imbalance by increasing the States’ share in Central taxes. Although the 14th and 15th FC raised the share of States in gross taxes to over 40%, the actual share never reached this mandated level.
After reaching a peak of 36.6% in FY19, States’ share fell and has since stagnated at around 29%. At the same time, the gap between the share recommended by the FC and the actual devolution has widened to more than 11 percentage points, the highest in at least two decades.
So, even though FC raised the States’ share in Central taxes, it didn’t translate into an increase in the actual share devolved as the divisible pool shrank. This can be explained by illustrating the revenue sharing during the pandemic.
As the gross tax revenues took a hit during the pandemic, the States’ share of the Union government’s taxes recorded a steep fall of 15% and 9% in FY20 and FY21, respectively.
But, the Union government’s share continued to rise. This is because the Centre beefed up its revenue by levying cesses and surchargeswhich are not shareable with the States.
Text & context
‘Kerala Savari’, India’s first online taxi service as a public option (Page no. 8)
(GS Paper 2, Polity and Governance)
The story so far: Kerala has soft launched ‘Kerala Savari’, the country’s first online taxi service owned by a State government, to ensure fair and decent service to passengers along with fair remuneration to auto-taxi workers.
Operated by the Motor Workers Welfare Board under the aegis of the Labour Department, the Kerala Savari ensures safe travel for the public at ‘government approved fares’ without any ‘surge pricing’.
The ‘Kerala Savari’ app would be made available to the public on online platforms shortly as it is under the scrutiny of Google now.
The alleged unfair trade practices and violation of consumer rights by private app-based cab aggregators have come as a major concern for governments.
Recently, the Central Consumer Protection Authority (CCPA) had issued notices to cab aggregators Ola and Uber for unfair trade practices and violation of consumer rights.
Passengers often complain about the deficiency in services including charging exorbitant fares during peak hours, unprofessional behaviour from the part of drivers, lack of proper response from customer support, and undue levy of cancellation charges despite the cab driver refusing to accept the ride booked by the passenger etc.
It is against this backdrop that the Kerala government has decided to come up with an app-based platform to offer auto-taxi service for the public.
As private companies are purely focusing on profit making, the government-controlled online taxi service is a service-oriented scheme — a win-win situation for both passengers and taxi-auto drivers and owners.
Private cab aggregators used to make a killing with surge pricing during peak hours or in the event of rains. The passengers were often forced to pay through their nose during these critical times. But there will be no fluctuation in fares on Kerala Savari irrespective of day or night or rain.
When private app-based taxi companies increase the charges for services up to two to three times during emergencies, neither passengers nor workers benefit from it.
But Kerala Savari only charges an 8% service charge in addition to the rate set by the government, whereas the private cab aggregators charge up to 20 to 30% service charge.
The taxi owner will get the approved fare on ‘Kerala Savari,’ while cab owners working for private online companies would often get a fare which is below the government-approved rate.
Furthermore, of the 8% service charge collected from passengers, 6% will go to the technical partner, and the remaining 2% will go to the implementation of this scheme and for providing promotional incentives to passengers and drivers. The government will not be benefiting from this scheme.
For instance, if the passenger travelled a distance fixed for ₹100, the total fare would be ₹108 including service charge.
The car owner will get ₹100 and the remaining ₹8 would be used for running the facility and for providing promotional incentives to passengers and drivers.
In the case of online private cab aggregators, the car owner used to get below the rate of ₹100 although he covered a distance fixed for the same fare band. In addition, they would charge more than 20% service charge.
News
India, Iran sign pact to aid movement of seafarers (Page no. 12)
(GS Paper 2, International Relations)
In a bid to smoothen the movement of seafarers between the two countries, India and Iran signed a Memorandum of Understanding (MoU) on recognition of Certificates of Competency in Unlimited Voyages to help seafarers from both the countries as per the provisions of International Convention on Standards of Training, Certification and Watch Keeping for Seafarers (1978).
The MoUwas signed during a bilateral meeting between Union Minister of Ports, Shipping and Waterways and Ayush, SarbanandaSonowal and Iranian Minister of Roads and Urban Development RostamGhasemi. Mr. Sonowal is on a three day visit to Iran.
“The Union Minister reiterated the importance of the bilateral relationship between the two countries. The role of Chabahar as a trade multiplier for the region was highlighted by the Union Minister at the meeting as the potential of the port to act as a swift, economical trade conduit between Central Asia and South Asia, even South East Asia, remains to be tapped fully,” the Ministry said in a statement.
The visiting Minister also called on the Iranian Vice-President Mohammad Mokhber. The Vice-President, who is Iran’s special envoy for relations with India, noted that the development of Chabahar port would lead to increase in trade and shipment volume, the statement said.
The statement said that since the India Ports Global Private Limited (IPGPL) assumed the operations of ShahidBeheshti Port, it has handled over 4.8 million tonnes of bulk cargo.
With close cooperation between India’s IGPL and Iranian stakeholders including Iran’s Port and Maritime Organisation, Iranian Customs Administration and the Chabahar Free Zone Authority, the ShahidBehesti Port Authority & other stakeholders, the Port is likely to act as a catalyst to unlock the huge trade potential in the region, it stated.
In 2020, India supplied 75,000 tonnes of wheat to Afghanistan as part of humanitarian assistance programme as well as provided for 40,000 litres of Malathion 96% ULV pesticides to Iran via Chabahar port in a concerted effort to mitigate locust threat to agriculture and enhance food security in the region.
Mr. Sonowal also commissioned Six mobile harbour cranes to Indian Ports Global Chabahar Free Trade Zone (IPGCFTZ).
Business
Loan defaulters, entities under probe need NOC to invest overseas (Page no. 14)
(GS Paper 3, Economy)
The government notified new norms for overseas investments by Indians on Monday that are aimed at making it easier for domestic corporates to invest abroad, while making it tougher for loan defaulters and others being probed by investigative agencies and regulators to shift funds out of the country.
The Overseas Investment Rules and Regulations, notified under the Foreign Exchange Management Act, will be administered by the Reserve Bank of India (RBI), and shall subsume all existing norms pertaining to overseas investments as well as acquisition and transfer of immovable property outside India.
No Indian resident shall be allowed to make investments into foreign entities that are engaged in real estate activity, gambling in any form; and, dealing with financial products linked to the Indian rupee would require the central bank’s specific approval.
To make it difficult for bank defaulters and fraudsters to acquire assets abroad, often as a precursor to leaving the country, the new rules mandate they secure a No Objection Certificate (NOC) from their lender, or concerned regulators and investigative agencies before making any ‘financial commitment’.
This NOC shall be mandatory for any person who has a bank account classified as a non-performing asset, or is labelled a wilful defaulter by any bank, or is under the investigation by a financial service regulator, the Enforcement Directorate (ED) or the Central Board of Investigation (CBI).
The rules, framed in consultation with the central bank, provide that if lender banks or the concerned regulatory body or investigative agency fail to furnish the NOC within 60 days of receiving an application, it may be presumed that they have no objection to the proposed transaction.
“In view of the evolving needs of businesses in India in an increasingly integrated global market, there is need of Indian corporates to be part of global value chain.
The revised regulatory framework for overseas investment provides for simplification of the existing framework for overseas investment and has been aligned with the current business and economic dynamics.
Clarity on Overseas Direct Investment and Overseas Portfolio Investment has been brought in and various overseas investment related transactions that were earlier under approval route are now under automatic route, significantly enhancing Ease of Doing Business.