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Syllabus

• Prelims – Economy

In News: To prevent the slide in the rupee and shore up foreign exchange reserves, the RBI announced a series of measures.

• This includes relaxation in foreign investment in debt, external commercial borrowings, and Non-Resident Indian (NRI) deposits.

Stats

• The rupee depreciated 4.1 per cent to 79.30 against the US dollar in the current financial year.
• Foreign portfolio investors pulled out 2.32 lakh crore in six months, and $50 billion being shaved off forex reserves over the last nine months.

Measures taken

• RBI has allowed banks temporarily to raise fresh Foreign Currency Non-Resident Bank i.e. FCNR(B) and Non-Resident External (NRE) deposits without reference to the current regulations on interest rates.
• Currently, interest rates on FCNR(B) deposits are subject to ceilings of overnight Alternative Reference Rate (ARR) for the respective currency/ swap plus 250 basis points for deposits of 1-3 years maturity and overnight ARR plus 350 basis points for deposits of 3-5 years maturity.
• In the case of NRE deposits, interest rates should not be higher than those offered by the banks on comparable domestic rupee term deposits.
• Investments by FPIs in government securities and corporate debt made till October 31, 2022, will be exempted from this short-term limit.
• These will not be reckoned for the short-term limit of one year till maturity or sale of such investments.
• Currently, not more than 30 per cent of investments each in government securities and corporate bonds can have a residual maturity of less than one year.
• FPIs will be provided with a limited window till October 31, 2022, during which they can invest in corporate money market instruments like commercial paper and non-convertible debentures with an original maturity of up to one year.
• FPIs can continue to stay invested in these instruments till their maturity or sale.
• Also the central bank decided to increase the limit under the automatic route for external commercial borrowing (ECB) from $750 million or its equivalent per financial year to $ 1.5 billion.
• The all-in cost ceiling under the ECB framework is also being raised by 100 basis points, subject to the borrower being of investment grade rating.
• Further incremental FCNR(B) and NRE deposits will be exempt from the maintenance of cash reserve ratio and statutory liquidity ratio (SLR).
• This relaxation, which will add to the returns of NRIs

External Commercial Borrowings

• ECBs is a loan availed by an Indian entity from a nonresident lender with a minimum average maturity.
• Most of these loans are provided by foreign commercial banks buyers’ credit, suppliers’ credit, securitized instruments such as Floating Rate Notes and Fixed Rate Bonds etc.

Advantages of ECBs:

• ECBs provide opportunity to borrow large volume of funds.
• The funds are available for relatively long term.
• Interest rate are also lower compared to domestic funds.
• ECBs are in the form of foreign currencies. Hence, they enable the corporate to have foreign currency to meet the import of machineries etc.

Foreign Currency Non-Resident (Bank) account

• FCNR(B) accounts can be opened by NRIs and Overseas Corporate Bodies (OCBs) with an authorized dealer.
• Rate of interest applicable to these accounts are in accordance with the directives issued by RBI from time to time.

NRE accounts

• NRE accounts can be opened by NRIs and OCBs with authorized dealers and with banks authorized by RBI.
• These can be in the form of savings, current, recurring or fixed deposit accounts. Deposits are allowed in any permitted currency.
• Rate of interest applicable to these accounts are in accordance with the directives issued by RBI from time to time.

Source: Indian Express

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Syllabus

• Prelims – Current Affairs

In News: The Union Cabinet gave the 13^th extension to the Justice Rohini Commission, to submit its report.

• The commission was set up on October 2, 2017 under Article 340 of the Constitution.
• It was tasked with sub-categorisation of the Other Backward Classes (OBCs) and equitable distribution of benefits reserved for them.
• In 2015, the National Commission for Backward Classes (NCBC) had recommended that OBCs should be categorised into extremely backward classes, more backward classes and backward classes.

Article 340

• The President may by order appoint a Commission consisting of such persons as he thinks fit to investigate the conditions of socially and educationally backward classes within the territory of India.
• A Commission so appointed shall investigate the matters referred to them and present to the President a report.
• The President shall cause a copy of the report so presented together with a memorandum explaining the action taken thereon to be laid before each House of Parliament.

OBC Reservation

• The Kalelkar Commission, set up in 1953, was the first to identify backward classes other than the SCs and STs at the national level.
• The Mandal Commission Report, 1980 estimated the OBC population at 52% and classified 1,257 communities as backward.
• It recommended increasing the existing quotas, which were only for SC/ST, from 22.5% to 49.5% to include the OBCs.
• The central government reserved 27% of seats in union civil posts and services for OBCs under Article 16(4).
• The quotas were subsequently enforced in central government educational institutions under Article 15 (4).
• In 2008, the Supreme Court directed the central government to exclude the creamy layer (advanced sections) among the OBCs.

Source: Indian Express

Previous Year Question

Q.1) If the President of India exercises his power as provided under Article 356 of the Constitution in respect of a particular State, then (2018)

1. the Assembly of the State is automatically dissolved.
2. the powers of the Legislature of that State shall be exercisable by or under the authority of the Parliament.
3. Article 19 is suspended in that State.
4. the President can make laws relating to that State.

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Syllabus

• Prelims – Polity and Governance
• Mains – GS 2(Polity and Governance)

Context: As Twitter initiated legal action against some of the government ordering it to take down certain content posted on the microblogging site, the focus is back on Section 69A of IT Act, 2000

• Alleging disproportionate use of power by officials, the social media company moved the Karnataka High Court against the Ministry of Electronics & Information Technology’s order content-blocking orders issued under Section 69 (A) of the Information Technology Act, 2000.
• IT Ministry had written to Twitter, asking it to comply with its orders by July 4 or lose its safe harbour protection under the intermediary rules.

Information Technology Act, 2000

• The Information Technology (IT) Act, 2000, governs all activities related to the use of computer resources.
• It covers all ‘intermediaries’ who play a role in the use of computer resources and electronic records.

Section 69 of the IT Act:

• It confers on the Central and State governments the power to issue directions to intercept, monitor or decrypt any information generated, transmitted, received or stored in any computer resource.

The grounds on which these powers may be exercised are:

• In the interest of the sovereignty or integrity of India, defence of India, the security of the state.
• Friendly relations with foreign states.
• Public order, or for preventing incitement to the commission of any cognizable offence relating to these.
• For investigating any offence.

Process of Blocking Internet Websites:

• Section 69A, for similar reasons and grounds (as stated above), enables the Centre to ask any agency of the government, or any intermediary, to block access to the public of any information generated, transmitted, received or stored or hosted on any computer resource.
• Any such request for blocking access must be based on reasons given in writing.

Intermediaries as per the IT Act 2000:

• Intermediary is defined in Section 2(1) (w) of the IT Act 2000.
• The term ‘intermediaries’ includes providers of telecom service, network service, Internet service and web hosting, besides search engines, online payment and auction sites, online marketplaces and cyber cafes.
• It includes any person who, on behalf of another, “receives, stores or transmits” any electronic record. Social media platforms would fall under this definition.

Obligations of Intermediaries under the Law:

• Intermediaries are required to preserve and retain specified information in a manner and format prescribed by the Centre for a specified duration.
• Contravention of this provision may attract a prison term that may go up to three years, besides a fine.
• When a direction is given for monitoring, the intermediary and any person in charge of a computer resource should extend technical assistance in the form of giving access or securing access to the resource involved.
• Failure to extend such assistance may entail a prison term of up to seven years, besides a fine.
• Failure to comply with a direction to block access to the public on a government’s written request also attracts a prison term of up to seven years, besides a fine.

Liability of Intermediaries:

• Section 79 of the IT Act 2000 makes it clear that “an intermediary shall not be liable for any third-party information, data, or communication link made available or hosted by him”.
• Third party information means any information dealt with by a network service provider in his capacity as an intermediary.
• This protects intermediaries such as Internet and data service providers and those hosting websites from being made liable for content that users may post or generate.
• Sections 79 also introduced the concept of “notice and take down” provision.
• It provides that an intermediary would lose its immunity if upon receiving actual knowledge or on being notified that any information, data or communication link residing in or connected to a computer resource controlled by it is being used to commit an unlawful act and it fails to expeditiously remove or disable access to that material.

Why has Twitter filed the lawsuit?

• It is learnt that in its filing, Twitter has claimed that many of the blocking orders are procedurally and substantively deficient under Section 69 (A) of the Act.
• This includes aspects such as not giving prior notice to users before taking down content posted by them.
• The company alleged that MeitY has failed to demonstrate how some of the content it wants taken down falls under the purview of Section 69 (A).
• The company has claimed that the basis on which multiple accounts and posts have been flagged by the Ministry are either “overbroad and arbitrary” or “disproportionate”

Source: Indian Express

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Syllabus

• Prelims – Current Affairs
• Mains – GS 2 (Governance)

In News: Central Consumer Protection authority (CCPA) under the Department of Consumer Affairs has notified ‘Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’.

What are the guidelines?

Objective

• To curb misleading advertisements and protect the consumers, who may be exploited or affected by such advertisements.

Key Provisions

A ‘valid’ advertisement:

• The guidelines lay down the conditions for non-misleading and valid advertisements.
• An advertisement can be considered non-misleading if it contains true and honest representation of goods and does not exaggerate the accuracy, scientific validity or practical usefulness or capability.
• In case of unintentional lapse, the advertisement may still be considered as valid if the advertiser has taken prompt action in letting the consumer know the deficiency.

Advertisements targeting children

• Advertisements that condone, encourage, inspire or unreasonably emulate behaviour that could be dangerous for children or take advantage of children’s inexperience, credulity or sense of loyalty etc. have been prohibited.
• The guidelines further require that the goods which require a health warning should not be advertised through children as well as personalities from music, sports and cinema.
• Advertisements that state any health or nutritional claims or benefits without being adequately and scientifically substantiated or any surgery which may have adverse effects on the physical and mental health of children are prohibited.
• The guidelines also require that advertisements including chips, carbonated beverages and such other snacks and drinks shall not be cast on channels exclusively meant for children.

Prohibits Surrogate Advertising:

• It bans surrogate advertising, a practice where a seller promotes a product whose advertisement is not allowed by disguising it as another product.
• Liquor ads commonly indulge in such practices — under the guise of selling soda, CDs, and even holiday packages.

Free claims advertisements:

• A free claims advertisement shall not describe any goods, products, or service to be ‘free’, ‘without charge’, or use such other terms if the consumer has to pay anything.

Bait Advertisements:

• The guidelines lay down conditions to be complied with while issuing bait advertisements.
• Bait advertisement means an advertisement in which goods, products, or service is offered for sale at a low price to attract consumers.

Other reforms

• The guidelines have also introduced the need to have “disclaimers in advertisements” to “clarify a claim made in such advertisement or make qualifications or resolve ambiguities therein in order to explain such claim in further detail.”
• Moreover, the advertiser must not attempt to hide material information with respect to any claim made in such advertisement, the omission or absence of which is likely to make the advertisement deceptive or conceal its commercial intent.

Significance

• The guidelines are pathbreaking because they fill significant consumer protection gaps while explicitly outlining advertiser duties.
• It also tries to discourage the promotion of illogical consumerism aimed at children.
• It performs an essential function in bringing the Indian regulatory framework at par with international norms and standards.
• The guidelines are momentous in empowering customers against mischievous advertisers.

While the guidelines must be hailed as a step in the right direction, there is a definite need to ensure their implementation in the spirit they have been drafted with.

Source: Pib.gov

The Hindu

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Syllabus

• Mains – GS 2 (Governance)

Context: The judgment by a two-judge Bench of the Supreme Court of India in M/s Apex Laboratories Pvt. Ltd. Vs. Deputy Commissioner of Income Tax, Large Tax Payer Unit-II, on February 22, 2022 has struck a blow for public good.

• The SC bench dismissed the Special Leave Petition by Apex Laboratories to claim deduction on freebies given to doctors.
• Upholding a decision by the Madras High Court, the Bench said that the act of pharmaceutical companies giving freebies to doctors is clearly ‘prohibited by the law’.
• Further, it cannot be claimed as a deduction under Section 37(1) of the Income Tax Act, 1961.
• The judgment will go a long way in checking unethical and illegal practices in the pharma sector which has become so out of reach for the common man.

A case of misuse

• Pharmaceutical companies have misused a legislative gap to actively perpetuate the commission of an offence of giving freebies to doctors to promote their brands, even though this was prohibited in the law framed by the Medical Council of India (MCI).
• In the said case, the company was giving out freebies to doctors in order for them to create awareness about a health supplement it was manufacturing called Zincovit.
• Thus court upheld that pharmaceutical companies’ gifting freebies to doctors, etc. is clearly ‘prohibited by law’ and not allowed to be claimed as a deduction under Section 37(1).
• A doctor’s prescription is considered as the final word on medication by the patient even if the cost of such medication is unaffordable.
• The Court was conscious that the cost of such freebies is factored in the cost of medicines sold, in turn driving up their prices and perpetuating a publicly injurious cycle.

The issue of retail price

• There is where a case of secret dealing that happens in the pharma world happens because drugs are invariably sold in pharmacist shops at MRP only.
• This is what affects medical treatment.
• Even though the Drug Price Control Order and Drugs and Cosmetics Act are there on the statute book, there is hardly any action to keep the sale price of medicines under control with due and proper investigation into their so-called research and development costs and keeping their profit margins within a prescribed limit.
• There is an urgent need to check looting that is driven by drug manufacturers to distribute their products using freebies or ‘bribes’.

Way forward

• This judgment can go far.
• It should be debated and applied to other unethical practices and expenditure out of public funds.
• The strategy here should be to use financial tools such as income-tax provisions for disallowing such expenditure and taxing the same as perquisites or taxable income in the hands of recipients viz. assurances and declarations in election campaigns by political parties by giving away free laptops, waived electricity charges, food grains, loan waivers, etc.

Source: The Hindu

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Syllabus:

• Mains – GS 1 (Social Issues)

Context: The recent incidents of communal violence has brought the focus on the Hate Speech

Recent occurrences

• The incident in Amravati, Maharashtra, where a chemist, Umesh Kolhe, was knifed to death allegedly by three men in retaliation for his sharing a post in support of former ruling party spokesperson on the Prophet was on the same lines as the dastardly murder of a tailor, Kanhaiya Lal, in Udaipur a week ago.
• In both cases, suspects who were incensed by the remarks took to violence as a counter to what they perceived as an insult to their religion.

Major Reasons of Hate Speech:

Feeling of Superiority:

• Individuals believe in stereotypes that are ingrained in their minds and these stereotypes lead them to believe that a class or group of persons are inferior to them and as such cannot have the same rights as them.

Stubbornness to Particular Ideology:

• The stubbornness to stick to a particular ideology without caring for the right to co-exist peacefully adds further fuel to the fire of hate speech.

Legal Position of Hate Speech:

Under Indian Penal Code:

• Sections 153A and 153B of the IPC: Punishes acts that cause enmity and hatred between two groups.
• Section 295A of the IPC: Deals with punishing acts which deliberately or with malicious intention outrage the religious feelings of a class of persons.
• Sections 505(1) and 505(2): Make the publication and circulation of content which may cause ill-will or hatred between different groups an offence.

Under Representation of People’s Act:

• Section 8 of the Representation of People’s Act, 1951 (RPA): Prevents a person convicted of the illegal use of the freedom of speech from contesting an election.
• Sections 123(3A) and 125 of the RPA: Bars the promotion of animosity on the grounds of race, religion, community, caste, or language in reference to elections and include it under corrupt electoral practices.

Recommendations for changes in IPC

Bezbaruah Committee 2014:

• It proposed amendment to Section 153 C of IPC punishable by five years and fine or both and Section 509A IPC punishable by three years or fine or both.

Viswanathan Committee 2019:

• It proposed inserting Sections 153 C (b) and Section 505 A in the IPC for incitement to commit an offence on grounds of religion, race, caste or community, sex, gender identity, sexual orientation, place of birth, residence, language, disability or tribe.
• It proposed punishment of up to two years along with Rs. 5,000 fine.

Way forward

• The most efficient way to dilute hatred is by means of Education.
• So our education system should play major role in promoting and understanding compassion with others.
• People should have a vision to unite all sections of society socially and culturally, and take the country forward.
• For India, the whole world is one family as encapsulated in its timeless ideal, ‘Vasudhaiva Kutumbakam’. It is with this spirit that we should move forward together.
• The government should also bring comprehensive amendments to criminal laws to prevent hate speech and expression.

Source: The Hindu

Syllabus

• GS-3: Economy and associated challenges
• GS-2: Government policies and interventions for development in various sectors

Context: The Central Consumer Protection Authority (CCPA) recently issued guidelines to prevent false or misleading advertisements.

The guidelines are pathbreaking because they fill significant consumer protection gaps while explicitly outlining advertiser duties.

Read Complete Details on CCPA: Advertisement Rules & Service Charge

Q.1) Consider the following statements

1. Under Article 350 of the constitution President may appoint a commission to investigate the conditions of socially and educationally backward classes within the territory of India.
2. Government of India has appointed Justice Rohini Commission to look into sub-categorisation of the Other Backward Classes and equitable distribution of benefits reserved for them.

Choose the incorrect statements:

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Q.2) Recently India signed Critical Minerals Investment Partnership with which of the following country?

1. South Africa
2. Australia
3. Kenya
4. Canada

Q.3) Consider the following statements about State Ranking Index for National Food Security Act (NFSA)

1. The index was released by Ministry of Agriculture and Farmers Welfare
2. 2022 edition is the first edition of the index and is built on 5 key pillars
3. Odisha scored the highest and secured the top position in the index

Choose the correct statements:

1. 1 and 2
2. 2 and 3
3. 1, 2 and 3
4. 1 and 3

Comment the answers to the above questions in the comment section below!!

ANSWERS FOR ’7th JULY 2022 – Daily Practice MCQs’ will be updated along with tomorrow’s Daily Current Affairs.

Q.1) – d

Q.2) – b

Q.3) – a