Daily News Analysis 2nd Dec. 2023 (The Hindu)

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Here are the topics covered for  2nd December 2023: 

GS-2: Disclosing Political Donations, Fast Track Special Courts (FTSCs)

GS-3: Regulatory Framework by SEBI, Decommissioning of Coal Plants

Fact for Prelims: NATPOLREX-IX, Schemes for minority communities

 

 

 

Disclosing Political Donations

Context:

  • The recent conclusion of Supreme Court hearings on the challenge to electoral bonds in India prompts a critical examination of the potential impact on democracy and the rule of law. 
  • The challenge revolves around the need to disclose political donations to promote transparency in the democratic process and prevent electoral corruption.

 

About Political Funding:

Statutory Provisions in India:

  • Representation of the People Act, 1951, governs elections, including rules on the declaration of expenses, contributions, and maintenance of accounts.
  • The Income Tax Act, of 1961, regulates the tax treatment of political parties and donors.
  • Companies Act, 2013, stipulates corporate donations and mandates disclosure in financial statements.

 

Methods of Raising Political Funding:

  • Individual persons, state/public funding, corporate funding, electoral bonds, and electoral trusts are common avenues.
  • The Electoral Bonds Scheme introduced anonymity in political donations.

 

Importance of Disclosure:

  • Global standards emphasize comprehensive disclosure and donation limits for transparency.
  • Disclosure is crucial for upholding citizens\’ trust, preventing undue influence, maintaining a level playing field, and combating corruption.

 

Supreme Court\’s Role:

Observations:

  • The Supreme Court instructed the Election Commission of India (ECI) to provide recent data on funds received through electoral bonds.
  • The right to know is integral to the freedom of expression, emphasizing the importance of transparency in elections.

Reforms Required:

  • Electoral justice is crucial for free, fair, and genuine elections.
  • Addressing issues with electoral bonds requires a comprehensive approach focusing on transparency and democratic integrity.
  • Mechanisms for reporting, independent audits, and identification of donors are essential.
  • State funding of elections can reduce reliance on private donations, minimizing potential vested interests.

 

Conclusion:

  • While the Supreme Court\’s involvement provides a legal framework, addressing challenges in political funding demands a holistic approach. 
  • Upholding transparency, ensuring electoral justice, and reforming the electoral finance system are essential for preserving the democratic essence of India\’s electoral process.

 

 

Fast Track Special Courts (FTSCs) 

Context:

  • The Union Cabinet has approved the continuation of Fast Track Special Courts (FTSCs) for three more years till 2026. Initially started in October 2019, the scheme was extended for an additional two years until March 2023. 
  • The FTSCs aim to expedite the trial process for cases related to sexual offences, particularly those involving rape and violations under the Protection of Children from Sexual Offences Act (POCSO Act).

 

About Fast Track Special Courts (FTSCs):

  • Objective: Specialized courts were established to expedite the trial process for cases related to sexual offences, especially those under the POCSO Act.
  • Address the prolonged duration of trials in regular courts, ensuring timely justice for victims.
  • Establishment: Enacted through the Criminal Law (Amendment) Act in 2018, introducing stricter punishments, including the death penalty for rape offenders.
  • Set up to ensure the swift dispensation of justice for sexual offence cases.
  • Centrally Sponsored Scheme: Formulated in August 2019 as a Centrally Sponsored Scheme following directions from the Supreme Court of India. 
  • Implemented by the Department of Justice, Ministry of Law & Justice.

 

Achievements So Far:

  • Operationalized 761 FTSCs, including 414 exclusive POCSO Courts.
  • Resolved over 1,95,000 cases, supporting State/UT Government efforts to provide timely justice.

 

Challenges Related to FTSCs:

Inadequate Infrastructure and Low Disposal Rate:

  • Limited infrastructure and support staff, lead to overburdened judges.
  • Low disposal rate of cases, with some FTSCs having rates as low as 19%, indicating delays.

 

Limited Jurisdiction:

  • Specialized jurisdiction may limit the ability to handle related cases, causing delays and inconsistency.

Vacancies and Lack of Training:

  • Vacancies in lower courts affect capacity.
  • Regular judges from normal courts may lack specialized training for FTSCs.

Prioritization of Offences:

  • Ad-hoc decisions lead to arbitrary prioritization of certain offences over others.

 

Initiatives to Curb Women and Child Abuse:

  • Child Abuse Prevention and Investigation Unit
  • Beti Bachao Beti Padhao
  • Juvenile Justice (Care and Protection of Children) Act, 2015
  • Child Marriage Prohibition Act (2006)
  • Child Labour Prohibition and Regulation Act, 2016

 

Suggestions:

  • Provide adequate infrastructure, support staff, and modern technology to FTSCs.
  • Allocate additional funding for their establishment and maintenance.
  • Focus on strict case management to reduce unnecessary delays.
  • Ensure timely presentation of evidence for faster proceedings.
  • Provide specialized training for judges and support staff to streamline procedures.
  • Promptly fill vacancies and assign judges with relevant expertise to FTSCs.

 

Conclusion:

  • The continuation of FTSCs is crucial for expediting justice in sexual offence cases. Addressing infrastructure challenges, improving disposal rates, and ensuring specialized expertise is essential for the effective functioning of these specialized courts. 
  • The government\’s commitment to extending the scheme reflects its recognition of the importance of timely justice in cases of sexual offences.

 

 

Regulatory Framework by SEBI

Context:

  • The Securities & Exchange Board of India (SEBI) recently approved a regulatory framework for Index Providers to enhance transparency and accountability in governing and administering financial benchmarks in the securities market. 
  • The new regulations align with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks.

 

About the New Regulations:

Framework for Registration of Index Providers:

  • SEBI approved regulations establishing a framework for the registration of Index Providers.
  • The framework applies to \’Significant Indices,\’ identified by SEBI based on objective criteria.
  • It aligns with the IOSCO Principles for Financial Benchmarks, emphasizing transparency and accountability in benchmark administration.

 

Dematerialization Requirement for AIF Investments:

  • SEBI introduced a requirement for Alternative Investment Funds (AIFs) to hold fresh investments made after September 2024 in dematerialized form.
  • Existing investments are exempt, unless mandated by applicable law or when the AIF, alone or with other SEBI-registered entities, has control of the investee company.
  • The mandate for the appointment of custodians, previously applicable to specific AIF categories, now extends to all AIFs.

 

Amendments to SEBI (Real Estate Investment Trusts) Regulations:

  • Amendments to the Real Estate Investment Trusts (REITs) Regulations create a regulatory framework for Small and medium REITs (SM REITs) with an asset value of at least ₹50 crore.
  • SM REITs can establish separate schemes for owning real estate assets through special purpose vehicles (SPVs).

 

Flexibility in Social Stock Exchange (SSE) Framework:

  • SEBI provides flexibility in the SSE framework to boost fundraising by Not-for-Profit Organizations (NPOs).
  • It includes a reduction in the minimum issue size and application size for public issuance of Zero Coupon Zero Principal Instruments (ZCZP) by NPOs on SSE.

 

Nomenclature Change and Comfort Measures for NPOs:

  • SEBI approved a change in the nomenclature from \”Social Auditor\” to \”Social Impact Assessor\” to convey a positive approach toward the social sector.
  • This measure aims to provide comfort to NPOs involved in the SSE and reinforces SEBI\’s support for social impact initiatives.

 

Recent Developments:

  • The approval of these regulations underscores SEBI\’s commitment to aligning with international standards and principles, as reflected in the IOSCO Principles for Financial Benchmarks. 
  • The dematerialization requirement for AIF investments and amendments to REIT regulations demonstrate SEBI\’s proactive approach to enhancing the regulatory framework across diverse segments of the securities market.

 

Challenges:

  • Implementing these regulations may pose challenges in terms of industry adaptation and ensuring compliance. 
  • The transition to dematerialized AIF investments and the operationalization of the regulatory framework for SM REITs may require careful monitoring and coordination.

 

Suggestions:

  • SEBI should engage with market participants, providing guidance and clarifications to facilitate a smooth transition. 
  • Periodic reviews and stakeholder consultations can address emerging issues and ensure the effectiveness of the regulatory framework.

 

Conclusion:

  • SEBI\’s approval of these regulatory measures marks a significant step toward fostering transparency, accountability, and investor protection in the securities market. 
  • By aligning with international standards and addressing specific market segments\’ regulatory needs, SEBI reinforces its role as a dynamic and forward-thinking securities regulator. 
  • The successful implementation of these measures will contribute to the overall integrity and resilience of India\’s capital markets.

 

 

Decommissioning Coal Plants

Context:

  • India\’s transition towards cleaner energy sources, particularly the decline in financing for new coal power projects and the rise in renewables, has raised concerns about the risks associated with decommissioning coal plants. 
  • This transition is critical for meeting sustainability goals but comes with economic implications and the challenge of managing stranded assets.

 

About Transition Towards Cleaner Energy:

  • Financing for new coal power projects has declined over the past five years.
  • The steady rise in financing for renewable energy projects.
  • Renewables constituted 41% of total capacity in 2022-23, increasing from 32% in 2011-12.
  • Clean energy in the electricity mix is around 23%, with over 55% of India\’s energy needs met by coal.

 

Economic Implications:

  • Assets losing value due to unforeseen market shifts, regulatory changes, and technological advancements.
  • Potential risks for banks and financial institutions with ties to the fossil fuel sector.

 

Financial Implications:

  • High financial risk in decommissioning coal plants due to their average age (13 years).
  • Public sector banks and NBFCs bear 90% of the loan burden associated with coal projects.
  • Private banks reducing financing for coal-fired thermal power plants.

 

Regional Vulnerabilities:

  • States like Chhattisgarh, Odisha, and Jharkhand have a high share of stressed assets in-state coal power capacities, posing financial risks.

 

Challenges and Way Forward:

  • Governments should create clear policies and regulations to provide investor clarity and predictability during the transition away from coal.
  • Supportive policies can incentivize the shift towards renewable energy while mitigating risks for stakeholders.
  • Thorough risk assessments, including stress testing and scenario planning, are crucial for anticipating the potential impacts of stranded assets.
  • Proactive risk management and mitigation strategies can be developed based on these assessments.
  • Financial institutions should gradually reallocate funds from fossil fuel-dependent assets to renewable energy projects.
  • Diversifying investment portfolios can help minimize risks associated with stranded assets and align with global sustainability objectives.

Conclusion:

  • While the transition towards cleaner energy is imperative for environmental sustainability, addressing the economic risks associated with decommissioning coal plants requires a multi-faceted approach. 
  • Clear policies, thorough risk assessments, and strategic investment diversification are essential components of managing this transition and ensuring a sustainable and economically viable energy landscape for India.

 

 

Fact for Prelims:

NATPOLREX-IX

  • The Indian Coast Guard (ICG) recently conducted the 9th National Level Pollution Response Exercise (NATPOLREX-IX) off Vadinar, Gujarat. 
  • The primary objective of NATPOLREX-IX was to assess the preparedness and coordination among various resource agencies in responding to a marine oil spill, activating the provisions outlined in the National Oil Spill Disaster Contingency Plan (NOSDCP).
  • During NATPOLREX-IX, the ICG utilized both surface and air platforms, including Pollution Response Vessels (PRVs), Offshore Patrol Vessels (OPVs), the indigenous Advanced Light Helicopter Mk-III, and Dornier Aircraft configured for marine pollution response. 
  • This exercise not only tested the efficiency of response mechanisms but also showcased India\’s industrial capabilities, aligning with the \’Make in India\’ initiative and the vision of \’Aatmanirbhar Bharat.\’
  • In addition to formulating the NOSDCP, the Indian Coast Guard has established four Pollution Response Centers located in Mumbai, Chennai, Port Blair, and Vadinar. These centres play a crucial role in enhancing India\’s capabilities to address and manage marine pollution incidents effectively.

 

 

Schemes to promote the welfare of minority communities

  • Pre-Matric Scholarship Scheme, Post-Matric Scholarship Scheme, Merit-cum-Means based Scholarship Scheme: These schemes aim to provide financial assistance to minority students for educational empowerment through Direct Benefit Transfer (DBT).
  • Naya Savera- Free Coaching and Allied Scheme: This program offers free coaching to economically weaker students from minority communities to prepare for technical/professional courses and competitive examinations.
  • Padho Pardesh: This scheme provides interest subsidies on educational loans for overseas higher studies to students from economically weaker sections of minority communities.
  • Nai Roshni: Focused on leadership development, particularly for women belonging to minority communities.
  • Seekho Aur Kamao: A skill development scheme targeting youth in the age group of 14-35, aiming to enhance employability.
  • Pradhan Mantri Jan Vikas Karyakram (PMJVK): Addressing development deficits in identified Minority Concentration Areas based on Census 2011 data.
  • USTTAD (Upgrading the Skills and Training in Traditional Arts/Crafts for Development): Launched to preserve traditional skills, this initiative includes HunnarHaats for nationwide marketing and employment opportunities
  • Prime Minister-Virasat Ka Samvardhan (PM Vikaas): Introduced in the Ministry of Minority Affairs\’ 2023 Budget, this skilling initiative focuses on entrepreneurship and leadership training for minority and artisan communities, aligning with the Skill India Mission. The scheme integrates with the Skill India Portal (SIP) for implementation.

 

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