DNA [Daily News Analysis] – 01 Oct 2022

News 1: Preventive detention serious invasion of personal liberty

Background

Underlining that “preventive detention is a serious invasion of personal liberty”, the Supreme Court ruled that safeguards laid down in the Constitution and laws authorizing detention “must” therefore “be strictly adhered to”.

Preventive detention

1. The bench referred to the 1982 SC decision in the ‘Ashok Kumar vs Delhi administration case which said “preventive detention is devised to afford protection to society.
2. The objective is not to punish a man for having done something but to intercept before he does it and to prevent him from doing” and added that “in view of the above object of the preventive detention.
3. It added that “preventive detention is a serious invasion of personal liberty, and the normal methods open to a person charged with commission of any offence to disprove the charge or to prove his innocence at the trial are not available to the person preventively”.

Constitutional provision

Article 22(3) provides that if the person who has been arrested or detained under preventive detention laws then the protection against arrest and detention provided under article22 (1) and22 (2) shall not be available to that person.

Grounds For Preventive Detention

1. Security of state, maintenance of public order,
2. maintenance of supplies and essential services and defense,
3. foreign affairs or security of India.
4. A person may be detained without trial only on any or some of the above grounds.

A detainee under preventive detention can have no right of personal liberty guaranteed by Article 19 or Article 21.

Safeguards Provided in Constitution

1. To prevent reckless use of Preventive Detention, certain safeguards are provided in the constitution.
2. Firstly, a person may be taken to preventive custody only for 3 months at the first instance.
3. If the period of detention is extended beyond 3 months, the case must be referred to an Advisory Board consisting of persons with qualifications for appointment as judges of High Courts.
4. It is implicit, that the period of detention may be extended beyond 3 months, only on approval by the Advisory Board.
5. Secondly, the detainee is entitled to know the grounds of his detention. The state, however, may refuse to divulge the grounds of detention if it is in the public interest to do so.
6. Needless to say, this power conferred on the state leaves scope for arbitrary action on the part of the authorities.
7. Thirdly, the detaining authorities must give the detainee earliest opportunities for making representation against the detention.

News 2: AFSPA extended in Nagaland, Arunachal

Background

1. The Ministry of Home Affairs (MHA) has extended the Armed Forces (Special Powers) Act (AFSPA) in parts of Arunachal Pradesh and Nagaland for another six months.

AFSPA

News 3: SC Collegium recommends transfer of two Chief Justices and elevation of three judges

Background

The Supreme Court Collegium led by Chief Justice of India U.U. Lalit has recommended the government transfer of Chief Justices of Orissa and Jammu and Kashmir High Courts.

Transfer and appointment of judges

Constitutional provision:

1. Articles 124(2) and 217 of the Constitution deal with the appointment of judges to the Supreme Court and High Courts.
2. The appointments are made by the President, who is required to hold consultations with “such of the judges of the Supreme Court and of the High Courts” as he may think is needed.
3. But the Constitution does not lay down any process for making these appointments.

Collegium

• It is the way by which judges of the Supreme Court and High Courts are appointed and transferred.
• The collegium system is not rooted in the Constitution, or a specific law promulgated by Parliament; it has evolved through judgments of the Supreme Court.
• The Supreme Court collegium is a five-member body, which is headed by the incumbent Chief Justice of India (CJI) and comprises the four other senior most judges of the court at that time.
•  A High Court collegium is led by the incumbent Chief Justice and four other senior most judges of that court.
• Judges of the higher judiciary are appointed only through the collegium system, and the government has a role only after names have been decided by the collegium.
• Names that are recommended for appointment by a High Court collegium reaches the government only after approval by the CJI and the Supreme Court collegium.
• The role of the government in this entire process is limited to getting an inquiry conducted by the Intelligence Bureau (IB) if a lawyer is to be elevated as a judge in a High Court or the Supreme Court.
• The government can also raise objections and seek clarifications regarding the collegium’s choices, but if the collegium reiterates the same names, the government is bound, under Constitution Bench judgments, to appoint them as judges.

Evolution of Collegium System

News 4: Core sector slowed to 3.3% in August

Background

Output growth in India’s eight core infrastructure sectors slowed to 3.3% in August from 4.5% in the previous month. This is the slowest pace seen since November 2021, with crude oil and natural gas continuing to report contractions while electricity and steel production clocked sharply lower expansions than in the previous month.

News 5:  Centre raises natural gas prices by 40%

Background

Prices of natural gas, used to generate electricity, make fertilizers and converted into CNG to run automobiles, were raised by a steep 40% to record levels, in step with firming global energy rates.

Natural gas

Natural gas is a fossil energy source that formed deep beneath the earth’s surface. Natural gas contains many different compounds. The largest component of natural gas is methane. Natural gas also contains smaller amounts of natural gas liquids (NGLs, which are also hydrocarbon gas liquids), and nonhydrocarbon gases, such as carbon dioxide and water vapor.

News 6: Putin annexes four Russia-held regions of Ukraine, calls for talks

Background

1. Russian President Vladimir Putin annexed four territories in Ukraine controlled by his Army at a grand ceremony in the Kremlin and urged Kyiv to lay down its arms and negotiate an end to seven months of fighting.
2. The four annexed regions are Luhansk, Donetsk, Kherson and Zaporizhzhya.
3. With the formal annexation of Kherson, Zaporizhzhia, Donetsk and Luhansk, nearly 15% of Ukraine’s territory will come under Russian control.

How much Ukrainian territory does Russia control

News 7: PM flags off Vande Bharat Express 2.0 from Gandhinagar

Background

Prime Minister flagged off the new and upgraded version of the Vande Bharat Express which will run from Gandhinagar in Gujarat to Mumbai in Maharashtra. 

Vande Bharat Express

News 8: Reserve Bank raises rates by 50 bps, brings down growth outlook to 7%

Background

The Reserve Bank of India’s Monetary Policy Committee (MPC) raised the policy repo rate by 50 basis points (bps) to 5.9%, with RBI Governor Shaktikanta Das citing the persistence of high inflation.

Monetary Policy Committee

Section 45ZB of the amended RBI Act, 1934 provides for an empowered six-member  (3 RBI officials + 3 Nominated by govt) monetary policy committee (MPC) to be constituted by the Central Government by notification in the Official Gazette. The first such MPC was constituted on September 29, 2016.

Constitution of Members

1. Chairperson: RBI Governor
2. Vice Chairperson: Deputy Governor of the Reserve Bank of India in charge of Monetary Policy
3. Other Members: One officer of the Reserve Bank of India to be nominated by the Central Board
4. External members: Noted Economists, finance experts etc, who’re not office bearers in RBI.
5. (External members, will hold office for a period of four years or until further orders, whichever is earlier)

Objective

1. The MPC determines the policy repo rate required to achieve the inflation target.

Meetings

1. The MPC is required to meet at least four times in a year. The quorum for the meeting of the MPC is four members.
2. Each member of the MPC has one vote, and in the event of an equality of votes, the Governor has a second or casting vote.

Inflation Target

1. Under Section 45ZA, the Central Government, in consultation with the RBI, determines the inflation target in terms of the Consumer Price Index (CPI), once in five years and notifies it in the Official Gazette.
2. Section 45ZB of the RBI Act provides for the constitution of a six-member Monetary Policy Committee (MPC) to determine the policy rate required to achieve the inflation target.

Failure to Maintain Inflation Target

The Central Government has notified the following as the factors that constitute failure to achieve the inflation target:

1. the average inflation is more than the upper tolerance level of the inflation target for any three consecutive quarters; or
2. the average inflation is less than the lower tolerance level for any three consecutive quarters.

Where the Bank fails to meet the inflation target, it shall set out in a report to the Central Government:

1. the reasons for failure to achieve the inflation target;
2. remedial actions proposed to be taken by the Bank; and
3. an estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions.

Repo Rate: The interest rate at which the Reserve Bank provides liquidity under the liquidity adjustment facility (LAF) to all LAF participants against the collateral of government and other approved securities.

Other important news

Open Network Digital Commerce:

Open Network for Digital Commerce (ONDC) is a network based on open protocol and will enable local commerce across segments, such as mobility, grocery, food order and delivery, hotel booking and travel, among others, to be discovered and engaged by any network-enabled application.

The platform aims to create new opportunities, curb digital monopolies and by supporting micro, small and medium enterprises and small traders and help them get on online platforms.

It is an initiative of the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.

Features of ONDC

ONDC, seeks to democratise digital or electronic commerce, moving it from a platform-centric model to an open-network.

Through ONDC, merchants will be able to save their data to build credit history and reach consumers.

The proposed government-backed platform aims to create a level playing field for e-commerce behemoths such as Amazon, Flipkart, and offline traders who have been crying foul at the unfair trade practices of these e-tailers.

In this system, ONDC plans to enable sellers and buyers to be digitally visible and transact through an open network, regardless of what platform or application they use.

It will also empower merchants and consumers by breaking silos to form a single network to drive innovation and scale, transforming all businesses from retail goods, food to mobility.

The new framework aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols independent of any specific platform.

It is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiencies in logistics and enhance value for consumers.

NBFCs

Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956. They offer niche banking services.

They are not exactly banks because they generally don’t accept deposits, but we have a few exceptions where NBFC can accept deposits (NBFC-D).

Difference between NBFCs and banks

NBFCs lend and make investments and hence their activities are akin to that of banks; however, there are a few differences as given below:

1. NBFC cannot accept demand deposits.
2. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.
3. deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.