DAILY NEWS ANALYSIS 05 MARCH
SECURITY
SC annuls RBI curb, frees trade in crypto currencies
Court order:
- The Supreme Court set aside April 6, 2018 circular of the Reserve Bank of India (RBI) that prohibited banks and entities regulated by it from providing services in relation to virtual currencies (VCs).
- Till date, RBI has not come out with a stand that any of the entities regulated by it namely, nationalised banks/scheduled commercial banks/cooperative banks/NBFCs, have suffered any loss or adverse effect directly or indirectly on account of VC exchanges.
- It found that the RBI circular is “disproportionate” with an otherwise consistent stand taken by the central bank that VCs were not prohibited in the country.
- The RBI did not consider the availability of alternatives before issuing the circular.
The Supreme Court held that the RBI directive came up short on the five-prong test to check proportionality that is:
- Direct and immediate impact upon fundamental rights;
- larger public interest sought to be ensured;
- Necessity to restrict citizens’ freedom;
- Inherent pernicious nature of the act prohibited or its capacity or tendency to be harmful to the general public;
- Possibility of achieving the same object by imposing a less drastic restraint.
The court held that the test of proportionality of any action by the government must pass the test of Article 19(1) (g), which states that all citizens of the country will have the right to practise any profession, or carry on any occupation or trade and business.
About Crypto Currencies:
- Crypto currency is an internet-based medium of exchange, which uses crypto graphical functions to conduct financial transactions.
- Crypto currencies leverage block chain technology to gain decentralization, transparency and immutability.
- The most important feature of a crypto currency is that it is not controlled by any central authority: the decentralized nature of the block chain makes crypto currencies theoretically immune to the old ways of government control and interference.
- Crypto currencies can be sent directly between two parties via the use of private and public keys.
- These transfers can be done with minimal processing fees, allowing users to avoid the steep fees charged by traditional financial institutions.
Impact of ruling:
- The government will have to revise its proposed legislation on crypto currency.
- This ruling is going to give a much needed boost to the struggling crypto currency platforms and work towards changing India’s image in adopting new age transactions.
Reasons behind RBI ban:
- Lack of any underlying fiat,
- Episodes of excessive volatility in their value,
- Their anonymous nature, which goes against global money-laundering rules.
- Risks and concerns about data security and consumer protection.
- Potential impact on the effectiveness of monetary policy.
- Significant spurt in the valuation of many virtual currencies and rapid growth in initial coin offerings”, virtual currencies were not safe for use.
Explained: What is ‘mac-binding’, the condition specified for using Internet in J&K?
The use of social media was allowed in Jammu and Kashmir on March 3, with an order laying down the latest rules for the use of Internet in the Union Territory.
It has conditions of making available internet connectivity “with mac-binding”.
Mac Binding:
- Every device has a Media Access Control (MAC) address, a hardware identification number that is unique to it.
- While accessing the Internet, every device is assigned an IP address.
- Mac-binding essentially means binding together the MAC and IP addresses, so that all requests from that IP address are served only by the computer having that particular MAC address.
- It means that if the IP address or the MAC addresses changes, the device can no longer access the Internet.
- Monitoring authorities can trace the specific system from which a particular online activity was carried out.
Other Conditions:
- Internet speed in Jammu and Kashmir is still restricted to 2G.
- This means very slow services — pictures will take a long time to be sent or downloaded, videos will be nearly impossible to share and there will be a long loading time for most websites.
- The Internet can be accessed on all post-paid devices and those using Local Area Networks (LAN).
- These services shall not be made available on prepaid SIM cards unless verified as per the norms applicable for post-paid connections.
Evolution of restrictions:
- The government has been relaxing Internet and phone usage in the Union Territory in phases.
- On January 18, prepaid cellular services (voice and SMS) were restored.
- Provided 2G mobile Internet connectivity to 153 “white listed” sites on post-paid cell phones in all 10 districts of Jammu and two revenue districts of Kashmir — Kupwara, and Bandipora.
- Later, the number of white listed sites went up to 481.
- Later, more than 1,000 websites were added to the white list, taking the number up to 1,485.
ECONOMY
Nod for changes to Companies Act for decriminalising offences
Government proposal:
- Proposes to amend the Companies Act again, in a bid to decriminalise a number of offences and ease corporate social responsibility (CSR) requirements, especially for smaller companies.
- The amendment bill will also enable the listing of Indian companies on stock exchanges in foreign jurisdictions.
- Minister outlined proposed changes to 52 out of 66 compoundable offences under the Act, either removing them entirely, downgrading penalties from jail sentences to fines or suggesting alternative adjudication mechanisms.
- Proposes to recategorise 23 offences so that they can be dealt with through an in-house adjudication framework.
- Five types of offences will be dealt with under different alternative frameworks.
- The proposed amendments will also ensure that companies, which have an obligation to spend Rs. 50 lakh per annum or less on Corporate Social Responsibility (CSR), are no longer required to have a CSR committee.
- Companies that spend more than the mandatory 2% on CSR in a particular year can carry it forward as credit for fulfilment of CSR obligations for the next few years as well.
About Companies act:
- The Companies Act 2013 is an Act of the Parliament of India on Indian company law, which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company
- National Financial Reporting Authority (NFRA) is established in March 2018 as an oversight body to investigate matters of professional misconduct by chartered accountants or CA firms.
- National Company Law Tribunal (NCLT) is established under the Companies Act 2013 and was constituted on 1 June 2016 by the government of India & is based on the recommendation of the Justice Eradi committee on law relating to insolvency and winding up of companies.
- According to the act, all firms with net worth above 5 billion rupees (approx. $75 million), turnover over 10 billion rupees (approx. $150 million), or net profit over 50 million rupees (approx. $750,000) are required to spend at least 2% of their annual profits of the preceding year.
Cabinet allows NRIs to take 100% in Air India
Recent development in AIR India disinvestment:
- The Union Cabinet decided to allow Non-Resident Indians (NRIs), who are Indian nationals to own up to 100% stake of Air India.
- The government is in the process of selling the national carrier, having invited preliminary bids recently.
- The amendment was meant to ‘liberalise and simplify the FDI policy to provide ease of doing business in the country.
SOCIETY
Bombay and Delhi IITs among world’s top 50 tech institutions
Findings of QS (Quacquarelli Symonds) World University global ranking:
- The Indian Institutes of Technology, Bombay and Delhi have both broken into the world’s top 50 engineering and technology institutions.
- Five IITs — including Kharagpur, Madras and Kanpur — made it into the top 100 list in that category of the by subject for 2020.
- However, engineering and technology was the only major subject group where Indian institutions were able to crack the elite top 100 tier.
Natural sciences category:
- Three Indian institutions made it to the top 200:
- IIT-Bombay at 108th rank
- The Indian Institute of Science, Bangalore, at the 111th position,
- IIT-Madras is at the 195th rank.
Arts and humanities category:
- JNU got 162 ranking.
- Delhi University got 231 ranking.
Reasons behind Poor Ranking:
- Low spending by global standards that it holds back India's economic, technological and strategic ambitions. India's R&D spending amounts to 0.7% of gross domestic product, a fraction of China's 2.1%, let alone Japan's 3.1%.
- A lax intellectual property regime, foolish sect oral regulations and a protectionist trade policy have deterred R&D thus reducing industry income.
- Composition of spending is also skewed. The government and a few strategic sectors, notably atomic energy, space and defence, account for the bulk of the meagre spending.
- The contribution of Indian companies, both private and public sector taken together, to total R&D is just 44% against a global average of 71%.
- Indian Higher education is marred with the curse of plagiarism.
- Government policies like paying graduate students cash incentives for publishing in the reputed journal creates a bias towards publishing than high quality science. Indian papers are cites lower compared to those in USA and China.
- Our school system is focussed on rote learning than critically thinking. It also affects the quality of research.
- Poor quality infrastructure at institutes is also an issue.
Questions on Rankings:
- Quantified rankings bring conflict between educational values and market values. Educational values focus on critical thinking, analytical abilities, social agendas and the inculcation of citizenship ideals that are unquantifiable and intangible. While Market values are industry-driven, orients the project of neoliberal higher education training towards developing particular skill-sets for the labour market.
- Rankings are leading to defunding of the public institutions, where they are supposed to enhance the income from corporate. It has an attack on dissent, critical education and any public institution that might exercise a democratising influence on the nation.
- Rankings are one Size fits all model where they do not consider local cultures/societies.
- Rankings increased focus in on research output fuelling the consumerism. It violates the basic principle of university: Teaching.
- Focus on increased international exposure reduces opportunity for local regions.
- Focus on publication has resulted in massification in research journals. Scams have been unearthed about fake journals providing no peer research support.
About QS ranking:
The six QS rankings indicators are:
- Academic reputation,
- Employer reputation,
- Citations per faculty,
- Faculty/student ratio,
- International faculty ratio,
- International student ratio.
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