The International Financial Services Centres Authority Bill, 2019 was introduced in Rajya Sabha by the Minister of Finance, Mr. Piyush Goyal, on February 12, 2019. The Bill provides for the establishment of an authority to develop and regulate the financial services market in the International Financial Services Centres set up in Special Economic Zones in India. Key features of the Bill include:
Coverage: The Bill will apply to all International Financial Services Centres (IFSC) set up under the Special Economic Zones Act, 2005.
Constitution of the International Financial Services Centres Authority: The Bill provides for the establishment of the International Financial Services Centres Authority. The Authority will consist of nine members, appointed by the central government. These posts will have a term of three years, subject to reappointment. Members of the Authority will include: (i) the Chairperson, (ii) four members to be nominated from the Reserve Bank of India, the Securities Exchange Board of India, the Insurance Regulatory and Development Authority of India, and the Pension Fund Regulatory and Development Authority, (iii) two members from amongst officials of the Ministry of Finance, and (iv) two members to be appointed on the recommendation of a Selection Committee.
Functions of the Authority: Functions of the Authority include: (i) regulating financial products, financial services, and financial institutions in an IFSC which have been approved by any regulator (such as the RBI or SEBI), before the enactment of the Bill, (ii) regulating any other financial products, services, or institutions in an IFSC, which may be notified by the central government, and (iii) recommending to the central government, any other financial services, products, or institutions which may be permitted in an IFSC.
Further, all powers relating to regulation of financial products, services, and institutions in IFSCs, which were previously exercised by the respective regulators will be exercised by the Authority. All processes and procedures to be followed by the Authority in respect of such regulation (such as, procedures for investigation of offences) will be identical to the provisions for these processes under the respective laws of the regulators.
Performance Review Committee: Under the Bill, the Authority will constitute a Performance Review Committee to review the functioning of the Authority. The Committee will consist of at least two members of the Authority. The Committee will review whether: (i) the Authority has complied with the provisions of the applicable laws while exercising powers or performing functions, (ii) the regulations made by the Authority to promote transparency and best practices of governance, and (iii) the Authority is managing risks to its functioning in a reasonable manner.
Transaction in foreign currency: As per the Bill, all transactions of financial services in IFSCs will be in such foreign currency as specified by the Authority, in consultation with the central government.
International Financial Services Centres Authority Fund: The Bill sets up the International Financial Services Centres Authority Fund. The following amounts will be credited to the Fund: (i) all grants, fees and charges received by the Authority, and (ii) all sums received by the Authority from various sources, as decided by the central government.
Why do we need a GST Council? The GST council is the key decision-making body that will take all important decisions regarding the GST. The GST Council dictates tax rate, tax exemption, the due date of forms, tax laws, and tax deadlines, keeping in mind special rates and provisions for some states. The predominant responsibility of the GST Council is to ensure to have one uniform tax rate for goods and services across the nation.
How is the GST Council structured? The Goods and Services Tax (GST) is governed by the GST Council. Article 279 (1) of the amended Indian Constitution states that the GST Council has to be constituted by the President within 60 days of the commencement of the Article 279A.
According to the article, GST Council will be a joint forum for the Centre and the States. It consists of the following members: The Union Finance Minister will be the Chairperson. Member – the Union Minister of State in charge of Revenue or Finance. The Minister in charge of finance or taxation or any other Minister nominated by each State government, as members.
GST Council recommendations: Article 279A (4) specifies that the Council will make recommendations to the Union and the States on the important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits etc.
The special stamps aim to create awareness about depleting glaciers and affect the ecology around the Himalayas.
Why are Ice stupas being built? The idea behind artificial glaciers is to freeze and hold the water that keeps flowing and wasting away down the streams and into the rivers throughout the winter. Instead, this ice will melt in the springtime, just when the fields need watering.
The idea of the Ice Stupa project was conceptualised by HIAL founder Sonam Wangchuk to reduce problems of Ladakhi farmers in spring.
How does it look? This is achieved by freezing the stream water vertically in the form of huge ice towers or cones of 30 to 50m height that look very similar to the local sacred mud structures called Stupa or Chorten. These ice mountains can be built right next to the village itself where the water is needed. Very little effort or investment would be needed except for laying one underground pipeline from a higher point on the stream to the outskirts of the village.
How it works? Water always maintains its level. Therefore, water piped from 60m upstream would easily rise close to 60m up from ground when it reaches the village. Water is made to fall from that height in cold Ladakhi winter nights when it is -30 to -50°C outside (with wind chill factor). The water would freeze by the time it reaches the ground and slowly form a huge cone or Ice Stupa roughly 30 to 50m high.
Since these ice cones extend vertically upwards towards the sun, they receive fewer of the sun’s rays per the volume of water stored; hence, they will take much longer to melt compared to an artificial glacier of the same volume formed horizontally on a flat surface.
Significance: The Ice Stupa is a survival technique that has been developed over a period. Each stupa has the capacity to store at least 30-50 lakh litres of water. This is apart from the naturally saved water in the slopes of mountains.
Key features: It aims to create registers containing the names, details and photographs of every resident of the state, on a household basis, in an effort to detect illegal foreigners staying and “eating away” benefits of development schemes.
As per the Bill, it shall be the responsibility of every householder as well as every member of household in the state to furnish all such information, particulars and passport-size photographs of the members of the household as may be required by the registering authorities,”
Once the information prescribed by the state government is received, the concerned registering authority will compile the details in two distinct registers- one for the citizen residents and another for non-citizen residents of a village/area/town.
Information furnished by individuals for the registers would be “verified and counter-signed by the president of the local branch of the state-level NGOs as may be designated by the state government from time to time”.
The Bill says that all government departments and police may use the household registers for administrative purposes, during implementation of development schemes and law enforcement.
It defines “citizens” as a person registered as such, or having requisite qualification as prescribed under the Citizenship Act, 1955.
What necessitated this? Influx of foreigners into Mizoram through its porous borders has remained a serious concern for several decades. In many cases the benefit of development and welfare programmes are found eaten away to a large extent by such foreigners who clandestinely stayed back and got assimilated in the people of the state by taking advantage of the mistaken identity and of difficulties in detecting them.
Large scale influx of foreigners and their malafide assimilation with the permanent residents in the villages of Mizoram has led to an “abnormal increase in the population” and poses a law and order threat.
Section 33(7) of the Representation of People’s Act Provisions in this regard- Section 33(7) of RPA: Section 33(7) of the Representation of People’s Act permits a candidate to contest any election (Parliamentary, State Assembly, Biennial Council, or bye-elections) from up to two constituencies. The provision was introduced in 1996 prior to which there was no bar on the number of constituencies from which a candidate could contest.
Why candidates should be barred from contesting from more than one seat? One person, one vote & one candidate, one constituency is the dictum of democracy. However, as per the law, as it stands today, a person can contest the election for the same office from two constituencies simultaneously.
When a candidate contests from two seats, it is imperative that he has to vacate one of the two seats if he wins both. This, apart from the consequent unavoidable financial burden on the public exchequer, government manpower and other resources for holding bye-election is also an injustice to the voters of the constituency which the candidate is quitting from.
Alternative suggested by the Election commission: The ECI has alternatively suggested that if existing provisions are retained then the candidate contesting from two seats should bear the cost of the bye-election to the seat that the contestant decides to vacate in the event of his/her winning both seats. The amount in such an event could be Rs 5 lakh for assembly election and Rs 10 lakh for parliament election.
SC’s views: The Supreme Court had in December 2017 issued notices seeking replies from the Election Commission and the Centre on the issue. At the time, the Supreme Court had said the practice of one candidate contesting multiple seats was a drain on the exchequer since it necessitated bypolls. A petition has also been filed in the Supreme Court challenging Section 33(7).
Highlights of the draft: The amendment defines community as “a group of persons specified on the basis of government records living in a specific locality and in joint possession and enjoyment of common property resources, without regard to race, religion, caste, language and culture”.
Forest is defined to include “any government or private or institutional land recorded or notified as forest/forest land in any government record and the lands managed by government/community as forest and mangroves, and also any land which the central or state government may by notification declare to be forest for the purpose of this Act.”
While the preamble of IFA, 1927, said the Act was focused on laws related to transport of forest produce and the tax on it, the amendment has increased the focus to “conservation, enrichment and sustainable management of forest resources and matters connected therewith to safeguard ecological stability to ensure provision of ecosystem services in perpetuity and to address the concerns related to climate change and international commitments”.
Increased role of states: The amendments say if the state government, after consultation with the central government, feels that the rights under FRA will hamper conservation efforts, then the state “may commute such rights by paying such persons a sum of money in lieu thereof, or grant of land, or in such other manner as it thinks fit, to maintain the social organisation of the forest dwelling communities or alternatively set out some other forest tract of sufficient extent, and in a locality reasonably convenient, for the purpose of such forest dwellers”.
The amendment also introduces a new category of forests — production forest. These will be forests with specific objectives for production of timber, pulp, pulpwood, firewood, non-timber forest produce, medicinal plants or any forest species to increase production in the country for a specified period.
Indian Forest Act, 1927: The Indian Forest Act, 1927 was largely based on previous Indian Forest Acts implemented under the British. The most famous one was the Indian Forest Act of 1878.
Both the 1878 act and the 1927 one sought to consolidate and reserve the areas having forest cover, or significant wildlife, to regulate movement and transit of forest produce, and duty leviable on timber and other forest produce.
It also defines the procedure to be followed for declaring an area to be a Reserved Forest, a Protected Forest or a Village Forest. It defines what a forest offence is, what are the acts prohibited inside a Reserved Forest, and penalties leviable on violation of the provisions of the Act.
The need for review: Many reports like the MB Shah report of 2010 and the TSR Subramanian report of 2015, have talked about amending the IFA.
Need for permanent status: Finance commissions have over the past several decades adopted different approaches with regard to principles of tax devolution, grants to be given to states and fiscal consolidation issues. In other words, there has to be continuity and change between finance commissions.
There is a need to ensure broad consistency between Finance Commissions so that there is some degree of certainty in the flow of funds, especially to the states. This has become even more critical in the post GST scenario.
If it is given permanent status, the Commission can function as a leaner entity in the intervening period till the next Finance Commission is set up in a full-fledged manner. During the intervening period, it can also address issues arising from implementation of the recommendations of the finance commission.
Context: 33rd Edition of India-Indonesia Coordinated Patrol (Ind-Indo Corpat) Commences at Port Blair.
The 33rd IND-INDO CORPAT, also coinciding with 70 years of India-Indonesia diplomatic ties, will contribute towards the Indian Navy’s efforts to consolidate inter-operability and forge strong bonds of friendship across the seas.
Significance: The IND-INDO CORPAT Series of bilaterals seek to underscore India’s peaceful presence and solidarity with friendly Maritime neighbouring countries to ensure good order in the maritime domain, consolidate interoperability and strengthen existing bonds of friendship between India and Indonesia.
Exercise MITRA SHAKTI is conducted annually as part of military diplomacy and interaction between armies of India & Sri Lanka.
The aim of the exercise is to build and promote close relations between armies of both the countries and to enhance ability of joint exercise commander to take military contingents of both nations under command.
It was established in 1988-89, during the birth centenary year of Bharat Ratna Pt. Govind Ballabh Pant.
It is an autonomous Institute of the Ministry of Environment, Forest & Climate Change (MoEF&CC), Govt. of India.
It has been identified as a focal agency to advance scientific knowledge, to evolve integrated management strategies, demonstrate their efficacy for conservation of natural resources, and to ensure environmentally sound development in the entire Indian Himalayan Region (IHR).
Context: The Abel Prize in mathematics was awarded to Karen Uhlenbeck of the U.S. for her work on partial differential equations, the first woman to win the award.
About Abel Prize: It is a Norwegian prize awarded annually by the King of Norway to one or more outstanding mathematicians. The prize is named after the 19th century Norwegian mathematician Niels Henrik Abel.
It was established by the Norwegian government in 2002 on the occasion of the 200th anniversary of Niels Henrik Abel’s birth.
The main objective of the Abel Prize is to recognize pioneering scientific achievements in mathematics. The prize comes with a cheque for $7,03,000.
Context: Weeks after President Ram Nath Kovind has issued an executive order amending The Constitution (Application to Jammu and Kashmir) Order, 1954 to extend the provisions of the 77th and 103rd Amendments to the state, the Centre’s move has been challenged in the Jammu & Kashmir High Court.
What’s the issue? The executive order was issued on March 1, the day after the Union Cabinet approved the proposal of the J&K Governor’s administration to amend the 1954 Order. The Centre said the amendment “will give benefit of promotion in service to the Scheduled Castes, Scheduled Tribes, and also extend the 10 per cent reservation for economically weaker sections in educational institutions and public employment”.
The latest order has the consent of the Governor without the requisite aid and advice of the Council of Ministers. In a situation of Central rule, the Governor acts only as a nominee of the Union government and does not meet the definition of state government as laid down by Article 370 and the Supreme Court.
Major J&K parties have always opposed the amendments to the 1954 Order without ratification by the Constituent Assembly of the state. The Centre could do it because the SC allowed it. The opposition in J&K has been to the route taken by the Centre, and not to the laws themselves.
How is J&K governed? J&K negotiated the terms of its entry into the Indian Union. When Maharaja Hari Singh signed the Instrument of Accession on October 26, 1947, J&K gave up control over only three subjects: Defence, Foreign Affairs, Communications. A separate Constituent Assembly of J&K was planned to frame the J&K Constitution, and to work out J&K’s constitutional relationship with New Delhi.
Under Article 370, which was part of the Indian Constitution at its commencement on January 26, 1950, only two articles apply to J&K: Article 1, which defines India, and Article 370 itself. Article 370 provides that other provisions of the Indian Constitution can apply to J&K “subject to such exceptions and modifications as the President may by order specify”, and with the concurrence of the state government.
Role of state government: State government was defined as “the person for the time being recognised by the President as the Maharaja of Jammu and Kashmir acting on the advice of the Council of Ministers for the time being in office”. The decisions to extend the provisions of the Indian Constitution other than those specified in the Instrument of Accession, however, had to be ratified by the J&K Constituent Assembly.
The 1954 Presidential Order: But the J&K Constituent Assembly was yet to be set up, and the Centre wanted to extend a few provisions of the Constitution to streamline J&K’s relationship with the Union. Thus, a Presidential Order was issued on January 26, 1950 itself, with the state government’s concurrence. On November 5, 1951, J&K’s Constituent Assembly was convened.
The 1950 Order was replaced by The Constitution (Application to Jammu and Kashmir) Order, 1954. This Order, while applying to J&K provisions of Part-III of the Indian Constitution that relates to fundamental rights, introduced Article 35A — which protected laws passed by the state legislature of J&K in respect of permanent residents from any challenge on the ground that they violated any of the fundamental rights.
This order was ratified by the Constituent Assembly that also framed the J&K Constitution, before dispersing on November 17, 1956.
Through these Presidential orders, successive central governments have extended 94 out of the 97 entries in the Union List, and 26 out of the 47 in the Concurrent List to J&K, and made 260 out of the 395 Articles of the Indian Constitution applicable to J&K. This list does not include The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002, the GST Acts, and the two constitutional provisions that were extended on March 1.
Views of the Supreme Court in various cases: Prem Nath Kaul vs The State Of Jammu & Kashmir (1959)- relationship should be finally determined by the Constituent Assembly of the State itself.
Sampat Prakash vs State Of Jammu & Kashmir, 1969- Presidential orders could still be made through Article 370.
Mohd Maqbool Damnoo vs State Of Jammu And Kashmir, 1972- upheld and highlighted the importance of state government.