Current Affairs for UPSC IAS Exam – 3 August 2021 | Legacy IAS Academy

Contents

1. SC: Preventive detention only to prevent public disorder
2. PM Modi launches digital payment solution e-RUPI
3. Concerns over mandatory fortification of food items
4. How IMF growth forecast will impact monetary policy?

SC: Preventive detention only to prevent public disorder

Context:

Preventive detention, the dreaded power of the State to restrain a person without trial, could be used only to prevent public disorder, the Supreme Court held in a judgment.

Relevance:

GS-II: Polity and Governance (Constitutional Provisions, Fundamental Rights), GS-II: Governance (Government Policies and Interventions)

Dimensions of the Article:

1. About Preventive Detention in India
2. Criticisms of Preventive detention
3. The argument in favour of Preventive detention
4. Recent SC Judgement on Preventive Detention

About Preventive Detention in India

• As the term suggests – Preventive detention helps to prevent a person from committing a crime.
• Article 22 deals with 2 kinds of detentions: Preventive and Punitive. Article 22 (3) (b) of the Constitution allows for preventive detention and restriction on personal liberty for reasons of state security and public order.
• According to Article 22 (4)- in case of preventive detention as well, the person being detained should be informed of the grounds of arrest, however, in case the authorities consider that it is against the public interest to disclose certain facts, they need not reveal them.
• The person cannot be detained under preventive detention for more than 3 months unless permission to do so has been granted by an advisory board consisting of 3 judges of the Supreme Court.
• The other way by which the period of detention can be extended beyond 3 months is if the Parliament prescribes a law for it.
• Acts by the Parliament which provide for extension of Preventive detention period beyond 3 months: National Security Act (NSA) 1980; Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA) 1974; Unlawful Activities Prevention Act (UAPA) 1967, etc.
• Many State legislatures have enacted similar laws that authorize preventive detention.

Criticisms of Preventive detention

• Preventive detention becomes a human rights concern as there have been various incidents of misuse of such laws in India.
• Preventive detention represents the police power of the State.
• No other democratic country mentions preventive detention in its constitution and such laws come into effect only under emergency conditions in democratic countries.

The argument in favour of Preventive detention

• Arbitrary action the State is prevented in India as the areas in the context of which Preventive detention laws can be made are laid down in the 7th Schedule of the Constitution itself.
• In the Union list – laws for Preventive detention can be enacted only for reasons connected with Defence, Foreign Affairs, or the Security of India.
• In the Concurrent list – laws for Preventive detention can be enacted only for reasons connected with Security of a State, the Maintenance of Public Order, or the Maintenance of Essential Supplies and Services.

Recent SC Judgement on Preventive Detention

• The SC said the State should not arbitrarily resort to “preventive detention” to deal with all and sundry “law and order” problems, which could be dealt with by the ordinary laws of the country.
• Preventive detention is a necessary evil only to prevent public disorder. The court must ensure that the facts brought before it directly and inevitably lead to a harm, danger or alarm or feeling of insecurity among the general public or any section thereof at large.
• Whe.never an order under a preventive detention law is challenged, one of the questions the court must ask in deciding its legality is: was the ordinary law of the land sufficient to deal with the situation? If the answer is in the affirmative, the detention order will be illegal.
• Preventive detention must fall within the four corners of Article 21 (due process of law) read with Article 22 (safeguards against arbitrary arrest and detention) and the statute in question.
• Mere contravention of law, such as indulging in cheating or criminal breach of trust, certainly affects ‘law and order’, but before it can be said to affect ‘public order’, it must affect the community or the public at large

-Source: The Hindu

PM Modi launches digital payment solution e-RUPI

Context:

Prime Minister Narendra Modi launched digital payment solution e-RUPI, a person and purpose specific cashless digital payment solution, via videoconference.

Relevance:

Prelims, GS-III: Science and Technology (IT & Computers), GS-III: Indian Economy (Mobilization of Resources, Growth and Development of Indian Economy)

Dimensions of the Article:

1. About e-RUPI
2. How will these vouchers be issued?
3. What are the use cases of e-RUPI?
4. What are the plans for a central bank digital currency (CBDC)?
5. Does India have appetite for a digital currency?

About e-RUPI

• e-RUPI is a cashless and contactless digital payments medium, which will be delivered to mobile phones of beneficiaries in form of an SMS-string or a QR code.
• This will essentially be like a prepaid gift-voucher that will be redeemable at specific accepting centres without any credit or debit card, a mobile app or internet banking.
• e-RUPI will connect the sponsors of the services with the beneficiaries and service providers in a digital manner without any physical interface.

How will these vouchers be issued?

• The system has been built by NPCI on its UPI platform, and has onboarded banks that will be the issuing entities.
• Any corporate or government agency will have to approach the partner banks, which are both private and public-sector lenders, with the details of specific persons and the purpose for which payments have to be made.
• The beneficiaries will be identified using their mobile number and a voucher allocated by a bank to the service provider in the name of a given person would only be delivered to that person.

What are the use cases of e-RUPI?

• According to the government, e-RUPI is expected to ensure a leak-proof delivery of welfare services.
• It can also be used for delivering services under schemes meant for providing drugs and nutritional support under Mother and Child welfare schemes, TB eradication programmes, drugs & diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertiliser subsidies etc.
• The government also said that even the private sector can leverage these digital vouchers as part of their employee welfare and corporate social responsibility programmes.
• The government is already working on developing a central bank digital currency and the launch of e-RUPI could potentially highlight the gaps in digital payments infrastructure that will be necessary for the success of the future digital currency.
• In effect, e-RUPI is still backed by the existing Indian rupee as the underlying asset and specificity of its purpose makes it different to a virtual currency and puts it closer to a voucher-based payment system.
• Also, the ubiquitousness of e-RUPI in the future will depend on the end-use cases.

What are the plans for a central bank digital currency (CBDC)?

• The Reserve Bank of India had recently said that it has been working towards a phased implementation strategy for central bank digital currency or CBDC — digital currencies issued by a central bank that generally take on a digital form of the nation’s existing fiat currency such as the rupee.
• RBI deputy governor T Rabi Sankar said that CBDCs “are desirable not just for the benefits they create in payments systems, but also might be necessary to protect the general public in an environment of volatile private VCs.
• Although CBDCs are conceptually similar to currency notes, the introduction of CBDC would involve changes to the enabling legal framework since the current provisions are primarily synced for currency in paper form.

Does India have appetite for a digital currency?

According to the RBI, there are at least four reasons why digital currencies are expected to do well in India:

• One, there is increasing penetration of digital payments in the country that exists alongside sustained interest in cash usage, especially for small value transactions.
• Two, India’s high currency to GDP ratio, according to the RBI, “holds out another benefit of CBDCs”. Three, the spread of private virtual currencies such as Bitcoin and Ethereum may be yet another reason why CBDCs become important from the point of view of the central bank.

-Source: The Hindu

Concerns over mandatory fortification of food items

Context:

In a pushback against the Centre’s plan to mandatorily fortify rice and edible oils with vitamins and minerals, a group of scientists and activists have written to the Food Safety and Standards Authority of India (FSSAI), warning of the adverse impacts on health and livelihoods.

Relevance:

GS-II: Social Justice (Issues Relating to Poverty & Hunger, Food Security, Issues Related to Children), GS-III: Agriculture (Public Distribution System (PDS))

Dimensions of the Article:

1. Fortification of food
2. The need for Fortification
3. What are the benefits of Fortification?
4. Fortification of Rice and its Distribution under PDS in India
5. Recent concerns over mandatory fortification of food

Fortification of food

• Fortification is the addition of key vitamins and minerals such as iron, iodine, zinc, Vitamin A & D to staple foods such as rice, milk and salt to improve their nutritional content.
• These nutrients may or may not have been originally present in the food before processing.

The need for Fortification

• 70% of people in India do not consume enough micronutrients such as vitamins and minerals.
• About 70 percent of pre-school children suffer from anaemia caused by Iron Deficiency and 57 percent of preschool children have sub–clinical Vitamin A deficiency.
• Neural Tube Defects (NTDs) are the most common congenital malformation with an incidence that varies between 0.5-8/1000 births. It is estimated that 50-70% of these birth defects are preventable. One of the major causes is deficiency of Folic Acid. Thus, deficiency of micronutrients or micronutrient malnutrition, also known as “hidden hunger”, is a serious health risk.
• Unfortunately, those who are economically disadvantaged do not have access to safe and nutritious food. Others either do not consume a balanced diet or lack variety in the diet because of which they do not get adequate micronutrients.
• Often, there is considerable loss of nutrients during the processing of food. One of the strategies to address this problem is fortification of food. This method complements other ways to improve nutrition such as such as diversification of diet and supplementation of food.

What are the benefits of Fortification?

• Since the nutrients are added to staple foods that are widely consumed, this is an excellent method to improve the health of a large section of the population, all at once.
• Fortification is a safe method of improving nutrition among people. The addition of micronutrients to food does not pose a health risk to people. The quantity added is so small and so well regulated as per prescribed standards that likelihood of an overdose of nutrients is unlikely.
• It does not require any changes in food habits and patterns of people. It is a socio-culturally acceptable way to deliver nutrients to people.
• It does not alter the characteristics of the food—the taste, the feel, the look.
• It can be implemented quickly as well as show results in improvement of health in a relatively short period of time.
• This method is cost-effective especially if advantage is taken of the existing technology and delivery platforms.
• The Copenhagen Consensus estimates that every 1 Rupee spent on fortification results in 9 Rupees in benefits to the economy. It requires an initial investment to purchase both the equipment and the vitamin and mineral premix, but overall costs of fortification are extremely low. Even when all program costs are passed on to consumers, the price increase is approximately 1-2%, less than normal price variation. Thus, it has a high benefit-to-cost ratio.

Fortification of Rice and its Distribution under PDS in India

• The Centrally Sponsored Pilot Scheme on “Fortification of Rice and its Distribution under Public Distribution System (PDS)” has been approved for a period of three years beginning 2019-20.
• The Pilot Scheme is funded by Government of India in the ratio of 90:10 in respect of North Eastern, Hilly and Island States and 75:25 in respect of the rest of the States.
• The Pilot Scheme focuses on 15 districts, preferably 1 district per State.
• The decentralized model of fortification by States/UTs has been approved in the Pilot Scheme with blending at the rice milling stage.
• The operational responsibilities and identification of the districts for implementation of the Pilot Scheme lie with the States/UTs.
• States/UTs have been requested to operationalize blending of fortified rice at milling stage and start its distribution through PDS as early as possible.

Recent concerns over mandatory fortification of food

• Multiple studies show that dietary diversity and higher protein consumption are key to solving undernutrition in India, rather than adding a few synthetic micronutrients which could harm the health of consumers.
• Studies show that both anaemia and Vitamin A deficiencies are overdiagnosed, meaning that mandatory fortification could lead to hypervitaminosis.
• It also notes that many of the studies which FSSAI relies on to promote fortification are sponsored by food companies who would benefit from it, leading to conflicts of interest. Studies funded by the Nestle Nutrition Institute and the Global Alliance for Improved Nutrition were mentioned as cases in point.
• One major problem with chemical fortification of foods is that nutrients don’t work in isolation but need each other for optimal absorption.
• Some also argue that mandatory fortification would harm the vast informal economy of Indian farmers and food processors including local oil and rice mills, and instead benefit a small group of multinational corporations who will have sway over a ₹3,000 crore market.
• Once iron-fortified rice is sold as the remedy to anaemia, the value and the choice of naturally iron-rich foods like millets, varieties of green leafy vegetables, flesh foods, liver, to name a few, will have been suppressed by a policy silence.

-Source: The Hindu

How IMF growth forecast will impact monetary policy?

Context:

The latest update on the global economy by the International Monetary Fund (IMF) cut India’s GDP growth forecast for 2021-22 (or FY22) by as much as three percentage points.

This is set to affect the upcoming monetary policy review by the Monetary Policy Committee of the Reserve Bank of India.

Relevance:

GS-III: Indian Economy (Growth and Development of Indian Economy, Monetary)

Dimensions of the Article:

1. Significant Points that will affect the August MPC review
2. Impact of the second Covid-19 wave on Monetary Policy

Significant Points that will affect the August MPC review

• The RBI is legally mandated to keep the inflation rate between 2% and 6% but there is no such requirement when it comes to GDP growth.
• So, it can be said that the thumb rule for RBI is that – if inflation is within the desired range, it tries to do whatever it can to boost economic growth.
• Typically, boosting economic growth translates to reducing the interest rate that RBI charges to lend money to India’s commercial banks; this rate is called the repo rate. By doing so, it tries to make it easier for all economic agents (especially businesses) to seek new loans and boost economic activity.
• When inflation is too high, the RBI typically increases the interest rate, thus incentivising consumers to keep their money in their bank accounts (instead of spending it) while also making it costlier for businesses to take out new loans.
• If the retail inflation is too low, it suggests weak economic activity and one would expect the RBI to lower interest rates to boost GDP.
• Of course, the RBI cannot boost growth as well as curb inflation at the same time. If it chooses to boost growth when inflation is also high, it runs the risk of further fuelling inflation.

Impact of the second Covid-19 wave on Monetary Policy

IMF cut India’s GDP growth forecast for 2021-22 due to:

• Inadequate levels of vaccination: Emerging economies such as India have only 11% of their population fully vaccinated — far behind the 40% mark for advanced economies such as the US and UK.
• Policy support that the Indian economy has received: Governments in most advanced economies have unveiled measures to support their economies longer. On the other hand, in the emerging market and developing economies most measures expired in 2020 and they are looking to rebuild fiscal buffers.
• Nature of policy support: Indian government has favoured the “below the line” measures (policy decisions where instead of a direct immediate outgo from its coffers, the government (including the RBI) provides more loans and credit guarantees) instead of the “above the line” measures (fiscal decisions that boost economic activity by either increasing government expenditures or reducing government revenues). This is contrary to the suggestion of many economists who argue that the Indian economy is in dire need of increased direct spending by the government.

• Inflation: The upshot – Retail inflation, which is the primary target of RBI, is expected to stay outside or almost outside RBI’s comfort zone in 2021-22.
• RBI is unlikely to raise interest rates on August 2021 because India’s economic recovery continues to be quite iffy.

-Source: Indian Express