Current Affairs 26 March 2025

Content:

1. Cannot be compelled to join the SAHYOG portal: X to Delhi HC
2. How is an in-house inquiry conducted?
3. SC considers question of timeline for Speakers to decide on defections
4. Easing FPI threshold can induce capital inflow, say experts
5. BHIM 3.0 launched with option to track shared expenses
6. ‘Social protection coverage doubled to 48.8% in 2024’

Cannot be compelled to join the SAHYOG portal: X to Delhi HC

Background and Context

• The Centre’s SAHYOG portal is designed as a unified framework to combat cybercrime, aiming to streamline legal requests related to online content regulation.
• X (formerly Twitter) has refused to join the portal, citing its own independent mechanism for handling legal requests.
• The platform has also challenged the legality of the portal in the Karnataka High Court, alleging that it acts as a “censorship” tool.

Relevance : GS 2(Governance ,Judiciary)

Legal Precedents and Statutory Framework

1. Section 69A of the IT Act, 2000

• Legal Basis for Blocking Content: Section 69A empowers the government to direct intermediaries (social media platforms) to block information in specific circumstances like national security, public order, or sovereignty concerns.
• Established Procedures and Safeguards: Blocking orders are issued with due process, including approval from a review committee.

2. Shreya Singhal vs Union of India (2015) Judgment

• The Supreme Court struck down Section 66A of the IT Act for violating freedom of speech but upheld Section 69A, provided that its safeguards were followed.
• X argues that SAHYOG lacks statutory backing and does not align with the Supreme Court’s interpretation of the law in this landmark case.

3. Government vs Big Tech: Ongoing Conflicts

• Similar cases of government vs social media platforms:
  • WhatsApp’s challenge to IT Rules, 2021, over traceability mandates.
  • Twitter’s (now X) lawsuit against blocking orders issued by the government in 2022.
  • Facebook’s legal battle over content takedown requests.

Policy and Governance Implications

1. Digital Regulation vs Freedom of Speech

• X’s argument: The portal creates a parallel mechanism outside the established 69A framework, potentially enabling censorship without procedural safeguards.
• Government’s stance: A centralized portal ensures transparency, efficiency, and compliance in addressing cybercrime and unlawful content.
• Global Parallel: EU’s Digital Services Act (DSA) mandates similar oversight, but with independent regulators ensuring checks and balances.

2. Big Tech’s Autonomy vs State Oversight

• X’s resistance highlights growing concerns over how much control governments should exert over digital platforms.
• Policy Question: Should global tech companies be bound by domestic regulatory frameworks, or should they retain independent content moderation mechanisms?

3. Cybersecurity and National Interest

• The SAHYOG portal is part of India’s broader cybersecurity strategy, ensuring quick responses to terror-related content, misinformation, and cybercrime.
• A refusal to join could impact law enforcement cooperation, potentially creating delays in investigations involving digital evidence.

Conclusion: Balancing Regulation and Digital Rights

• Legal Angle: The case will determine if SAHYOG complies with existing IT laws or oversteps them.
• Policy Perspective: It raises questions about governmental oversight vs platform autonomy.
• Global Context: India’s approach will be closely watched as countries navigate social media regulation vs freedom of speech.

How is an in-house inquiry conducted?

Current Issue and Its Implications

• The allegations of misconduct against Justice Yashwant Varma and the in-house inquiry raise fundamental concerns about judicial accountability and the mechanism of judicial oversight in India.
• The discovery of burnt currency notes at his residence has triggered deeper scrutiny, leading to his transfer to the Allahabad High Court and suspension of judicial work.

Relevance : GS 2(Judiciary ,Governance)

Institutional and Legal Context

1. In-House Inquiry Mechanism (1999 Resolution, Public in 2014)
   1. Established to self-regulate the judiciary without external interference.
   1. Follows a confidential process where an inquiry committee of senior judges reviews allegations and recommends action.
   1. If serious misconduct is found, the judge is requested to resign; if not, the matter is closed.

• Judicial Accountability in India
  • Collegium System (Post-1993): Judges appoint judges, ensuring judicial independence but raising concerns about lack of transparency.
  • Impeachment Process (Article 124 & 217 of the Constitution): Removal of judges via parliamentary process is rare and cumbersome, with only one judge (Justice V. Ramaswami) facing impeachment proceedings in 1993, which eventually failed.

• Judicial Misconduct Cases in the Past
  • Justice Soumitra Sen (2011): Rajya Sabha passed an impeachment motion, but he resigned before Lok Sabha could act.
  • Justice P.D. Dinakaran (2011): Accused of corruption, he resigned before impeachment could proceed.
  • Justice C.S. Karnan (2017): Sentenced to jail for contempt, a rare instance of a sitting judge facing criminal conviction.

Reforms and the Road Ahead

1. Transparency in Judicial Inquiries
   1. The in-house mechanism is currently opaque; only the President and PM are informed if serious misconduct is found.
   1. There is a need for public disclosure of key findings while maintaining judicial independence.

• Criminal Liability for Judges
  • No criminal punishment has ever been imposed even when judges were found guilty of misconduct.
  • Strengthening investigative autonomy for serious offenses (e.g., financial corruption, bribery) is crucial.
  • Comparison with the UK Model:
    • Judicial Conduct Investigations Office (JCIO) independently probes misconduct.
    • A similar statutory body in India could make investigations more credible and impartial.

• Revival of the NJAC Debate
  • NJAC (2014) aimed at transparency but was struck down in 2015 for violating judicial independence.
  • A modified NJAC 2.0 could ensure a broad-based selection committee with final veto power resting with the CJI.
  • Comparing South Africa’s Judicial Service Commission:
    • Includes judges, legal professionals, and legislators in judicial appointments.
    • Balances accountability with judicial independence.

SC considers question of timeline for Speakers to decide on defections

Background: Tenth Schedule and Role of Speaker

• The Tenth Schedule of the Constitution, introduced by the 52nd Constitutional Amendment (1985), aims to curb political defections by disqualifying legislators who switch parties under certain conditions.
• The Speaker of the House is the designated authority to decide on disqualification petitions under this law.
• However, there is no fixed timeline within which the Speaker must decide, leading to frequent delays—often politically motivated.

Relevance : GS 2(Polity , Governance)

Issue at Hand: Timeline for Disqualification Petitions

• The Supreme Court (SC) is examining whether constitutional courts (SC and High Courts) can direct Speakers to decide disqualification petitions within a specified period.
• Traditionally, the court has only advised Speakers to act within a “reasonable time”, without defining what “reasonable” means.
• The petitions in this case involve 10 MLAs in Telangana who defected to the ruling Congress from the Bharat Rashtra Samithi (BRS).

Legal and Constitutional Questions Raised

1. Can Constitutional Courts Direct the Speaker?
   1. The Speaker acts as a quasi-judicial tribunal under the anti-defection law.
   1. Courts have power of judicial review but must balance this with the separation of powers principle.
   1. There is ambiguity in whether courts can mandate a specific timeline for Speakers.

• Is There an Implied Obligation for Timely Decision-Making?
  • The Tenth Schedule does not specify a timeline, but the spirit of the law demands timely action to prevent defection–related instability.
  • The delay in deciding cases allows political maneuvering, effectively nullifying the purpose of the anti-defection law.

• Should a Fixed Timeline Be Imposed?
  • Petitioners argue for a four-week deadline for Speakers to decide disqualification petitions.
  • Precedents indicate that courts have urged Speakers to act swiftly but have not imposed a rigid timeline.

Potential Impact on Indian Polity

• Stronger Anti-Defection Law Implementation: A defined timeline would prevent deliberate delays, making anti-defection provisions more effective.
• Judicial Precedent for Future Cases: If the SC rules in favor of setting a time limit, it will establish a binding precedent for future defection cases across India.
• Balance Between Judiciary and Legislature: The case could redefine the extent of judicial intervention in legislative matters, especially in quasi-judicial functions of the Speaker.

Past Judicial Observations and Political Trends

• Kihoto Hollohan v. Zachillhu (1992): SC upheld the constitutional validity of the Tenth Schedule but clarified that the Speaker’s decisions are subject to judicial review.
• Manipur (2020) Case: SC directed the Speaker to decide on a disqualification plea within four weeks, though it was not a general rule.
• Maharashtra Political Crisis (2022-23): Delays in Speaker’s decision-making led to prolonged political instability, highlighting the need for time-bound rulings.

Conclusion

The Supreme Court’s ruling in this case could significantly shape the enforcement of anti-defection provisions, ensuring timely decision-making and reducing political uncertainty. However, it must balance judicial oversight with legislative independence, avoiding undue interference in the Speaker’s powers.

Easing FPI threshold can induce capital inflow, say experts

Background & Context

• SEBI has raised the Foreign Portfolio Investors (FPI) investment threshold for granular disclosures from ₹25,000 crore to ₹50,000 crore.
• This decision comes amid persistent FPI outflows and aims to reduce compliance burdens while maintaining regulatory oversight.
• The move follows the August 24, 2023 circular, which introduced stricter disclosure norms after allegations of stock manipulation using FPI structures (e.g., Hindenburg-Adani case).

Relevance : GS 3(Indian Economy )

A. Backward Linkages (Causes & Historical Context)

1. Hindenburg Report & Market Integrity:
   1. The 2023 SEBI circular was introduced to curb misuse of FPI routes in stock price manipulation and non-compliance with minimum public shareholding norms.
   1. Allegations of opaque ownership structures led to regulatory tightening.

• FPI Outflows & Market Volatility:
  • High compliance costs for large FPIs (above ₹25,000 crore) led some funds to reduce their exposure, contributing to recent outflows.
  • India had some of the most stringent granular disclosure norms among emerging markets, discouraging investment.

• Equity Market Growth:
  • India’s cash equity markets have doubled in size in the last few years, warranting an adjustment in regulatory thresholds.
  • Raising the threshold to ₹50,000 crore aligns with this expansion, reducing regulatory burdens for mid-sized FPIs.

B. Forward Linkages (Impacts & Future Prospects)

1. Increased Capital Inflows & Market Depth:
   1. Relaxed compliance norms may attract larger foreign funds, reversing the recent FPI outflows.
   1. Improved liquidity in equity markets may enhance stability and valuation.

• Boost to Investor Confidence & Participation:
  • Mid-sized FPIs now face less regulatory burden, encouraging greater foreign participation in Indian equities.
  • Institutional investors will find Indian markets more attractive due to reduced compliance complexities.

• Regulatory Balancing & Market Oversight:
  • SEBI has maintained oversight for FPIs investing over ₹50,000 crore, ensuring transparency while easing burdens.
  • The move indicates flexibility in policymaking, adapting to market realities without compromising accountability.

• Comparative Positioning in Emerging Markets:
  • India was among the few markets with such detailed beneficial ownership disclosures for FPIs.
  • The revised norms make India more competitive vis-à-vis markets like Brazil, South Korea, and Taiwan, which have relatively relaxed FPI regulations.

BHIM 3.0 launched with option to track shared expenses

Introduction

Bharat Interface for Money (BHIM) 3.0, launched by NPCI BHIM Services Ltd. (NBSL), introduces advanced features to enhance user experience and financial planning. The key highlight is its ability to track shared expenses, making digital transactions more transparent and user-friendly.

Relevance : GS 2(Governance, Digital India, and Financial Inclusion) , GS 3(Indian Economy, Fintech, and Cybersecurity)

Evolution of BHIM and Digital Payments in India

1. Pre-UPI Digital Payment Ecosystem:
   1. Prior to UPI, digital payments in India were fragmented, relying on NEFT, RTGS, and IMPS.
   1. Limited interoperability and dependency on banking hours hindered financial inclusion.

• Launch of BHIM & UPI Revolution (2016-Present):
  • BHIM was introduced in 2016 post-demonetization to simplify peer-to-peer transactions via UPI.
  • UPI’s exponential growth, with over 14 billion transactions monthly (2024), has made it India’s primary digital payment mode.
  • BHIM lagged behind third-party UPI apps like Google Pay and PhonePe but retained its relevance through government backing.

• Key Features of Earlier BHIM Versions:
  • BHIM 1.0: Launched in 2016, focused on simple UPI-based transactions.
  • BHIM 2.0 (2019): Introduced donation links, increased transaction limits, and support for multiple accounts.
  • BHIM 3.0 (2024): Adds expense tracking, bill splitting, and family account features.

Core Features & Significance of BHIM 3.0

1. Expense Tracking & Bill Splitting

• Users can now split bills with friends/family for rent, dining, shopping, etc.
• Financial Planning Impact: Provides a consolidated view of household/group expenses, promoting budgetary discipline.

2. Family Account Management

• Onboarding of family members to monitor shared expenses.
• Significance: Enhances financial inclusion by allowing better household budget tracking.

3. Enhanced Business Offerings

• New tools for merchants, businesses, and banks to streamline transactions.
• Potential integration with accounting software for small businesses.

Potential Impact and Future Trends

1. Strengthening Digital Financial Inclusion

• Bridging the Urban-Rural Digital Divide: BHIM’s accessibility in multiple regional languages ensures deeper penetration in Tier-2 & Tier-3 cities.
• Financial Empowerment for Women & Senior Citizens: Shared expense tracking could help in better money management in families.

2. Integration with Fintech and AI

• Future updates could include AI-driven spending analysis.
• Potential for linking BHIM with personal finance management tools.

3. Role in India’s Digital Economy Roadmap

• Supports India’s goal of a cashless economy under Digital India Mission.
• Strengthens UPI Lite and Offline Payments for deeper financial access.

Challenges and Concerns

1. Market Competition: Private UPI apps (Google Pay, PhonePe, Paytm) dominate the sector.
2. Cybersecurity Risks: Increased digital transactions necessitate robust fraud prevention mechanisms.
3. User Adoption Barriers: Many still prefer third-party apps over BHIM due to better UI/UX.

‘Social protection coverage doubled to 48.8% in 2024’

Overview of Social Protection Expansion

• India’s social protection coverage has doubled from 24.4% in 2021 to 48.8% in 2024, according to the ILO’s World Social Protection Report (2024-26).
• The Union Labour Ministry, in collaboration with the ILO, pooled data from 34 major Central schemes and identified 92 crore people receiving at least one form of social protection.
• Cash benefits cover 48.8% of the population, while additional in-kind benefits like food security and housing have not been fully accounted for in the ILO report.

Relevance : GS 2(Governance ,Social Issues, Welfare Schemes)

Historical Context & Challenges

1. Evolution of Social Protection in India

• Pre-Independence Phase: Welfare initiatives were largely employer-driven, covering only industrial workers under schemes like the Workmen’s Compensation Act, 1923.
• Post-Independence Reforms: Introduction of EPF (1952), ESI (1952), MGNREGA (2005), and expansion of Food Security through PDS, NFSA (2013).
• Labour Code Reforms (2020): Aimed at universalizing social security to gig workers and unorganized sectors.

2. Gaps in Coverage Before 2021

• Fragmented Implementation: Different social security schemes operated in silos, leading to duplication and inefficiencies.
• Low Awareness & Accessibility: Many eligible beneficiaries remained outside the safety net due to lack of awareness and documentation.
• Exclusion of Gig and Informal Workers: Unorganized workers (80% of India’s workforce) had limited coverage before the E-Shram initiative.

Implications and Future Prospects

1. Strengthening Universal Social Security

• Formalization of Labour Force: Expansion of ESIC to 15 more districts in Uttar Pradesh indicates a move towards universal health and employment security.
• Integration of State Schemes: Central data pooling will help reduce redundancy and improve beneficiary tracking.

2. Economic and Social Impact

• Poverty Reduction: Increased cash transfers improve consumption levels, reducing multidimensional poverty.
• Better Health and Productivity: Expansion of ESIC and Ayushman Bharat enhances workforce efficiency and reduces out-of-pocket expenditure.
• Rural and Urban Convergence: MGNREGA, food security, and urban employment schemes create a comprehensive safety net for diverse socio-economic groups.

3. Challenges and Policy Recommendations

• Addressing Underestimation by ILO: India must push for international recognition of its in-kind benefits and state-level social protection measures.
• Digital Inclusion & Aadhaar Integration: Ensure seamless delivery while safeguarding privacy concerns in data pooling initiatives.
• Expanding Gig Worker Coverage: Strengthen implementation of Social Security Code (2020) and E-Shram portal benefits.