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01 August, 2019

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Paper Topics Subject
GS-II Too much quota may impact right to equal opportunity Supreme Court .
Government introduces Bill to amend RTI Act, opposition protest
GS-III Flee Market
Regulatory Sandbox Economic Issues
Start Up India Scheme
GS-II :
Too much quota may impact right to equal opportunity Supreme Court .

GS-II: Too much quota may impact right to equal opportunity Supreme Court

Context

The Bench is examining whether to refer to a Constitution Bench a batch of petitions challenging the validity of a constitutional amendment providing 10% economic quota in government jobs and educational institutions.

Why issue over Quota?

  • The Supreme Court orally remarked that excessive quota may impact the right to equal opportunity guaranteed under the Constitution.
  • The court said quota benefits given to the most “forward” classes, especially to those who had no qualification whatsoever, would result in “excess” reservation and breach equality.
  • Reservation itself is an exception. Reservation is intended to achieve equality of opportunity.

Referring Indra Sawhney case

  • The economic reservation violated the 50% reservation ceiling limit fixed by a nine-judge Bench in the Indra Sawhney case.
  • Further, the 1992 judgment had barred reservation solely on economic criterion.
  • In a 6:3 majority verdict, the apex court, in the Indra Sawhney case, had held that “a backward class cannot be determined only and exclusively with reference to economic criterion.
  • It may be a consideration or basis along with and in addition to social backwardness, but it can never be the sole criterion.

Issue over economically backward quota

  • After a gap of 27 years, the Constitution (103rd Amendment) Act of 2019 has provided 10% reservation in government jobs and educational institutions for the “economically backward” in the unreserved category.
  • The Act amends Articles 15 and 16 of the Constitution by adding clauses empowering the government to provide reservation on the basis of economic backwardness.
  • This 10% economic reservation is over and above the 50% reservation cap.
  • The government however has justified to the apex court that the 10% economic quota law was a move towards a classless and casteless society.
  • It said the law was meant to benefit a “large section of the population of 135 crore people” who are mostly lower middle class and below poverty line.
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GS-II :
Government introduces Bill to amend RTI Act, opposition protest

GS-II Paper: Government introduces Bill to amend RTI Act, opposition protest

Context

 A bill give centre the power to set the salaries and service conditions of information commissioners was introduced by the government in Lok Sabha.

What is Right to Information Act (RTI), 2005?

RTI stands for Right To Information and has been given the status of a fundamental right under Article 19(1) of the Constitution Right to Information (RTI) Act 2005 mandates timely response to citizen requests for government information by various Public Authorities under the government of India as well as the State Governments. The law imposes a penalty for wilful default by government officials. Citizens can ask for anything that the government can disclose to Parliament.

The basic object of the Right to Information Act is to:

  • Empowers the citizen.
  • Promote transparency and accountability in the working of the government.
  • Contain corruption , and make our democracy work for the people in real sense.

Achievements of Right to Information Act:

  • The answer keys of civil service examination and IIT-JEE are now available on the websites of the Union Public Service Commission and IIT-JEE respectively, helping students to find out their scores even before the official announcement.
  • Assets and wealth declaration of all public servants – PM and his entire council of ministers, civil servants — are now in the public domain.

How does Right to Information Act?

  • Every citizen has freedom of speech and expression. Therefore, Citizens have a right to know how the governments, meant to serve them, are functioning.
  • The Right to Information Act (RTI), 2015 is an Act of the Parliament of India – to provide for setting out the practical regime of right to information for citizens. ”Simply put, it allows citizens of the country to request information from any public authority about its work, actions, etc”.

Significance of Right to Information Act:

  • Improved citizen-government partnership
  • Greater transparency which gives citizens right to access information regarding rules, regulation, plans & expenditure of govt.
  • Greater accountability in the working of the Government.
  • To check corruption.
  • To make our democracy work for the people in real sense.
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GS-III :
Flee Market

 

GS-III: Flee Market

Context

The wheels of India’s multi-year stock market rally are slowly beginning to come off. Since the Union Budget was presented this month, there has been a palpable change in mood among investors, who in June led a mini-rally in the market as signs emerged one after another that the government led by Prime Minister Narendra Modi would be returning to power at the Centre.

Background

  • The Nifty and the Sensex are down roughly by about 5% since the Budget was presented.
  • Foreign portfolio investors have pulled out over ?2,500 crore in July, in contrast to June when FPIs made a net investment of close to ?10,400 crore.
  • Investors who were quite enthusiastic about the prospects of structural reforms that could boost India’s economic growth under the second Modi government, have been quite disappointed by the Budget proposals.
  • Finance Minister Nirmala Sitharaman imposed new taxes on the “super rich” and on companies that buy back their own shares, and raised the mandatory minimum public shareholding in listed companies .

Falling stock market

  • Even more worrying is the signal that is sent across by the falling stock market.
  • As stock prices discount the future, lacklustre market performance could well be a prelude to the further worsening of general economic conditions in the near term.
  •        There is already a significant downturn in sectors such as automobile with major companies reporting falling sales and earnings, and automobile dealers closing down showrooms and slashing jobs.

Slowing Growth

  • The overall gross domestic product growth, which slipped below 6% to hit 5.8% in the fourth quarter, has also been slowly catching up with the bleak picture painted by high-frequency economic indicators for quite some time.
  • The underlying turmoil in Indian markets becomes evident when one looks beyond the Sensex and the Nifty at the mid-cap and small-cap space that has witnessed significant value erosion since the start of 2018.
  • The small-cap index has lost almost a third of its value since January 2018 while the mid-cap index has lost about a fifth of its value.

Conclusion

Interestingly, many industrialists who were previously enthusiastic cheerleaders for the Narendra Modi government have turned vocal about their disappointment at the government not being bold enough in pushing through structural reforms needed to boost economic growth despite the majority it enjoys in Parliament. This suggests the deep sell-off in stocks over the last 18 months may well be a sign of disappointed investors voting with their feet.

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GS-III : Economic Issues
Regulatory Sandbox

GS-III: Regulatory Sandbox

News

The Insurance Regulatory and Development Authority of India (IRDAI) will soon allow the use of regulatory sandbox (RS) to promote new, innovative products and processes in the industry.

Regulatory Sandbox

  • A sandbox approach provides a secure environment for fintech firms to experiment with products under supervision of a regulator.
  • It is an infrastructure that helps fintech players live test their products or solutions, before getting the necessary regulatory approvals for a mass launch, saving start-ups time and cost.
  • The concept of a regulatory sandbox or innovation hub for fintech firms was mooted by a committee headed by then RBI executive director Sudarshan Sen.
  • The panel submitted its report in Nov 2017 has called for a regulatory sandbox to help firms experiment with fintech solutions, where the consequences of failure can be contained and reasons for failure analysed.
  • If the product appears to have the potential to be successful, it might be authorised and brought to the broader market more quickly.

About IRDAI sandbox

  • For the IRDAI sandbox, an applicant should have a net worth of Rs 10 lakh and a proven financial record of at least one year.
  • Companies will be allowed to test products for up to 12 months in five categories.
  • It has said applicants can test products for up to a period of one year in five categories – insurance solicitation or distribution, insurance products, underwriting, policy and claims servicing.

Why sandbox is necessary?

  • The RS allows the regulator, the innovators, the financial service providers (as potential deployers of the technology) and the customers (as final users) to conduct field tests to collect evidence on the benefits and risks of new financial innovations, while carefully monitoring and containing their risks.
  • India accounts for approximately 6 per cent of insurance premium in Asia and around 2 per cent of the global premium volume.

 

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GS-III :
Start Up India Scheme

GS-III: Start Up India Scheme

News

  • Maharashtra, Karnataka, and Delhi have seen the highest number of start-ups recognised under the government’s flagship Start-Up India Scheme in the period from 2016 to 2019.
  • These three states also attracted the highest investments from Alternative Investment Funds (AIFs) in start-ups.

About Start-Up India Scheme

  • Startup India Scheme is an initiative of the Indian government, the primary objective of which is the promotion of startups, generation of employment, and wealth creation.
  • It was launched on the 16th of January, 2016.
  • A startup defined as an entity that is headquartered in India, which was opened less than 10 years ago, and has an annual turnover less than ?100 crore (US$14 million).

         The action plan of this initiative is based on the following three pillars:

  1. Simplification and Handholding
  2. Funding Support and Incentives
  3. Industry-Academia Partnership and Incubation
  • An additional area of focus is to discard restrictive States Government policies within this domain, such as License Raj, Land Permissions, Foreign Investment Proposals, and Environmental Clearances.
  • It was organized by The Department for promotion of industry and internal trade (DPI&IT).
 

Alternative Investment Funds (AIFs)

  • An alternative investment is a financial asset that does not fall into one of the conventional investment categories. Conventional categories include stocks, bonds, and cash.
  • Most alternative investment assets are held by institutional investors or accredited, high-net-worth individuals because of their complex nature, lack of regulation, and degree of risk.
  • Alternative investments include private equity or venture capital, hedge funds, managed futures, art and antiques, commodities, and derivatives contracts.
  • Real estate is also often classified as an alternative investment.
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