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Detailed News Articles: 04 May 2019

1. Not keeping record of pre-natal tests is criminal: SC

In a significant judgment, the Supreme Court  upheld the provisions in the anti-pre-natal sex determination law which ‘criminalises’ non-maintenance of medical records by obstetricians and gynaecologists and suspend their medical licence indefinitely.

Background:

  • Supreme Court in Center for Enquiry into Health & Allied Themes (CEHAT) and others v. Union of India and others (1), Center for Enquiry into Health & Allied Themes (CEHAT) and others v. Union of India and others (2) and Voluntary Health Association of Punjab Vs. Union of India and others (1) had already issued many directions for the effective implementation of the ‘The Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994’.
  • In 2016, the Supreme Court in Voluntary Health Association Vs State of Punjab, had issued additional directions to curb female foeticide by effective implementation of the ‘The Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994’.
    • All the States and the Union Territories in India shall maintain a centralized database of civil registration records from all registration units so that information can be made available from the website regarding the number of boys and girls being born.
    • If there has been violation of any of the provisions of the Act or the Rules, proper action has to be taken by the authorities under the Act so that the legally inapposite acts are immediately curbed.
    • The Courts which deal with the complaints under the Act shall be fast tracked and the concerned High Courts shall issue appropriate directions in that regard.
    • The learned Chief Justices of each of the High Courts in the country are requested to constitute a Committee of three Judges that can periodically oversee the progress of the cases.
    • The awareness campaigns with regard to the provisions of the Act as well as the social awareness shall be undertaken.
    • The State Legal Services Authorities of the States shall give emphasis on this campaign during the spread of legal aid and involve the para-legal volunteers.
    • The States and Union Territories shall implement the Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) (Six Months Training) Rules, 2014 forthwith considering that the training provided therein is imperative for realising the objects and purpose of this Act

Issue:

  • Under the Pre-Conception and Pre-Natal Diagnostic Techniques (Prohibition Of Sex Selection) Act (PCPNDT Act), a medical practitioner could be sent to jail for upto three years for even anomalies in paper work and not keeping records of the patients.
  • The doctors had alleged that the provisions in the law criminalise even the smallest anomaly in paperwork which is in fact an inadvertent and unintentional error.
  • The sections had made obstetricians and gynaecologists vulnerable to prosecution all over the country.

Details:

  • A Bench of Justices Arun Mishra and Vineet Saran held that the particular provisions in the Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act of 1994 were necessary to prevent female foeticide in the country.
  • There are only 586 convictions out of 4202 cases registered even after 24 years of existence. It reflects the challenges being faced in implementing this social legislation, the court observed.
  • The main purpose of the Act is to ban the use of sex selection and misuse of pre-natal diagnostic technique for sex selective abortions and to regulate such techniques.
  • The SC also observed that a fall in sex ratio has not only impact, but also leads to trafficking of women and bride-buying.
  • “It is a responsible job of the person who is undertaking such a test i.e., the gynaecologist/medical geneticist/radiologist/ paediatrician/director of the clinic/centre/laboratory to fill the requisite information. In case he keeps it vague, he knows fully well that he is violating the provisions of the Act,” the court observed.

2. Don’t terminate GSP benefits to India

Background:

  • On March 4, President Donald Trump announced that the US intends to terminate India’s designations as a beneficiary developing country under the GSP programme.
  • “India’s termination from GSP follows its failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors,” Trump had said in a letter to Congress.
  • However, Trump says that there is continued assessment to check whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria
  • The USTR through a simple notification in federal register can formally terminate GSP benefits to India.

What is GSP?

  • The Generalized System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
  • It is a preferential tariff system which provides tariff reduction on various products.
  • The concept of GSP is very different from the concept of MFN. MFN status provides equal treatment in the case of tariff being imposed by a nation but in case of GSP, differential tariff could be imposed by a nation on various countries whether it is a developed country or a developing country.
  • Both the rules come under the purview of WTO.
  • GSP provides tariff reduction for least developed countries but MFN is only for not discriminating among WTO members.
  • GSP involves reduced/zero tariffs of eligible products exported by beneficiary countries to the markets of GSP-providing countries.

Details:

  • The lawmakers stated that the country’s companies seeking to expand their exports to India could be affected.
  • The 25 members of the US House of Representatives in a passionate letter urged US Trade Representative to continue negotiating a deal that protects and promotes jobs that rely on trade both imports and exports with India.
  • American companies that rely on duty-free treatment for India under the GSP will pay hundreds of millions of dollars annually in new taxes. In the past, even temporary lapses in such benefits have caused companies to lay off workers, cut salaries and benefits, and delay or cancel job-creating investments in the United States.

India extends retaliatory tariff deadline on U.S. items

  • The Indian government has again extended its deadline to impose retaliatory import duties on 29 U.S. products, including on almonds, walnuts and pulses.
  • A Finance Ministry notification said that implementation of increased customs duty on specified imports from the U.S. has been postponed.
  • These deadlines have been extended several times since June 2018, when India decided to impose duties in retaliation to a U.S. move to impose high customs duties on certain steel and aluminium products.

3. RBI imposes fines on PPIs for violating norms

The Reserve Bank of India has slapped monetary penalty on five pre-paid payment instrument issuers, for violating regulatory guidelines.

Details:

  • A penalty of Rs. 3.05 crore has been imposed on Vodafone m-pesa and Rs. 1 crore each on Mobile Payments, PhonePe and G.I. Technology Private Ltd.
  • Also, a penalty of Rs. 5 lakh has been imposed on Y-Cash Software Solutions.
  • In a separate statement, RBI said it had imposed a penalty on Western Union Financial Services Inc., USA., and MoneyGram Payment Systems Inc, USA, for non-compliance of regulatory guidelines.
  • The penalties on Western Union and MoneyGram had been imposed by the central bank under the provisions of the Payment and Settlement Systems Act, 2007, for compounding of the contravention.
  • RBI also imposed a penalty on private sector lender Yes Bank for violation of norms pertaining to issuance and operations of PPIs.

Prepaid Payment Instruments (PPIs):

  • What are PPIs?

PPIs are instruments that facilitate purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments. PPIs that can be issued in the country are classified under three types viz. (i) Closed System PPIs, (ii) Semi-closed System PPIs, and (iii) Open System PPIs.

  • Who is an issuer of PPI?

PPI issuer is an entity participating in a payment system for issuing PPIs to individuals or organisations. The money so collected is used by the entity to make payment to the merchants who are part of the acceptance arrangement and for facilitating funds transfer or remittance services.

  • Who is a holder of a PPI?

A holder is an individual / organisation who purchases PPI from the PPI issuer and uses the same for purchase of goods and services, including financial services, remittance facilities, etc. However, in case of a Gift PPI, the targeted beneficiary (though not being a purchaser) can also be a holder.

  • Who can issue and operate PPIs in India?

A company incorporated in India and registered under the Companies Act, 1956 / Companies Act, 2013 can issue and operate PPIs after receiving authorisation from RBI.

  • What are various types of PPIs?
  1. Closed System PPIs: These PPIs are issued by an entity for facilitating the purchase of goods and services from that entity only and do not permit cash withdrawal. As these instruments cannot be used for payments or settlement for third party services, the issuance and operation of such instruments is not classified as payment system requiring authorisation by the RBI.
  2. Semi-closed System PPIs: These PPIs are issued by banks (approved by RBI) and non-banks (authorized by RBI) for purchase of goods and services, including financial services, remittance facilities, etc., at a group of clearly identified merchant locations / establishments which have a specific contract with the issuer (or contract through a payment aggregator or payment gateway) to accept the PPIs as payment instruments. These instruments do not permit cash withdrawal, irrespective of whether they are issued by banks or non-banks.
  3. Open System PPIs: These PPIs are issued only by banks (approved by RBI) and are used at any merchant for purchase of goods and services, including financial services, remittance facilities, etc. Cash withdrawal at ATMs / Points of Sale (PoS) terminals / Business Correspondents (BCs) are also allowed through such PPIs.
  • Does a holder earn any interest on PPI balances?

No interest is payable on PPI balances. 

  • How can a PPI be loaded?

PPIs can be loaded by cash, by debit to a bank account, by a credit / debit card, or from other PPIs. The loading / reloading of PPIs shall be through payment instruments issued by entities regulated in India and shall be in Indian Rupees (INR) only. Banks and non-banks are permitted to issue and reload such payment instruments through their authorised branches / ATMs or through their authorised agents.

Image result for belt and road initiative
  • The summit segment was attended by 37 heads of state or government.
  • The list included strategic partner Russia and almost all from Central and Southeast Asia, two important areas of BRI operation.
  • If the attendance from South Asia was somewhat disappointing (only Pakistan and Nepal at the leaders’ level), South Asian countries, except India and Bhutan, joined various initiatives launched at the forum.

Diverse Nature of Participants:

  • The east coast of Africa, which is on the Maritime Silk Road, sent five leaders.
  • Particularly in the context of recent U.S. tirades against the “predatory economics” of the BRI, it was significant that nine European leaders attended, including seven from the European Union.
  • Japanese Prime Minister Shinzo Abe sent a special envoy, conveying that the BRI “is a grand vision with great potential”.
  • The UN Secretary General and IMF Managing Director were in attendance. As a matter of fact, the IMF Managing Director extolled the BRI’s achievements, “from stimulating infrastructure investment to developing new global supply chains”.
  • China claimed participation from 150 countries at the forum, which included a CEO conference, where agreements worth $64 billion were signed.

Litany of complaints:

  • The Chinese leadership claimed the attendance rebutted allegations that BRI is a geopolitical tool and exploitative “debt trap” driving countries into dependence on China.
  • It would be more realistic to see it as indicating China’s economic clout and the desire of most countries to hedge their bets in the current turbulence in great power relations.
  • It is important to note that the concerns about the viability of BRI projects have not dissolved; it is just that immediate benefits sometimes obscure the direness of future consequences.
  • Over the years, the structure and implementation of the BRI have attracted negative comment, including from some of the countries represented at the forum.
  • The litany of complaints include the following:
  1. that projects are selected as per Chinese priorities, with inadequate consultation with recipients;
  2. terms are agreed bilaterally and non-transparently with the leadership, and
  3. benefits do not trickle down to the population;
  4. contracts go to Chinese companies and are implemented by Chinese labour,
  5. raw materials and products are from China;
  6. most projects are over-valued and economically unviable;
  7. most financing is by Chinese loans on unrealistic terms, leading eventually to “debt traps”;
  8. foreign companies and private investment are spurned;
  9. corruption flourishes in the absence of transparency, and finally,
  10. labour laws are flouted and environmental compliance is lax.
  • Above all, the BRI exhibits China’s geostrategic ambition for economic dominance and political hegemony.

China’s promises on the BRI:

  • Some experts opine that President Xi Jinping’s speeches and the final forum communique silenced this criticism by promising a total makeover of the BRI.
  • They declared that it will be guided by extensive consultation, joint contribution and shared benefits.
  • Cooperation should be transparent, people-centric, green and clean, with zero tolerance for corruption.
  • Project evaluation, tendering, bidding and implementation would meet international standards.
  • The right of participating countries to define their developmental priorities would be respected, as also their laws, sovereignty and territorial integrity.
  • Foreign investment would be welcomed.
  • Economic, social, fiscal and environmental sustainability of projects should be ensured, with emphasis on debt sustainability.
  • In short, it was a promise to transform the BRI, in one fell swoop, from all that it was into all that it should have been.
  • However, in the wake of all this, an important question arises: How will this rhetoric translate into action?

The “Belt and Road”: A framework for bilateral and plurilateral cooperation?

  • The other remarkable feature was the launch of the “Belt and Road” as an overarching framework for bilateral and plurilateral cooperation.
  • China announced a clutch of “Belt and Road” scholarships, training courses and exchange programmes.
  • Groups of countries launched cooperation mechanisms for ports administration, accounting standards, tax administration, banking, intellectual property, sustainable cities, energy and dispute settlement, among many others.
  • It is important to note that some of these mechanisms were facilitated by UN agencies.
  • China listed 283 “deliverables” from the forum, comprising Chinese initiatives, bilateral and multilateral agreements, investment projects and financing arrangements.
  • The message was the BRI is now more than a bunch of Chinese infrastructure projects; it is truly a “community of common destiny” (as Mr. Xi termed it in 2017) to reshape global governance – a sort of G-150, promoting multilateralism, globalisation, development and human rights, whose members could forge plurilateral cooperation under its umbrella.

Good Optics for China?

  • All in all, it was a show of China’s self-confidence about its place in the world at a time of churn in global politics.
  • The U.S. absence was barely mentioned, nor did the shadow of the increasingly strident U.S. campaign against China’s “militarism”, “predatory economics” and “technology theft” intrude into the bonhomie of forum proceedings.
  • India’s absence was gracefully handled, with the Chinese Foreign Minister confirming that it would not affect the ongoing high-level India-China dialogue.

A vehicle to further digital connectivity?

  • Xi announced in 2017 that it would enhance digital connectivity and integration of big data to build the “digital silk road of the 21st century”.
  • Digital connectivity infrastructure is to be built in tandem with physical connectivity.
  • This arouses U.S. (and wider) concerns that with its lead in 5G network technology and deep pockets, China will establish dominance of its 5G standards and equipment in Eurasia and beyond.
  • Experts opine that the sudden image makeover of the BRI may well be intended to open up a more accommodating attitude to this technology insertion.

Concluding Remarks: India and the BRI

  • The debate in India about whether or not we should join the BRI will probably be reignited in the wake of its new avatar.
  • The opposition to the China-Pakistan Economic Corridor determined absence at the forum.
  • There is no specific opportunity for India in any other element of the BRI. India’s attitude to it has to be set in the larger picture of the relationship with China, which combines a strong economic partnership with major strategic challenges, further complicated by the global geopolitical flux.

5.  GST buoyancy

  • Experts opine that the final month of financial year 2018-19 has given the government some reason for cheer.
  • Targets for indirect tax collections may have been missed for the last year (2018), however,  collections from the Goods and Services Tax in April 2019 for economic activity in March the same year scaled a new high.
  • It is important to note that the GST inflows of ₹1,13,865 crore in April’19 are the highest recorded since the tax regime was introduced in July 2017.
  • They represent an increase of over 10% compared to the same month a year ago, and over 15% buoyancy over the average monthly GST collections in 2018-19 of ₹98,114 crore.

Acknowledgement by the Government:

  • The government has acknowledged that economic growth did slow down in 2018-19, owing to declining private consumption growth, a tepid increase in fixed investments and muted exports.
  • The hope would be that the latest GST numbers are a harbinger of better growth momentum for 2019-20.
  • The growth rate of the economy fell from 8.2% in the first quarter to 7.1% in the second and 6.6% in the third, so any improvement in the final quarter numbers due at the end of May, 2019 should provide some succour.
  • Experts also point out that healthier GST collections, if sustained, will also mean less pressure on the Centre to cover its fiscal deficit.

Factors attributed to the rise in tax collections:

  • The April GST numbers have come as a surprise to many experts, given the lacklustre economic activity witnessed across many sectors in recent months, which should normally have impacted tax collections adversely.
  • This perplexing trend may be attributed to increasing compliance among businesses amidst the aggressive push by the tax authorities to widen the tax base.
  • GST filings, for instance, were the highest in March this year (2019).
  • However, the April surge has occurred despite a decrease in the total number of GSTR-3B returns filed by businesses, from 75.95 lakh in March’ 19 to 72.13 lakh in April’19.
  • As a matter of fact, in the absence of more disaggregated data, it could be argued that tax rate cuts by the GST Council in December’ 19 too may have spurred higher volumes for some goods and services.
  • The rush to pay tax arrears at the end of the financial year may have been another seasonal factor contributing to better tax collection in April’ 19.
  • Enforcement action by the taxman to collect more revenue from registered taxpayers who have not been filing returns could be yet another factor.

Concluding Remarks:

  • It is still too early to assume that this is the beginning of a secular trend.
  • One must not lose sight of the need for further simplification of the GST regime once the election season is over.
  • A significant number of businesses have already been brought into the tax net since the advent of the GST.
  • In order to encourage greater compliance, there must be efforts to make it easier for small firms to remain in the tax net by cutting down the time and energy required to fill myriad tax returns.
  • In conclusion, a nudge would be preferable to the stick.

6. Encryption can secure the right to privacy

  • The Supreme Court’s decision in the Puttaswamy case established the right to privacy as a Fundamental Right under Article 21 of the Constitution.
  • Further, given the rampant data leaks and unauthorised tapping of users’ data, the court’s decision was applauded by citizens and privacy activists alike.

The Safety of Personal Data:

  • According to a recent research by AudienceNet, a social and consumer research company, for most urban Indians, irrespective of their age or gender, privacy and safety of personal data remains a major concern.
  • As a matter of fact, this concern may explain the popularity of end-to-end encrypted messaging platform such as WhatsApp.

End-to-End Encryption: An Issue

  • Critics argue that fully encrypted social media platforms are prone to misuse, and a tool to spread fake news especially during elections that calls for corrective actions.
  • It’s heartening to note social media platforms are increasingly taking steps to mitigate such risks. Nevertheless, India’s data protection regime remains a concern.

The Need for effective legislation:

  • The existing privacy framework under the IT Act 2000 and Telegraph Act 1885 is inadequate when it comes to providing protection to data or remedies in case of data breach.
  • Besides, there are no effective safeguards against excessive state surveillance under the existing rules.
  • India’s draft Data Protection Bill 2018 emphasises on the need for data localisation to ensure data privacy and prevent foreign surveillance of Indian citizens.
  • Undoubtedly, the Bill provides far greater protection to privacy than the IT Act, its grievance redressal mechanism is better, and punishment for data breach harsher.
  • However, the Data Protection Bill 2018 has several flaws. These flaws are as under mentioned:
    a) The scope of non-consensual processing of data is too wide: consent will not be needed for data processing on grounds such as national security and legal proceedings or for any other reasonable purposes specified by the proposed Data Protection Authority (DPA).
  1. Further, the exceptions granted to the state by the proposed law do not inspire confidence as they allow unwarranted intrusion into citizens’ privacy.
  2. Besides, the degree of data privacy will depend on the effectiveness of the country’s data-protection regime and not where data is located. Moreover, domestic enforcement agencies may pose a greater threat to an individual’s privacy than suspected foreign snoopers due to local storage of data.
  3. Experts opine that India’s proposed data protection law in its current form is not effective enough to safeguard data principals against unchecked state surveillance.
  4. Thus, imposing a sweeping data localisation regime on the country without an effective mechanism to protect (personal) data may encourage intrusive data gathering by state agencies.
  5. Besides, there are adverse side-effects of localisation that are not being fully appreciated. For instance, localisation may drive up the infrastructure cost of IT firms, tech start-ups and SMEs that currently rely on storing data abroad that costs less.
  • It is important to note that India’s software and IT-enabled services sector is export driven and deals with data of non-national citizens and corporations. Mandatory data localisation could be perceived as a protectionist trade barrier and may prompt retaliation.
  • Moreover, consumers will have to bear higher charges for digital services arising out local data storage.

Concluding Remarks: The way forward

  • Trust remains a major concern for social media users given widespread data leaks and unauthorised use of users’ data. Thus, experts opine that tougher privacy norms — either self-imposed or enforced by government — are needed.
  • Encryption by ensuring safety and security of the data will improve trust.
  • However, social media and messaging platforms must take responsibility to check the misuse of their platforms.
  • In this context, WhatsApp has taken several pro-active measures to prevent misuse.
  • For instance, it has stopped forwarding of a message to more than five people in one go in India.
  • It has also started a helpline that users can use to verify any message or news being circulated.
  • In conclusion, encryption strengthens privacy while localisation may weaken it.
  • There is a potential danger that allowing state unrestricted access to users’ data through regulatory moves such as data localisation will dilute privacy protection and may lead to state intrusion into citizens’ personal lives, undermining the spirit of Supreme Court’s decision in the Puttaswamy case.
  • A far better alternative to data localisation would be bilateral and multilateral data-sharing agreementsthat will keep India’s digital economy open and yet expedite criminal investigation without diluting the protection to privacy.

Thank you!

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