IAS UPSC Prelims and Mains Exam – 6th December 2019

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(PRELIMS + MAINS FOCUS)

Extra Neutral Alcohol (ENA)

Part of: GS Prelims and GS Mains III- Economy

In News

• Anticipating shortage of domestic supplies, Alcohol manufacturers have sought a reduction in import duty to make it cost-effective for them to import Extra Neutral Alcohol from global markets.
• Extra Neutral Alcohol (ENA) is the primary raw material for making alcoholic beverages. It is a colourless food-grade alcohol that does not have any impurities. 
• It has a neutral smell and taste, and typically contains over 95 per cent alcohol by volume. 
• It is derived from different sources — sugarcane molasses and grains — and is used in the production of alcoholic beverages such as whisky, vodka, gin, cane, liqueurs, and alcoholic fruit beverages.
• ENA also serves as an essential ingredient in the manufacture of cosmetics and personal care products such as perfumes, toiletries, hair spray, etc. 
• Given its properties as a good solvent, ENA also finds industrial use and is utilised in the production of some lacquers, paints and ink for the printing industry, as well as in pharmaceutical products such as antiseptics, drugs, syrups, medicated sprays.
• Like ethanol, ENA is a byproduct of the sugar industry, and is formed from molasses that are a residue of sugarcane processing

RBI keeps interest rate unchanged

Part of: GS Prelims and GS Mains III – Economy

In News

• The Reserve Bank of India’s Monetary Policy Committee (MPC) announced that it would not cut the repo rate (presently at 5.15%) in its last monetary policy review for the current calendar year
• Repo rate is the rate at which India’s central bank loans money to the banking system. 
• It is also the rate to which all new loans in the economy are benchmarked. 
• A cut in the repo rate would have signalled a further reduction in the interest rate new borrowers — hoping to avail loans for homes and cars etc. — will be charged by the banking system.
• Most economists and bankers expected the RBI to cut the repo rate in a bid to boost India’s sharply decelerating economic growth.
• In the first five bi-monthly policy reviews of 2020, the RBI had cut repo rate by 135 basis points.But only about 44 bps have been passed on to the consumers of new loans. The RBI believes that with more time, the monetary transmission will deepen.
• RBI also pointed to the fact that there is money in the market if one wants to borrow but credit off-take has been weak and it is unlikely to improve by another rate cut.
• When it comes to monetary policy, the RBI’s most important mandate is to maintain price stability. With rising inflation, RBI is worried that further cut in repo rate would further fuel inflation.

Do You Know?

• The RBI is required by law to maintain retail inflation — which is based on Consumer Price Index (CPI) — at the 4% level (with a band of variation of 2 percentage point)
• Retail inflation rose to a 16-month high in October and breached the RBI’s target level of 4% even as India’s GDP growth decelerated for the sixth consecutive quarter to just 4.5% in Q2 (July to September), which is a new six-year low.
• The reason for the rise in inflation is the spike in food prices, as agriculture sector suffered from the unexpected weather shocks such as unseasonal rains (in Karnataka, Maharashtra & Kerala)

Daily Current Affairs IAS | UPSC Prelims and Mains Exam – 5th December 2019

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Uighur issue

Part of: GS Prelims and GS Mains II- International Relations

In News

• On December 3rd, the US House of Representatives passed by a 407-1 vote a Bill –The Uighur Human Rights Policy Act 2019 –  that seeks to impose sanctions on senior Chinese officials for their involvement in the detention of Muslims.
• The billalso calls for the United States Secretary of Commerce to consider prohibiting the sale of US-made goods or services to any state agent in Xinjiang.
• The Uyghurs are a Turkic ethnic group who live in East and Central Asia.They live primarily in the Xinjiang Uyghur Autonomous Region of China, where they are one of 55 officially recognized ethnic minorities. Uyghurs primarily practice Islam.
• China has detained at least a million Uighurs and other Muslims, including ethnic Kazakhs and Uzbeks, in “re-education camps” in the country’s northwesternXinjiang province.
• The crackdown against the Muslims in the region — who are ethnically and culturally closer to central Asia than to the mainland Han Chinese — intensified after riots broke out in the regional capital Urumqi in 2009, in which over 200 people were killed.

Do You Know?

• President Trump signed into law on November 27 The Hong Kong Human Rights and Democracy Act 2019. Under this law, the US government must impose sanctions against Chinese and Hong Kong officials responsible for human rights abuses in Hong Kong.

Investor Education and Protection Fund Authority (IEPFA)

Part of: GS Prelims and GS-III – Economy

In News

• IEPFA signed a MOU with Bank of Baroda for Investor Awareness.
• In 2016, Government of India established IEPFA under the provisions of section 125 of the Companies Act, 2013.
• The Authority is entrusted with the responsibility of administration of the Investor Education Protection Fund (IEPF), make refunds of shares, unclaimed dividends, matured deposits/debentures etc. to investors and to promote awareness among investors.

Zero FIR

Part of: GS Prelims and GS-II – Polity& Governance

In News

• In the context of the Hyderabad Veterinary doctor rape& murder case, her family alleged that the Shamsabad police station delayed the filing of an FIR citing jurisdictional issues
• FIR which stands for First Information Report has serial number, date of occurrence, time of occurrence, place of occurrence, contents of complaint etc. and it is lodged because of commission of cognizable offence (an offence in which police can take suo moto action and no prior approval from court is required). 
• Every police station has jurisdictional area for which they can take up the investigation if commission of cognizable offence area found under their jurisdiction.
• But in Zero FIR, any police station can register FIR irrespective of jurisdictional area but the investigation will be taken up the police in which place of occurrence reported in FIR. 
• The police station can register the zero FIR marking it serial number zero and transfer to the competent jurisdictional area which can carry out the investigation.
• The sanctity of legal process remains same in zero FIR. It is very helpful for people as it facilitates them by not allowing to make rounds of different police station for lodging the FIR.

Do You Know?

• A Constitution Bench of the Supreme Court in LalitaKumari v. Govt. of U.P held that registration of FIR is mandatory under Section 154 of the Code of Criminal Procedure, if the information discloses commission of a cognizable offence.
• Inspite of the Justice Verma Committee report and also the multiple advisories issued by the Ministry of Home Affairs on the registration of Zero FIR, the police are still reluctant to register a case of cognizable offence especially in cases relating to heinous crimes against women. 

Nirav Modi now a fugitive economic offender

Part of: GS Prelims and GS Mains III- Economy

In News

• A special Prevention of Money Laundering Act court declared diamond trader Nirav Modi, an accused in the Punjab National Bank scam case, a fugitive economic offender.
• Nirav Modi is the second person to be declared a fugitive economic offender, under the new Fugitive Economic Offenders Act, after liquor baron Vijay Mallya.
• Now, the Union government can confiscate his assets.
• The declaration would also help in the extradition proceedings pending before a United Kingdom court

About Fugitive Economic Offenders Act, 2018

• The objective of the act is to deter economic offenders from avoiding the process of Indian law by remaining outside the jurisdiction of Indian courts.
• FEO is defined as an individualwho has committed offences involving an amount of 100 crore rupees or more and has ran away from India to avoid criminal prosecution.

(MAINS FOCUS)

INTERNAL SECURITY

TOPIC: General Studies 3:

• Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology and issues relating to intellectual property rights.

Personal Data Protection Bill

The Personal Data Protection (PDP) Bill, 2019, has been approved by the Cabinet and is slated to be placed in Parliament this winter session. 

What do we mean by data?

• Data usually refers to information about messages, social media posts, online transactions, and browser searches.

• The individual whose data is being stored and processed is called the data principal in the PDP Bill. 

• This large collection of information has become an important source of profits, but also a potential avenue for invasion of privacy because it can reveal extremely personal aspects. 

Companies, governments, and political parties can use it to find the most convincing ways to advertise online.

Who handles data and how?

• Data is stored in a physical space similar to a file cabinet of documents, and 

• It is transported across country borders in underwater cables that run as deep as Mount Everest and as long as four times the Indian Ocean. 

• To be considered useful, data has to be processed, which means analysed by computers.

• Data is collected and handled by entities called data fiduciaries. 

• The fiduciary controls how and why data is processed, 

• The processing itself may be by a third party, the data processor.

• For example, in the US, Facebook (the data controller) fell into controversy for the actions of the data processor — Cambridge Analytica.

• The physical attributes of data — where data is stored, where it is sent, where it is turned into something useful — are called data flows. 

• Data localisation arguments are premised on the idea that data flows determine who has access to the data, who profits off it, who taxes and who “owns” it. 

• However, many contend that the physical location of the data is not relevant in the cyber world.

How does the PDP Bill propose to regulate data transfer?

• To legislate on the topic, the Bill trifurcates personal data. 

• The umbrella group is all personal data — data from which an individual can be identified. 

• Some types of personal data are considered sensitive personal data (SPD), which the Bill defines as financial, health, sexual orientation, biometric, genetic, transgender status, caste, religious belief, and more. 

• Another subset is critical personal data. The government at any time can deem something critical, and has given examples as military or national security data.
• The approved Bill requires individual consent for data transfer abroad. 
• The Bill also requires sensitive personal data to be stored only in India. 
• It can be processed abroad only under certain conditions including approval of a Data Protection Agency (DPA). 
• The final category of critical personal data must be stored and processed in India.
• The Bill mandates fiduciaries to give the government any non-personal data when demanded. Non-personal data refers to anonymised data, such as traffic patterns or demographic data. 
•  The Bill requires social media companies, to develop their own user verification mechanism. 
• While the process can be voluntary for users and can be completely designed by the company, it may decrease the anonymity of users and “prevent trolling”.
• The Bill includes exemptions for processing data without an individual’s consent for “reasonable purposes”, including security of the state, detection of any unlawful activity or fraud, whistleblowing, etc. 
• The Bill calls for the creation of an independent regulator DPA, which will oversee assessments and audits and definition making. 
• Each company will have a Data Protection Officer (DPO) who will liaison with the DPA for auditing, grievance redressal, recording maintenance and more. 
• It also grants individuals the right to data portability, and the ability to access and transfer one’s own data.
• It legislates on the right to be forgotten. With historical roots in European Union law, this right allows an individual to remove consent for data collection and disclosure.

The two sides of the debate:

For data localisation

• A common argument from government officials has been that data localisation will help law-enforcement access data for investigations and enforcement. 
• As of now, much of cross-border data transfer is governed by individual bilateral “mutual legal assistance treaties” — a process that almost all stakeholders agree is cumbersome. 
• In addition, proponents highlight security against foreign attacks and surveillance. 
• The government doubled down on this argument after news broke that 121 Indian citizens’ WhatsApp accounts were hacked by an Israeli software called Pegasus.
• Many domestic-born technology companies, which store most of their data exclusively in India, support localisation. Eg: Paytm and Reliance Jio.
• Many economy stakeholders say localisation will also increase the ability of the Indian government to tax Internet giants.

Against the Bill

• Civil society groups have criticised the open-ended exceptions given to the government in the Bill, allowing for surveillance. 
• Moreover, some lawyers contend that security and government access are not achieved by localisation. 
• Even if the data is stored in the country, the encryption keys may still be out of reach of national agencies.
• Technology giants like Facebook and Google and their industry bodies, especially those with significant ties to the US, have slung heavy backlash. 
• Many are concerned with a fractured Internet (or a “splinternet”), where the domino effect of protectionist policy will lead to other countries following suit. 
• Much of this sentiment harkens to the values of a globalised, competitive internet marketplace, where costs and speeds determine information flows rather than nationalistic borders. 
• Opponents say protectionism may backfire on India’s own young startups that are attempting global growth, or on larger firms that process foreign data in India, such as Tata Consulting Services and Wipro.

Conclusion:

• Without an enabling law, the exemptions provided in the bill will fall short of securing accountability from the state for activities such as dragnet surveillance. The grey areas must spark public and parliamentary debate before a final legislation comes to fruition.

Connecting the dots :

• The data protection bill ticks many boxes. Critically examine 

ECONOMY

TOPIC: General Studies 3:

• Money-laundering and its prevention

Fugitive Economic Offender (FEO)

• A Mumbai PMLA judge declared jeweller Nirav Modi, a “fugitive economic offender” (FEO) on a plea by the Enforcement Directorate (ED).

Background:

• Diamantaire Nirav Modi is wanted in the Rs13,570 crore-fraud caused to the Punjab National Bank. 
• He left the country to avoid criminal prosecution, 
• After getting him declared a Fugitive Economic Offender (FEO), way has been paved for the premier probe agency to confiscate his offshore assets.
• He is the second citizen to be declared FEO under the special law. 
• Embattled liquor baron Vijay Mallya was the first Indian national to be declared earlier this year.
• Both Mallya and Nirav Modi are in the United Kingdom, and fighting extradition to India.

Fugitive Economic Offender (FEO):

• An FEO is defined by The Fugitive Economic Offenders (FEO) Act, 2018 as “any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, who (i) has left India so as to avoid criminal prosecution; or (ii) being abroad, refuses to return to India to face criminal prosecution”.
• The FEO Act aims “to provide for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts, to preserve the sanctity of the rule of law in India and for matters connected therewith or incidental thereto.”.
• The FEO Bill came into effect in 2018.

Why was such a law required?

• Economic offences relate to fraud, counterfeiting, money-laundering, tax evasion, etc. 
• Among the laws available for prosecuting these offences are The Prevention of Money-Laundering Act (PMLA), 2002, The Benami Properties Transactions Act, 1988, and The Companies Act, 2013.
• Sections of The Indian Penal Code, 1860 and The Code of Criminal Procedure, 1973, also cover offences such as forgery and cheating.
• In 2017, Finance Ministry released a draft Bill to address cases of high-value economic offenders fleeing the country to avoid prosecution.
•  It was observed that existing civil and criminal laws did not contain specific provisions to deal with such offenders, and that a new legal framework was needed to prosecute them.
• The ministry also argued that procedures under these laws were time-consuming, led to roadblocks in investigation and impacted the financial health of banks.
• In March 2018, the Ministry of External Affairs stated that over 30 businessmen, under investigation by the CBI and the ED, had absconded to avoid facing prosecution before Indian courts.

What is the process for declaring an individual an FEO?

• Under the Act, an application must be filed in the special court asking that a particular individual may be declared an FEO.
• The application must be accompanied by “reasons for the belief that an individual is a fugitive economic offender; any information available as to the whereabouts of the fugitive economic offender; a list of properties or the value of such properties believed to be the proceeds of crime, etc.”
• The special court may then issue a notice to the individual to appear at a specified place, and drop the proceedings if the individual complies.
• If, however, the special court is satisfied that an individual is an FEO, it may, record so in order, along with reasons. 
• The court may then order the confiscation of the properties of the accused individual in India or abroad.
• In the case of Nirav Modi, the ED filed an application under the FEO Act in July 2018. In the case of Mallya, the application was moved in June 2018, when the Act was still an Ordinance.

Connecting the dots:

• With new rules, ‘fugitive economic offender’ law has more teeth. Comment.

(TEST YOUR KNOWLEDGE)

Model questions: (You can now post your answers in comment section)

Note: 

• Correct answers of today’s questions will be provided in next day’s DNA section. Kindly refer to it and update your answers. 

• Comments Up-voted by IASbaba are also the “correct answers”.

Q.1) Consider the following statements about Extra Neutral Alcohol

1. It acts as the primary raw material for making alcoholic beverages
2. It serves as an essential ingredient in the manufacture of cosmetics and personal care products such as perfumes, toiletries, hair spray

Which of the statement(s) given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Q.2) Uyghurs often seen in news is predominantly associated with which country? 

1. South Africa
2. Australia
3. Myanmar
4. China

Q.3) Consider the following statements

1. Repo rate is the rate at which Reserve Bank of India (RBI) loans money to the banking system 
2. The RBI is required by law to maintain retail inflation — which is based on Consumer Price Index (CPI) — at the 2% level (with a band of variation of 1 percentage point)

Which of the statement(s) given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Q.4) Consider the following statements about Zero First Information Report (FIR)

1. in Zero FIR, any police station can register FIR irrespective of jurisdictional area but the investigation will be taken up the police in which place of occurrence reported in FIR. 
2. It is very helpful for public as it facilitates them by not allowing to make rounds of different police station for lodging the FIR.

Which of the statement(s) given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2 
4. Neither 1 nor 2

Q.5) Consider the following statements about Fugitive Economic Offender (FEO)

1. FEO is defined as an individual who has committed offences involving an amount of 100 crore rupees or more and has ran away from India to avoid criminal prosecution.
2. Only after theSupreme Court declares the person as FEO, the Government can confiscate all his properties.

Which of the statement(s) given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2 
4. Neither 1 nor 2

ANSWERS FOR 05 DEC 2019 TEST YOUR KNOWLEDGE (TYK)

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