Context

• The Supreme Court has recently declared the suspension of 12 BJP legislators for one year by the Maharashtra Assembly for disorderly conduct, as grossly illegal and irrational.
• In doing so, the Supreme Court has set the limits of the legislature’s power to deal with disorderly conduct in the House.
• ​​​​​​​​​​​​​​​​​​​​​Brushing aside objections that the judiciary should not examine the validity of the proceedings of the House, a three-judge Bench, comprising Justice A.M. Khanwilkar, Justice Dinesh Maheshwari and Justice C.T. Ravikumar, ruled that the suspension beyond the term of the particular session in which it was imposed was a nullity in the eyes of the law.

More about the incident

• July 2021: when the Maharashtra government introduced a resolution seeking empirical data on OBCs from the Union government there was ruckus in the house. The House was adjourned briefly for a few times before the resolution was passed, as BJP members rushed to the well of the House and were accused of damaging the presiding officer’s microphone and grabbing the mace.
• Suspension: Later the Chair, during the incidents, said that when he was in the Deputy Speaker’s chamber, some members rushed inside and abused him. A resolution moved by the Parliamentary Affairs Minister was subsequently adopted by the House suspending 12 MLAs. They were barred from entering the legislative premises for 12 months.
• The members challenged their suspension in the Supreme Court.

Syllabus: General Studies Paper 3

Context

• Finance Minister Nirmala Sitharaman in the budget announced the launch of the Digital Rupee — a central bank digital currency (CBDC) — 2022-23 onwards.

Authority

• The Reserve Bank of India will launch the CBDC from the upcoming financial year.
• This follows the government’s plans to launch the CBDC that will be backed by blockchain technology.

CBDC

• CBDC is a legal tender issued by a central bank in a digital form.
• It is similar to a fiat currency issued in paper and is interchangeable with any other fiat currency.

Context

• India has invited applications from 100 domestic companies, startups and small and medium enterprises to become a part of the design-linked incentive (DLI) scheme.
• Along with it the IT ministry has sought proposals from academia, start-ups and MSMEs to train 85,000 qualified engineers on semiconductor design and manufacturing.

About Design-linked incentive (DLI) scheme:

• Aim: to provide financial and infrastructural support to companies setting up fabs or semiconductor making plants in India.
• It will offerfiscal support of up to 50% of the total cost to eligible participants who can set up these fabs in the country.
• It will also offerfiscal support of 30% of the capital expenditure to participants for building compound semiconductors, silicon photonics and sensors fabrication plants in India.
• Anincentive of 4% to 6% on net sales will be provided for five years to companies of semiconductor design for integrated circuits, chipsets, system on chips, systems and IP cores.

Importance of Semiconductor manufacturing:

• The sudden surge in demand of chips and semiconductor components has underpinned the need to establish a robust semiconductor ecosystem in India.
• Several sectors, including auto, telecom, and medical technology suffered due to the unexpected surge leading to the scarcity of chips manufactured by only a few countries.

Recently, the New York Times published an article extensively detailing how Pegasus, a spyware developed by Israel-based NSO Group, has been used as a tool to firm up Israel’s interests across the globe.

Claims of the investigative article:

• Israel got countries that had historically been against it on the Palestine issue to switch sides by offering this powerful spyware that can be deployed not only against drug traffickers and terrorists, but also against opposition activists and prying journalists.
• The tool is cited as one of the reasons why the Abraham accords between Israel and its neighbouring Arab countries fell into place and won the blessing of Saudi Arabia.
• Pegasus was part of a $2-billion “package of sophisticated weapons and intelligence gear” transaction between India and Israel after Narendra Modi became the first Indian Prime Minister to visit Israel. It was after this deal that India changed its historically pro-Palestine stance and voted in Israel’s favour in 2019 “at the U.N.’s Economic and Social Council to deny observer status to a Palestinian human rights organization.”

About Pegasus Spyware:

• Capabilities-It can mop up information storedon phones such as photos and contacts, and also activate a phone’s cameras and microphones to turn it into a spying device without the owner’s knowledge.
• Mechanism:
  • The earliest avatars of Pegasus used spear phishingto enter phones, utilising a message designed to entice the target to click on a malicious link.
  • However, it evolved into “zero-click” attackswith the phones being infected without any action from the target individual.
• Detection of the Pegasus system for the first time:
  • In 2019, WhatsAppreleased a statement saying that Pegasus could enter phones via calls made on the platform, even if they were not attended.
  • Pegasus used several such “exploits”, or weaknesses, to enter Android and Apple phones; andmany of these exploits were reported “zero day”, which means even the device manufacturers were unaware of these weaknesses.

Context

The first India-Central Asia Summit hosted by Prime Minister Narendra Modi with the Presidents of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, officials said on Thursday.

• As the joint statement at the end of the India-Central Asia virtual summit noted, ties between India and the region have been historically close, with “civilisational, cultural, trade and people-to-people linkages”, but the lack of access to land routes, and the situation in Afghanistan are among the biggest challenges.
• It was a first dialogue held with the Presidents of the 5 CARs(Central Asian Republics), building on years of dialogue.
• The summit also came after the meeting of NSAs in Delhi, where they built on several common themes of concern and priority.

Late last year, the Union government authorised the SBI to issue and encash a new tranche of electoral bonds, the 19th such parcel since the scheme’s notification in 2018.

• The timing of the announcement was predictable, with elections slated to be held to five different State Assemblies beginning next month.
• Now, as a result, voters in those States will go to the ballot box with no knowledge about the donors backing the various contestants.

Electoral bond Scheme:

• It is designed to allow an individual, or any “artificial juridical person”, including body corporates, to purchase bonds issued by the State Bank of India during notified periods of time.
• These instruments are issued in the form of promissory notes, and in denominations ranging from ₹1,000 to ₹1 crore.
• Once purchased, the buyer can donate the bond to any political party of their choice and the party can then encash it on demand.
• The purchasers are not obliged to disclose to whom they presented the bond, and a political party encashing a bond is compelled to keep the donor’s identity secret.

Since 2016, the Government has made several efforts to formalise the economy. Currency demonetisation, introduction of the Goods and Services Tax (GST), digitalisation of financial transactions and enrolment of informal sector workers on numerous government Internet portals are all meant to encourage the formalisation of the economy.

Benefits of a formal economy:

• The formal sector is more productivethan the informal sector, and
• Formal workers haveaccess to social security benefits.

Reasons for informalization:

• International Financial institutions like IMF that informal sector exists due to excessive state regulation of enterprises and labourwhich drives genuine economic activity outside the regulatory ambit. Arguably, excessive regulation and taxation ensure the endurance of informal activities.
• It underplays informality as an outcome of structural and historical factors of economic backwardness.
• Hence
• simplifying registration processes,
• easing rules for business conduct, and
• lowering the standards of protection of formal sector workers

will bring informal enterprises and their workers into the fold of formality.

Syllabus: General Studies Paper 3

Context

With the economy still hurting from the pandemic, the Budget on February 1 is likely to address concerns around growth, inflation and spending. The Budget, which will be tabled in Parliament by Finance Minister Nirmala Sitharaman, is the Government’s blueprint on expenditure, taxes it plans to levy, and other transactions which affect the economy and the lives of citizens.

Major Components of the Budget:

• There are three major components— expenditure, receipts and deficit indicators. Depending on the manner in which they are defined, there can be many classifications and indicators of expenditure, receipts and deficits.

The Expenditure :

• Based on their impact on assets and liabilities,total expenditure can be divided into capital and revenue expenditure.
  • Capital expenditureis incurred with the purpose of increasing assets of a durable nature or of reducing recurring liabilities. For example,  expenditure incurred for constructing new schools or new hospitals, which is a creation of assets.
  • Revenue expenditureinvolves any expenditure that does not add to assets or reduce liabilities. Expenditure on the payment of wages and salaries, subsidies or interest payments would be typically classified as revenue expenditure.
• Depending on the manner in which it affects different sectors,expenditure is also classified into:
  • General services
  • Economic services:It includes expenditure on transport, communication, rural development, agricultural and allied sectors.
  • Social services:It includes education or health is categorised as social services.
  • Grants-in-aid and contribution.
  • The sum of expenditure on economic and social services together form the development expenditure.

• • • Again, depending on its effect on asset creation or liability reduction, development expenditure can be further classified as revenue and capital expenditure.

Context

One of the largest producers of fruits and vegetables in the world to boost processed food in large quantities, India has formulated a unique Production-Linked Incentive Scheme (PLIS) which aims to incentivize incremental sales.

• However, the challenge to feed the 10 billion population by mid-century is therefore being deliberated on several fronts. It demands efficient ways of production that are both economically viable and ecologically sustainable.
• Fortunately, technologies are emerging that revamp the traditional approach of farm to fork and with a lower environmental footprint.

Progress so far in the food processing industry:

• Production-Linked Incentive Scheme (PLIS): A sum of ₹10,900 crore has been earmarked for the scheme and to date, 60 applicants have already been selected under Category 1 which incentivizes firms for incremental sales and branding/marketing initiatives taken abroad.
• Beneficiaries have been obliged to commit a minimum investment while applying for the scheme.
• Assuming the committed investment as a fixed ratio of their sales and undertaking execution of at least 75% of the projects, the sector islikely to witness at least ₹6,500 crores worth of investment over the next two years.

Context

The British firm Cairn Energy has said it has concluded all steps prescribed by the Indian government in order to be eligible for the refund of a contentious retroactive tax levy.

•  This should be the last act of a long and winding tax dispute drama.
• It should be the last act of a long and winding tax dispute drama.
• The firm, now rechristened as Capricorn Energy, expects to get back ₹7,900 crore.

The Dispute

• Cairn Energy was the second major firm pursued by the I-T Department for taxes it believed had accrued in the past, using retro-active legislative changes introduced in the 2012 Budgetby then Finance Minister Pranab Mukherjee.
• The original target for this move, that has sharply dented India’s credibility, was Vodafone, which had secured a Supreme Court verdict against the tax department’s demands for past transactions.
• Empowered to dig up similar transactions, involving the indirect transfer of assets situated in India, the I-T Department had, since 2014, pursued Cairn over a group restructuring undertaken in 2006, culminating in a tax demand of as much as ₹24,500 crore.
• Cairn and Vodafone had initiated arbitration proceedings against the Indian tax authorities’ actions, and won in late 2020.
• But in Cairn’s case, the taxman had recovered part of its ‘dues’by forcibly selling its shares even as arbitration proceedings were pending — an action that led to The Hague awarding it penal damages of $1.2 billion.