FOREIGN CONTRIBUTION REGULATION ACT (FCRA)
1. Context
The Union Home Ministry has cancelled the Foreign Contribution Regulation Act (FCRA) registration of a Christian organisation — Tamil Nadu Social Service Society (TASOSS).
The non-governmental organisation (NGO) is the second Tamil Nadu-based Christian association whose FCRA registration has been cancelled this year
2. Foreign Contribution Regulation Act
- The law sought to regulate foreign donations to individuals and associations so that they functioned "in a manner consistent with the values of a sovereign democratic republic".
- Foreign funding in India is regulated under the FCRA act. Individuals are permitted to accept foreign contributions without the permission of MHA. However, the monetary limit for acceptance of such foreign contributions shall be less than Rs. 25,000.
- It is implemented by the Ministry of Home Affairs. The FCRA was enacted during the Emergency in 1976 amid apprehensions that foreign powers were interfering in India's affairs by pumping money into the country through independent organizations. These concerns were, in fact, even older- they had been expressed in Parliament as early as 1969.
3. Provisions of the Act
- The FCRA requires every person or NGO wishing to receive foreign donations to be registered under the act, to open a bank account for the receipt of foreign funds in the statute Bank of India, Delhi, and to utilize those funds only for which they have been received, and as stipulated in the act.
- They are also required to file annual returns, and they must not transfer the funds to another NGO.
- The Act prohibits the receipt of foreign funds by candidates for elections, journalists or newspapers and media broadcast companies, judges and government servants, members of the legislature and political parties or their office-bearers, and organizations of a political nature.
4. Key Highlights of the 2020 Amendment
- It bars public servants from receiving foreign contributions. It prohibits the transfer of foreign contributions to any other person.
- Aadhar number is mandatory for all office bearers, directors, or key functionaries of a person receiving foreign contributions, as an identification document.
- The foreign contribution must be received only in an account designated by the bank as an FCRA account in such branches of the State Bank of India, New Delhi.
- No funds other than foreign contributions should be received or deposited in this account.
- It allowed the government to restrict the usage of unutilized foreign contributions. This may be done if, based on an inquiry the government believes that such a person has contravened provisions of the FCRA.
- While NGOs earlier could use up to 50 percent of funds for administrative use, the new amendment restricted this use to 20 percent.
5. Registration under FCRA
- NGOs that want to receive foreign funds must apply online in a prescribed format with the required documentation. FCRA registrations are granted to individuals or associations that have definite cultural, economic, educational, religious, and social programs.
- Following the application, the MHA makes inquiries through the Intelligence Bureau into the antecedents of the applicant and accordingly processes the application. The MHA is required to approve or reject the application within 90 days-failing which is expected to inform the NGO of the reasons for the same.
- Once granted, FCRA registration is valid for five years. NGOs are expected to apply for renewal within six months of the date of expiry of registration. In case of failure to apply for renewal, the registration is deemed to have expired.
6. Cancellation of Approval
The government reserves the right to cancel the FCRA registration of any NGO if it finds it to violate the Act. Registration can be cancelled for a range of reasons including, if "in the opinion of the Central Government, the public interest must cancel the certificate". Once the registration of an NGO is canceled, it is not eligible for re-registration for three years. All orders of the government can be challenged in the High court.
For Prlims& Mains
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For Prelims: FCRA, Rajiv Gandhi Foundation, Rajiv Gandhi Charitable Trust, NGO, Ministry of Home Affairs (MHA). For Mains: 1. What is the Foreign contribution regulation act and discuss the new restrictions introduced by the Foreign Contribution (Regulation) Amendment Act, 2020. |
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Previous Year Questions
1.Examine critically the recent changes in the rules governing foreign funding of NGOs under the Foreign Contribution (Regulation) Act (FCRA), 1976. (Please refer GS-II Paper, 2015) |
Source: The Indian Express
FISCAL DEFICIT
1. Context
2. Fiscal Deficit
- A fiscal deficit is a financial situation that occurs when a government's total expenditures exceed its total revenue or income during a specific period, usually a fiscal year.
- In simpler terms, it means that the government is spending more money than it is earning through various sources, such as taxes, fees, and other revenues.
- The fiscal deficit is an essential indicator of a country's financial health and reflects the gap between the money the government spends on public services, infrastructure projects, social welfare programs, defense, and interest payments on existing debts, and the money it collects from various sources.
- When a government faces a fiscal deficit, it needs to finance the shortfall through borrowing.
- Governments typically borrow money by issuing government bonds or taking loans from domestic or international financial institutions. The accumulated borrowing over time leads to the creation of national debt.
3. Causes of Fiscal Deficit
- Economic Downturns: During economic recessions or downturns, government revenues tend to decline as economic activity slows down. At the same time, government spending may increase to provide stimulus and support to the economy. This combination of reduced revenue and increased expenditure can lead to a fiscal deficit.
- Insufficient Tax Revenues: If a country's tax collection system is inefficient or ineffective, it may not generate enough revenue to cover the government's expenses. Low tax compliance rates, tax evasion, or outdated tax policies can contribute to a fiscal deficit.
- High Public Spending: Governments may have high spending commitments, including expenditures on public services, infrastructure development, defense, and social welfare programs. If spending is not matched with adequate revenue generation, it can result in a fiscal deficit.
- Social Welfare Programs: Social welfare initiatives, such as healthcare, education, unemployment benefits, and pension schemes, can be costly for the government. While they are essential for the well-being of citizens, funding these programs without appropriate revenue sources can lead to fiscal deficits.
- Interest Payments on National Debt: If a significant portion of the government's budget is allocated to servicing the interest on the accumulated national debt, it can strain the budget and contribute to a fiscal deficit.
- Infrastructure Investment: Governments often invest in long-term infrastructure projects, such as roads, bridges, and public transportation systems. While these investments can promote economic growth, they require substantial initial funding and can contribute to a temporary fiscal deficit.
4. Public debt
- Public debt, also known as government debt or national debt, refers to the total amount of money that a government owes to external creditors (such as foreign governments, international organizations, and investors) and domestic creditors (like individuals, banks, and institutions) resulting from past borrowing and deficit financing.
- It is a key component of a country's overall debt burden and is a measure of the government's accumulated financial liabilities over time.
- Governments borrow money to finance various activities, including infrastructure development, social welfare programs, defense, and other public services when their expenses exceed their revenues.
- The main sources of public debt include issuing government bonds, treasury bills, notes, and loans from domestic and foreign lenders.
Public debt can be classified into two main categories:
Internal Debt: This refers to the debt owed by the government to its own citizens and domestic institutions. Internal debt is denominated in domestic currency and is typically held in the form of government bonds, savings certificates, and other securities.
External Debt: This refers to the debt owed by the government to foreign lenders and entities. External debt is denominated in foreign currencies and may include loans from international financial institutions, foreign governments, and private investors.
5. Challenges of High Fiscal Deficits and Debt in India
- Debt-Dynamics Equation: When GDP growth surpasses effective interest rates on government bonds and there's no primary deficit, overall debt declines. However, financial repression to keep interest rates low can cause distortions in the economy.
- Costs of High Deficits: Carrying high deficits and debt has significant costs for the economy. Interest payments consume over 5% of GDP and 25% of revenue, hindering investment in education, healthcare, and infrastructure.
- Impact on Fiscal Policy: High debt levels limit the government's ability to implement counter-cyclical fiscal policies and respond to economic shocks effectively.
- Captive Debt Market: The debt market in India is primarily dominated by commercial banks and insurance companies, leading to limited resources for lending to the manufacturing sector and higher borrowing costs.
- Impact on Sovereign Rating: High deficits and debt can lead to lower sovereign ratings, increasing the cost of external commercial borrowing.
- Inter-generational Burden: Large deficits and debt burden future generations as today's borrowing is taxing tomorrow.
- Regional Disparities: States like Punjab, Kerala, Rajasthan, and West Bengal face higher debt-to-GSDP ratios, exacerbating economic challenges.
- Green Transition: High debt levels may impede funding for emerging priorities like transitioning to a green economy.
- Difficulty in Calibration: High debt makes it difficult to calibrate fiscal policies effectively to address economic fluctuations.
- Need for Prudent Fiscal Management: Addressing high deficits and debt requires prudent fiscal management to ensure sustainable economic growth and development.
6. Challenges of Fiscal Consolidation and Policy Interventions
- Achieving the recommended debt-to-GDP ratio of 58.2% (14th Finance Commission) seems unfeasible in the medium term.
- Even before the pandemic, aggregate public debt was at 74.3% in 2019-20, reaching 89.7% in 2020-21 due to the pandemic.
- Despite a nominal GDP recovery of 18.5% in 2021-22, the debt ratio declined only slightly to 85.7%.
- The high primary deficit in 2022-23 (3.7% of GDP) and budgeted deficit in 2023-24 (over 3%) indicate persistently elevated debt levels.
- The stable Goods and Services Tax (GST) platform is expected to improve tax administration and compliance, increasing the tax-GDP ratio by 1.5 to 2 percentage points in the medium term.
- The need to reconsider the state's role and vacate activities better suited for the market rather than competing with it.
- The slow pace of disinvestment at the central level is a concern.
- Enforcing rules on States' borrowing is crucial to impose hard budget constraints and ensure macroeconomic stability.
- Cash transfers are preferred over subsidizing commodities and services for effective redistribution.
- The Union government should lead by example in following and enforcing fiscal responsibility rules effectively in States.
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For Prelims: Fiscal deficit, public debt, fiscal consolidation, 14th finance commission, Tax-GDP ratio.
For Mains: 1. Discuss the concept of public debt and its significance in the context of fiscal sustainability. Examine the key sources of public debt and the reasons why governments resort to borrowing. (250 words).
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THE PLACES OF WORSHIP ACT
1. Context
2. The Places of Worship Act and its Provisions
| The long title describes it as “An Act to prohibit conversion of any place of worship and to provide for the maintenance of the religious character of any place of worship as it existed on the 15th day of August, 1947, and for matters connected therewith or incidental thereto.” |
religious denomination into a place of worship of a different religious denomination or even a different segment of the same religious denomination.
Section 4(1) declares that the religious character of a place of worship “shall continue to be the same as it existed” on August 15, 1947.
Section 5 stipulates that the Act shall not apply to the Ramjanmabhoomi-Babri Masjid case, and to any suit, appeal or proceeding relating to it.
At least two petitions challenging the Act are pending before the Supreme Court.
| The law has been challenged on the ground that it bars judicial review, which is a basic feature of the Constitution, imposes an “arbitrary irrational retrospective cutoff date”, and abridges the right to religion of Hindus, Jains, Buddhists and Sikhs. |
3. Reasons for bringing of the act
- The Act was brought by the Prime Minister P V Narasimha Rao at a time when the Ram temple movement was at its peak.
- The Babri Masjid was still standing, but L K Advani’s rath yatra, his arrest in Bihar and the firing on kar sevaks in Uttar Pradesh had raised communal tensions.
| Moving the Bill in Parliament, then Home Minister S B Chavan said: “It is considered necessary to adopt these measures in view of the controversies arising from time to time with regard to conversion of places of worship which tend to vitiate the communal atmosphere Adoption of this Bill will effectively prevent any new controversies from arising in respect of conversion of any place of worship…” |
4. Supreme Court verdict
- The constitutional validity of the 1991 Act was not under challenge, nor had it been examined before the Supreme Court Bench that heard the Ramjanmaboomi-Babri Masjid title suit.
- Even so, the court, while disagreeing with certain conclusions drawn by the Allahabad High Court about the Act, made specific observations in its support.
- “In providing a guarantee for the preservation of the religious character of places of public worship as they existed on 15 August 1947 and against the conversion of places of public worship, Parliament determined that independence from colonial rule furnishes a constitutional basis for healing the injustices of the past by providing the confidence to every religious community that their places of worship will be preserved and that their character will not be altered,” the court said.
5. Constitutional obligations
- The law addresses itself to the State as much as to every citizen of the nation.
- The State, has by enacting the law, enforced a constitutional commitment and operationalised its constitutional obligations to uphold the equality of all religions and secularism which is a part of the basic features of the Constitution.
- The Places of Worship Act imposes a non-derogable obligation towards enforcing our commitment to secularism under the Indian Constitution.
- The law is hence a legislative instrument designed to protect the secular features of the Indian polity, which is one of the basic features of the Constitution.
- The Places of Worship Act is a legislative intervention which preserves non-retrogression as an essential feature of our secular values.
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For Prelims: The Places of Worship Act, secularism, Indian Constitution, Ramjanmaboomi-Babri Masjid title suit,
For Mains:
1. What is the Places of Worship Act and discuss its constitutional obligations (250 words)
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EXCLUSIVE ECONOMIC ZONE (EEZ)
On January 31, the Indian Army intercepted a Maldivian fishing boat engaged in fishing activities within the Maldives’ Special Economic Zone (EEZ), located 72 nautical miles northeast of Dhidhdhoo, Haa Alifu Atoll, the Maldives’ Defence Ministry claimed in a statement.
It said that the Indian troops boarded three fishing boats within the Maldives EEZ without prior consultation with relevant authorities, thereby breaching international maritime laws and regulations
An Exclusive Economic Zone (EEZ) is a maritime zone that extends beyond a country's territorial sea and is established by coastal nations according to the United Nations Convention on the Law of the Sea (UNCLOS). The EEZ provides a sovereign state with certain rights regarding the exploration and use of marine resources within that zone.
Key features of an EEZ include:
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Resource Rights: The coastal state has the exclusive rights to explore, exploit, conserve, and manage natural resources found in the waters, seabed, and subsoil within the EEZ. This includes resources like fish, oil, gas, and minerals.
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Sovereign Rights: The nation holds sovereign rights for the purpose of exploring, exploiting, conserving, and managing natural resources, both living (like fish) and non-living (such as oil and gas) within the EEZ.
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Jurisdiction: The coastal state has the authority to regulate various activities within the zone, including scientific research, environmental protection, and the construction of artificial islands or structures for economic purposes.
An EEZ typically extends up to 200 nautical miles (370 kilometers) from the coastline, but it can be modified based on specific geographical conditions or agreements between neighboring countries. It's important to note that while coastal states have rights within their EEZs, other nations have the freedom of navigation and overflight through these zones, as well as the right to lay submarine cables and pipelines in accordance with international law
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3.Rights of the country in the EEZ
Within their Exclusive Economic Zone (EEZ), countries have specific rights granted by international law, primarily defined by the United Nations Convention on the Law of the Sea (UNCLOS).
Some of these rights include:
- The coastal state has the exclusive right to explore and exploit natural resources, both living (like fish) and non-living (such as oil, gas, and minerals), within its EEZ
- Nations can conduct various economic activities, including fishing, mining, and the extraction of oil and gas, subject to their own regulations and in compliance with international agreements and environmental conservation principles
- Coastal states have the right to conduct scientific research and surveys related to marine ecosystems, resources, and environmental factors within their EEZ
- Countries are responsible for the conservation and management of the marine environment within their EEZ, ensuring that activities carried out do not harm the ecosystem or endanger marine life
- The coastal state has regulatory jurisdiction over the EEZ, allowing it to establish and enforce laws related to customs, immigration, sanitation, and other matters concerning economic activities and environmental protection within this zone
- Nations can construct artificial islands, installations, and structures for economic purposes within their EEZ, provided they comply with international regulations and environmental safeguards
- While coastal states have exclusive rights to the resources within their EEZ, other countries have the freedom of navigation and overflight through these zones for purposes like shipping, laying cables, and conducting military activities, as permitted by international law
Territorial Waters
The territorial waters of a nation encompass all water regions under its authority, consisting of internal waters, the territorial sea, contiguous zone, the Exclusive Economic Zone (EEZ), and potentially extending to the continental shelf.
Territorial Sea
The territorial sea is a concept in international law that refers to the belt of coastal waters extending from a country's baseline (usually the low-water line along the coast) outwards for up to 12 nautical miles (22.2 kilometers), as recognized by the United Nations Convention on the Law of the Sea (UNCLOS)
Contiguous Zone
The contiguous zone is an area of water that extends beyond a country's territorial sea, stretching up to 24 nautical miles (44.4 kilometers) from the baseline. In this zone, a coastal state can exert limited control for the purpose of preventing or punishing infringements of its customs, fiscal, immigration, or sanitary regulations within its territory or territorial sea. While it allows for certain enforcement measures, it doesn't grant full sovereignty, unlike the territorial sea
5. India and Exclusive Economic Zone (EEZ)
- India has an Exclusive Economic Zone (EEZ) that extends up to 200 nautical miles (370 kilometers) from its coastline.
- Within this zone, India holds exclusive rights for exploring, exploiting, conserving, and managing natural resources, both living and non-living, such as fish, oil, gas, minerals, and other marine resources.
- The EEZ of India is significant, offering opportunities for economic activities like fishing, offshore energy exploration, scientific research, and environmental protection.
- India exercises jurisdictional control over this zone, regulating various activities and safeguarding the marine environment in accordance with international laws, including the United Nations Convention on the Law of the Sea (UNCLOS).
- Additionally, while India has exclusive rights to the resources within its EEZ, other nations have the freedom of navigation and overflight through these waters, respecting India's sovereign rights and complying with international laws and agreements.
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For Prelims: Exclusive Economic Zone (EEZ), UNCLOS, Contigous Zone
For Mains: General Studies II - International Law and Governance regarding EEZ
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Previous Year Questions
1.With reference to the United Nations Convention on the Law of Sea, consider the following statements: (UPSC CSE 2022)
1. A coastal state has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles, measured from baseline determined in accordance with the convention.
2. Ships of all states, whether coastal or land-locked, enjoy the right of innocent passage through the territorial sea.
3. The Exclusive Economic zone shall not extend beyond 200 nautical miles from the baseline from which the breadth of the territorial sea is measured.
Which of the statements given above are correct?
A.1 and 2 only
B.2 and 3 only
C.1 and 3 only
D.1, 2 and 3
Answer (D)
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NON PERFORMING ASSET (NPA)
Gross Non Performing Assets (NPA) decreased by 11.8% to ₹86,749 crore as compared with ₹98,347 crore a year earlier.
Net NPA reduced by 4.58% to ₹22,408 crore from ₹23,484 crore in the year-earlier period.
Credit cost of the bank for Q3 FY24 remained flat YoY at 0.21%.
Capital Adequacy Ratio as at the end of Q3 FY24 stood at 13.05%
A Non-Performing Asset (NPA) refers to a classification used by financial institutions, primarily banks, to categorize loans or advances that are in default or are in arrears on scheduled payments of principal or interest. In simpler terms, when a borrower fails to make interest or principal payments for a certain period of time, typically 90 days or more past the due date, the loan is classified as a non-performing asset.
NPAs are detrimental to banks and financial institutions as they indicate a risk of default and can lead to financial losses. These assets can hamper the lender's ability to generate income through interest and can also impact their capital adequacy and liquidity.
Financial institutions employ various strategies to manage and recover NPAs, such as restructuring loans, loan recovery processes, selling off bad debts to asset reconstruction companies, or writing off the non-recoverable amount from their books
3. NPA (Non-Performing Assets) –Classifications
Non-performing assets (NPAs) are classified based on the period for which the loan remains overdue and the likelihood of recovery. The classifications typically involve three categories:
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Substandard Assets: These are assets that have remained non-performing for less than or equal to 12 months. They are characterized by the bank or financial institution experiencing a potential loss if full repayment occurs. Substandard assets have a higher risk of turning into bad loans.
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Doubtful Assets: These assets have remained in the non-performing category for more than 12 months. There is a significant risk associated with these assets, where the full repayment of the loan is highly uncertain. However, there might still be some potential, albeit remote, for recovery.
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Loss Assets: When the assets' loss has been identified by the bank or financial institution or an external auditor, and these assets have very little chance of recovery, they are classified as loss assets. These assets are considered uncollectible and of such little value that their continuance as assets is not warranted, and the entire outstanding balance is written off.
These classifications are crucial for banks and financial institutions to assess the health of their loan portfolios and take appropriate measures to manage and mitigate risks associated with NPAs
Bank fraud and Non-Performing Assets (NPAs) are two distinct issues in the banking sector, although they can sometimes be interconnected.
Bank Fraud: Bank fraud involves deliberate deception or dishonest actions carried out by individuals or groups, intending to gain an unfair or unlawful advantage, causing financial loss to the bank or its customers. Fraud can take various forms, such as embezzlement, forgery, loan fraud, identity theft, money laundering, or manipulating financial statements. It's essentially a criminal act involving deceit, misrepresentation, or illegal activities that lead to financial losses for the bank.
Non-Performing Assets (NPAs): NPAs refer to loans or advances that have stopped generating income for the bank because the borrower has defaulted on repayment. When a borrower fails to pay interest or principal for a specified period, typically 90 days or more, the loan is classified as an NPA. NPAs can arise due to various reasons such as economic downturns, borrower insolvency, mismanagement, or inadequate risk assessment by the lending institution.
While these issues are distinct, there can be situations where bank fraud contributes to the creation of NPAs. For instance, if a fraudulent loan is issued based on false documents or misrepresented information, it might result in the borrower defaulting on payments, eventually turning the loan into an NPA
5. What are the impacts of Non-Performing Assets (NPA)
Non-Performing Assets (NPAs) can have significant impacts on banks, the economy, and the overall financial ecosystem.
Here are some of the key effects:
- NPAs erode a bank's profitability as they stop generating income through interest payments. This affects the bank's ability to lend further and impacts its overall financial health. A high level of NPAs can weaken a bank's capital base, affecting its ability to absorb losses and maintain stability
- Banks with high NPAs become cautious about lending, especially to risky sectors or borrowers, leading to a credit crunch. This restricted lending can hamper economic growth as businesses and individuals find it challenging to secure credit for expansion or investment
- High NPAs can dent depositor and investor confidence in the banking system. Customers might withdraw deposits or shift to more stable institutions, causing liquidity issues for the affected bank
- NPAs can have broader economic repercussions. When banks face financial strain due to NPAs, their ability to support economic growth through lending diminishes. This can affect employment, investments, and overall economic development
- Regulators monitor and impose stricter norms on banks with high levels of NPAs to ensure financial stability. Banks might face regulatory penalties or restrictions, impacting their operations and growth prospects
- Banks might need additional capital infusion to cover the losses arising from NPAs. This can strain the bank's resources or necessitate seeking external funding, impacting shareholders and overall financial planning
Controlling Non-Performing Assets (NPAs) is crucial for the financial health of banks and the stability of the financial system. Several measures can be implemented to manage and control NPAs effectively:
Prudent Lending Practices: Implementing robust credit appraisal and risk assessment mechanisms before disbursing loans can prevent potential NPAs. Thoroughly evaluating borrower creditworthiness, financial stability, and collateral can mitigate risks.
Early Detection and Monitoring: Early identification of potential NPAs is crucial. Banks should closely monitor repayment schedules and intervene at the first signs of distress. Timely action can prevent assets from slipping into the NPA category.
Loan Restructuring and Rescheduling: Offering viable borrowers alternative repayment structures can help them meet their obligations. Loan restructuring involves altering repayment terms, interest rates, or extending the tenure to make repayments more manageable.
Asset Quality Review (AQR): Conducting regular asset quality reviews helps in identifying stressed assets early on. This enables banks to take proactive measures to prevent assets from turning into NPAs.
Asset Reconstruction Companies (ARCs): Collaborating with ARCs allows banks to transfer NPAs to specialized entities that focus on recovering these assets. It helps banks clean up their balance sheets and concentrate on core operations.
Strengthening Recovery Mechanisms: Banks should have robust recovery mechanisms in place, including legal recourse and debt recovery tribunals, to expedite the recovery of NPAs. Effective recovery minimizes losses for the bank.
Loan Recovery through Securitization and Asset Sale: Selling NPAs to other entities or securitizing them can provide liquidity and reduce the burden on banks. However, this should be balanced with ensuring fair value realization.
Prudential Norms and Regulatory Compliance: Adhering to prudential norms set by regulatory authorities helps in maintaining healthy asset quality. Compliance with regulations ensures timely recognition and provisioning for NPAs.
Debt Recovery Tribunals (DRTs) and SARFAESI Act: Utilizing legal mechanisms like DRTs and the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act expedites the recovery process and acts as a deterrent against defaulting borrowers
7. Way forward
Implementing these measures collectively and consistently can aid in controlling NPAs, maintaining a healthy loan portfolio, and preserving the stability of the banking sector.
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For Prelims: Current events of Economy in Indian Scenario, RBI measurement to Control Non Performing Assets (NPAs) For Mains: General Studies III: Non Performing Asset (NPAs), Bad Bank |
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Previous Year Questions 1.Consider the following statements: Non-performing assets (NPAs) decline in value when (UPSC ESE 2018) 1. Demand revives in the economy. 2. Capacity utilization increases. 3. Capacity utilization, though substantive, is yet sub-optimal. 4. Capacity utilization decreases consequently upon merger of unit. Which of the above statements are correct? A.1, 3 and 4 only B.1, 2 and 4 only C.1, 2 and 3 only D.1, 2, 3 and 4 Answer (C) |
Source: Indianexpress
PERSONALLY IDENTIFIABLE INFORMATION (PII)
2. About Personally Identifiable Information
- Personally Identifiable Information (PII) refers to any data or details maintained by an organization or agency that has the potential to identify a specific individual.
- This encompassing information includes data such as Aadhaar, PAN, voter identity, passport details, date of birth, contact numbers, communication addresses, and biometric information.
- The components of PII may vary based on an individual's home country.
- Additionally, non-PII, when combined with supplementary information, can also be utilized to identify a person.
- Non-PII information may consist of photographic images, especially those highlighting facial or other distinctive features, place of birth, religious affiliation, geographical indicators, employment details, educational qualifications, and medical records.
- The comprehensive nature of this information enables accurate identification of individuals.
- While access to a single set of PII may pose a risk to online security, unauthorized access to multiple databases could potentially lead to the identification and targeting of specific individuals.
- The distinction between sensitive and non-sensitive Personally Identifiable Information (PII) lies in the level of potential harm and the ability to accurately identify individuals.
- Non-sensitive PII encompasses publicly available information that can be stored and transmitted without encryption.
- Examples include details like zip code, race, gender, and religion. While these details are part of an individual's information, they are not sufficient to accurately identify that person.
- Sensitive PII, when exposed, holds the capacity to identify individuals accurately and may lead to potential harm.
- This category includes crucial components stored by entities such as employers, government organizations, banks, and other digital accounts used by individuals.
- The exposure of sensitive PII poses a higher risk due to the potential for misuse, making protection and encryption essential for safeguarding individuals from identity theft or other malicious activities.
The exposure of Personally Identifiable Information (PII) due to cyberattacks and vulnerabilities in digital infrastructure poses various risks to individuals:
- Threat actors can leverage exposed PII to launch targeted attacks on individuals. This may involve crafting phishing messages with personalized information to deceive individuals and gain unauthorized access to their accounts.
- Exposed PII can be misused for fraudulent activities, such as opening unauthorized bank accounts or siphoning funds from accounts associated with government welfare programs.
- Threat actors may use the exposed information to impersonate individuals, leading to identity theft. This can result in unauthorized access to various services, accounts, or benefits.
- Cybercriminals may exploit the exposed PII to obtain cellular connections, and credit cards, or compromise the security of an individual’s digital accounts, leading to unauthorized access and potential misuse.
- Exposed PII is often traded on the dark web, where threat actors buy and sell personal information. This can contribute to a broader ecosystem of cybercrime and illicit activities.
5. The recent events where PII was compromised
In 2023, several incidents highlighted the compromise of Personally Identifiable Information (PII) in India:
- Reports revealed that a Telegram bot was responsible for returning the personal data of Indian citizens registered on the COVID-19 vaccine intelligence network (CoWIN) portal for vaccination. This breach raised concerns about the exposure of sensitive information.
- An American cybersecurity company reported the sale of PII belonging to 815 million Indian citizens on the dark web. The compromised data included Aadhaar numbers and passport details. While the government of India denied a biometric data leak, an investigation was initiated, resulting in arrests in Bihar.
- A data breach was reported on the RailYatri platform in January 2023, indicating vulnerabilities in the security of personal information.
- According to a Re-Security report, 67% of Indian government and essential services organizations experienced a significant surge of over 50% in disruptive cyberattacks. This heightened risk posed a threat to critical infrastructure and essential services.
- A survey of 200 IT decision-makers revealed that 45% of Indian businesses encountered a substantial increase of more than 50% in cyberattacks. This trend indicated a broader challenge for businesses in safeguarding sensitive information.
6. Practical Steps for Protection PII
Protecting Personally Identifiable Information (PII) is crucial, and individuals can take several measures to enhance their privacy and reduce the risk of exposure:
- When visiting websites, especially unfamiliar ones, look for "HTTPS" in the URL. The "S" indicates a secure connection, safeguarding information from potential threats. Some browsers also display a lock symbol in the URL bar to denote a secure website.
- Employ a Virtual Private Network (VPN) when accessing sensitive information on public networks. A VPN encrypts your online connection, adding an extra layer of security to protect PII from unauthorized access on public networks.
- Keep a close watch on essential identity documents such as Aadhaar, passport, PAN, and Voter ID. Refrain from sharing or accessing these documents through unknown devices. If using public facilities like photocopy shops, ensure thorough deletion of documents to prevent misuse.
- Avoid sharing excessive personal information on social media platforms. Limiting the details publicly available reduces the risk of unauthorized access and potential misuse.
- Stay alert for phishing attacks, especially if your PII has been leaked. Phishers may use this information to create convincing messages. Verify the legitimacy of communications and avoid clicking on suspicious links.
- Regularly review bank account transactions, credit card statements, and credit scores. Any unexpected changes in credit scores could indicate potential misuse of PII to procure credit cards or conduct fraudulent activities.
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For Prelims: Computer Emergency Response Team of India, Personally Identifiable Information, Cyber Attacks
For Mains:
1. What are the key differences between sensitive and non-sensitive Personally Identifiable Information (PII)? How can the misuse of sensitive PII have a more significant impact on individuals and society? Analyze the recent PII breaches in India with this distinction in mind. (250 Words)
2. As a civil servant, how would you approach the issue of Personally Identifiable Information (PII) protection in your area of responsibility? What policies or initiatives would you advocate for to create a more secure digital environment for citizens? (250 Words)
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Previous Year Questions
1. In India, under cyber insurance for individuals, which of the following benefits are generally covered, in addition to payment for the loss of funds and other benefits? (UPSC 2020)
1. Cost of restoration of the computer system in case of malware disrupting access to one's computer
2. Cost of a new computer if some miscreant wilfully damages it, if proved so
3. Cost of hiring a specialized consultant to minimize the loss in case of cyber extortion
4. Cost of defence in the Court of Law if any third party files a suit
Select the correct answer using the code given below:
A.1, 2 and 4 only B.1, 3 and 4 only C.2 and 3 only D.1, 2, 3 and 4
2. Which of the following best describes the term ‘import cover’, sometimes seen in the news? (UPSC 2016) 3. Consider the following statements: (UPSC 2018)
1. Aadhaar card can be used as a proof of citizenship or domicile.
2. Once issued, the Aadhaar number cannot be deactivated or omitted by the Issuing Authority.
Which of the statements given above is/are correct?
A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2
4. Consider the following statements: (UPSC 2020)
1. Aadhaar metadata cannot be stored for more than three months.
2. State cannot enter into any contract with private corporations for sharing of Aadhaar data.
3. Aadhaar is mandatory for obtaining insurance products.
4. Aadhaar is mandatory for getting benefits funded out of the Consolidated Fund of India.
Which of the statements given above is / are correct?
A. 1 and 4 only B. 2 and 4 only C. 3 only D. 1, 2 and 3 only
5. ‘Right to Privacy’ is protected under which Article of the Constitution of India? (UPSC 2021) (a) Article 15 (b) Article 19 (c) Article 21 (d) Article 29
6. Right to Privacy is protected as an intrinsic part of Right to Life and Personal Liberty. Which of the following in the Constitution of India correctly and appropriately imply the above statement? (2018) (a) Article 14 and the provisions under the 42nd Amendment to the Constitution. (b) Article 17 and the Directive Principles of State Policy in Part IV. (c) Article 21 and the freedoms guaranteed in Part III. (d) Article 24 and the provisions under the 44th Amendment to the Constitution.
7. Article 21 of Indian Constitution secures: (OPSC OAS 2018)
A. Right to life only
B. Right to personal liberty only
C. Right to liberty and privacy
D. Right to life, personal liberty and right to privacy
Answers: 1-D, 2-D, 3-D, 4-B, 5-C, 6-C, 7-D
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UTTARAKHAND'S UNIFORM CIVIL CODE
2. The objective of a Uniform Civil Code (UCC) in India
- A Uniform Civil Code (UCC) aims to establish a consistent set of laws to replace the diverse personal laws associated with different religions. These laws pertain to crucial aspects like marriage, divorce, adoption, and inheritance. The constitutional basis for the UCC is found in Article 44, which directs the state to "endeavour to secure for the citizens a uniform civil code throughout the territory of India." This provision falls under the Directive Principles of State Policy, playing a significant role in governance, even though it is not legally enforceable.
- The inclusion of the UCC provision sparked intense debates during the deliberations of India's Constituent Assembly. There was a profound discussion on whether it should be considered a fundamental right or a directive principle. Opponents raised concerns that implementing a UCC might compromise the rights of religious minorities and erode India's cultural diversity. Some argued that it could conflict with the freedom of religion guaranteed under Article 19 (now Article 25) of the draft Constitution.
- While some, like Member K.M. Munshi, advocated for the UCC, emphasizing its potential to promote gender equality and eliminate discriminatory practices against women, others, like Member Naziruddin Ahmad, expressed reservations. Ahmad highlighted the need for community consent for implementing such a uniform set of laws.
- Dr. B.R. Ambedkar, taking a more ambivalent stance, expressed the desirability of a UCC but recommended that it be "purely voluntary" in its initial stages. He argued that since the provision was recommendatory and not mandatory, it should not be imposed on all citizens.
- The matter was ultimately settled with a 5:4 majority vote, led by the sub-committee on fundamental rights headed by Sardar Vallabhbhai Patel. The decision was that the establishment of a UCC should not be categorized as a fundamental right.
3. Development of Uttarakhand's Uniform Civil Code (UCC)
- In June 2022, the Uttarakhand government established an expert committee led by former Supreme Court judge Justice Ranjana Prakash Desai to explore avenues for implementing a Uniform Civil Code (UCC). This initiative to implement a UCC in the state if re-elected. Despite the Chief Minister's announcement in June of that year that a draft UCC was prepared, the committee faced delays in submitting its report. The original deadline in November 2022 was extended multiple times.
- Right from the outset, the proposal encountered opposition from rival political parties, with Congress representatives in the state claiming that the UCC initiative was merely a political strategy to influence voters in the lead-up to the general elections. The tribal community, constituting 2.9% of the population, had not given consent to the UCC. Additionally, the Van Gujjar tribe, a Muslim nomadic group with around 60,000 members, expressed concerns about the proposed law.
- The controversies surrounding community consent and political motivations added complexity to the discussions surrounding the proposed implementation of the UCC in the state.
4. Anticipated Changes in Uttarakhand's Uniform Civil Code (UCC)
- The forthcoming draft of the Uniform Civil Code (UCC) in Uttarakhand is poised to bring about significant changes, primarily focusing on gender equality within legal frameworks. Notable provisions include equal treatment of men and women, particularly in matters related to inheritance. The UCC is expected to eliminate practices associated with marriage and divorce, such as polygamy, iddat (mandatory waiting period for women after the dissolution of a Muslim marriage), and triple talaq. Furthermore, the proposed Code is likely to ensure an equal property share for Muslim women, surpassing the current 25% share stipulated by Muslim personal law.
- Despite these amendments, the minimum age for marriage is anticipated to remain unchanged, with 18 years for women and 21 years for men. The UCC is set to encompass a range of issues, including divorce, marriage registrations, adoption, and provisions for the social security of ageing parents. Additionally, the committee has recommended the mandatory registration of live-in relationships.
- In clarifying the intentions behind the UCC, the proposed changes are not geared towards appeasing any specific community but rather aim to empower all sections of society. The implementation of the UCC would not impact reservations, marital rights, customs, or any other class-specific considerations. The emphasis is on fostering equality and empowerment across diverse segments of the population.
5. Supreme Court's Stance on Uniform Civil Code (UCC) and Related Petitions
Over the years, the Supreme Court has engaged in discussions on the Uniform Civil Code (UCC) through various judgments. However, it has consistently refrained from issuing directives to the government, emphasizing that law-making falls exclusively within the domain of Parliament. In the 1985 Shah Bano Begum case, the Court expressed regret over Article 44 remaining a "dead letter" and urged its implementation. This sentiment was echoed in subsequent cases like Sarla Mudgal versus Union of India (1995) and John Vallamattom versus Union of India (2003).
Petitions for Uniformity in Laws
Between 2021 and 2022, six petitions were filed in the Supreme Court seeking uniformity in divorce, maintenance, and alimony laws, asserting that existing laws discriminated against women and thereby violated constitutional provisions under Article 14 (right to equality) and Article 15 (right against discrimination based on religion and gender). In March of the previous year, a Bench led by Chief Justice of India (CJI) D.Y. Chandrachud dismissed these petitions, emphasizing that such matters are within the exclusive legislative purview of Parliament.
Dismissal of Petition Challenging Uttarakhand's UCC Committee
In January of the same year, the Supreme Court dismissed a petition challenging the Uttarakhand government's establishment of an expert committee on the UCC. The Court highlighted that Article 162 permits the exercise of executive powers, stating, "Article 162 of the Constitution indicates that the executive power of a State extends to matters concerning which the Legislature of the State has power to make laws." The order emphasized that the constitution of such a committee, as per Entry 5 of the Concurrent List, dealing with "marriage and divorce; infants and minors; adoption; wills, intestacy, and succession," could not be challenged as ultra vires.
6. Law Commission's Perspective on the Uniform Civil Code (UCC)
- In 2016, the government sought the Law Commission of India's guidance on formulating a Uniform Civil Code (UCC) due to the diverse personal laws existing in the country. In response, the 21st Law Commission, led by former Supreme Court judge Justice Balbir Singh Chauhan, submitted a 185-page consultation paper in August 2018 titled "Reforms of family law." The paper concluded that, at that stage, the formulation of a UCC was deemed "neither necessary nor desirable." It emphasized that a unified nation did not inherently require "uniformity" and that secularism should not contradict the diverse cultural and religious practices prevailing in the country. While rejecting the immediate need for a UCC, the commission recommended amendments to eliminate discriminatory practices and stereotypes present in the existing personal laws.
- On June 14 of the following year, the 22nd Law Commission, led by Justice (Retd) Rituraj Awasthi, issued a notification seeking input from various stakeholders, including the public and religious organizations, on the UCC. Notably, Justice Awasthi, during his tenure as Chief Justice of the Karnataka High Court, had ruled in favour of the Karnataka government's order prohibiting the wearing of hijab in educational institutions.
- The Law Commission's transition from deeming a UCC as unnecessary in 2018 to actively seeking public opinion in 2022 signifies a shift in perspective. While the 2018 report emphasized the importance of maintaining cultural and religious diversity, the subsequent move to engage stakeholders suggests a willingness to reconsider and evaluate the need for a UCC, taking into account diverse viewpoints and societal changes.
7. Future Developments in the Uniform Civil Code (UCC) Landscape
- Following Uttarakhand's lead, Madhya Pradesh and Gujarat have also established committees to kickstart the formulation of a Uniform Civil Code (UCC). This push for a UCC was included in the BJP's election manifesto for the Karnataka Assembly polls, although the Congress eventually secured a significant victory in that election.
- The question of whether the central government will propose a UCC on a pan-India level remains a topic of debate. The central government will likely proceed cautiously, observing the outcomes of the initiatives undertaken by individual states. The awaited report from the 22nd Law Commission is anticipated to carry persuasive weight in shaping the discourse.
- The renewed momentum towards a UCC may also be influenced by a pending query before the Supreme Court concerning the "scope and ambit of the right to freedom of religion under Article 25 of the Constitution." This question originated in the Sabarimala case and was framed by a Constitution Bench for reference to a larger bench. Despite three years passing, there has been no substantial progress on this matter.
- The evolving landscape of UCC initiatives in various states, coupled with the legal and political considerations at the national level, indicates a complex and dynamic situation. The outcome of these state-level efforts, coupled with the pending Supreme Court query, will likely influence the trajectory of discussions on the UCC at both the state and national levels. The UCC debate continues to be shaped by legal, political, and societal dynamics, with potentially far-reaching implications for India's legal framework and cultural diversity.
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For Prelims: Uniform Civil Code, Article 44, Article 14, Article 15, Article 25, Shah Bano Begum Case, Law Commission
For Mains:
1. Discuss the potential impact of the UCC on the rights of religious minorities in India. How can their concerns be addressed while simultaneously pursuing the goal of gender equality? (250 Words)
2. Discuss the possible scenarios for the future of the UCC in India, considering the initiatives in Uttarakhand and other states, as well as the pending Supreme Court query. What are the potential challenges and opportunities? (250 Words)
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Previous Year Questions
1. The purpose of Uniform Civil Code incorporated in Article 44 of Indian Constitution is for: (OPSC OAS 2021)
A. National Security B. Cultural Integration C. National Unity D. Welfare of Minorities
2. Consider the following provisions under the Directive Principles of State Policy as enshrined in the Constitution of India: (2012)
Which of the above are the Gandhian Principles that are reflected in the Directive Principles of State Policy? (a) 1, 2 and 4 only (b) 2 and 3 only (c) 1, 3 and 4 only (d) 1, 2, 3 and 4
3. A legislation that confers on the executive or administrative authority an unguided and uncontrolled discretionary power in the matter of the application of law violates which one of the following Articles of the Constitution of India? (a) Article 14 (b) Article 28 (c) Article 32 (d) Article 44 Answer: 1-C, 2-B, 3- A Mains1. Discuss the possible factors that inhibit India from enacting for its citizen a uniform civil code as provided for in the Directive Principles of State Policy. (UPSC 2015) |
