The Enforcement Directorate (ED) has sent a notice to fintech firm Paytm owner One97 Communications for alleged violation of certain FEMA rules by the company in relation to the acquisition of two subsidiaries, as per a filing.

2.Foreign Exchange Management Act(FEMA)

The Foreign Exchange Management Act (FEMA) is an important piece of legislation in India that governs foreign exchange and payments.

Here is an overview of FEMA and its history:

FEMA replaced the Foreign Exchange Regulation Act (FERA) of 1973. FERA was considered stringent and primarily aimed at controlling and regulating foreign exchange in India. However, it was felt that the economic environment required a more liberalized and contemporary approach

FEMA was introduced in 1999 to replace FERA, aligning with the economic reforms and liberalization measures undertaken by the Indian government in the early 1990s. The primary objective was to promote external trade and payments and to facilitate foreign investment in India.

3.Key Features of FEMA

• FEMA brought about a more liberalized approach compared to its predecessor. It aimed to simplify and rationalize foreign exchange management, making it more conducive for foreign trade and investment
• FEMA distinguishes between current account transactions (related to trade in goods, services, and short-term financial transactions) and capital account transactions (related to long-term investments and capital movements)
• FEMA provides a comprehensive regulatory framework for foreign exchange transactions and seeks to manage and regulate various aspects, including dealings in foreign exchange, export and import of currency, and opening and maintenance of foreign currency accounts
• The act empowers the Reserve Bank of India (RBI) to regulate foreign exchange transactions. It also prescribes penalties for contravention of its provisions to ensure compliance.
• FEMA establishes adjudicating authorities to hear cases related to violations. It also provides for the establishment of the Foreign Exchange Appellate Tribunal to hear appeals against the orders of the adjudicating authorities
• Since its enactment, FEMA has undergone several amendments to keep pace with changing economic scenarios and to address emerging challenges. Amendments have been made to enhance regulatory measures, facilitate ease of doing business, and align with international best practices

• One of the primary objectives of FEMA is to liberalize and facilitate foreign exchange transactions. It aims to simplify procedures and create a conducive environment for foreign trade and investment
• FEMA seeks to promote external trade and payments by providing a regulatory framework that governs the flow of foreign exchange in and out of the country. This includes facilitating imports and exports of goods and services
• FEMA is designed to encourage foreign direct investment (FDI) and foreign portfolio investment (FPI) by providing a transparent and predictable regulatory environment. The act lays down the rules and regulations governing the acquisition and transfer of immovable property by non-residents
• FEMA empowers the Reserve Bank of India (RBI) to manage and regulate the country's foreign exchange reserves effectively. This involves maintaining stability in the foreign exchange market and ensuring the availability of adequate reserves to meet external obligations
• FEMA distinguishes between current account transactions (related to day-to-day trade in goods, services, and short-term financial transactions) and capital account transactions (related to long-term investments and capital movements). This helps in applying appropriate regulations to different types of transactions
• The act aims to establish a robust adjudication and enforcement mechanism to ensure compliance with its provisions. It provides for penalties and adjudicating authorities to address violations and maintain the integrity of the foreign exchange management system
• FEMA is designed to align with international best practices in the field of foreign exchange management. This alignment is essential for integrating India into the global economy and ensuring compatibility with international norms and standards
• The act allows for amendments to be made to its provisions to adapt to changing economic conditions and emerging challenges. This ensures that the regulatory framework remains relevant and effective in a dynamic global economic environment.

The Foreign Exchange Management Act (FEMA) in India has a wide applicability, covering various individuals, entities, and transactions involved in foreign exchange dealings. Here's a breakdown of its applicability:

• Residents and Non-Residents: FEMA applies to both residents and non-residents of India. Residents are individuals or entities ordinarily resident in India, while non-residents are those residing outside India.

• Indian Entities: Indian entities, including companies, partnerships, trusts, and other forms of organizations, are subject to FEMA regulations concerning foreign exchange transactions.

• Foreign Entities: Foreign entities, including companies, branches, subsidiaries, and other organizations, are also subject to FEMA regulations when conducting transactions involving Indian currency or assets in India.

• Foreign Exchange Transactions: FEMA governs various foreign exchange transactions, including the acquisition and transfer of foreign exchange, remittances, import and export of goods and services, external commercial borrowings, and investments in India by non-residents.

• Current and Capital Account Transactions: FEMA distinguishes between current account transactions and capital account transactions. Current account transactions include day-to-day trade in goods and services, while capital account transactions involve long-term investments and capital movements. FEMA applies different regulations to these types of transactions.

• Authorized Persons: FEMA designates certain individuals and entities as authorized persons, such as authorized dealers, authorized banks, and other financial institutions. These authorized persons play a crucial role in facilitating foreign exchange transactions and are responsible for complying with FEMA regulations.

• Regulatory Authorities: The Reserve Bank of India (RBI) is the primary regulatory authority responsible for administering FEMA and enforcing its provisions. The RBI issues regulations, notifications, and guidelines to ensure compliance with FEMA requirements.

• Penalties and Enforcement: FEMA establishes penalties for contravention of its provisions, including fines, confiscation of assets, and imprisonment. Adjudicating authorities and appellate tribunals are designated to hear cases related to violations and enforce compliance with FEMA regulations.

6.Categories of Authorised Persons under FEMA

 

Category	Description	Examples
Authorized Dealers (ADs)	Broadest category, authorized for a wide range of forex transactions.	State banks, commercial banks, co-operative banks, foreign banks.
Full-Fledged Money Changers (FFMCs)	Authorized to buy and sell foreign currency notes, travelers' cheques and foreign currency instruments.	Money exchange companies, authorized hotels.
Authorised Money Changers (AMCs)	Limited scope compared to FFMCs, can only buy and sell foreign currency notes and travelers' cheques.	Small money exchange booths, airport counters.
Authorized Banks	Specific banks authorized for limited forex transactions, like specific export-import transactions.	Export houses, financial institutions engaged in specific foreign exchange activities.

 

 

 

 

Previous Year Questions 1.Which one of the following groups of items is included in India’s foreign-exchange reserves? (UPSC CSE 2013) (a) Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries (b) Foreign-currency assets, gold holdings of the RBI and SDRs (c) Foreign-currency assets, loans from the World Bank and SDRs (d) Foreign-currency assets, gold holdings of the RBI and loans from the World Bank Answer: (b) Mains   1.Discuss how emerging technologies and globalisation contribute to money laundering. Elaborate measures to tackle the problem of money laundering both at national and international levels. (2021)

 

 

Source: The Hindu

 

THREE LANGUAGE POLICY

 

 

1. Context

 

The Union Government has withheld ₹2,152 crore in funds due to Tamil Nadu under the Samagra Shiksha scheme for refusing to join the Prime Minister Schools for Rising India (PMSHRI) initiative.

 

2. What is a three language policy?

 

• The NEP 2020 continues with the three-language formula, originally introduced in the 1968 NEP. However, a key distinction is that while the earlier policy mandated Hindi as a compulsory language nationwide, NEP 2020 adopts a more flexible approach.
• Under the 1968 policy, Hindi-speaking states were required to teach Hindi, English, and a modern Indian language—preferably one from southern India—whereas non-Hindi-speaking states had to include their regional language, Hindi, and English in their curriculum.
• In contrast, the NEP 2020 does not impose any particular language on states. Instead, it allows states, regions, and students to choose their three languages, provided that at least two of them are Indian languages.
• This implies that while students must learn their state’s language, the additional Indian language does not have to be Hindi. The policy also highlights the importance of bilingual education, particularly in the home language or mother tongue alongside English.
• Additionally, Sanskrit is given notable emphasis as an optional choice within the three-language framework

3.Significance of the Three-Language Formula

 

The Three-Language Formula is an educational policy in India designed to promote multilingualism and linguistic harmony in a country with immense linguistic diversity. It was first proposed by the Kothari Commission in 1968 and has since been adopted by many states, with variations based on regional needs. The formula aims to balance the learning of regional, national, and international languages to foster unity, cultural preservation, and global competitiveness.

Key Objectives of the Three-Language Formula:

• Promote National Integration:

  • By encouraging the study of Hindi (the official language of the Union) and English (an associate official language), the formula seeks to bridge communication gaps between states and promote national unity.

  • It also respects regional languages, ensuring that local cultures and identities are preserved.

• Preserve Linguistic Diversity:

  • India is home to hundreds of languages and dialects. The formula ensures that students learn their mother tongue or regional language, helping to sustain linguistic heritage.

• Enhance Global Competence:

  • The inclusion of English, a global lingua franca, prepares students for higher education and professional opportunities in an increasingly interconnected world.

• Facilitate Communication:

  • The formula aims to equip students with proficiency in multiple languages, enabling them to communicate effectively across different regions and cultures within India.

Structure of the Three-Language Formula:

• First Language: The mother tongue or regional language of the state.

• Second Language: Hindi (in non-Hindi-speaking states) or another Indian language (in Hindi-speaking states).

• Third Language: English or a modern Indian language (depending on the state's policy)

 

 

4. Challenges

 

• Tamil Nadu has historically opposed the imposition of Hindi. In 1937, when the C. Rajagopalachari-led government in Madras sought to make Hindi a compulsory subject in secondary schools, the Justice Party strongly resisted the move.
• During the protests, two young activists, Thalamuthu and Natarajan, lost their lives and became symbols of the anti-Hindi movement. Following widespread opposition, Rajaji resigned, and the British administration repealed the order.
• In 1965, as the deadline for making Hindi the sole official language of India approached, large-scale protests erupted in Tamil Nadu, resulting in the deaths of at least 70 people due to police action or self-immolation.
• The issue resurfaced when Parliament passed the Official Languages (Amendment) Act, 1967, and the Official Language Resolution, 1968, which mandated Hindi instruction under the three-language formula.
• In response, the C.N. Annadurai-led DMK government passed a resolution in January 1968, advocating for the abolition of the three-language policy and the removal of Hindi from Tamil Nadu's school curriculum.
• Since then, the state has consistently adhered to a two-language system, offering instruction only in Tamil and English. Both the ruling DMK and the opposition AIADMK have steadfastly resisted any attempts to modify this approach. In 2019, widespread opposition led the Kasturirangan Committee to drop the mandatory Hindi clause from the draft National Education Policy (NEP

 

5.Why is the three-language policy seen as an attempt to impose Hindi?

 

 

• Political parties and activists in Tamil Nadu perceive the three-language policy as a covert attempt to introduce Hindi under the guise of linguistic diversity. They argue that, in reality, implementing this policy would inevitably result in Hindi being taught, as there are limited resources available for recruiting teachers and developing learning materials for other languages.
• Additionally, the Union Government and key BJP leaders have consistently advocated for the expansion of Hindi. In 2019, the Union Budget allocated ₹50 crore for hiring Hindi teachers in non-Hindi-speaking states.
• Critics argue that the Centre’s actions contradict its stated commitment to promoting regional languages, pointing to the insufficient recruitment of regional language teachers in Kendriya Vidyalayas and the lack of efforts to introduce South Indian languages in schools north of the Vindhyas

 

6. Way Forward

 

The most effective way forward is through meaningful dialogue and a balanced compromise between the Centre and the State, particularly on education—a subject that was moved to the Concurrent List during the Emergency. Tamil Nadu, which has adhered to its two-language policy for decades, has consistently achieved higher performance than many other states in crucial areas like Gross Enrolment Ratio and reducing school dropout rates. Disputes over introducing a third language should not be allowed to hinder funding for Samagra Shiksha, a comprehensive education programme

 

 

 

For Prelims: NEP 2020, National Curriculum Framework, Sustainable Development Goals, University Grants Commission, Kothari Commission, Sarva Shiksha Abhiyan, Rashtriya Madhyamik Shiksha Abhiyan,  For Mains:  1. Discuss the key provisions and objectives of the National Education Policy (NEP) 2020. How does it aim to transform the Indian education system, and what are its implications for inclusive development? (250 Words)

 

 

Previous Year Questions   1. Consider the following statements: (UPSC CSE 2018) 1. As per the Right to Education (RTE) Act, to be eligible for appointment as a teacher in a State, a person would be required to possess the minimum qualification laid down by the State Council of Teacher Education concerned. 2. As per the RTE Act, for teaching primary classes, a candidate is required to pass a Teacher Eligibility Test conducted in accordance with the National Council of Teacher Education guidelines. 3. In India, more than 90% of teacher education institutions are directly under the State Governments. Which of the statements given above is/are correct? (a) 1 and 2         (b) 2 only            (c) 1 and 3            (d) 3 only Answer: B   2. Consider the following statements: (UPSC CSE 2016) 1. The Sustainable Development Goals were first proposed in 1972 by a global think tank called the 'Club of Rome'. 2. The Sustainable Development Goals have to be achieved by 2030. 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   Answer: B   3. The objective(s) of Rashtriya Madhyamik Shiksha Abhiyaan is/are: (UKSSSC Forest Guard 2021)  A. To provide quality based education to all children from 14 to 18 years B. Universal standstill till the year 2020 C. To provide residential school for the students of remote areas D. All of the above   Answer: D

 

Source: The Hindu

 

UNITED STATES AGENCY OF INTERNATIONAL DEVELOPMENT (USAID)

 

 

1. Context

 

The Trump administration said Wednesday it is eliminating more than 90% of the U.S. Agency for International Development’s foreign aid contracts and $60 billion in overall U.S. assistance around the world, putting numbers on its plans to eliminate the majority of U.S. development and humanitarian help abroad

 

2.  United States Agency of International Development (USAID)

 

• The United States Agency for International Development (USAID) is recognized as the primary international humanitarian and development agency of the U.S. government, as described by the Congressional Research Service (CRS).
• The agency delivers assistance to other nations primarily by financing non-governmental organizations (NGOs), foreign governments, international institutions, and other U.S. agencies. This funding is often directed toward specific programs aimed at reducing poverty, improving access to education and healthcare, and addressing other critical needs.
• In the fiscal year 2023, USAID managed over $43 billion in funds and extended assistance to approximately 130 countries. The top 10 recipients of USAID-managed funds during this period, listed in descending order of funding, were: Ukraine, Ethiopia, Jordan, the Democratic Republic of Congo, Somalia, Yemen, Afghanistan, Nigeria, South Sudan, and Syria.
• According to CRS, USAID employed more than 10,000 individuals in FY2023, with about two-thirds of its workforce stationed overseas. This figure does not include the thousands of "institutional support contractors" who play a crucial role in implementing the agency’s programs. USAID operates through more than 60 missions worldwide, ensuring its presence and impact across the globe

 

3. History of USAID

 

The United States Agency for International Development (USAID) was established on November 3, 1961, under President John F. Kennedy’s administration. Its creation marked a significant step in U.S. foreign policy, consolidating various foreign assistance programs under a single agency to streamline and enhance the effectiveness of American development and humanitarian efforts worldwide.

Origins and Early Years:

• Post-World War II Context: After World War II, the U.S. launched several aid programs, such as the Marshall Plan (1948), to rebuild war-torn Europe and counter the spread of communism. These efforts laid the groundwork for a more structured approach to international development.

• Point Four Program: In 1949, President Harry S. Truman introduced the Point Four Program, which focused on providing technical assistance to developing countries. This initiative emphasized sharing American expertise in agriculture, health, and industry to promote economic growth and stability.

• Cold War Era: During the Cold War, U.S. foreign aid became a strategic tool to counter Soviet influence. Programs like the Mutual Security Act (1951) and the Development Loan Fund (1957) were established to support allies and foster development in emerging nations.

Establishment of USAID:

• In 1961, President Kennedy signed the Foreign Assistance Act, which reorganized U.S. foreign aid programs and led to the creation of USAID. The agency was tasked with managing economic assistance and humanitarian programs, focusing on long-term development rather than short-term relief.

• USAID absorbed the functions of earlier organizations, such as the International Cooperation Administration (ICA) and the Development Loan Fund, to create a unified approach to foreign aid.

Evolution and Expansion:

• 1960s-1970s: USAID focused on infrastructure development, agriculture, and education in developing countries. Programs like the Green Revolution helped increase agricultural productivity in nations such as India and Pakistan.

• 1980s: The agency shifted its focus to address global challenges such as population growth, environmental degradation, and the HIV/AIDS epidemic. It also played a key role in supporting democratic transitions in Latin America and Eastern Europe.

• 1990s: After the Cold War, USAID’s mission expanded to include promoting democracy, governance, and market-oriented reforms. It also provided humanitarian assistance during crises, such as the Rwandan genocide and the Balkan conflicts.

• 2000s: USAID became a critical player in post-9/11 efforts, particularly in Afghanistan and Iraq, where it supported reconstruction, governance, and counterterrorism initiatives. It also intensified its focus on global health, particularly through programs like the President’s Emergency Plan for AIDS Relief (PEPFAR).

• 2010s-Present: USAID has increasingly emphasized innovation, partnerships with the private sector, and sustainable development. It has also addressed emerging challenges such as climate change, food security, and global pandemics like COVID-19

 

4.Roles and Functions of USAID

 

The United States Agency for International Development (USAID) advances U.S. foreign policy and global development through:

• Economic Development: Reduces poverty, boosts agriculture, and promotes trade and investment.

• Democracy & Governance: Strengthens institutions, fights corruption, and supports civil society.

• Global Health: Combats diseases (e.g., HIV/AIDS, malaria), improves maternal/child health, and strengthens healthcare systems.

• Humanitarian Assistance: Provides disaster relief, supports refugees, and aids crisis recovery.

• Education & Workforce Development: Expands access to education, offers skills training, and promotes higher education partnerships.

 

5. India and USAID

 

 

India and USAID have a long-standing partnership focused on development and humanitarian efforts, though the nature of their collaboration has evolved over time. Initially, USAID played a significant role in India’s development during the mid-20th century, particularly in areas like agriculture, health, and education. However, as India’s economy grew and it became a rising global power, the relationship shifted from traditional aid to more collaborative and strategic partnerships.

Key Areas of Collaboration:

• Agriculture and Food Security:

  • USAID supported India’s Green Revolution in the 1960s, helping to increase agricultural productivity and reduce food shortages.

  • Ongoing programs focus on sustainable farming, climate-resilient crops, and improving supply chains.

• Health:

  • USAID has contributed to India’s efforts in combating infectious diseases like HIV/AIDS, tuberculosis, and malaria.

  • It has also supported maternal and child health programs, immunization campaigns, and strengthening healthcare systems.

• Clean Energy and Climate Change:

  • USAID collaborates with India on renewable energy projects, energy efficiency, and climate resilience initiatives.

  • Programs aim to reduce greenhouse gas emissions and promote sustainable development.

• Education and Skill Development:

  • USAID has supported initiatives to improve access to quality education, particularly for girls and marginalized communities.

  • It also promotes vocational training and workforce development to enhance employability

 

6. Recent Controversy

 

• The debate surrounding USAID’s role in India highlights the growing polarization in public discourse, which risks eroding national confidence and international reputation. Both the BJP and Congress have engaged in a political tussle, using USAID-funded projects and foreign affiliations as tools to target each other.
• However, much of this rhetoric is driven by misinformation and misinterpretation, often influenced by narratives from the Trump administration, which regarded international aid as an unnecessary burden on American resources.
• While the U.S. may have its own reasons for reassessing aid priorities, it is unfortunate that India’s leading political parties are adopting these arguments without deeper analysis.
• USAID has a longstanding history of supporting developmental projects in India, many of which have been carried out in collaboration with the Indian government.
• However, due to the lack of transparent and verified data on the scope and impact of these initiatives, discussions around them tend to be uninformed and biased.
• In an interconnected world, where nations compete for investment, technology, and skilled talent across borders, using foreign connections as a political weapon may serve short-term propaganda goals but ultimately harms India’s domestic political landscape and weakens its ambitions of becoming a global power

 

7. Way Forward

 

USAID’s roles and functions are integral to U.S. efforts to promote global stability, economic growth, and human welfare. By addressing critical issues such as poverty, health, education, and climate change, USAID not only improves lives worldwide but also advances U.S. national security and diplomatic interests. Its work reflects a commitment to fostering sustainable development and building a more prosperous, equitable, and resilient world

 

For Prelims: Non-Government Organisation (NGO), USAID   For Mains: GS II - International organisation

 

Source: Indianexpress

 

WORLD WILDLIFE DAY 

 

 

1.Context

March 3 is observed each year as World Wildlife Day to highlight the importance of conserving flora and fauna. The theme of World Wildlife Day for this year is ‘Wildlife Conservation Finance: Investing in People and Planet.’

2.About World Wildlife Day

In 2013, the United Nations General Assembly (UNGA) proclaimed March 3 as the UN World Wildlife Day to celebrate and raise awareness of protecting the world’s wild animals and plants

This was as the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) was signed in 1973 on this day

March 3 marks the 50th anniversary of CITES’ establishment. CITES is considered a landmark agreement on conservation that focuses on ensuring the sustainability of endangered species.

3.About CITES

• CITES is an international agreement between governments. Its aim is to ensure that international trade in specimens of wild animals and plants does not threaten the survival of the species
• The trade in wild animals and plants crosses borders between countries, the effort to regulate it requires international cooperation to safeguard certain species from over-exploitation
• It accords varying degrees of protection to more than 37,000 species of animals and plants, ranging from live animals and plants to wildlife products derived from them, including food products, exotic leather goods, medicines, etc
• Currently, there are 184 parties to the convention, including India. The CITES Secretariat is administered by UNEP (The United Nations Environment Programme) and is located in Geneva, Switzerland
• The Conference of the Parties to CITES is the supreme consensus-based decision-making body of the Convention and comprises all its parties.
• In India, apart from the Union Ministery of Environment, Forests and Climate Change, the Wildlife Crime Control Bureau is a statutory body under the Ministry that is especially meant to combat organised wildlife crime in the country.
• It assists and advises the customs authorities in the inspection of the consignments of flora and fauna as per the provisions of the Wild Life Protection Act of 1972, CITES and the export and import policy governing items.

4.Works of CITES

• The species covered under CITES are listed in three Appendices, according to the degree of protection they need
• Appendix I includes species threatened with extinction. Trade in specimens of these species is permitted rarely, only in “exceptional circumstances”, such as gorillas, and lions from India
• Appendix II includes species not necessarily threatened with extinction, but in which trade must be controlled to ensure their survival. For example, certain kinds of foxes and Hippopotamuses
• Appendix III contains species that are protected in at least one country, which has asked other CITES Parties for assistance in controlling the trade, like the Bengal fox or the Golden Jackal from India
• Different procedures are given category-wise to engage in the trade of species in each of the lists
• One argument says having wildlife allowed to be traded further legitimises their movement and increases the possibility of their illegal trade
• However, issues of international conventions not going far enough to enforce their mandate are common in agreements of such a scale, given the number of parties involved
• They rest on the implicit agreement that while the bodies generally do not have powers to penalise, there is at least a level of commitment that ensures some common ground as a first step
•  Critics claimed there were sharp spikes in elephant poaching globally after one-off sales were allowed by the CITES in 1999 and 2008, of recovered ivory or from elephant deaths due to natural causes.

 

 

 

Source:indianexpress