Daily Current Affairs : 17th and 18th July 2022

Daily Current Affairs for UPSC CSE

Topics Covered

1. Election of Vice President
2. Bail Law Reforms
3. Special Vostro Account
4. Project 75I
5. Study on Loan Waivers
6. Facts for Prelims

1 . Election of Vice President

Context : The opposition named former Governor and former union minister Margaret Alva as its candidate for Vice President. The ruling NDA has announced West Bengal Governor Jagdeep Dhankhar will be its candidate for the post. The election is scheduled for August 6.

Office of the Vice President

• Article 63 of the Constitution states that “there shall be a Vice-President of India”. Under Article 64, the Vice-President “shall be ex officio Chairman of the Council of the States” (Rajya Sabha).
• Article 65 says that “in the event of the occurrence of any vacancy in the office of the President by reason of his death, resignation or removal, or otherwise, the Vice-President shall act as President until the date on which a new President…enters upon his office”.
• The Vice-President shall also discharge the functions of the President when the latter is unable to do so “owing to absence, illness or any other cause”.
• During this period, the Vice-President shall “have all the powers and immunities of the President and be entitled to… (the) emoluments, allowances and privileges” that are due to the President. The office of the Vice-President of India is the second-highest constitutional office after that of the President, and ranks second in the order of precedence.

Election of the Vice-President

• Article 66 lays down the process of the election of the Vice-President.
• It says the Vice-President “shall be elected by the members of an electoral college consisting of the members of both Houses of Parliament in accordance with the system of proportional representation by means of the single transferable vote and the voting at such election shall be by secret ballot”. In the system of proportional representation by means of the single transferable vote, the elector has to mark preferences against the names of the candidates.
• Preference can be marked in the international form of Indian numerals, in Roman form, or in the form in any recognised Indian languages… The elector can mark as many preferences as the number of candidates. While the marking of the first preference is compulsory for the ballot paper to be valid, other preferences are optional,” the Election Commission of India said in a release issued on June 29.
• Under the Constitution, the Vice-President “shall not be a member of either House of Parliament or of a House of the Legislature of any State”. If a member of any of these Houses is elected to the post, “he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as Vice-President”.
• For the 16th Vice-Presidential Election, 2022, the Electoral College consists of 233 elected members of Rajya Sabha, 12 nominated members of Rajya Sabha, and 543 elected members of Lok Sabha, adding up to 788 members.

Eligibility and term of office

• Article 66(3) says “No person shall be eligible for election as Vice-President unless he — (a) is a citizen of India; (b) has completed the age of thirty-five years; and (c) is qualified for election as a member of the Council of States”.
• Under Article 66(4), “A person shall not be eligible for election as Vice-President if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments.”
• Article 67 lays down that the “Vice-President shall hold office for a term of five years from the date on which he enters upon his office”. However, the Vice-President “shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office”.
• The Vice-President may leave office before the end of his term by resigning to the President, or he “may be removed…by a resolution of the Council of States passed by a majority of all the then members of the Council and agreed to by the House of the People”.

What if the election is disputed?

• Article 71 of the Constitution deals with “Matters relating to, or connected with, the election of a President or Vice-President”. It says that “all doubts and disputes arising out of or in connection with the election of a President or Vice-President shall be inquired into and decided by the Supreme Court whose decision shall be final”.
• Should the Supreme Court declare the election of the President or Vice-President void however, “acts done by him in the exercise and performance of the powers and duties of the office of President or Vice-President,…on or before the date of the decision of the Supreme Court shall not be invalidated by reason of that declaration”.
• Also, “Parliament may by law regulate any matter relating to or connected with the election of a President or Vice-President”.

2 . Bail Law Reforms

Context : On July 11, the Supreme Court urged the Centre to bring a new law to simplify and streamline the process of bail, referring to the Bail Act of the U.K. A Bench of Justices S.K. Kaul and M.M. Sundresh said there is a “pressing need” to reform bail laws considering the “abysmally low” conviction rate. Stating that such detentions reflect a colonial mindset and create the impression of a “police state”, the apex court issued directions to courts and investigation agencies to prevent “unnecessary” arrests.

What did the court observe?

• The Supreme Court judgment issued clarifications to a 2021 ruling on the guidelines for considering bail for offences under the Criminal Procedure Code (CrPC), 1973. The Court observed that arrest is a “draconian” measure that should be used “sparingly”.
• It held that bail continues to be the rule and jail an exception, the touchstone of Article 21, and highlighted the presumption of innocence until proven guilty. It said unwarranted arrests are carried out in violation of Section 41 (empowers police to arrest without a warrant) and Section 41A (deals with the procedure for appearance before police) of the CrPC.

What is the present law?

• Bail is governed by provisions in the CrPC. Offences are categorised as bailable and non-bailable.
• Under Section 436, bail is a right in bailable offences and the police or court is bound to release the accused following the furnishing of a bail bond, with or without surety. For a non-bailable offence, an accused cannot claim bail as a right.
• The discretion lies with the courts. Section 437 sets out the circumstances in which courts can grant bail for non-bailable offences.
• Provision mandates the court to consider granting bail to an accused below 16 years, someone who is sick, or is a woman.

What are some of the guidelines from the Court?

• The court’s ruling is in the form of guidelines, and it also draws the line on certain procedural issues for the police and judiciary.
• Separate Law for Bail : The court underlined that the CrPC, despite amendments since Independence, largely retains its original structure as drafted by a colonial power over its subjects. The court made this point to signal that despite its rulings, structurally, the Code does not account for arrest as a fundamental liberty issue in itself. It also highlighted that magistrates do not necessarily exercise their discretionary powers uniformly. The court’s solution on this is the framing of a separate law that deals with the grant of bail.
• Indiscriminate arrests : The court noted that the culture of too many arrests, especially for non-cognisable offences, is unwarranted. It emphasised that even for cognisable offences, arrest is not mandatory and must be “necessitated”.
• Bail Application : “There need not be any insistence of a bail application while considering the application under Section 88, 170, 204 and 209 of the Code,” the court held. These sections relate to various stages of a trial where a magistrate can decide on release of an accused. These range from power of the magistrate to take bond for appearance (Section 88) to power to issue summons (Section 204). The Supreme Court held that in these circumstances, magistrates must routinely consider granting bail, without insisting on a separate bail application.
• Direction to States : The SC also directed all state governments and Union Territories to facilitate standing orders to comply with the orders and avoid indiscriminate arrests. The CBI has already communicated earlier orders of the Court to special judges under its jurisdiction.

What is the U.K. law on bail?

• In the United Kingdom, the Bail Act of 1976 governs the procedure for granting or denying bail. It recognises a “general right” to bail and aims to reduce the number of inmates to prevent clogging of jails.
• It says an accused should be granted bail unless there is a justified reason to refuse it. Bail can be rejected if the court finds substantial grounds for believing that the defendant will fail to surrender, commit an offence, or interfere with witnesses if released on bail. The court has to give reasons in case it withholds or alters bail conditions.

3 . Special Vostro Account

Context : The Reserve Bank of India (RBI) issued a circular that detailed ‘additional arrangement’ for invoicing, payment, and settlement of exports and imports in Indian rupees. Under this mechanism, Indian importers could make payment in rupees to the Special Vostro account of the correspondent bank of the partner country, against invoices for the supply of goods or services from the overseas seller. Indian exporters shall be paid proceeds in rupees from the balances in the designated vostro account of the correspondent bank of the partner country.

About Special Vostro Account

• Reserve Bank of India (RBI) announced a new trade mechanism to settle international trade in rupees.
• To settle these trade deals, authorized Indian banks need to open and maintain Special Rupee Vostro Accounts of the partner trading country’s banks.
• Rupee vostro accounts keep the foreign entity’s holdings in the Indian bank, in Indian rupees. When an Indian importer want to make a payment to a foreign trader in rupees, the amount will be credited to this Vostro account.
• Similarly when an Indian exporter has to be paid for goods services in rupees, this Vostro account will be deducted and amount credited to the exporter’s regular account

How does this change the status quo?

• Vostro accounts have been around for a while. They were likely not widely used because exporters typically prefer settlements in a strong and stable currency.
• Also, there are at least three new aspects to the newly-issued circular.
  • First, the RBI has explicitly said that exchange of messages in a safe, secure and efficient way may be agreed upon mutually between the banks of partner countries. SWIFT system was seen as an acceptable standard for international transactions. It may be recalled that soon after Russia invaded Ukraine, the Belgium-based SWIFT, or Society for Worldwide Interbank Financial Telecommunication, a system that allows instant messaging among banks, began excluding Russian banks from transacting through this channel. The aim was to make it difficult and tedious for Russian entities to transact with the rest of the world. The RBI’s circular could be taken to mean that partnering banks may use any messaging system they deem fit and not confine themselves to the SWIFT platform.
  • Two RBI has allowed for surplus to be invested”. That is, the rupee surplus balance held in the vostro accounts may be used by the foreign entities for payments for projects and investments in India as also for investment in Indian government treasury bills and government securities.
  • Three, vostro accounts did not need permission earlier. Now the RBI has specified that banks acting as authorised dealers need to secure prior approval from the regulator to put in place this mechanism. This is likely because the RBI may seek to understand which countries are interested in this mechanism, and whether the accounts are being used for the purpose for which the RBI intended them to be.

Which countries may be interested in the facility?

• The RBI’s fresh directive seems intended to ease doing business with Russia. Ever since sanctions were imposed on Russia, sectoral trade has been virtually at a standstill with the country due to payment problems.

How does the new mechanism help India?

• For India, doing business with Russia using rupees would mean there is no hard currency outflow in such transactions. The impact on the rupee market is that foreign currency outflow would be lower by $3 billion every month. Technically, it would ease the downward pressure on the rupee, which has been sliding to record lows frequently in the recent past. It would be seen in a medium–to–long term because in the current scenario, payments to Russia have anyway not been going through and a credit system has helped continuity of trade.
• If other countries too begin showing interest in using the facility, then a strengthening impact may be seen more quickly for the rupee.

4 . Project 75 I

Context : The Defence Ministry has once again extended the deadline to submit responses to the Request For Proposal (RFP) in the over ₹40,000-crore deal for six advanced submarines under Project-75(I), to December-end. At the same time, the Navy has approached the Ministry for relaxation of certain specifications, which have made most submarine manufacturers non-compliant.

About Project 75I

• The P75I project is part of a 30-year submarine building plan that ends in 2030.
• As part of this plan, India was to build 24 submarines — 18 conventional submarines and six nuclear-powered submarines (SSNs) — as an effective deterrent against China and Pakistan.

About the proposal

• The Navy is looking to buy six advanced conventional diesel-electric submarines under Project 75I that, after several delays, has made progress in the past several months. The procurement is under the Strategic Partnership (SP) model, and is the second project to be processed through this route after the Navy’s tender for utility helicopters.
• The earlier RFP deadline of June 30, which was already an extension, has been extended by another six months, two defence sources independently confirmed. The deal that has been delayed is the first under the Strategic Partnership model of the procurement procedure to make progress.
• In January 2020, the Defence Acquisition Council (DAC) had shortlisted Mazgaon Docks Limited (MDL) and Larsen & Toubro (L&T) as the Indian partners for the P-75(I) deal. The five foreign original equipment manufacturers (OEMs) are Daewoo Shipbuilding & Marine Engineering (South Korea), Naval Group (France), Navantia (Spain), Rosoboronexport (Russia) and TKMS (Germany).
• The RFP was issued in July 2021 to MDL and L&T with 12 weeks to respond. The Indian companies are free to tie up with any of the five OEMs shortlisted earlier. However, the project ran into rough weather, among other things, over one of the specifications mentioned, that the submarine on offer should have an operational air idependent propulsion (AIP) module. Only Germany and South Korea technically meet this criterion, official sources said.

5 . Study on Loan Waivers

Context : Only about half of the intended beneficiaries of farm loan waivers announced by nine States since 2014 have actually received debt write-offs, shows a study by State Bank of India researchers.

About the Study

• The SBI study was based on the outcomes of 10 farm loan write-offs worth about ₹2.53 lakh crore announced by nine States, starting with Andhra Pradesh and Telangana in 2014. As many as 92% of Andhra Pradesh’s 42 lakh farmers eligible for loan waivers had benefited, while the number was a mere 5% for Telangana.

Key Findings

• As of March 2022, the poorest implementation of farm loan waiver schemes in terms of proportion of eligible farmers who had received the announced benefits was in Telangana (5%), Madhya Pradesh (12%), Jharkhand (13%), Punjab (24%), Karnataka (38%) and Uttar Pradesh (52%).
• By contrast, farm loan waivers implemented by Chhattisgarh in 2018 and Maharashtra in 2020 were received by 100% and 91% of the eligible farmers, respectively. A similar waiver announced by Maharashtra in 2017 worth ₹34,000 crore for 67 lakh farmers has been implemented for 68% of beneficiaries, SBI researchers reckoned.
• “Since 2014, out of approximately 3.7 crore eligible farmers, only around 50% of the farmers received the amount of loan waiver till March 2022… Despite much hype and political patronage, farm loan waivers by States have failed to bring respite to intended subjects, sabotaging credit discipline in select geographies and making banks and financial institutions wary of further lending,” the SBI report noted, terming it a “self goal” inflicted by the State on its subjects.

Possible reasons

• The report identified rejection of farmers’ claims by State governments, limited or low fiscal space to meet promises, and change in governments in subsequent years, as the possible reasons for the low implementation rate of these loan waivers.
• Apart from benefits not reaching the targeted farmers, the report flagged concerns about whether they actually help farmers in genuine distress. “Of the total accounts eligible for farm loan waiver, most of the accounts (more than 80% in some States) were in standard category, begging a question whose interest rampant waivers actually serve
• The proportion of standard accounts, which refers to loans being serviced in a timely manner by borrowers, that were covered by the farm loan waiver, was particularly high in Jharkhand (100%), U.P. (96%), Andhra Pradesh (95%), Punjab (86%) and Telangana (84%).
• Loan waivers destroy the credit culture which may harm the farmers’ interest in the medium to long term and also squeeze the fiscal space of governments to increase productive investment in agriculture infrastructure.

6 . Facts for Prelims

e-swaroop

• A new software — e Swaroop is being developed. After a child is born, the details will be automatically updated in the Census register. After someone turns 18, the name will be added to the electoral register. After death, the name of the will be deleted from the voters list. If you change residence and there is a new registry, you will get an SMS asking whether you bought the property or were transferred there or if there is any other reason? The details will be updated in the Census register automatically based on your answer.

INS Sindhudhvaj

• INS Sindhudhvaj (S56) was a Sindhughosh-class submarine of the Indian Navy in service from 1987 until 16 July 2022, when she was decommissioned.