Current Affairs 25th March

Justice N.V. Ramana set to take over as 48th CJI #GS2 #Governance

Chief Justice of India Sharad A. Bobde has recommended Justice N.V. Ramana, the senior-most judge of the Supreme Court, as the next top judge.

The recommendation to the government was followed by the publication of a short statement on Wednesday, informing that a complaint sent to the CJI by Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy against Justice Ramana was dismissed under an in-house procedure after due consideration.

A complaint dated October 6, 2020, sent by the Chief Minister of Andhra Pradesh to the Supreme Court was dealt with under the In-House Procedure and the same, on due consideration, stands dismissed. It be noted that all the matters dealt with under the In-House Procedure being strictly confidential in nature, are not liable to be made public.

Cases against Ministers

Mr. Reddy had complained that Justice Ramana was influencing the Andhra Pradesh High Court judiciary to destabilise his government. The complaint was sent shortly after a Bench led by Justice Ramana started hearing and fast-tracking hundreds of criminal cases against Ministers, legislators and politicians pending in trial courts across the country.

In an affidavit filed with the election nomination papers in 2019, Mr. Reddy had declared that there were 31 criminal cases pending against him with the CBI, the Enforcement Directorate and different police stations in Andhra Pradesh and Telangana.

Justice Ramana is now set to take over as the 48th Chief Justice of India from April 24. Chief Justice Bobde handed over a copy of his letter of recommendation to Justice Ramana on Wednesday after sending it to the government.

The Centre had recently asked Chief Justice Bobde, who is retiring on April 23, to initiate the transition process to the top judicial office.

‘Double mutant’ virus variant found #GS3 #SnT

A unique “double mutant” coronavirus variant — with a combination of mutations not seen anywhere else in the world — has been found in India. However, it is still to be established if this has any role to play in increased infectivity or in making COVID-19 more severe.

Genome sequencing of a section of virus samples by a consortium of 10 laboratories across the country, called the Indian SARS-CoV-2 Consortium on Genomics (INSACOG), revealed the presence of two mutations, E484Q and L452R together, in at least 200 virus samples from Maharashtra, as well as a handful in Delhi, Punjab and Gujarat.

Mutations in the virus per se are not surprising but specific mutations that help the virus evolve to thwart vaccines or the immune system or are linked to a spike in cases or in disease severity are causes of concern.

While the two mutations have been individually identified in other variants of SARS-CoV-2 globally and have been associated with a reduction in vaccine efficacy, their combined effect and biological implications have not yet been understood.

In the days ahead, the INSACOG will submit details of this variant to a global repository called GISAID and, if it merits, classify it as a “variant of concern” (VOC). India has not yet conducted studies on how vaccine efficacy is influenced by variants, except for limited laboratory trials.

However, international studies have shown reduced efficacy of vaccines — particularly those by Pfizer, Moderna and Novavax — to certain variants. However, the vaccines continue to be significantly protective in spite of this.

So far, only three global VOCs have been identified: the U.K. variant (B.1.1.7), the South African (B.1.351) and the Brazilian (P.1) lineage. So far, of 10,787 samples from international passengers, 771 instances of these VOCs have been identified in 18 States of the country.

After the new double variant has been submitted to GISAID, it will be categorised under a formal lineage, and will have its own name.

The identification of a new variant does not yet imply new public health measures, the Health Ministry said: “It would require the same epidemiological and public health response of increased testing, comprehensive tracking of close contacts, prompt isolation of positive cases & contacts as well as treatment as per National Treatment Protocol” by the States/Union Territories.

Separately, genome variation studies from Kerala have revealed the presence of other mutations associated with the ability to help the coronavirus evade neutralising antibodies.

Supreme Court flags concern over misuse of electoral bonds #GS2 #Governance

The Supreme Court flagged its concern that political parties could misuse crores of rupees received as donations through electoral bonds to bankroll violent protests or even terror. The court asked the government whether there was any “control” over how these donations were used by the political parties.

“Suppose there is a political party, which wants to buy electoral bonds and finance a protest. What is the control of the government on how the money is put to use? A party receives electoral bonds worth Rs. 100 crore — what is the guarantee that they will use the entire funds for political purpose alone and not for terrorism or other activities? Funds can be misused… We would like you, as the government, to look into that aspect. They [parties] can use the funds for activities outside their political agenda… along with election expenditure, you [a party] can also start a violent protest.

Mr. Venugopal, appearing for the government, said only parties registered under the Representation of the People Act could receive donations through electoral bonds, and that they should not have secured less than 1% of the votes polled in the previous elections.

The court said it did not want to “get into politics” nor were its comments aimed at any particular party.

The exchange came during a virtual court hearing of an application filed by the Association for Democratic Reforms, represented by advocate Prashant Bhushan, to stay the sale of electoral bonds scheduled between April 1 and April 10, prior to the crucial Assembly elections in five States, including West Bengal and Tamil Nadu. “Electoral bonds scheme introduces anonymity in political donations. The sale of bonds in April should be stopped,” Mr. Bhushan urged.

Mr. Venugopal said the sale was announced after getting permission from the Election Commission of India. “The Election Commission is supporting electoral bonds or we will go back to the pre-existing situation of donations coming in by cash,” senior advocate Rakesh Dwivedi, for the poll body, said.

Chief Justice Bobde then asked whether the purchasers of electoral bonds disclosed whether the money paid was black or white. “When a businessman goes and buys bonds, does he have to disclose whether he purchases them with white or black money? Does he have to pay tax?” the Chief Justice asked Mr. Venugopal.

“Buyers have to use white money. The purchase is through bank drafts, cheques or electronic transfer,” Mr. Venugopal replied.

But Mr. Bhushan intervened to submit that though the original purchase of bonds could be done using white money, somebody could anonymously re-purchase the bonds from the original buyer and drop it at a political party office with anyone none the wiser. “Nobody will know who purchased the bonds from the original buyer. The scheme facilitates kickbacks,”

Excluding India from Moscow talks a mistake: Afghan Minister #GS2 #IR

India should have been included by the China-Russia-U.S. “troika” that met in Moscow with regional stakeholders, including Pakistan, last week, said Afghanistan’s Foreign Minister Haneef Atmar during a three-day visit to India, where he discussed a new peace plan proposed by President Ashraf Ghani.

According to the plan, for which Mr. Atmar sought New Delhi’s support, Mr. Ghani said he was prepared to hold early Presidential elections in Afghanistan, if the Taliban agreed to a ceasefire and to take part in those elections.

The plan could set the Ghani government at odds with the Biden administration as it runs counter to a recent U.S. proposal for an interim government in Afghanistan that would include the Taliban as a negotiated settlement, not elections.

“[Mr. Ghani’s proposal] is what the Afghan people want. And it is the legitimate way for Afghan free political will to be expressed, adding that the U.S.’s promise to pull out all “foreign” troops later this year had set the conditions for the plan, which would give the militants a “legitimate way to participate in the polity and governance of Afghanistan”.

The Afghanistan government is expected to unveil its full proposal during the upcoming intra-Afghan talks due to be held in Istanbul in the beginning of April. The talks are a part of the U.S.’s latest push for intra-Afghan talks with the Taliban that appear to have stalled in Doha, and was outlined in a letter from U.S. Secretary of State Anthony Blinken to President Ghani.

While the U.S. has also proposed future regional talks, led by the UN, to engage all regional stakeholders, including India, the most recent talks held in Moscow on March 18 by the so-called “troika”, with envoys from Pakistan, Qatar, Afghan and Taliban leadership, had not invited the Indian government, which Mr. Atmar called a “mistake”.

“We made it clear [to the organisers] that peace and stability in our region and regional connectivity and prosperity cannot happen without India,” he said.

Mr. Atmar said there was no proposal to request Indian troops in Afghanistan, nor had his government asked India to directly open a dialogue with the Taliban. He said that Afghanistan “appreciates” India’s position that it would engage the Taliban “if the Taliban come and join a legitimate government of Afghanistan”.

In a statement at the end of Mr. Atmar’s visit, issued , the Ministry of External Affairs did not refer directly to the Ghani proposal, but said that India remains committed to “a peaceful, sovereign, stable and inclusive Afghanistan where the rights of all sections of the society are protected within a democratic constitutional framework”.

Asked if he had discussed recent steps in India-Pakistan engagement with External Affairs Minister S. Jaishankar and National Security Advisor Ajit Doval, Mr. Atmar said that India-Afghanistan talks focused only on “bilateral issues”, which included regional and international cooperation. However, he added that he welcomed any dialogue between them, and hoped that India’s “responsible gestures are met with reciprocity” from Pakistan.

GST: ‘No discretion, only formula’ #GS3 #Economy

Finance Minister Nirmala Sitharaman informed the Rajya Sabha that compensation to States under the Goods and Services Tax (GST) for the financial year 2017-18 and 2018-19 was not pending with the Centre.

“GST compensation has been paid to States for 2017-18, 2018-19, nothing is pending. Prior to COVID-19, every compensation to States has been paid. The unutilised contribution of 2017-18 and 2018-19 has been carried forward and utilised in 2019-20 and 2020-21.

Over Rs. 2,17,000 crore is the GST compensation due for 2020-21 [till January]. The compensation will be released in March, Rs. 30,000 crore will go to States. There is no discretion in GST, it is as per formula.

She sidestepped questions raised by the Opposition regarding amendments made to the Life Insurance of India (LIC) Act through the Finance Bill in the Rajya Sabha on Wednesday. The Bill seeks to amend 27 out of 49 Sections of the LIC Act, 1956. One of the amendments proposes that the Centre will hold at least 75% stake in state-controlled LIC for the next five years and will continue to hold at least 51% after that period.

Responding to the debate on the Finance Bill that lasted more than five hours, Ms. Sitharaman said the 14th Finance Commission (around 2014-15) recommended devolution to States and the Centre in the ratio of 42:58 compared to the earlier 32:68 ratio which naturally resulted in slashing down of Centrally run schemes.

TB notifications fall due to pandemic disruptions #GS3 #SnT

In 2020, there were 18.05 tuberculosis notifications, which was a fall of 24% from 2019 due to the disruptions caused by the pandemic. The report said between January and February 2020, the notifications were on an upward trajectory, with 6% more cases reported in the same period in 2019.

“As a result of the lockdown, notifications in the public sector fell by 38% and 44% in the private sector in April and May. Of the reported 24.04 lakh TB cases in 2019, treatment success was 82%, mortality rate was 4%, 4% patients were lost to follow up and treatment failure and regimen change after initiation of treatment was about 3%,’’ said the report.

It said the approved budgets toward the programme have increased substantially, from Rs. 640 crore in 2016-17 to Rs. 3,333 crores in 2019-20, however, there was a fall in budget to Rs. 3,110 crore in 2020-21.

As per the report over 95% of all cases reported were initiated on treatment in 2020 and the treatment success rate for patients reported in 2019 was 82% (83% among patients in the public sector and 79% in the private).

The report said 20,892 (42%) of patients were initiated on a shorter MDR-TB regimen at the time of diagnosis. “This is a significant decline from 2019.

Define unfair trade practice for e-com’ #GS3 #Economy

A parliamentary panel has recommended that the government should offer a more clear-cut definition of what constitutes ‘unfair’ trade practice as well as spell out a practical legal remedy to tackle the issue, warning that there was a risk that predatory pricing by e-commerce firms may result in competition being wiped out and prove detrimental to consumers in the long run.

The panel, headed by Partap Singh Bajwa, in its report on ‘The Consumer Protection (E-Commerce) Rules, 2020’ tabled in Parliament on Wednesday, has also recommended fixing a cap on delivery charges levied by e-commerce firms, as well as providing for penal provisions for violation of rules related to misinformation.

The committee noted that while e-commerce enterprises offer many benefits, the development of the segment has rendered consumers vulnerable to new forms of unfair trade practices, violation of privacy and issues of unattended grievances.

“Predatory pricing as a short-term strategy, adopted by some of the market giants with deep pockets to sustain short-term losses and reduce the prices of their products below the average variable costs may lead to wiping out competition from the market and could be detrimental to the consumers in the long run,” the committee said.

‘Difficult to prove’

It, however, added that from a legal standpoint it was very hard to substantiate allegations of predatory pricing, since the impact of such practice on the competition in the market would be very difficult to prove.

“The Committee, therefore, recommends that there should be a more clear-cut definition of what constitutes Unfair Trade Practice and practical legal remedy to tackle such circumventing practices by e-commerce entities specifically multinational companies and kirana small vendors.”

The panel also suggested that the Ministry of Consumer Affairs, Food and Public Distribution should issue broad guidelines for the fixation of delivery charges charged by the marketplace entities along with a cap on the highest limits of the delivery charges in peak hours of service.

“The Ministry should clearly distinguish in the rules itself the cases of misinformation, no information and the information which is otherwise correct but creates a false impression and provide for penal provision for each case in the rules itself,” it said.

The Ministry should also clearly define ‘drip pricing’— wherein the final cost of the product goes up due to additional charges, and provide for protecting consumers against this by including penal provisions for violation.

What increase in taxable Provident Fund limit means to you #GS3 #Economy

In a major relief to a large number of middle to high-income earners, the government doubled the limit of provident fund contribution on which interest income will remain non-taxable. While in the Budget 2021-22, the finance minister had proposed to tax interest income on own contribution of employees exceeding Rs 2.5 lakh a year, the government in its amendments to the Finance Bill 2021, proposed to raise the limit to Rs 5 lakh. This will be applicable for all contributions beginning April 1, 2021.

What is the amendment?

In the budget proposal last month, the government proposed “to restrict tax exemption for the interest income earned on the employees’ contribution to various provident fund to the annual contribution of Rs 2.5 lakh.”

As there was a demand from various corners to increase the cap for tax benefit, the government has proposed to double the limit of contribution from Rs 2.5 lakh to Rs 5 lakh for tax-exempt interest income.

In the Finance Bill 2021, the government brought an amendment to the effect that read, “Provided further that if the contribution by such person is in a fund in which there is no contribution by the employer of such person, the provisions of the first proviso shall have the effect as if for the words ‘two lakh and fifty thousand rupees’, the words ‘five lakh rupees’ had been substituted.”

What does it mean?

This means that if an individual’s own contribution to the employees’ provident fund in a month is up to Rs 41,666 (Rs 5 lakh in a year), there will be no tax on the interest income. However, if the contribution exceeds that, then interest income on additional contribution will be taxed. This means that individuals having monthly basic salary of over Rs 3,47,216 will now get impacted by the move as their annual EPF contributions (at the rate of 12 per cent of basic salary) would exceed Rs 5 lakh.

So, if an individual contributes Rs 12 lakh in a year, the tax will be applicable on interest income on Rs 7 lakh (Rs 12 lakh -Rs 5 lakh). While the interest income on Rs 7 lakh would amount to Rs 59,500 (at EPF interest rate of 8.5 per cent), the tax payable on the same would be Rs 18,450 (at marginal tax rate of 30 per cent).

Who benefits?

The decision to increase the cap on EPF contributions that will have tax-exempt interest income, from 2.5 lakh to 5 lakh per annum, will ensure that individuals earning annual basic salary of up to Rs 41.66 lakh or total salary of around Rs 83 lakh (if basic is 50 per cent of CTC) are covered under it.

What levels of income get protected?

The decision to increase the cap on EPF contributions that will have tax exempt interest income will ensure that individuals earning annual basic salary of up to Rs 41.66 lakh or total salary of around Rs 83 lakh (if basic is 50 per cent of CTC) or even more. Thus, it will cover almost 99 per cent of the population.

Will it affect the interest income on your existing corpus?

The government proposal clearly states that the tax will be on the interest income on the contribution exceeding Rs 5 lakh in a previous year. This means that the aggregate corpus (till March 31, 2021) and interest income on that will not get impacted. The tax will be limited on the contribution in excess of Rs 5 lakh beginning April 1, 2021.

What should you do?

While almost 99 per cent of the individuals will continue to benefit, those among the high net worth individuals whose contribution will fall in the taxable bracket can look at some options. Investors who are not comfortable with debt or equity mutual funds and are willing to pay tax at marginal tax rate on the interest income (on additional contribution) could still go for high contribution in provident fund.

However, those who are comfortable investing in mutual funds can got for AAA-rated debt schemes or diversified large-cap funds for more tax-efficient long-term gains. While long-term capital gains tax (after 12-months) for equity schemes stands at 10 per cent for gains above Rs 1 lakh, the long-term tax on debt funds is 20 per cent with indexation benefit.

So for tax efficiency purposes and better returns, it is advisable to stop the voluntary contribution to PF if it exceeds Rs 5 lakh in a year, as the interest income will get taxed at a marginal tax rate.

Also, since interest rates are on a decline, many feel that going forward, the government may reduce the interest offering on EPF and so your corpus may fetch lower return. While tax-free interest of 8.5 per cent is the best one can get, once it starts getting taxed at 30 per cent, the post-tax returns fall sharply to 5.86 per cent. And if the rates were to fall to 8 per cent, the return would drop further to 5.5 per cent.

Why did the government propose to tax interest income on EPF?

Justifying its move in February, the government stated that it had found instances where some employees were contributing huge amounts to these funds and getting the tax benefit. With an aim to exclude HNIs from the benefit of high tax-free interest income on their large contributions, the government proposed to impose a threshold limit of contribution at Rs 2.5 lakh for tax exemption. It has now, however, been raised to Rs 5 lakh.

On the move, Finance Minister Nirmala Sitharaman, last month, said “This fund is actually for the benefit of the workers, and workers are not going to be affected by it… it is only for big-ticket money which comes into it because it has tax benefits and also (is) assured about 8 per cent return.

You find huge amounts, some to the extent of Rs 1 crore also being put into this each month. For somebody who puts Rs 1 crore into this fund each month, what should be his salary. So, for him to give both tax concessions and also an assured 8 per cent return, we thought this is probably not comparable with an employee with about Rs 2 lakh.”

How many people invest higher amounts?

According to sources in the know of the matter, while there are more than 4.5 crore contributors’ accounts to EPF, more than 1.23 lakh accounts belonging to HNIs contribute large sums to their EPF accounts every month. According to estimates, the total contribution of these HNI accounts for FY’2018-19 was Rs 62,500 crore (which comes to an average of Rs 50.8 lakh per contributor).

Which are the Covid-19 variants in India, and do they explain the recent surge? #GS3 #SnT

More than 320 coronavirus samples from Punjab have been found to have the “UK lineage”, a reference to a new strain of the virus that had emerged in the UK in December, with genetic mutations that have enabled it to spread faster. This is the most widespread occurrence of the UK variant in the Indian population found till date, and could possibly explain the rapid surge in cases in Punjab in the last few weeks.

A government statement on Wednesday said 736 samples from across the country had so far been found to have UK lineage. Apart from these, 34 samples were found to have the “South African lineage”, and one had the “Brazilian lineage”. The South African and Brazilian variants are two other dominant strains of coronavirus circulating around the world. The genetic mutations in these two variants make them more likely to escape the human immune system. The apprehension, therefore, is that current vaccines might be comparatively less effective against them, although this is still being investigated.

Variants in India

The UK, Brazilian and South African variants are not the only ones currently circulating in the Indian population. Like any other organism, the coronavirus is also constantly mutating, with some changes in its genetic structure happening in every replication cycle. Most of these mutations are inconsequential, and do not alter the overall nature or behaviour of the coronavirus. But a few of them, possibly one in thousands, can introduce important changes, helping the virus to adapt or survive better.

During this epidemic, three kinds of changes are being keenly watched — those that increase the ability of the virus to spread faster, those that cause more severe disease in the infected person, and those that help the virus escape the immune response.

The UK, Brazilian and South African variants are such strains. Each of them now has its own families, meaning there have been many subsequent mutations in these but with the original defining mutation remaining intact. These three variant families, or lineages, have been found in multiple countries, and are mainly responsible for the surge in cases in Europe and Brazil.

Besides these, several other variants are circulating in the Indian population, those that have originated locally as well as others that have been brought by travellers from abroad. But none of these has been classified as a “variant of concern”.

UK Covid-19 variant & concerns

Scientists have maintained that none of the three ‘variants of concern’ — UK, Brazilian or South African — can be linked to the present rise in cases in India. Their level of prevalence in the community, as of now, is not so high that the current surge could be attributed to them.

Even in Punjab, where 80% of 400 samples analysed turned out to be the UK variant, it is too early to blame it for the extraordinary rise in cases in the last few weeks. The results of genome sequencing have been revealed now, and a clinical correlation needs to be done to assess whether they are responsible for the rise in cases.

As scientists have pointed out, if the people infected with the UK strain in Punjab are all travellers, or their direct contacts, then their occurrences could be easily explained, and are not too much of a worry. However, if it has been found in people in the wider community as well, then there is the danger of it spreading to others very quickly. It would also mean that the isolation and quarantine procedures being followed in the state, especially for travellers, have not been very followed strictly.

A few specific mutations found in the UK strain, like one named E484Q and another called N440K, have been seen in some other variants as well, and these have been circulating in the Indian population for several months. At present, there is no evidence to suggest that either of these could have led to the second surge, or caused re-infection in patients.

However, much more detailed scientific investigations are required to assess their impact on the spread of the disease in India.

Genome sequencing…

India has the second highest number of people infected with the coronavirus during the epidemic. But it has done very few genome sequences of the different variants in circulation. So far, it has carried out gene analysis of 19,092 samples from across the country, according to a statement made by the government in Parliament last week.

This includes the sequencing of 10,787 samples since the government set up INSACOG (Indian SARS-CoV2 Consortium on Genomics) in December specifically for this purpose. Many other countries, including the United States and China, have analysed more than 100,000 gene sequences.

Studying genetic changes in the organism is important clues to understand the origin, transmission and impact of the virus on patients. The stated objective of INSACOG is to sequence the samples from at least 5% of all the infected cases through a network of ten laboratories. That looks like a very tall order right now. India has so far recorded over 1.17 crore positive cases. The 19,092 samples that have sequenced till now form just 0.16% of that number.

… and why it’s been slow

One of the major reasons for the slow pace of genome sequencing has been a lack of funds. So far, no money has been allocated for INSACOG, although officials said approval for funds was now expected any day. The laboratories have been using money from their own annual budgets to do the sequencing work. It takes between Rs 3,000 and Rs 5,000 to extract the gene sequence of one sample. The cost is mainly of the chemical reagents that are required in the process.

Also, states have not been proactively sending their samples to the laboratories for sequencing. Maharashtra, which has recorded more than 25 lakh infections till now, has sent only about 2,800 samples for sequencing, according to government data presented in Parliament.

That’s just about 0.11% of all the cases. Kerala has sent the highest number of samples for sequencing, about 5,200, but Karnataka, which has a comparable number of cases, has sent only 137 samples. Such a low rate of genome sequencing might not be statistically significant to draw conclusions about the changing nature and behaviour of the virus, or in designing appropriate interventions to contain the spread of the epidemic.