News & Editorial Analysis 15 March 2023

The Hindu News Analysis

1 – SEBI:

GS II Topic Statutory and Non Statutory Bodies

Context:

The Department of Revenue Intelligence (DRI) has concluded its investigations in a case involving the importation of power equipment by the Adani Group of Companies, while another case involving the importation of Indonesian coal is being delayed by litigation. Stock market regulator Securities Exchange Board of India (SEBI) is looking into “market allegations” against the Adani Group of Companies.

About:

The Securities and Exchange Board of India (SEBI) was established on April 12, 1992, in accordance with the Securities and Exchange Board of India Act, 1992. (a non-constitutional organisation created by a Parliament).

Promoting and overseeing the securities market as well as defending the rights of investors in securities are among SEBI’s main duties.

Mumbai serves as SEBI’s administrative centre. Delhi, Chennai, Kolkata, and Ahmedabad house SEBI’s regional offices.

Background:

The Capital Issues (Control) Act of 1947 gave the Controller of Capital Issues, the regulating body, jurisdiction prior to the creation of SEBI.

As per an Indian government decree, the SEBI was founded in April 1988 to serve as the nation’s capital markets’ regulator.

At first, SEBI was a non-statutory organisation with no statutory powers.

It was given autonomy and legal standing by the SEBI Act of 1992.

What is the organization’s structure?

The chairman of the SEBI Board is joined by a number of other full- and part-time members.

When required, SEBI also appoints a number of committees to look into the most crucial issues at hand.

To protect the rights of organisations who believe SEBI’s ruling violated their rights, the Securities Appellate Tribunal (SAT) has also been established.

A Presiding Officer and two additional Members make up SAT.

It has the same authority that a civil court would have. Additionally, the Supreme Court will hear any appeals from anybody who believe they were wronged by the SAT’s decision or order.

What are SEBI’s responsibilities and authority?

Being a quasi-legislative and quasi-judicial body, SEBI has the power to establish regulations, conduct inquiries, make decisions, and impose penalties.

It fulfils the requirements of three categories:

Issuers: By offering them access to a market where they can raise more money.

Investors: By providing up-to-date information that is both accurate and safe.

This enables a competitive professional market for intermediaries.

The Securities Laws (Amendment) Act of 2014 gave SEBI the authority to regulate money pooling schemes with a minimum value of Rs. 100 crore and to recover assets in the event of non-compliance.

“Search and seizure activities” may be authorised by the SEBI Chairperson. The SEBI Board may also request information from anyone regarding any securities transaction that it is investigating, such as phone logs.

SEBI registers and oversees the operations of venture capital funds, collective investment plans, and mutual funds.

It also helps to support and regulate self-regulatory organisations and to make unfair and dishonest commercial practises in the securities markets illegal.

2 – Credit Rating Agencies:

GS III Topic Indian Economy

Context:

India wants to increase its sovereign credit rating, which is currently at the lowest investment grade level, because it believes its economic indicators have dramatically improved since the outbreak, according to a senior government official.

According to the source, the Finance Ministry of the nation met with representatives from Fitch Ratings, Moody’s Investors Service, and S&P Global Ratings after the government unveiled its annual budget on February 1.

How do credit scores function?

An assessment of a borrower’s creditworthiness, either generally or in respect to a particular debt or financial obligation, is known as a credit rating.

A credit rating can be issued to any organisation seeking to borrow money, whether it’s a person, corporation, state or local government, or sovereign nation.

What Are Credit Rating Agencies?

A credit rating agency (CRA) is a business that assigns credit scores. These scores assess a debtor’s ability to repay a loan by making timely principal and interest payments as well as the likelihood of default.

There are six credit rating firms registered with SEBI: CRISIL, ICRA, CARE, SMERA, Fitch India, and Brickwork Ratings.

Essentially, CRAs assign a probability of default to a certain instrument by offering unbiased information and a research-based assessment of the issuer’s capacity and motivation to meet its debt service commitments.

Credit rating is far from a simple mathematical calculation because determining an instrument’s creditworthiness involves both qualitative and quantitative factors.

Importance:

Credit ratings provide information on the creditworthiness of the person or firm borrowing the money as well as the risk associated, which helps investors make smarter investment decisions. By analysing this, they can make a wiser investment decision.

A high credit score ensures that the money will be safe and will be repaid on time with interest.

Fast Loan Approval: Banks are ready to approve loan applications from borrowers with good credit ratings in a short amount of time.

Credit ratings have promoted a culture of fiscal responsibility, improved the efficiency of capital allocation by accurately estimating risk, and promoted financial innovation. Independent benchmarks for pricing debt will be possible thanks to credit ratings.

Issues:

Absence of uniformity among Indian rating agencies: The typical Indian investor is unable to understand the numerous credit ratings that are in use in India since there is no uniformity among the credit rating organisations.

The lack of uniformity in rating and in the fee structure for rating agencies is one of the primary issues in India.

One of the major flaws in Indian credit ratings is their inability to distinguish between equity instruments and mutual funds.

Credit ratings are unreliable in India. Even businesses in India with excellent credit ratings have failed, and there is no fix for this. As an example, neither SEBI nor the RBI were able to protect the investors when CRB Capital Markets, which had an A credit rating and an annual income of Rs. 1,000 crores, failed.

The Indian credit rating agency lacks transparency.

The nation has experienced stock fraud and the demise of CRB Capital Markets since the creation of credit rating agencies. This merely puts doubt on the effectiveness of credit rating agencies.

Credit rating agencies must take all reasonable steps to inform the relevant authorities of any weaknesses and drawbacks of the companies they are analysing.

A conflict of interest results from the “issuer-pays” model, in which the issuer pays the CRA’s fees directly. Investor-pays must be incorporated into the model. Comparison of prices and issues of choice.

Due to the low number of credit rating agencies (CRAs) and high entry barriers, there is no competition in India.

There is no mechanism to hold CRAs accountable by asking them “who will assess the rating agency”.

How to Proceed:

In order to minimise conflicts of interest, CRAs should avoid delivering consulting services to the rated corporations directly or through subsidiaries. SEBI may look at this as part of its regulatory processes for protecting investors.

Rating agencies should refrain from issuing ratings based on incomplete information, even if doing so means avoiding that obligation.

To reduce subjectivity and cognitive bias, CRAs should operate under a defined fee structure that limits competition to quality rather than pricing and increases the objectivity of rating models.

Government should create a surveillance plan that demands stringent supervision of a perfect score.

Improve CRA responsibility to better protect clients; Sebi intervention is necessary here by tying some monetary or commercial consequences. For example, preventing a particular CRA from re-rating a business that defaulted over a certain threshold and for a certain period of time.

3 – RTI:

GS II Topic Government Policies and Interventions

Context:

On March 13, opposition politicians and activists voiced worry over a proposal to modify the Access to Information Act, 2005, saying they feared it may make it harder for people to report misconduct. In accordance with Section 8(1)(j) of the RTI Act, public organisations are permitted to withhold information from the general public if doing so would violate a person’s right to privacy, but they are also allowed to publish information where doing so is in the public interest.

Historical Perspective:

After the International Declaration of Human Rights was ratified in 1948, everyone gained access to knowledge and ideas via any media, regardless of where they were located.

Everyone has the right to freedom of expression, which includes the ability to access and disseminate information and ideas of all kinds, according to the 1966 International Covenant of Civil and Political Rights.

Thomas Jefferson believed that knowledge is the “currency of democracy” and is crucial for the establishment and growth of a functioning civil society. The Indian Parliament did however create the Right to Information Act, 2005 in an effort to provide people with a useful framework to secure information as a matter of right.

According to the Supreme Court’s ruling in the 1986 case of Mr. Kulwal v. Jaipur Municipal Corporation, citizens cannot fully use the freedom of speech and expression guaranteed by Article 19 of the Constitution. This was the beginning of the RTI law.

Objectives:

to increase the people’s power.

to encourage accountability and openness.

so as to avoid corruption.

to increase the participation of citizens in the democratic process.

Why did the Information Act pass into law?

corruption and scandals.

Widespread action and pressure.

The information society and modernization.

How the Act functions:

Section 1(2): Except for Jammu and Kashmir, it is applicable to the entirety of India.

Any material, regardless of its format, is referred to as “information” in Section 2(f), including documents such as memoranda, emails, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, and models. In conformity with any other law now in effect, it also contains information about any private body that may be accessible by a public authority.

“Right to Information” refers, in accordance with Section 2(j), to the legal right to access information that is maintained by or under the control of any public body and is made accessible pursuant to this Act. You have the right to inspect any work, record, or document, make notes about it, extract it, have a certified copy produced of it, and receive certified samples of the items you wish to examine thanks to this privilege. Accessing information on diskettes, floppies, tapes, video cassettes, or in any other format is similarly protected by this right.

Public Authority:

Any institution of self-government that has been created or created is a “public authority”:

By the Constitution; by any other law enacted by the federal or state legislatures; or by any other law.

By declaration or order made by the relevant government, which also includes any body it controls, heavily finances, or owns. This includes non-governmental organisations.

4 – Vulture Conservation in India:

GS III Topic à Environmental Conservation

Context:

As many as 246 vultures were counted during the first-ever synchronised survey, which was conducted on the borders of Tamil Nadu, Kerala, and Karnataka on February 25 and 26.

The estimation was done in the Bandipur Tiger Reserve (BTR), the Mudumalai Tiger Reserve (MTR), the Sathyamangalam Tiger Reserve (STR), the Wayanad Wildlife Sanctuary (WWS), and the Nagerhole Tiger Reserve (NTR) in Karnataka. Vultures were counted in the following locations: 98 in MTR, 2 in STR, 52 in WWS, 73 in BTR, and 23 in NTR.

About:

It belongs to one of the 22 species of large carrion-eating birds, most of which are located in tropical and subtropical areas.

They play a vital part in keeping the environment free of waste by acting as nature’s garbage collectors.

Also, vultures play a significant part in controlling animal diseases.

The nine vulture species that can be found in India are the Oriental white-backed, Long-billed, Slender-billed, Himalayan, Red-headed, Egyptian, Bearded, Cinereous, and Eurasian Griffon.

The bulk of these nine species face extinction.

The Bearded, Long-billed, Slender-billed, and Oriental White-backed bird species are all listed as being protected under Schedule 1 of the Wildlife Protection Act of 1972. Rest periods are protected by Schedule IV.

Threats:

Poisoning from diclofenac, a drug used to treat animals.

Habitat destruction brought on by human activity.

Food contamination and scarcity.

Persons electrocuted by power lines.

Efforts for conservation:

The Vulture Action Plan 2020–25 was unveiled by the Ministry for Environment, Forestry, and Climate Change with the goal of vulture conservation in the country.

Diclofenac usage would be kept to a minimal, and cow carcasses—the main source of food for vultures—would not be contaminated.

In order to look into the causes of vulture deaths in India, the VCC was founded in Pinjore, Haryana, in 2001.

Later in 2004, the VCC was enlarged to create the first Vulture Conservation and Breeding Center in the nation (VCBC).

There are currently nine Vulture Conservation and Breeding Centers (VCBC) in India, three of which are directly managed by the Bombay Natural History Society (BNHS).

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The Hindu Editorial Analysis

Data Governance In India:

Context:

India has the opportunity to promote its technical advancements thanks to its G-20 chairmanship, particularly in the fields of data infrastructure and data governance. The G-20 has highlighted the need for global collaboration and cooperation in addressing the difficulties, opportunities, and dangers presented by the quick development of data and digital technologies as the world becomes more digital.

Recent changes:

India has improved substantially in recent years in terms of its data governance and digital legislation. Nevertheless, as the country grows, it must also ensure that its digital projects and data governance are open, transparent, secure, and supportive of sustainable growth.

There have been considerable advancements in the promotion of digital transactions through the Unified Payments Interface (UPI) and other options, as well as the use of digital technologies to grant access to bank accounts.

DEPA and related problems:

The launch of India’s Data Empowerment and Protection Architecture (DEPA), a consent management platform, has stakeholders both excited and concerned. On the one hand, by offering people more control over how their personal information is used and shared, DEPA has the potential to strengthen data protection and privacy for citizens. By allowing consumers to easily manage and control their data consents, DEPA may help boost public confidence in digital technologies and data governance.

However, if the consent management tool is not correctly built or managed, there is a possibility that personal data may be misused or exploited.

Additionally, there are worries that DEPA may not be administered consistently across different industries and jurisdictions, which would diminish its efficacy and increase citizen confusion.

To realise the potential benefits of DEPA and lessen the risks, the tool must be used in a transparent, reliable, and secure manner. To do this, it will be important for the government, corporate community, civil society, and other stakeholders to work closely together to establish clear and applicable laws and standards.

It must be determined whether advancements in financial inclusion and successful UPI implementation in India can be successfully replicated in other industries such as healthcare and agriculture. In addition to enhancing access to healthcare, particularly in remote and rural areas, digital technologies can also assist farmers increase their income and level of independence.

About data sovereignty:

The significance of the data sovereignty issue has increased. Data sovereignty is the ability of a country to control the gathering, storing, and use of data within its borders. It also refers to the informational autonomy of citizens over their own data.

India has made progress in data sharing and data governance with the establishment of the India Data Management Office (IDMO). The IDMO is tasked with overseeing and coordinating the implementation of India’s digital plans and data governance framework in order to ensure that these activities are consistent with the country’s goals and values. It will also support the development and application of open-source solutions, helping to ensure that underlying data architectures are a social public good and promoting the accessibility and affordability of digital technology. Once more, India has enormous potential to provide solutions that other countries can use and modify. Open source and open innovation techniques are alternatives to the proprietary solutions governed by large IT businesses, and they can be very beneficial.

In this context, a number of analysts have urged for the opening of data “silos” in order to realise the potential advantages of data sharing among governmental organisations, companies, and individuals. While some data silos might be opened to allow information access and promote public involvement, other data silos might jeopardise security and trust.

Revealing private information can have harmful repercussions on individuals as well as society as a whole since it can lead to bias, exclusion, and other unforeseen bad outcomes. India must therefore choose a medium ground between strict data sovereignty and unrestricted data flow, and decide which data can be shared and used by whom for what objectives.

India must balance the interests of all parties involved, including governments, corporations, and individuals, as well as respect and protect the fundamental right to privacy, in order to achieve sustainable growth.

It is essential to create clear, transparent, and accountable data governance policies and regulations as well as the necessary digital infrastructure and expertise to guarantee that data is gathered, stored, and used in a responsible, secure, and accountable manner in order to achieve a resilient data governance regime.

There are valid reasons for scepticism that must be taken into account, even while advancements in UPI and financial inclusion indicate promise for, among other things, data flow to other parts of the India Stack (such as in health and agriculture). Digital public goods, application interfaces, and the promotion of digital inclusion are all provided via the integrated software platform known as India Stack. The problems with digital infrastructure, privacy protection, data security, and responsible data governance must be solved before these innovations can be fully realised in other businesses.

Conclusion:

The creation and implementation of the India Stack must be in line with India’s bigger development goals. This will help to ensure that data governance is in keeping with the country’s values and priorities and will support rather than hinder the development of a secure, more egalitarian, and trustworthy digital future for all. India has a unique opportunity to design and implement a data governance system that might operate as a model for other countries in this area.

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The Indian Express Editorial Analysis

Antiquities Laws In India:

Present circumstances:

The International Consortium of Investigative recently found that Subhash Kapoor, who is currently serving a 10-year prison sentence in Tamil Nadu for smuggling antiquities, is connected to at least 77 items in the Metropolitan Museum of Art, New York, catalogue.

Any coin, artwork, sculpture, painting, epigraph, or other work of art or craftsmanship; any article, object, or thing removed from a structure or cave; any article, object, or thing depicting politics, religion, science, the arts, or crafts; any article, object, or thing of historical interest; and any article, object, or thing of historical interest that “has been around for at least that long.

For “manuscript, record, or other document which is of scientific, historical, literary, or artistic importance,” this time frame is “not less than seventy-five years.”

What are the laws governing international agreements?

According to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export, and Transfer of Ownership of Cultural Property, items designated by nations as having “importance for archaeology, prehistory, history, literature, art, or science” are referred to as cultural property.

According to the Declaration, one of the best ways to safeguard each country’s cultural assets is through international cooperation, and “illegal import, export, and transfer of ownership of cultural property is one of the main causes of the impoverishment of the cultural heritage of the countries of origin of such property.”

The UN General Assembly in 2000 and UN Security Council in 2015 and 2016 have expressed concern over the issue in an effort to protect it.

In 2019, an INTERPOL assessment stated that “the unlawful international traffic of cultural objects and related offences is regrettably more frequent” over 50 years after the UNESCO pact.

What are India’s laws?

Item-67 of the Union List, Item-12 of the State List, and Item 40 of the Concurrent List of the Constitution all address India’s legacy.

In order to prevent “any antiquities from being exported without authorization,” the Antiquities (Export Control) Act was passed in April 1947.

1958 saw the passage of the Act Preserving Ancient Monuments, Sites, and Remains. Subsequently, in 1971, numerous large sandstone idols from different locales as well as a bronze idol from Chamba were taken, raising a commotion in Parliament.

The UNESCO agreement and The Antiquities and Art Treasures Act, 1972 (AATA), which entered into effect on April 1, 1976, were both passed by the government as a result of pressure.

The Antiquities and Art Treasures Act of 1972 specifies (AATA),

“Any person who is not a representative of the Central Government or a body or agency that has been designated by the Central Government in this regard is not entitled to export any antiquities or works of art. Anybody who does not act in accordance with the terms and conditions of a licence, whether on their own behalf or through a third party, is not permitted to engage in the business of offering or selling any antiquities.

What establishes ownership?

According to the 1970 UNESCO declaration, the requesting Party shall provide, at its expense, the documentation and other proof required to support its claim for recovery and return.

The first document that must be submitted in order to prove ownership is the police complaint (FIR). The difficulty with lost antiques in India is that there is typically no FIR. Yet, other supporting information also exists, such as details mentioned in study publications by recognised academics, etc.

How may fake antiquities be identified?

Anybody who “owns, controls, or is in possession of any antiquity” must register it with the registering officer, according to section 14(3) of the AATA, “and get a certificate in token of such registration.”

The National Mission on Monuments and Antiquities, founded in March 2007, has so far registered 3.52 lakh antiquities out of the 16.70 lakh that it has recorded in an effort to “actively curtail” illegal activity.

This is a very small portion of the nation’s whole collection of antiquities, which the government estimates to be somewhere in the neighbourhood of 58 lakh pieces, according to a declaration made in Parliament by the Ministry of Culture in July 2022.

Can India bring artefacts home?

Artefacts removed from India before independence, those removed from the country after independence up to March 1976, or before the adoption of AATA, and artefacts removed from the country after April 1976, are the three categories to be aware of.

Requests must be made bilaterally or through international forums for the first two categories. For instance, the Maharashtra government said on November 10, 2022 that it was making an effort to return the sword of Chhatrapati Shivaji Maharaj from London.

Shivaji IV handed this sword to Edward, the Prince of Wales (later King Edward VII) in 1875-1876.

Several historical artefacts, like Vagdevi of Dhar (MP), the Kohinoor diamond, the Amaravati marbles, the Sultanganj Buddha, and artefacts associated with Rani Laxmibai and Tipu Sultan, are currently on display abroad.

By raising a concern bilaterally with ownership paperwork and with the assistance of the UNESCO convention, it is simple to recover artefacts in the second and third categories.

Conclusion:

A country’s rich cultural history and heritage are represented by its antiquities, which should be protected by domestic legislation and international cooperation.

Along with other nations, they must advocate for the interchange of these special artefacts on a worldwide scale in order to explain historical literature, art, and national aesthetic appeal.