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Responding to a question by the Law Commission of India if periodic elections lead to a policy paralysis owing to the frequent imposition of the Model Code of Conduct (MCC), the Election Commission described MCC as a “vital instrumentality” in providing a level playing field to everyone, and “integral to the design of conducting free and fair elections and credible electoral outcomes”.
The EC’s March 17, 2023, reply was in response to queries by the Law Commission regarding the feasibility and challenges associated with holding simultaneous polls for the Lok Sabha and state Assembly elections.
The response is significant since it is the first time that the poll watchdog has so staunchly defended the MCC stating “it would not be correct” to view its application as a “disruption”.
The EC is further learned to have said it has consistently evolved a strategy to keep the time period of the Model Code of Conduct to a minimum.
Express Network
How can centre not accept 1981 amendment by parliament : SC (Page no. 10)
(GS Paper 2, Judiciary)
The Supreme Court questioned Solicitor-General Tushar Mehta’s submission that the government did not accept the 1981 amendment made by Parliament to the Aligarh Muslim University Act, and said it cannot take such a stand.
The top court said that “irrespective of which government represents the cause of the Union of India, Parliament’s cause is eternal, indivisible and indestructible” and that the government would have to stand by the amendment.
It began with Justice Sanjiv Khanna, who was part of a seven-judge Constitution bench hearing the question of AMU’s minority status, asking Mehta, appearing for the Centre, whether he accepted the 1981 amendment.
Presided by Chief Justice of India DY Chandrachud, the bench also comprises Justices Surya Kant, JB Pardiwala, Dipankar Datta, Manoj Misra and Satish Chandra Sharma. The court is hearing a reference made to it by a three-judge bench in February 2019.
“This is an amendment by the Parliament. Is the government accepting?” asked Justice Khanna.
Editorial
The Jan Nayak(Page no. 12)
(Miscellaneous)
Jan Nayak Karpoori Thakur was finally conferred the Bharat Ratna, India’s highest civilian honour. The demand to confer this award on Karpooriji, the often unacknowledged pioneer of India’s social justice movement, was long overdue and much awaited.
That the honour was conferred by the government led by Narendra Modi, another champion of social justice and backward classes, is a true tribute to the legend.
Karpooriji belonged to the “Nai” community, among the most backward communities in Bihar. Back then, no one would have thought that a member of this community would take on the Congress, fight for the rights of the backward classes and end up becoming one of the first non-Congress chief ministers of Bihar in 1970, and then come back again as CM.
Karpooriji studied only till the intermediate level. He had to cut short his education to join the country’s freedom movement. But this was no hindrance for this son of the soil — Karpooriji had learnt much through his experiences in poverty and backwardness.
Very early on, he realised that the benefit of reservation was being arrogated by the privileged backward classes. To undo this wrong, Karpooriji provided a separate 12 per cent reservation to the EBCs.
Powerful BC communities like the Yadav, Kurmi and Koeri were given only 8 per cent reservation. While the Congress vacillated on implementing the report of the Mungeri Lal Commission, in 1978, Karpooriji showed courage and created quotas in government jobs for EBCs and BCs.
The Karpoori Formula also gave women a share of 3 per cent and reserved another 3 per cent seats for the poor from the upper castes. It, therefore, tried to accommodate all sections of society.
Ideas Page
A GST less taxing (Page no. 13)
(GS Paper 3, Economy)
The GST regime will complete seven years in July. There has been a substantial increase in the number of show-cause notices and other recovery proceedings in the last few years.
The timelines have been extended for the passing of orders and there has been an avalanche of orders just before the expiry of the timelines, creating various demands on issues such as mere reconciliation, return mismatches, input tax credit (ITC) denials for suppliers’ defaults, time-barred ITC claims and ITC on account of blocked credit.
Further, there are classification disputes arising out of differential rates of tax because of multiple notifications, many not fully aligned with customs tariff. Unfortunately, most of the demands pertaining to denial of ITC are based on a comparison of GSTR-3B and GSTR-2A which is not even legally permissible before January 1, 2022.
A large number of disputes have also arisen because of a lack of understanding of the new law and procedures, numerous amendments and the impact of frequent portal glitches.
In many cases, the First Appellate Authority simply confirms the order of the lower authority and there is no GST Appellate Tribunal in place for relief to be obtained.
The GST Tribunal is yet to be formed and the defective drafting of the relevant statutory provisions relating to the formation of this Tribunal has resulted in the repeated filing of writ petitions and the matter is still pending in the Supreme Court.
Even though several amendments have been made, it would still take considerable time for the members to be selected and the infrastructure to be set up. The more practical step of increasing the strength of the existing CESTAT was, unfortunately, not accepted.
Economy
Govt permits direct listing on GIFT – IFSC’s global exchanges (Page no. 19)
(GS Paper 3, Economu)
The government on Wednesday allowed direct listing of securities by public Indian companies on the international exchanges of GIFT International Financial Services Centre (GIFT-IFSC), and made the requisite provisions to provide “an overarching regulatory framework” to facilitate it.
In July, Finance Minister Nirmala Sitharaman announced that the government had decided to enable direct listing of listed and unlisted companies on the IFSC exchanges. The move is expected to give Indian companies access to cheaper foreign capital, boost foreign investment, and broaden investor.
The Department of Economic Affairs of the Finance Ministry has amended Foreign Exchange Management (Non-debt Instruments) Rules, 2019, and notified the Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme.
Additionally, the Ministry of Corporate Affairs (MCA) has issued Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024.
“These, together, provide an overarching regulatory framework to enable public Indian companies to issue and list their shares in permitted international exchanges.
As of now, the framework allows unlisted public Indian companies to list their shares on an international exchange. SEBI (Securities and Exchange Board of India) is in the process of issuing the operational guidelines for listed public Indian companies,” the Finance Ministry said in a statement.
Banking system liquidity deficit at record high of 3.4 lakh crore (Page no. 19)
(GS Paper 3, Economy)
The liquidity in the banking system has turned deficit to a record high of Rs 3.4 lakh crore due to moderation in government spending, higher tax outflows and slower bank deposit growth.
Analysts expect the Reserve Bank of India (RBI) to announce permanent liquidity measures such as open market operations (OMO) purchases to ease liquidity deficit conditions in the banking system rather than variable repo rate auctions (VRR) to infuse temporary liquidity.
“The primary reason for this (liquidity deficit) is that the government is not spending much. Also, this week is when the goods and services tax (GST) outflow happens,” said a treasury head of a private sector bank.
Banking system liquidity, as reflected by the amount of money injected by the RBI into the banking system, has been in deficit mode since last month after advance tax and goods and services tax (GST) payments.
On a net basis, the RBI has injected liquidity averaging Rs 1.8 trillion between December 16, 2023 and January 14, 2024.
Higher outflows from foreign portfolio investors (FPIs) have also led to the widening of banking system liquidity, analysts said.
So far in the current month, FPIs have pulled out Rs 19,308 crore of local shares on a net basis in January so far, according to data from National Securities Depository Ltd (NSDL).
According to Madan Sabnavis, Chief Economist, Bank of Baroda, the liquidity tightness is a case of deposits rising at a slower pace compared to the growth in credit.
Explained
BSF jurisdiction extended : Why Punjab moved SC (Page no. 20)
(GS Paper 2, Judiciary)
The Supreme Court is set to hear the dispute over the expansion of the Border Security Force (BSF) jurisdiction in Punjab. Final hearings in this case will commence next week.
On October 11, 2021, the Ministry of Home Affairs issued a notification expanding the jurisdiction of the BSF in Punjab, West Bengal and Assam. This was challenged by the Punjab government the following December.
The BSF was created after the enactment of the Border Security Force Act in September 1968. The BSF is meant to secure India’s borders with its neighbouring nations and is empowered to arrest, search and seize under a number of laws, such as the Criminal Procedure Code, the Passports Act, the Passport (Entry into India) Act, and the NDPS Act, to name a few.
Section 139(1) of the BSF Act allows the central government, through an order, to designate an area “within the local limits of such area adjoining the borders of India” where members of the BSF can exercise powers to prevent offenses under any Acts that the central government may specify.