SC order on CEC and ECs appointment

GS Paper - 2 (Polity)

A five-judge Constitution Bench of the Supreme Court on 2 March 2023 unanimously ruled that a high-power committee consisting of the Prime Minister, Leader of Opposition in Lok Sabha and the Chief Justice of India must pick the Chief Election Commissioner (CEC) and Election Commissioners (ECs). The Bench headed by Justice K M Joseph ruled on a batch of petitions seeking a selection process similar to what is followed in the case of the Director, Central Bureau of Investigation (CBI).

What was the plea before the Supreme Court?

1. The public interest petitions sought a law governing the appointment of the CEC and ECs. A first PIL had been filed in 2015, and the Supreme Court agreed to hear a second PIL on the issue filed in 2018 by Delhi BJP leader Ashwini Upadhyaya, and referred the issues to a Constitution Bench.
2. The court had heard the case in November last year. On the last day of the hearing, the court had noted that the appointment of Arun Goel as EC had been carried out with “lightning speed”, with the procedure taking less than 24 hours on 18 November from start to finish.

How are the CEC and ECs currently appointed?

1. There are just five Articles (324-329) in Part XV (Elections) of the Constitution. Article 324 of the Constitution vests the “superintendence, direction and control of elections” in an Election Commission consisting “of the Chief Election Commissioner and such number of other Election Commissioners, if any, as the President may from time to time fix”.
2. The Constitution does not lay down a specific legislative process for the appointment of the CEC and ECs.
3. The President makes the appointment on the advice of the Union Council of Ministers headed by the Prime Minister.

What are the powers of the Election Commission?

1. The Constitution of India gave the Election Commission sweeping powers without going into the specifics. Introducing this provision in the Constituent Assembly on 15 June 1949, Babasaheb Ambedkar had said “the whole election machinery should be in the hands of a Central Election Commission, which alone would be entitled to issue directives to returning officers, polling officers and others”.
2. Parliament subsequently enacted The Representation of the People Act, 1950 and The Representation of the People Act, 1951 to define and enlarge the powers of the Commission.
3. The Supreme Court in ‘Mohinder Singh Gill & Anr vs The Chief Election Commissioner, New Delhi and Ors’ (1977) held that Article 324 “operates in areas left unoccupied by legislation and the words ‘superintendence, direction and control’ as well as ‘conduct of all elections’ are the broadest terms”. The Constitution has not defined these terms.
4. The SC said Article 324 “is a plenary provision vesting the whole responsibility for national and State elections” in the ECI “and, therefore, the necessary powers to discharge that function”.
5. The Election Commission (Conditions of Service of Election Commissioners and Transaction of Business) Act, 1991 (EC Act) requires that the EC and CEC must hold the post for a period of six years. This law essentially governs the conditions of service of the CEC and ECs.

 FCRA licence of CPR suspended

GS Paper - 3 (Economy)

The Centre suspended the Foreign Contribution Regulation Act (FCRA) licence of the Centre for Policy Research (CPR). This came five months after the Income Tax department conducted ‘surveys’ on the premises of the CPR, Oxfam India, and the Independent and Public Spirited Media Foundation (IPSMF), which funds a range of digital media entities. The Ministry of Home Affairs said that the licence was suspended following prima facie inputs regarding the violation of funding norms.

What is the FCRA?

1. The law sought to regulate foreign donations to individuals and associations so that they functioned “in a manner consistent with the values of a sovereign democratic republic”.
2. An amended FCRA was enacted under the UPA government in 2010 to “consolidate the law” on utilisation of foreign funds, and “to prohibit” their use for “any activities detrimental to national interest”.
3. The law was amended again by the current government in 2020, giving the government tighter control and scrutiny over the receipt and utilisation of foreign funds by NGOs.
4. Broadly, the FCRA requires every person or NGO seeking to receive foreign donations to be (i) registered under the Act, (ii) to open a bank account for the receipt of the foreign funds in State Bank of India, Delhi, and (iii) to utilise those funds only for the purpose for which they have been received and as stipulated in the Act.
5. They are also required to file annual returns, and they must not transfer the funds to another NGO.
6. The Act prohibits the receipt of foreign funds by candidates for elections, journalists or newspaper and media broadcast companies, judges and government servants, members of legislature and political parties or their office-bearers, and organisations of a political nature.
7. In July 2022, the MHA effected changes to FCRA rules through two gazette notifications and increased the number of compoundable offences under the Act from 7 to 12.
8. The other key changes were exemption from intimation to the government for contributions less than Rs 10 lakh – the earlier limit was Rs 1 lakh — received from relatives abroad, and increase in time limit for intimation of opening of bank accounts.

How is FCRA registration granted?

1. NGOs that want to receive foreign funds must apply online in a prescribed format with the required documentation.
2. FCRA registrations are granted to individuals or associations that have definite cultural, economic, educational, religious, and social programmes.
3. Following the application by the NGO, the MHA makes inquiries through the Intelligence Bureau into the antecedents of the applicant, and accordingly processes the application.
4. Under the FCRA, the applicant should not be fictitious or benami; and should not have been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another.
5. The applicant should also not have been prosecuted for or convicted of creating communal tension or disharmony; should not have been found guilty of diversion or misutilisation of funds; and should not be engaged or likely to be engaged in the propagation of sedition.
6. The MHA is required to approve or reject the application within 90 days. In case of failure to process the application in the given time, the MHA is expected to inform the NGO of the reasons for the same.

'Start-up Bridge' between India, Italy

GS Paper -2 (International Relations)

PM announced the establishment of a 'Start-up Bridge' between India and Italy, and said that both countries have laid special emphasis on increasing cooperation in areas like Renewable Energy, Green Hydrogen, IT, semiconductors, telecom and space.

More about the news:

1. India and Italy are celebrating the 75th anniversary of their bilateral relations this year and India has decided to give the status of Strategic Partnership to India-Italy partnership" on this occasion.
2. India emphasized on further strengthening economic ties, and added that 'Make in India' and 'Self-reliant India' campaigns are opening up immense investment opportunities.
3. India and Italy are walking shoulder to shoulder in the fight against terrorism and separatism, and taking steps to further strengthen this cooperation.
4. To celebrate the 75th anniversary of the relations between India and Italy, PM Modi said "India decided to make an action plan." With this, we will be able to showcase the diversity, history, science and technology, innovation, sports and achievements of both countries on the global stage."
5. India Italy's active participation in the Indo-Pacific, saying the move will help in identifying concrete themes for enhancing our cooperation in the Indo-Pacific.
6. Italian Prime Minister Giorgia Meloni also spoke on bilateral engagement between the two countries in areas of defence and security, economy and technology.
7. For India, Italy has been closely following the European Union's Indo-Pacific Strategy and is keen to participate in it both economically as well as strategically.

Flashback:

1. Diplomatic relations between the Republic of India and the Italian Republic were established in 1947. Indian Prime Minister Jawaharlal Nehru visited Italy in 1953.
2. President Oscar Luigi Scalfaro was the first Italian head of state to visit India in February 1995. President Carlo Azeglio Ciampi visited India in February 2005.
3. Romano Prodi became the first Italian Prime Minister to visit India in February 2007. Indian Prime Minister Manmohan Singh visited Italy to attend the 35th G8 summit at L'Aquila in July 2009.
4. The two leaders described Gentiloni's visit to India in 2017 as a "new beginning" and a great opportunity for both countries.

Social Stock Exchange and its link to NPO and FPO

GS Paper -3 (Economy)

The National Stock Exchange of India received the final approval from the markets regulator Securities and Exchange Board of India (SEBI) to set up a Social Stock Exchange (SSE). The Finance Minister, presenting the Union Budget back in 2019, had proposed to initiate steps for creating a stock exchange under the market regulator’s ambit.

More about the news:

It was argued that it was time “to take our capital markets closer to the masses and meet various social welfare objectives to inclusive growth and financial inclusion.” The proposal was cleared in September 2021.

About Social Stock Exchange:

1. The SSE would function as a separate segment within the existing stock exchange and help social enterprises raise funds from the public through its mechanism.
2. It would serve as a medium for enterprises to seek finance for their social initiatives, acquire visibility and provide increased transparency about fund mobilisation and utilisation.
3. Retail investors can only invest in securities offered by for-profit social enterprises (SEs) under the Main Board.
4. In all other cases, only institutional investors and non-institutional investors can invest in securities issued by SEs.

About eligibility:

1. Any non-profit organisation (NPO) or for-profit social enterprise (FPSEs) that establishes the primacy of social intent would be recognised as a social enterprise (SE), which will make it eligible to be registered or listed on the SSE.
2. The seventeen plausible criteria as listed under Regulations 292E of SEBI’s ICDR (Issue of Capital and Disclosure Requirements) Regulations, 2018 entail that enterprises must be serving to eradicate either hunger, poverty, malnutrition and inequality; promoting education, employability, equality, empowerment of women and LGBTQIA+ communities; working towards environmental sustainability; protection of national heritage and art or bridging the digital divide, among other things.
3. At least 67% of their activities must be directed towards attaining the stated objective. This is to be established by enumerating that, in the immediately preceding three-year period, either 67% of its average revenue came from the eligible activities, expenditure (in the same proportion) was incurred towards attaining the objective or the target population constitutes 67% of the overall beneficiary base.
4. Corporate foundations, political or religious organisations or activities, professional or trade associations, infrastructure and housing companies (except affordable housing) would not be identified as an SE.
5. Additionally, NPOs would be deemed ineligible, should it be dependent on corporations for more than 50% of its funding.

How do NPOs raise money?

1. NPOs can raise money either through issuance of Zero Coupon Zero Principal (ZCZP) Instruments from private placement or public issue, or donations from mutual funds.
2. SEBI had earlier recognised that NPOs by their very nature have primacy of social impact and are non-revenue generating. Thus, there was a need to provide NPOs a direct access to the securities market for raising funds.
3. ZCZP bonds differ from conventional bonds in the sense that it entails zero coupons and no principal payment at maturity. The latter provisions a fixed interest (or repayment) on the funds raised through varied contractual agreement, whereas ZCZP would not provision any such return instead promising a social return.
4. It is mandatory that the NPO is registered with the SSE for facilitating the issuance.

How do FPOs raise money?

1. For-Profit Enterprises (FPEs) need not register with social stock exchanges before it raises funds through SSE. However, it must comply with all provisions of the ICDR Regulations when getting through the SSE.
2. It can raise money through issue of equity shares (on main board, SME platform or innovators growth platform of the stock exchange) or issuing equity shares to an Alternative Investment Fund including Social Impact Fund or issue of debt instruments.