Today's Headlines

Today's Headlines - 26 March 2023

Laws under which MP has been disqualified

GS Paper - 2 (Polity)

Congress leader Rahul Gandhi has been disqualified from the Lok Sabha, a day after he was convicted in a defamation case by a Surat court. A notice issued by the Lok Sabha Secretariat said he stood disqualified from the House from, the day of his conviction. Rahul Gandhi has to now move a higher court and get his conviction stayed.

What is the notice?

  1. The notice read, “Consequent upon his conviction by the Court of the Chief Judicial Magistrate, Surat C.C./18712/2019, Shri Rahul Gandhi, Member of Lok Sabha representing the Wayanad Parliamentary Constituency in Kerala stands disqualified from the membership of the Lok Sabha from the date of his conviction i.e. 23 March, 2023 in terms of the provisions of Article 102 (1)(e) of the Constitution of India read with Section 8 of the Representation of People Act,1951.”

What is Article 102 of the Indian Constitution?

  1. Article 102 deals with the disqualification of MPs from either house of the Parliament.

  2. Part (1) of the article lists the reasons why an MP can be disqualified. These include, “(a) if he holds any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holder; (b) if he is of unsound mind and stands so declared by a competent court; (c) if he is an undischarged insolvent; (d) if he is not a citizen of India, or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgment of allegiance or adherence to a foreign State; (e) if he is so disqualified by or under any law made by Parliament.”

  3. In Rahul Gandhi’s case, the last point (if he is so disqualified by or under any law made by Parliament) applies. The law under which he has been disqualified is the Representation of People Act, 1951.

What is the Representation of People Act, 1951?

  1. The Representation of the People Act, 1951 is an act of Parliament of India to provide for the conduct of election of the Houses of Parliament and to the House or Houses of the Legislature of each State, the qualifications and disqualifications for membership of those Houses, the corrupt practices and other offences at or in connection with such elections and the decision of doubts and disputes arising out of or in connection with such elections. It was introduced in Parliament by law minister Dr BR Ambedkar.

  2. There are several provisions that deal with disqualification under the RPA.

  3. First, disqualification is triggered for conviction under certain offences listed in Section 8(1) of The Representation of The People Act.

  4. This includes specific offences such as promoting enmity between two groups, bribery, and undue influence or personation at an election.

  5. Senior Samajwadi Party leader Azam Khan lost his Uttar Pradesh Assembly membership in October 2022 after he was convicted in a hate speech case. Defamation does not fall in this list.

  6. Section 8(2) also lists offences that deal with hoarding or profiteering, adulteration of food or drugs and for conviction and sentence of at least six months for an offence under any provisions of the Dowry Prohibition Act.

  7. Section 8(3) states: “A person convicted of any offence and sentenced to imprisonment for not less than two years shall be disqualified from the date of such conviction and shall continue to be disqualified for a further period of six years since his release.” This is the provision under which Rahul Gandhi has been disqualified.

How does the disqualification work?

  1. The disqualification can be reversed if a higher court grants a stay on the conviction or decides the appeal in favour of the convicted lawmaker.

  2. Significantly, the stay cannot merely be a suspension of sentence under Section 389 of the Code of Criminal Procedure (CrPC), but a stay of conviction.

  3. Over the years, the law has changed when it comes to disqualification. Under the RPA, Section 8(4) stated that the disqualification takes effect only “after three months have elapsed” from the date of conviction. Within that period, lawmakers could file an appeal against the sentence before the High Court.

  4. However, in the landmark 2013 ruling in ‘Lily Thomas v Union of India’, the Supreme Court struck down Section 8(4) of the RPA as unconstitutional. This is what has allowed the Lok Sabha Secretariat to immediately disqualify Rahul Gandhi.

Transgender female athletes can’t compete in female events

GS Paper - 2 (Society)

Transgender women have been barred from competing in the female category by World Athletics (WA), the international governing body for track and field, following a vote on 23 March 2023. WA has followed the path of FINA, the international swimming federation, which enforced a similar ban in June last year.

What does the ban mean?

  1. Transgender women who have experienced male puberty will not be able to compete in the female competition after 31 March 2023 this year. However, the World Athletics Council has set up a working group to conduct research “to further consider the issue of transgender inclusion”.

  2. The former double Olympic gold medalist in the 1,500 metres emphasised on “fair and meaningful” female competition.

  3. Decisions are always difficult when they involve conflicting needs and rights between different groups, but we continue to take the view that we must maintain fairness for female athletes above all other considerations.

Why have transgender women been barred?

  1. In its ‘Eligibility Regulations for Transgender Athletes’, WA focuses on the physical advantages men have over women post-puberty.

  2. The substantial sex difference in sports performance that emerges from puberty onwards means that the only way to achieve the objectives set out…is to maintain separate classifications (competition categories) for male and female athletes.

  3. The debate has raged since New Zealand weightlifter Laurel Hubbard competed in the women’s 87-kg class at the Tokyo Olympics, although she had participated in the men’s category earlier.

  4. NCAA swimmer Lia Thomas used hormone replacement therapy and moved from the men’s category to the women’s category. She started breaking records in the IVY League competition before FINA stepped in.

What were the rules for transgender women before WA’s ban?

  1. Under the previous rules, there was no blanket ban, but transgender women had to reduce the amount of blood testosterone to 5 nanomoles per litre (nmol/L) and maintain this level for 12 months in order to participate.

What had WA initially proposed?

  1. In January, WA had come up with the ‘preferred option’ for transgender women. Instead of a complete ban, WA said it would allow transgender women to compete in the female category but would reduce the blood testosterone limit to below 2.5nmol/L for two years — basically cutting it down by half, and doubling the time period before they become eligible to compete.

Which other sports have banned transgender female athletes?

  1. The International Olympic Committee’s Framework on Fairness released in November 2021 stated that “athletes are not excluded solely on the basis of their transgender identity or sex variations”.

  2. But the IOC had put the onus on sports federations to put in place rules. FINA implemented a ban last year.

  3. However, it was World Rugby in 2020 which became the first international sports federation to bar transgender women from the female competition. Following this, Rugby Football League and Rugby Football Union also banned transgender women from the female competition. Last year, British Triathlon implemented a similar ban.

New Mutual Fund rules

GS Paper -3 (Economy)

The Centre amended the mutual fund rules in the Finance Bill, 2023. The debt mutual fund (Debt MF) investors will no longer receive the long-term capital gain tax benefit. They will be taxed like bank deposits. It will be applicable from April 1.

More about the news:

The amendment to the Finance Bill was passed in Parliament.

What are the current rules of taxation on mutual funds?

  • Currently, debt fund investments of over three years qualify for long-term capital gains tax.

  • Their gains are taxed at 20 per cent with indexation benefits or 10 per cent without indexation.

  • Investments of less than three years qualify for short-term gains tax, and the investor has to pay tax at his slab rate.

  • Indexation offers major tax benefits to investors, especially in the case of high inflation.

What is indexation?

  •  Indexation is a process by which an investor can account for inflation in the gains made in debt funds to reduce total tax outgo. It is done through a mechanism that uses the cost inflation index (CII).

  • The CII adjusts the purchase price of an asset for inflation in the year of its sale. It calculates taxes after accounting for inflation.

  •  In a high-inflation environment, the tax liability reduces significantly. Currently, India is facing high inflation, and thus indexation is all the more relevant.

What are the new mutual fund rules?

  • According to the amendment, debt funds with less than or equal to 35 per cent invested in equity shares will be taxed at the investors' income tax slab and treated as short-term capital gains. This is similar to how bank deposits are taxed in India.

  • The debt mutual fund investments will also not allow indexation from April 1 in the above-mentioned case.

  • Investors mainly opt for debt funds because of the tax advantage they offer over fixed deposits (FDs). It will be treated more like FD income.

  • The new changes will also apply to gold, international equity and even domestic equity fund of funds (FoFs).

  • Debt mutual funds had a favourable tax regime as compared to banks' fixed deposits and small savings.

Impact of this decision:

  • This could impact debt mutual funds’ investments in corporate bonds.

  • This move is targeted mostly towards high net-worth individuals who were using this investment as a tax-saving instrument.

  • The government intends to remove tax arbitrage by creating a consistent tax policy across all debt instruments.

Who will be impacted by the change?

  • Amongst retailer investors, senior citizens seem to be affected most who can enjoy 80TTB deduction annually on interest on Fixed Deposit but not on gain on debts funds.

  • We may see a shift from long-term debt funds to equity funds, and money may be directed towards sovereign gold bonds, bank fixed deposits and non-convertible debentures in the debt category.

  • This is good news for banks as they can attract customers with higher interest rates and increase their borrowing and saving book sizes.

Who is protected from the new changes?

All existing or new investments made before March 31 will not be affected by the proposed mutual fund tax change.

LVM3-M3 One Web India-2 mission

GS Paper -3 (Space technology)

The countdown for the launch of 36 satellites on-board LVM3-M3/One Web India-2 mission has commenced, the Indian Space Research Organisation (ISRO) said.

More about the news:

  • Network Access Associates Ltd, United Kingdom (OneWeb Group Company) has signed an agreement with ISRO's commercial arm New Space India Ltd to launch 72 satellites into Low-Earth orbits (LEO).

  • The first set of 36 satellites for OneWeb Group Company was launched on October 23, 2022.

  • OneWeb is a global communication network powered from space, enabling connectivity for governments and businesses.

  • The company which has Bharti Enterprises as a major investor is implementing the constellation of low earth orbit satellites.

  • According to OneWeb, this launch would be the 18th launch and third this year and it would be completing the first generation of LEO (Low Earth Orbit) constellation. For ISRO this would be the second launch in 2023 after the successful launch of SSLV-D2/EOS07 mission in February.

  • The company said the mission would be one of the "most significant milestones" in the history of OneWeb as it will add 36 satellites to the OneWeb fleet and complete the first ever global LEO constellation.

  • "OneWeb will soon be ready to roll out its global coverage", the Indian space agency said. ISRO said the launch vehicle mission would place the 36 first generation satellites weighing 5,805 kgs into a 450 kms circular orbit with an inclination of about 87.4 degree.

  • This is the sixth flight of LVM3 which was earlier known as Geosynchronous Satellite Launch Vehicle MkIII (GSLVMkIII). It had five consecutive missions including the Chandrayaan-2.

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