Daily Current Affairs 16 February 2024- Top News Of The Day

1. Amendments Enabling Corporate Donations Through Electoral Bonds Are Overturned by the Supreme Court

Topic: GS2 – Governance – Important aspects of governance: Transparency and accountability GS2 – Polity – Judiciary 
Knowing the details of significant legislation amendments, like the Companies Act of 2013, the Income-tax Act of 1961, and the Representation of the People Act of 1951, and their importance in the context of Indian democracy and governance, makes this topic pertinent for both the Prelims and Mains exams.

Context:

– Through the Finance Act of 2017, the government made significant legal amendments prior to the launch of the Electoral Bonds Scheme in January 2018. – These amendments included modifications to the Companies Act of 2013, the Income-tax Act of 1961, and the Representation of the People Act of 1951 (RP Act), with the goal of facilitating corporate donations to political parties. – The Supreme Court’s recent ruling, however, has invalidated these changes and reinstated the pre-Finance Act, 2017 legal status quo for all of these statutes.

More about the news:Representation of the People Act, 1951:

• Political parties were obligated by the RP Act, 1951, to reveal donations exceeding Rs 20,000 and to indicate whether the contributions came from private citizens or businesses.
• A provision exempting donations made through Electoral Bonds from this requirement was introduced by the Finance Act of 2017.
• The Supreme Court, however, overturned this amendment, highlighting the significance of striking a balance between the right to information for voters and the right to privacy for donors, particularly for contributions that have the potential to affect political decisions.

Companies Act, 2013:

• The Finance Act of 2017 also made modifications to Section 182 of the Companies Act of 2013.
• In the past, this clause capped the amount of money a business could give to political parties and mandated that contributions be disclosed, along with information about the recipient party.
• The donation cap was removed, and it was no longer necessary to identify the recipient party or the amount donated, thanks to the amendment.
• The original provision intended to prevent corruption in electoral financing was reinstated by the Supreme Court after it was determined that this amendment gave companies undue influence in the electoral process.

Income-tax Act, 1961:

• Section 13A(b) of the Income-tax Act, 1961 was amended by the Finance Act, 2017, which exempted political parties from keeping track of donations made through Electoral Bonds.
• Furthermore, Electoral Bonds and other specified methods for donations over Rs 2,000 were required by a newly added Section 13A(d).
• The Supreme Court ruled, however, that voters’ right to information was violated by exempting political parties from disclosing Electoral Bond donations.
• As a result, the court invalidated both the new Section 13A(d) and the amendment to Section 13A(b).

Conclusion:

• The Supreme Court’s decision to overturn amendments that permitted corporate donations through Electoral Bonds has brought transparency and accountability back to the financing of political parties.
• This emphasizes how crucial it is to strike a balance between preserving donor privacy rights and election finance transparency.

Practice Question: Examine the ramifications of the recent ruling by the Supreme Court, which invalidated modifications to important legislation related to electoral financing, such as the Companies Act of 2013, the Income-tax Act of 1961, and the Representation of the People Act of 1951. Examine how the court’s ruling has affected political party funding transparency and accountability, and consider the decision’s larger ramifications for Indian democracy. (15 m/250 words)

2. The Supreme Court maintains the proportionality test for fundamental rights while overturning the electoral bonds scheme.

Topic: GS2 – Governance – Important aspects of governance: Transparency and accountability GS2 – Polity – Judiciary 
Knowing the facts regarding the application of constitutional principles, such as the right to privacy, the right to free speech, and the proportionality test, in the context of state actions makes this topic pertinent for both the Prelims and Mains exams.

Context:

– The Electoral Bonds Scheme was unanimously struck down by a five-judge Constitution Bench of the Supreme Court, led by Chief Justice of India (CJI) DY Chandrachud. This decision highlights the significance of the proportionality test in determining whether state actions that infringe upon individual rights are legitimate. – This judicial review essentially involved determining whether the state’s interference with fundamental rights—like the right to free speech—is proportionate to accomplishing its goals, which include limiting the amount of money that goes to black charities and safeguarding donor confidentiality.

More about the news:Understanding the Proportionality Test:

• The proportionality test, which as stated in Article 19(1) of the Constitution, establishes whether a state action is a reasonable restriction on fundamental rights, is a crucial component of this review process.
• This standard, which was developed by judicial precedent, makes sure that government actions are appropriate, necessary, and consistent with democratic ideals.

Application of the Proportionality Test:

• The Supreme Court has highlighted the significance of the proportionality test in resolving disputes involving conflicting rights or legitimate government interests in previous rulings, including the 2018 Aadhaar Act case and the 2017 Puttaswamy judgment recognizing the right to privacy.
• The test is noteworthy in that it stipulates that state actions must be authorized by law, required for a justifiable purpose, proportionate to the need for interference, and subject to procedural safeguards against misuse.

Government’s Argument and Court’s Analysis:

• In the case of the Electoral Bonds Scheme, the government argued that both curbing black money and protecting donor anonymity are legitimate state interests.
• However, the Supreme Court, through its application of the proportionality test, determined that donor anonymity cannot justify the scheme’s infringement on voters’ right to know about political party funding.
• Notably, Justice Khanna emphasized that voters’ right to information supersedes donor anonymity in political funding.

Double Proportionality Test:

• The “double proportionality” test was first proposed by CJI Chandrachud, who acknowledged the need to strike a balance between conflicting fundamental rights like the right to privacy and the right to information.
• In accordance with this framework, the court determines whether the state has implemented the least restrictive measures to achieve both rights and determines whether any one right has been disproportionately affected.
• The CJI emphasized that donor anonymity can be preserved and black money can be curbed through the use of less invasive techniques like the electoral trusts scheme.

Conclusion:

• The Supreme Court’s ruling emphasizes how crucial it is to subject state actions impacting fundamental rights to stringent judicial scrutiny, including the proportionality test, especially in light of electoral accountability and transparency.

Why are Electoral Bonds Unconstitutional?

The court has held that the scheme is unconstitutional because: – The right to information is being violated: The plan violates Article 19(1)(a) of the Constitution by keeping the public in the dark about the funding source of political parties. Additionally, the plan promotes corporate influence in politics, foreign funding, and black money—all of which are detrimental to national sovereignty and the general welfare. – It transgresses the equality principle: The plan favors the ruling party and the main opposition parties unfairly while excluding smaller and regional parties, discriminating between political parties according to their vote share. Additionally, because the donors have the power to influence the political parties’ policies and decisions while the voters are kept in the dark, the scheme creates a divide between the two groups of people. – It transgresses the electoral reforms outlined in the constitution: The plan contradicts the goal of the constitution, which is to criminalize politics and reduce corruption. Additionally, the plan goes against the advice of numerous commissions and committees that have recommended increased disclosure and openness in political funding. The Representation of Peoples Act, 1951, which mandates that political parties reveal their contributions and expenses, is also at odds with the plan.

Practice Question: With reference to the recent ruling by the Supreme Court invalidating the Electoral Bonds Scheme, discuss the importance of the proportionality test in determining the constitutionality of state actions. (15 m/250 words)

3. After a three-year break, India resumes importing Venezuelan oil and becomes the top buyer.

Topic: GS3 – Indian Economy – Issues relating to mobilization of resources. GS2- International relations- Bilateral Relations 
Given that India heavily depends on oil imports to meet its energy needs, this topic is pertinent for both the Prelims and Mains exams. It concerns the facts surrounding India’s import of Venezuelan crude oil, which has important economic ramifications.

Context:

– Shipping fixtures and ship tracking data show that, in December and January, India surpassed all other buyers of Venezuelan crude oil, a position it had held for more than three years. – Since Indian refiners stopped importing oil from Venezuela in 2020 as a result of US sanctions against Caracas, this represents a dramatic change.

More about the news:Easing of Restrictions:

• After the US lifted some of its sanctions on Venezuela’s oil industry in October, Indian refiners—mostly Reliance Industries (RIL)—have returned to the market for Venezuelan oil, which is probably cheaper now.

Increased Imports:

• Venezuela exported approximately 191,600 barrels of crude oil per day (bpd) to India on average in December, and that number rose to over 254,000 bpd in January.
• For the corresponding months, these numbers account for more than 45% of Venezuela’s oil export earnings.

Historical Import Relationship:

• India was a regular purchaser of Venezuelan crude oil prior to the US imposing sanctions in 2019, especially through private sector refiners like RIL and Nayara Energy (NEL).
• In 2019, Venezuela ranked among the top five oil suppliers to India, giving Indian refiners access to almost 16 million tonnes of crude.

Economic Considerations:

• India’s willingness to purchase Venezuelan oil has been stated by Petroleum Minister Hardeep Singh Puri, provided that the economic climate is conducive.
• India, the third-largest crude oil consumer in the world, is largely dependent on imports to meet more than 85% of its needs.

Impact on Global Market:

• Chinese refiners have suffered as a result of Venezuela’s increased oil exports to India.
• With the lifting of US sanctions, Venezuela’s oil exports to China drastically decreased, with Indian refiners now emerging as major buyers.

Destination Ports and Volumes:

• Refiners in India, especially RIL, IOC, and HPCL-Mittal Energy, have been receiving more Venezuelan oil; loading data from December and January indicates significant volumes.
• Although the final volumes’ destination ports are still unknown, signs point to a sizable portion possibly going to RIL’s refineries.

Market Dynamics and Future Outlook:

• Market analysts suggest that India’s interest in Venezuelan oil remains strong, especially with the uncertainty surrounding US sanctions waivers.
• The possibility of Indian refiners waiting for potential waivers extension from the Biden administration before further purchases remains a topic of discussion.

Conclusion:

• India’s decision to resume importing Venezuelan oil highlights the intricate relationship between market dynamics, geopolitical concerns, and economic factors in the world’s oil trade.
• India’s choices as it manages its energy needs will affect not only its own economy but also the overall dynamics of the world’s oil markets.

What can be Done to Reduce India’s Oil Import Dependence?

– Promoting Homegrown Production: For many years to come, India will continue to be an oil-dependent nation, and even though we aim for a 10% GDP growth, the country will always require more oil. – The only way India can reduce its reliance on imports is to increase its exploration and production holdings overseas. This is how China has behaved. – In addition to redeveloping established sites, the enormous state-owned oil corporation Oil and Natural Gas Corporation (ONGC) is also exploring new and marginal fields in order to increase production. – Alternative Green Sources: India can also expand its portfolio and prioritize green energy. Power demand is increasing as a result of the strengthening economy. The demand for renewable energy has increased dramatically since the CoP26 pledges were made, requiring a large increase in capacity. – Government initiatives, private capital investments, and regulatory support all contributed to the growth of the wind industry. – Nonetheless, favorable regulations and an abundant supply of solar cells and modules globally allowed solar power to surpass wind power.

PYQ: The most significant aspect of India’s economic development is the issue of energy security. Examine India’s energy policy collaboration with countries in West Asia. (15 minutes, 250 words) (CSE (M) GS-2, UPSSC 2017)

Practice Question: Talk about the significance of India becoming the top buyer of Venezuelan oil after a three-year break and its decision to resume imports. Examine the development’s effects on the environment, geopolitics, and economy. (15 m/250 words)