28, December 2016

1.Remission power lies with State: SC

Source: The Hindu

The judgment is in sync with Tamil Nadu government’s review petition

Grant Remission:

Noting that the power to grant remission is exclusively that of the State government and not the judiciary, the Supreme Court refrained itself from allowing any reprieve to four convicts who have served 25 years of their life sentence for the murder of an elderly couple in Kolkata in 1991.

  • A Bench of Justices acknowledged, in its recent judgment, that the convicts have suffered incarceration for more than 25 years and, therefore, there should be a chance for remission of further prison sentence.
  • But the court declined to intervene, simply observing that “this is a power which can be exercised by the State”.

Tamil Nadu review on Rajiv Gandhi assassination case:

The judgment is in sync with the Tamil Nadu government’s review petition on the question of who has the actual authority — the Centre or the State — in granting remission for life convicts in the Rajiv Gandhi assassination case.

Tamil Nadu has sought a review of the Constitution Bench verdict in the high-profile case, arguing that the State government and its officials are the most competent to decide whether a life term convict deserves to be granted remission.

The Constitution Bench had held that the Centre and not the State enjoyed “primacy” in deciding whether the seven life convicts in the former Prime Minister’s assassination case should be granted remission.

2.Antlers could end up in medicines

Source: The Hindu

Union government’s approval to be sought for using deer antlers in Ayurveda drugs

Antlers of spotted deer and sambar may find their way to Ayurveda medicines if a recommendation of the State Board for Wildlife (SBWL) finds favour with the National Board for Wildlife and the Ministry of Environment and Forests.

Decided to approach the Centre for suitable amendments to the Wildlife Protection Act for using the antlers for medicinal purposes.

What are ANTLERS?

Antlers are the extensions of the deer’s skull. There are three deer varieties deer, sambar, and barking deer having antlers and are found in Kerala. They shed their antlers annually.

It is believed that antlers have medicinal values and are mainly used for invigorating spleen, strengthening bones/muscles and boosting blood flow.

What are others state that?

Though some board members objected to the recommendation apprehending that such a move would lead to hunting of the animals, the Chief Minister was of the view that it shall be permitted as the clearance was sought for Oushadhi, an Ayurvedic medicine manufacturing company owned by the Kerala government.

The Wildlife (Protection) Act, 1972

  • The Wildlife (Protection) Act, 1972, has included antler in the definition of wildlife trophy. A wildlife trophy is defined as the “whole or any part of any captive animal or wild animal”.
  • Section 39 of the Act also states that “no person shall, without the previous permission in writing of the Chief Wildlife Warden or the authorised officer acquire or keep in his possession, custody or control or transfer to any person, whether by way of gift, sale or otherwise or destroy or damage such property.”
  • Wildlife and wildlife trophies are considered as owned by the government. The Act also prescribes imprisonment up to three years and fine of RS. 25,000 for offences involving wildlife trophies.

3.Watal committee suggests curbs, nominal levy on cash transaction

Source: Indian Express

The committee also noted that there should be incentives for consumers for making payments, including those for fines and penalties, to government using an electronic mode.

  • There is no evidence that the rationalisation has resulted in increase in POS (point-of-sale) infrastructure. Thus, the committee believes that there is no merit in further rationalization.

A nominal levy on high-value cash transactions, monthly, quarterly or yearly limitations on cash transactions are among the recommendations submitted to the finance ministry by the 11-member Committee on Digital Payments headed by Niti Aayog principal advisor Ratan Watal, as measures to disincentivise use of cash in the system.

Watal committee:

The committee recommends that cash transaction should be disincentivised by imposing nominal charges after a certain limit.

  • Additionally, the Committee suggests that consumer payments to government department/utilities can be a good starting point for such handling charges,” the committee’s report said.
  • The report, which was submitted to the finance ministry, was floated by the ministry for public consultations.

On the other hand, to encourage people to use the tools for digital payments,

  • The committee has suggested that all charges levied by government departments and utilities on digital payments should be removed while bearing the cost of such transactions.
  • It has also suggested that government departments and agencies be mandated to provide option to consumers to pay digitally.
  • The committee also noted that there should be incentives for consumers for making payments, including those for fines and penalties, to government using an electronic mode.
  • This could be done by giving a discount or cashback and enable consumers to make payments (including taxes) to government through suitable digital means like cards and wallets.

However, on the issue of merchant discount rate (MDR), which has been pegged to be a hindrance to incentivising credit and debit card payments, the committee noted in its report that reducing MDR would increase the disincentive to the business and have the opposite effect of slowing down the growth card payment ecosystem.

  • The committee is of the view that a market driven MDR is an important element in the business of card infrastructure, including setting up and running the terminals.
  • Capping the MDR reduces this incentive,” according to the report.

There is no evidence that the rationalisation has resulted in increase in POS (point-of-sale) infrastructure. Thus, the committee believes that there is no merit in further rationalisation.

New law needed to protect cashless customers: Expert panel on digital payments

Issues:

Stating that the drawbacks in the existing Payment and Settlement Systems Act of 2007 compel most of India to rely on cash transactions by restricting the reach of digital payments, the panel has said a Bill must be introduced to amend the law within a month, that is, in the coming Budget session of Parliament

  • The existing law specifies neither the purpose of regulating the payments market and promoting competition, nor does it pay any attention to protecting consumers in digital payments.
  • With the rising number of users of digital payment services, it is absolutely necessary to develop consumer confidence on digital payments (and) essential to have legislative safeguards to protect such consumers.

The present law is also silent on data protection issues, which are becoming more relevant now, the committee said, mooting a regime where consumers shouldn’t be liable for losses arising out of unauthorised transactions or system malfunction.

  • Though a sub-committee of the Reserve Bank of India regulates payments, the Watal committee has said that banking requires micro-prudential regulation from RBI, while payments is a separate, more technology-business driven activity, so both need to be viewed separately.
  • A new Payments Regulatory Board should be backed by law as independent of RBI and if there is any conflict between its policies and the central bank’s policies or regulations, the RBI’s decision shall prevail, the committee suggested.

  1. Centre’s nod for apex corridor development body

Source: The Hindu

National Industrial Corridor Development & Implementation Trust (NICDIT)

The Centre has approved the re-designation of the Delhi-Mumbai Industrial Corridor Project Implementation Trust Fund as National Industrial Corridor Development & Implementation Trust (NICDIT) — the apex body to oversee development of all industrial corridors across the country.

NICDIT will implement all the five proposed industrial corridors, together covering 15 States.

Keyfacts:

  • The Delhi-Mumbai Industrial Corridor, the first of the planned corridors, is under development.
  • The Chennai-Bengaluru Industrial Corridor, Bengaluru-Mumbai Economic Corridor, Amritsar-Kolkata Industrial Corridor and the Vizag-Chennai Industrial Corridor are in various stages of planning.
  • Alkesh Kumar Sharma, the CEO of the DMIC Development Corporation (DMICDC), will take additional charge as the Member Secretary and CEO of the new NICDIT.
  • “As an apex body, the NICDIT will help streamline activities and better coordination of the industrial corridor projects which are essential to our goal of becoming a global manufacturing hub.
  • The DMICDC, which is currently developing the western corridor, will serve as the Knowledge Partner (KP) to the NICDIT for all the industrial corridors until the KPs for them are in place.

  1. Ken-Betwa project gets green nod

Source: Indian Express

The National Board for Wildlife (NBWL) has given its clearance for the Ken-Betwa inter-linking of rivers (ILR) project, paving the way to begin work for linking two rivers.

 The clearance of NBWL was requires since the project requires diversion of forest land from core area of Panna Tiger Reserve.

  • However NBWL has set some conditions. They are Integration of nearby sanctuaries including Ranipur and Rani Durgavati with the Panna Tiger Reserve to compensate loss of tiger habitat and complete ban of fresh mining lease in the area.
  • The National Tiger Conservation Authority (NTCA) will take care of the landscape plan for the area with the help of Wildlife Institute of India (WII) and state forest departments.

Ken-Betwa ILR project

  • The Ken-Betwa ILR project aims to transfer surplus water from the Ken River to the Betwa basin through concrete canal to irrigate India’s worst drought-prone Bundelkhand region.
  • The project will benefit Uttar Pradesh and Madhya Pradesh in terms of meeting irrigation, drinking water and electricity needs of people across 6 districts in the two states.
  • The 221-km concrete canal will pass through Jhansi, Banda and Mahoba districts of Uttar Pradesh and Chhatarpur, Panna and Tikamgarh districts of Madhya Pradesh.
  • The project also had received green signal from the Supreme Court following the tripartite MoU involving UP, MP and Centre. The apex court in February 2012 had directed Centre to implement this project in a time-bound manner and also had appointed a high-powered committee for its planning and implementation.

Background;

  • The Ken-Betwa ILR project had received clearance of the Union Cabinet in July 2014 but the work could not begin as the mandatory clearance from the NBWL got stuck due to objections raised from wildlife conservationists and environmentalists.
  • Nearly 8,650 hectares of forest land including part of Panna National Park in Madhya Pradesh will be submerged due to implementation of this project.
  • The conservationists and environmentalists have been mainly opposing the project, flagging its impact on tiger reserve and wildlife sanctuaries.

  1. Real estate: A real fillip needs additional push post-currency pullback

Source: Indian Express

The government last month announced the withdrawal of Rs 500 and Rs 1,000 currency notes. In a country where the real estate sector is highly unorganised, with large components of cash transactions, the implications are manifold.

Nature of the real estate sector in India

  • The real estate sector in India has forward and backward linkages with as many as 265 industries. After agriculture, it is the single largest employer of illiterate labour, seasonal workers, women and unskilled workers and also supplements agricultural income.
  • The contribution which real estate makes to the economy is therefore very significant. Yet, unfortunately, while all other sectors of the economy have mostly migrated to modern high-end technology and corporate good governance practices, the real estate still largely remains unorganised.
  • This poor state of organisation is at all levels of the industry; production, technology, transactions, financing and government interface.

Primary and secondary markets

The real estate market in India can be visualised broadly in terms of the primary and the secondary market.

  1. The primary market comprises of the supply of new properties produced by real estate developers and released into the market.
  2. The secondary market comprises of second and subsequent sales.

It is believed that the volume of capital exchange in the secondary market is much more than that of the primary market. Sadly, it is in the secondary market that ‘black money’ i.e. unaccounted money is exchanged to a substantial extent.

Implications of demonetisation

As per the Central notification of November 8, Rs 500 and Rs 1,000 currency notes are no longer legal tenders.

The implications of this decision are:

  • Flushing out of black money: Those who had intentions of investing in the real estate sector now can’t transact. This means a reduction in the business for sellers and brokers, at least for quite some time to come.
  • Slowdown of ongoing projects: With a squeeze in the cash available, workers are not being paid and construction works have come to a standstill.
  • Reduction in speculation: The general slowdown in the market and economy as a whole on the one hand and the reduction, if not complete elimination of black money from the system, would lead to a reduction in the speculative investors in the market.

Decline in prices: For some time to come, maybe a year, prices would be at their lowest.

Increased liquidity in the banking sector: Banks are flush with funds now and would be under a pressure to lend and this offload would happen more in the retail lending sector to home buyers and not so much in wholesale lending to developers.

In the long run, demonetisation is good for the industry to get streamlined, more transparent and credit worthy. However, many more steps are required and demonetisation is just the beginning and a good one at that.

What are the steps needed?

1.Full implementation of RERA: The full effect of demonetisation can be actualised only if the state governments enact the Real Estate Regulation and Development Acts in their states, notify rules there under, create the authorities and tribunals and start functioning.

2.Cashless property registrations: In order that property transactions become cashless, it should be made mandatory for all property transactions to be effected either by cheque or by electronic transfer.

3.Safety measures for electronic transactions: While electronic / digital payments are being promoted, safety and security needs to be tightened so that the hard earned money of the citizens is not siphoned off by hackers and other such elements.

4.Reduction in real estate transaction costs: One of the major reasons for understatement of sale considerations is the unrealistic stamp duties.

  • With high stamp duties, the transaction costs become very high and the tendency is to circumvent. Stamp duties need to be drastically reduced.
  • In the US, the stamp duties on property registrations range from 0.5 per cent to 0.8 per cent. In India, they are in the range of 6 per cent to 14 per cent.
  1. Legislation for streamlining real estate brokerage business: Unfortunately, the Real Estate (Regulation and Development) Act, 2016, only covers the primary market and the entire secondary market for real estate is completely left untouched.
  • This is a major gap which needs to be filled up. Secondary sales transactions are carried out by real estate brokers and a major portion of dealings happen in cash. With no entry/exit barriers, anybody can become a real estate broker in India and dabble in huge cash dealings.
  1. Making FDI happen: With transparency achieved, foreign investors would be more open to invest in Indian real estate. However, for FDI to happen, a series of hurdles at the local level need to be removed. Under the ‘ease of doing business’, a small attempt has been made.
  2. Inclusion of small investors through REITs: In a more transparent system, the industry would become more credit worthy and small investors can also start looking at real estate as a credible asset class to safely invest for good returns.
  • This is another area where many restrictions need to be removed so as to make it happen. REITs needs to be top on the agenda of the government.

Way ahead:

  • It was well known that black money and real estate are intrinsically interrelated and intertwined. Successive governments did precious little for containing black money.
  • However, the present government has brought the debate once again to centrestage and has actually started acting.
  • Added to this is the ‘Digital India’, RERA and Benami Transactions legislation and other measures which, seen together, form an umbrella of initiatives to take the country towards a cleaner, professional, ethical and global environment to development and prosperity.


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