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20th July Current Affairs

Empowering CCI for negotiated case settlements

(GS-II: Statutory and non-statutory bodies)

In News:

Government has introduced the CCI bill which will allow it to settle cases with businesses accused of anti-competitive practices, including abuse of their dominant positions.

Details:

At present, the CCI is empowered to show leniency and give full exemption from penalty to a member of a cartel who makes vital disclosures about the existence of the cartel and cooperates with investigations, but negotiated settlements are not part of the rule book.

Previously, the Securities and Exchange Board of India (Sebi) and the income tax department has offered settlements under different schemes.

International practices: Negotiated ‘settlements and commitments’, are allowed in the EU, Japan and the US, to quickly resolve cases through financial or non-monetary provisions to reduce litigation.

Benefits: Settlements and commitments will help to avoid extensive procedures, cut down litigation, and make enforcement more effective while improving the investment climate for businesses by reducing uncertainty.

Competition (Amendment) Bill, 2022: – It has been introduced to improve regulatory setup by increasing the CCI’s accountability, giving it flexibility and enforcement efficiency.

Key changes made in the bill:

Increasing transparency and strengthening accountability:

A board with part-time membersto supervise CCI activities.

CCI to mandatorily issue penalty guidelinesand give reasons in case of any divergence.

Enforcement efficiency

CCI could engage in structured negotiations with parties and arrive at mutually-workable solutions without having to go through lengthy formal proceedings.

Changes in the governing structure of CCI

The regulator at present has two members in addition to chairperson Ashok Kumar Gupta, though the law allows up to six members.

Provisions for regulation of the digital economy

 About:

The Competition Commission of India (CCI) is a statutory and quasi-judicial body working under the Ministry of Corporate Affairs. It was established under the Competition Act, 2002 for the administration, implementation and enforcement of the Act, and was duly constituted in March 2009.

Amendment of EIA rules

(GS-III: Environment: Environmental impact assessment)

In News:

The Ministry of Environment, Forests and Climate Change has notified amendment to the Environment Impact Assessment (EIA) Rules.

Changes notified:

Exempted highway projects of strategic and defence importance: Any project which is 100 km from the Line of Control, among other locations, will be exempted from an environmental clearance before construction.

Impact: It will do away with the need for green clearance for the construction of the controversial Char Dham project, ( connectivity to Kedarnath, Badrinath, Yamunotri, and Gangotri shrines)

Exemption to the thermal power plant: Thermal power plants up to 15 MW based on biomass or non-hazardous municipal solid waste using auxiliary fuel such as coal, lignite or petroleum products up to 15 per cent have also been exempted.

Ports which exclusively deal in fish handling, and cater to small fishermen, will be exempted from environmental clearance.

Other projects exempted are Toll plazas that need more width for the installation of toll collection booths, and expansion activities in existing airports without an increase in the airport’s existing area.

Significance of EIA for Developmental Projects in India:

Make all the stakeholders aware of the environmental and socio-economic impact of the project

Facilitates a basis for policy decisions: EIA provides the impact assessment well before the project is implemented.

Helps to eliminate or minimize the adverse impact of developmental projects

EIA encourages the adaptation of mitigation strategies in the developmental plan

Protects the biodiversity of the environment by suggesting alternative safe project designs and methods.

Simplifies the technical issues: EIA produces an environmental management plan and summary for the non-tech general public.

EIA notification 2020 and its impact:

Public Consultation: Reduced to max 40 days and only 20 days (from 30days) for submitting a response

This will help speed up the process of EIA. However, it may give very little time for Tribal and forest dwellers who are not aware of technical details or have means to access it.

More Discretionary power for Government: Power to declare ‘economically sensitive areas’ without a public hearing as well as give any project ‘strategic tag’ (so no EIA obligation)

This is important for the clearance of strategic projects related to defence and national security as well as projects deemed too important for the nation.

However, there is fear of misuse of this clause for political or economic reasons to circumvent EIA

Post-Facto-project clearance:

This will enable ease of doing business and reduce bureaucratic delays. But it is a violation of the fundamental principles of environmental jurisprudence and is contrary to both the precautionary principle as well as the need for sustainable development.

An extended period of Environmental clearance: From 30years to 50 years

However, it raises the risk of irreversible environmental, health, and social consequence.

Baseline data: No need to cover all the seasons in a year.

This may make EIA less reliable and not reveal the full impact of EIA

Report Issues: reduced from once every six months to once every year.

This will dilute the scrutiny and it may be late before any mitigation measures could be taken for highlighted project impact.

EIA needs to provide the balance between ‘ease of doing businesses and maintaining environmental sustainability. In this context, an Independent EIA Authority can be set up for fair and objective decisions. Also, a centralized data bank for storing information and providing access to local communities and the general public to all the aspects of projects.

Giving up citizenship

Details:

Over 1.6 lakh Indians renounced their citizenship in 2021, the highest in the past five years, according to information provided by the Ministry of Home Affairs (MHA).

Details:

Over 78,000 Indians acquired U.S. citizenship, the highest among all other countries.

India does not allow dual citizenship.

The citizenship act, of 1955 prescribes three ways of losing citizenship:

By renunciation: Any citizen of India of full age and capacity can make a declaration renouncing Indian citizenship. Such declaration may not be accepted during the war. Even the minor children of the person who renounces citizenship stand to lose their Indian citizenship. However, when their children attain the age of eighteen, they may resume Indian citizenship

By termination: If a citizen of India voluntarily acquires the citizenship of another country, then he loses the citizenship of India

By deprivation: Compulsory termination of Indian citizenship by the Central government, if the person obtained the citizenship by fraud or shown disloyalty to the Constitution of India or imprisoned for a term of two years (in the last 5 years after naturalization) or citizen has been ordinarily resident out of India for a period of 7 years.

What Rs 80 to a dollar means

(GS-III: Economy)

In News:

The Indian rupee breached the exchange rate level of 80 to a US dollar recently for the 1st time.

What is the rupee exchange rate?

The rupee’s exchange rate vis-à-vis the dollar is essentially the number of rupees one needs to buy for $1. This is an important metric to buy not just US goods but also other goods and services (say crude oil) trade which happens in US dollars.

Rupee depreciation impact: when the rupee depreciates, importing goods and services becomes costlier. But the export of goods and services to other countries, become cheaper.

Why are the rupee-dollar exchange rate and forex reserves falling?

As investors are pulling money out of the Indian market, there is a fall in forex reserve and also less dollar in the Indian market would mean, the value of the dollar against the rupee would increase. Thereby depreciating the rupee.

India has a capital account surplus but a current account deficit: The net effect of BOP in India had been a surplus of $47.5 billion last year.

The RBI keeps monitoring the BoP every week and keeps intervening in such a manner which ensures that the rupee’s exchange rate does not fluctuate too much.

What will be the effect on the economy?

Under normal circumstances, rupee depreciation is good for the current account deficit because it leads to higher exports. But at present, India is already facing high inflation and continued depreciation may be making matters worse. Costlier imports (because of a weaker rupee) add to the cost-push inflation and bump up the domestic inflationary process.

A weakening rupee hurts foreign investors, who came looking for a good return, as well as Indians, who have loans abroad.

Higher Inflation: Should the INR depreciate by 5 per cent from the baseline (76 per dollar), inflation could edge up by around 20 bps while GDP growth could be higher by around 15 bps through increased net exports, according to the RBI April Monetary Policy Report.

Should policymakers prevent the fall?

Experts say it is neither wise nor possible for the RBI to prevent the rupee from falling indefinitely.

Defending the rupee will simply result in India exhausting its forex reserves over time because global investors have much bigger financial clout.

Most analysts believe that the better strategy is to let the rupee depreciate and act as a natural shock absorber to the adverse terms of trade.

What should policymakers do?

RBI (which is in charge of monetary policy) should focus on containing inflation, as it is legally mandated to do, and the government (which is in charge of the fiscal policy) should contain its borrowings”.