Guidelines To Curb Illegal Demolitions By Supreme Court of India 

Syllabus: GS2/Governance; Judiciary; Government Policies & Interventions

Context

• Recently, the Supreme Court of India laid down comprehensive guidelines to curb demolition of people’s homes and private properties by the government ‘only on the ground that they are accused of a crime’.

Background

• The practice of demolishing properties as a punitive measure has been observed in several states, including Uttar Pradesh, Madhya Pradesh, and Rajasthan. 
• These demolitions have often been justified on grounds of encroachment or unauthorised construction but have raised serious concerns about legality and human rights violations.

Concerns Regarding Illegal Demolition

The illegal demolition of private property is a serious issue that raises several legal and ethical concerns. 

• Violation of Fundamental Rights: Article 21 of the Constitution guarantees the right to life and personal liberty. The right to shelter is considered a part of this right, and illegal demolition can deprive individuals of their homes and basic necessities.
• Violation of Procedural Fairness and Natural Justice: This principle requires fair treatment and unbiased decision-making. Illegal demolitions can violate this principle by not providing affected individuals with a fair hearing.
• Erosion of Rule of Law: Illegal demolitions undermine the rule of law and can lead to a culture of impunity.
• Governance Concerns: Such actions can damage the government’s credibility and erode public trust.
• Displacement and Hardship: Illegal demolitions can lead to displacement, loss of livelihood, and significant financial hardship for affected individuals and families.
• Social Unrest: Such actions can spark protests and social unrest, further destabilizing the situation.

Key Guidelines Issued by the Supreme Court

• 15-Day Notice: A mandatory 15-day notice must be given before demolition to allow for legal challenge.
• Due Process: Demolitions must follow due process, with clear reasons provided by authorities.
• Legal Backing: Demolitions need proper authorization, including court orders where necessary.
• Right to Shelter: Demolitions should not proceed solely based on accusations; the right to shelter under Article 21 is emphasized.
• Right to Challenge: Property owners and tenants can challenge demolition orders during the notice period.
• Accountability: Officials conducting illegal demolitions may face disciplinary actions, contempt charges, and be liable for compensation.
• Personal Hearing: Affected parties are entitled to a personal hearing before finalizing demolition orders.
• Videography Requirement: Demolitions must be recorded for transparency.
• Contempt & Restitution: Violations of guidelines may lead to contempt proceedings and restitution costs for officials.
• Exemptions: Protections don’t apply to unauthorized structures in public spaces or court-ordered demolitions.

Conclusion

• The Supreme Court’s guidelines mark a significant step towards ensuring justice and fairness in the process of demolitions. 
• By mandating a notice period, personal hearings, and videography, the court aims to protect the rights of individuals and prevent arbitrary actions by the authorities. 
• These guidelines also highlight the importance of following due process and respecting the rule of law, setting a precedent for state laws to align with these principles.

Guidelines for Prevention of Misleading Advertisement in Coaching Sector, 2024

Syllabus: GS2/ Education

Context

• The Central Consumer Protection Authority (CCPA) has issued comprehensive guidelines to address the issue of misleading advertisements in the coaching sector.

About

• These guidelines are drafted in the wake of growing concerns about false/misleading claims, exaggerated success rates, and unfair contracts that coaching institutes often impose on students. 
• Such practices have been found to mislead students, influencing their decisions by concealing important information, giving false guarantees etc.

Important definition in the Guidelines

• Coaching includes academic support, imparting education, guidance, instructions, study programme or tuition or any other activity of similar nature but does not include counseling, sports, dance, theater and other creative activities;
• Coaching Center includes a center, established, run, or administered by any person(s) for providing coaching to more than fifty students;
• Endorser shall have the same meaning as provided under clause 2(f) of the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022.

Key Highlights of the Guidelines

• Regulation of Advertisements: The guidelines explicitly prohibit coaching institutes from making false claims related to;
  • The courses offered, their duration, faculty qualifications, fees, and refund policies.
  • Selection rates, success stories, exam rankings, and job security promises.
  • Assured admissions, high exam scores, guaranteed selections or promotions.
• Truthful Representation: Misleading representations about the quality or standard of their services are strictly prohibited. Coaching institutes must accurately represent their infrastructure, resources, and facilities.
• Convergence with National Consumer Helpline: Every coaching center will be required to partner with the National Consumer Helpline, making it easier for students to raise concerns or complaints regarding misleading advertisements and unfair trade practices.
• Fair Contracts: Coaching institutes will no longer be allowed to use successful candidate’s photographs, names, or testimonials without post-selection consent. 
• No Creation of False Urgency: The guidelines aim to address common practices in coaching that create false urgency or scarcity such as suggesting limited seats or overstating demand.
• Enforcement and Penalties: Any violation of these guidelines will be treated as a contravention of the Consumer Protection Act, 2019.
  • The Central Authority has the power to take stringent actions against offenders, including imposing penalties.

Consumer Protection Act, 2019  – This Act replaced The Consumer Protection Act, 1986, and seeks to widen its scope in addressing consumer concerns. – The new Act recognises offenses such as providing false information regarding the quality or quantity of a good or service, and misleading advertisements. – The Act came into force in July 2020 and it will empower consumers and help them in protecting their rights through its various notified rules and provisions. Central Consumer Protection Authority  – Section 10 of the Consumer Protection Act, 2019  establishes the Central Consumer Protection Authority which seeks to promote, protect and enforce the rights of consumers as a class. – Powers & Functions of CCPA: It is empowered to: 1. conduct investigations into violation of consumer rights and institute complaints / prosecution 2. order recall of unsafe goods and services 3. order discontinuation of unfair trade practices and misleading advertisements 4. impose penalties on manufacturers/endorsers/publishers of misleading advertisements.

RBI Releases List of Domestic Systemically Important Banks (D-SIBs)

Syllabus:GS 3/ Economy 

In News 

• RBI has retained State Bank of India (SBI), HDFC Bank, and ICICI Bank as Domestic Systemically Important Banks (D-SIBs) for 2024 under the same bucket structure as in 2023.
  • SBI and ICICI were classified as D-SIBs in 2015 and 2016, respectively, while HDFC joined in 2017. 

About Domestic Systemically Important Banks (D-SIBs)

• The Reserve Bank of India (RBI) designates D-SIB status to banks that are considered “Too Big to Fail” due to their size, complexity, and interconnectedness within the financial system.
• The D-SIB classification is updated annually based on the framework set by RBI in 2014.
• The Reserve Bank of India (RBI) has categorized banks into five buckets based on their risk profiles and capital requirements. This categorization is primarily based on their Additional Common Equity Tier 1 (CET1) ratio to Risk Weighted Assets (RWAs).
  • Banks in Bucket 1 must maintain the lowest Common Equity Tier 1 (CET1) capital surcharge, while those in Bucket 5 have to maintain the highest CET1 buffer.
  • RBI evaluates banks over 2% of GDP in size to determine systemic importance.  Banks above a threshold are classified as D-SIBs and assigned a bucket, determining their CET1 requirements.
• Foreign Banks Operating in India: The Financial Stability Board, with other global regulators, identifies Global Systemically Important Banks (G-SIBs) annually.
  • Foreign banks designated as  (G-SIBs) must maintain CET1 capital in India proportional to their Risk Weighted Assets (RWAs) in the country.

– Common Equity Tier 1 (CET1): It is a critical component of a bank’s capital and a key measure of its financial strength. CET1 capital includes the bank’s common shares, retained earnings, and other comprehensive income, excluding items like intangible assets and deferred tax assets that could reduce its ability to absorb losses. – Risk Weighted Assets (RWAs): It is used to determine the minimum amount of capital a bank needs to hold to cover potential losses, ensuring the bank remains stable in times of financial stress. Assets are assigned different risk weights (e.g., 0% for cash, higher percentages for loans) based on their likelihood of default. Riskier assets like loans or derivatives have higher weights, requiring more capital.

Benefits of the D-SIB Classification

• Enhanced Stability: Large banks with complex operations are essential for providing continuous financial services.
  • By requiring higher capital reserves, the RBI ensures that D-SIBs are better equipped to handle economic downturns, protecting depositors and maintaining confidence in the banking system.
• Systemic Safeguards: The classification encourages sound risk management practices among major banks, lowering the risk of disruptive bank failures.
• Preparedness for Future Shocks: The RBI’s D-SIB framework allows proactive adjustments to banks’ capital requirements, enabling the financial system to respond more effectively to future challenges.

Challenges

• Moral Hazard: The “Too Big to Fail” perception can create expectations of government support for D-SIBs in times of crisis, which may inadvertently encourage risk-taking and reduce market discipline.
• Competitive Distortions: Smaller banks, which are not classified as D-SIBs, may find it difficult to compete against these large institutions that benefit from investor confidence and market advantages tied to their perceived stability
• Increased Costs: Higher capital requirements may lead to increased operational costs for D-SIBs, potentially affecting their profitability and competitive positioning in the banking industry.

Conclusion and Way Forward 

• The D-SIB classification remains a vital tool for safeguarding India’s financial stability, ensuring that essential banking services remain available even during economic challenges. As India’s economy grows and its financial landscape evolves, the RBI’s D-SIB framework may continue to expand, potentially adding more institutions to the list.
• With proactive regulation and risk management, D-SIBs will likely continue to play a pivotal role in supporting India’s economic growth and resilience.

Bitcoin Hits All-Time High After Trump Win

Syllabus: GS3/ Economy

Context

• Bitcoin, the world’s largest cryptocurrency, has soared to an all-time high after Donald Trump’s historic win in the US presidential elections. 

What is Cryptocurrency?

• Cryptocurrency is a type of digital or virtual currency that uses cryptography for security, making it difficult to counterfeit or double-spend. 
• It operates on decentralized networks based on blockchain technology—a distributed ledger enforced by a network of computers. 
• Cryptocurrencies are typically not controlled by any central authority, which makes them theoretically immune to government interference or manipulation.

Key Features of Cryptocurrency

• Decentralization: Most cryptocurrencies operate on decentralized blockchain networks, ensuring that no single entity has control over the entire network.
• Security: The use of blockchain technology also adds a layer of protection through consensus mechanisms like Proof of Work (PoW) or Proof of Stake (PoS).
• Transparency and Anonymity: Blockchain technology allows for transparent record-keeping of transactions that are visible to all participants on the network.
  • Despite this, cryptocurrencies often offer a degree of user anonymity.
• Global Accessibility: Cryptocurrencies can be transferred across borders quickly and efficiently without the need for currency conversion or significant fees.
• Ownership: Cryptocurrency holders have full ownership of their digital assets, which are stored in digital wallets secured by private keys. 

Blockchain technology – Blockchain technology is a decentralized, distributed ledger system that records transactions across many computers in a way that ensures security and transparency. – Blockchain networks rely on consensus algorithms to validate transactions and maintain network integrity. These mechanisms ensure that only legitimate transactions are added to the chain.

Challenges with Cryptocurrency

• Regulatory Uncertainty: The lack of clear, consistent regulation stifles innovation, leads to fragmented markets, and leaves investors vulnerable.
• Market Volatility: Cryptocurrencies are known for their price swings, which can result in substantial financial loss.
• Lack of Consumer Protection: Most cryptocurrency transactions lack consumer protections. This absence led to fraud, scams, and loss of funds with limited recourse for victims.
• Environmental Impact: The energy-intensive nature of proof-of-work mining, especially in Bitcoin, raises concerns about its sustainability and environmental footprint. 

India’s Cryptocurrency Landscape

• Taxation Policies: The Indian government imposed a 30% tax on income from transfers of virtual digital assets in 2022, along with a 1% tax deducted at source (TDS) on each transaction.
  • These stringent measures have dampened domestic enthusiasm for cryptocurrency trading.
• Regulatory Uncertainty: In 2018, the Central Board of Direct Taxes proposed a ban on cryptocurrencies, and the Reserve Bank of India (RBI) restricted banks from facilitating cryptocurrency transactions labeling it as a “macro-economic risk.”
  • This decision was overturned by the Supreme Court in 2020. 

Way Forward

• Comprehensive Regulation: Clear, balanced policies that delineate the legal status of cryptocurrencies while addressing security concerns.
• Investor Education: Initiatives to inform investors about the risks and benefits of digital assets.
• Collaborative Frameworks: International partnerships for coordinated regulation and technical expertise.

Centenary of Bose-Einstein Statistics

Syllabus: GS3/ S&T, Achievement of Indians in S&T

In News

• India recently marked the centenary of Bose-Einstein Statistics, a groundbreaking contribution by physicist Satyendra Nath Bose that reshaped modern physics and quantum mechanics.

About Bose-Einstein Condensate (BEC)

• A BEC is a state of matter where a large number of bosons occupy the same quantum state.
• This occurs at extremely low temperatures, near absolute zero.
• BECs exhibit unique properties, such as superfluidity and superconductivity.
• They have applications in fields like quantum computing and precision measurement.

Significance of Bose-Einstein Statistics

• It revolutionized our understanding of quantum mechanics and statistical mechanics.
• It has led to numerous technological advancements, including lasers, transistors, and superconductors.
• It continues to be a fundamental tool in modern physics research.

Key Facts

• Particles that obey the Bose-Einstein statistics principle are known as “Bosons”.
• Bosons, unlike fermions, do not obey the Pauli exclusion principle. This means that multiple bosons can occupy the same quantum state.
• Bose-Einstein statistics is used to describe the behavior of photons, phonons, and other bosonic particles.
• It has applications in various fields, including condensed matter physics, quantum optics, and astrophysics.
• India’s National Quantum Mission (NQM) is designed to drive advancements in Quantum Computing, Communication, Sensing, and Materials. The mission aligns with India’s vision for self-reliance by 2047.