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Incumbent upon government servants to comply with judicial orders promptly: ap hc

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While taking a very strong exception to the government servants reprehensible habit of not complying time and again with judicial orders, the Andhra Pradesh High Court in a noteworthy judgment titled NMS Goud v. Punam Malakondaiah & Ors in Contempt Case No. 1248 of 2020 pronounced as recently as on May 6, 2022 has sentenced 3 IAS officers to one month jail for contempt of court while observing that it is incumbent on government servants to ensure that the orders of this Court are complied with promptitude.

We have seen of late how even none other than the Apex Court itself voices its sheer anguish over repeated non-compliance with various judicial orders with impunity time and again. To check this open defiance of order of courts, we see that the Andhra Pradesh High Court has resorted to take this extreme step in this leading case.

Of course, this is definitely a strong wake up call for all government servants to never take the orders of the court for granted because if they do so then it is none other than they themselves who will bear the maximum brunt in the longer run as we see in this notable case also!

To start with, this leading judgment which has attracted limelight all over and is authored by a single Judge Bench of the Andhra Pradesh High Court comprising of Justice Battu Devanand sets the ball rolling by first and foremost putting forth in para 1 that:
This Contempt Case has been filed seeking to punish the respondents for violation of the orders, dated 22.10.2019 passed in W.P.No.15797 of 2019.

To put things in perspective, the Bench then envisages in para 2 that:
The petitioner filed W.P.No.15797 of 2019 praying to declare the action of the respondent Nos.2 and 3 in not selecting the petitioner as Village Agriculture Assistant (Grade-II) in pursuance of Notification 1/2019 dated 26.07.2019 as illegal, arbitrary and violative of Articles 14, 16 and 21 of the Constitution of India and further to declare that the petitioner is entitled for selection and appointment and consequently direct the respondent Nos.2 and 4 to select and appoint the petitioner to the post of Village Agriculture Assistant (Grade-II) as per his merit.

In hindsight, the Bench then recalls in para 3 that:
This Court, by order, dated 22.10.2019, directed the respondents to consider the candidature of the petitioner to the post of Village Agriculture Assistant and pass appropriate orders, within a period of two (2) weeks from the date of receipt of a copy of this order.

Needless to say, the Bench then states in para 4 that:
Complaining the action of the respondents in not implementing the orders of this Court, the petitioner filed this Contempt Case.

As we see, the Bench then mentions in para 5 that:
The respondent Nos.1 to 3 filed their counter-affidavits.

To be sure, the Bench then notes in para 15 that:
Heard learned counsel for the petitioner and the learned counsel appearing for the Respondents.

Be it noted, the Bench then enunciates in para 16 that:
On careful perusal of the submissions made by the respective counsels and upon careful perusal of the material available on record, it is an admitted fact that this Court by order, dated 22.10.2019, directed the Respondents to consider the candidature of the petitioner to the post of Village Agricultural Assistant and pass appropriate orders within a period of two weeks from the date of receipt of a copy of the order. It appears the 1st Respondent vide Memo, dated 27.11.2019 instructed the 2nd Respondent to take immediate further necessary action. Thereafter, the 2nd Respondent did not take action as per the instructions of the 1st Respondent, dated 27.11.2019.

Truth be told, the Bench then remarks in para 17 that:
In the counter-affidavit, the 2nd Respondent is contending that he instructed the Joint Director of Agriculture, Kurnool through phone call to file counter-affidavit in contempt case to avoid legal complications. Though the 2nd Respondent contending that the 3rd Respondent is the competent authority to attend the grievance of the petitioner in pursuance of the orders of the Court, it is not stated anywhere in his counter that subsequent to receipt of the instructions from the 1st Respondent, dated 27.11.2019, he instructed the 3rd Respondent to pass orders in compliance of the order of this Court.

Notably, the Bench then discloses in para 18 that:
The order of this Court received by the 3rd Respondent on 30.11.2019. This contempt case has been filed complaining non-compliance of the order of the Court on 17.11.2020 and this Court ordered notice to the Respondents in contempt case on 20.11.2020. As per the 3rd Respondent, he has considered the case of the petitioner as directed by the Court and passed speaking order on 02.12.2020 rejecting the claim of the petitioner, since he fails to fulfill the qualifications prescribed for the post of Village Agricultural Assistant Grade-II. Therefore, it appears that only after filing of the contempt case on 17.11.2020, the 3rd Respondent issued speaking orders on 02.12.2020 to implement the order, dated 30.11.2019 of this Court.

Objectively speaking, the Bench then after analyzing everything very rightly points out without mincing any words in para 19 that:
After considering the facts mentioned above, it appears that after issuing instructions on 27.09.2019 to the 2nd respondent, no further steps are taken by the 1st respondent to implement the order. The 2nd respondent also did not take any steps or issue any instructions to the 3rd respondent to take steps to implement the order of the Court. The 3rd respondent also issued speaking order only on 02.12.2020 after filing the contempt case (i.e.) beyond the time stipulated by the Court in its order, dated 22.10.2019. As such, in our considered opinion, the Respondents disobeyed the order passed by this Court on 22.10.2019 to implement in true spirit.

Quite conspicuously, the Bench then does not mince any words to also point out further in para 20 that:
The affidavits of the respondents is silent as to why they could not file a petition before this Court seeking extension of time to comply with the Order of this Court. Having chosen not to seek extension, the respondents cannot be heard to contend that despite a direction to comply with the Order within two weeks from the date of receipt of a copy of the order, they are justified in complying with the order at their convenience, without adhering to the time limit imposed by this Court. The Order of this Court has been violated to the extent this Court directed compliance of its order within two weeks.

Quite naturally, the Bench then reveals in para 21 that:
On being asked as to what was the appropriate punishment, the learned counsel for the respondents would submit that, since the delay was unintentional, this Court should refrain from imposing any punishment on a senior Officers of the Government.

Most significantly, the Bench then without mincing any words whatsoever says in simple, straightforward and suave language in para 22 that:
I must express my inability to agree. It is incumbent upon the respondents, more particularly, those who are holding senior position in Government, to ensure that the Orders of this Court are complied with promptitude, and within the time stipulated for its compliance. Any difficulty which they may have in complying with the order of this Court would require them to invoke this Court jurisdiction seeking extension of time to comply with the orders. Admittedly, in the present case, no such efforts were made by the respondents.

Most remarkably, the Bench then has no compunction to hold in para 23 that, While holding the respondents are guilty of Contempt, and for having violated the orders of the Court to the extent they failed to comply with the order of this Court within the time specified, they are liable for punishment under the Contempt of Court Act.

As a corollary and as anticipated, the Bench then finds no difficulty in holding in para 24 that:
Accordingly, the contempt case is allowed and the contemnors are sentenced to undergo simple imprisonment for a period of one (1) month each and to pay fine of Rs.2,000/- (Rupees two thousand only) each in default of payment of fine, they shall undergo simple imprisonment for a period of one (1) week each.

Furthermore, the Bench then hastens to add in para 25 that:
The contemnor Nos.2 and 3, who are present before this Court, requested the Court to suspend the sentence. Considering their request, the sentence is suspended for a period of six (06) weeks.

What’s more, the Bench then clearly directs in para 26 that:
The 1st Contemnor is directed to surrender before the Registrar (Judicial) of this Court on or before 13.05.2022.

Finally, the Bench then concludes by holding in para 27 that:
There shall be no order as to costs. As a sequel, miscellaneous petitions pending, if any, shall stand closed.

On the whole, it is a very brief judgment wherein the single Judge Bench of the Andhra Pradesh High Court comprising of Justice Battu Devanand has sent out a loud and unequivocal message to all the government servants that they dare not take the judicial orders for granted anymore. If they do as we see in this notable case then they will have to pay a very heavy price for it and spend a month in jail for committing contempt of the court. One fervently hopes that IAS officers as also other government servants will have a cursory look at this learned judgment and take the right lessons from it and always strictly ensure that they don’t end up being on the wrong side of the stick of law as we see most unfortunately in this leading case! It merits just no reiteration that this will in their own best long term interests also! After all, which government servant will ever like to land up in jail? The answer is no one!

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Policy&Politics

Govt extends date for submission of R&D proposals

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The Government has extended the deadline for submission of proposals related to R&D scheme under the National Green Hydrogen Mission. The R&D scheme seeks to make the production, storage, transportation and utilisation of green hydrogen more affordable. It also aims to improve the efficiency, safety and reliability of the relevant processes and technologies involved in the green hydrogen value chain. Subsequent to the issue of the guidelines, the Ministry of New & Renewable Energy issued a call for proposals on 16 March, 2024.

While the Call for Proposals is receiving encouraging response, some stakeholders have requested more time for submission of R&D proposals. In view of such requests and to allow sufficient time to the institutions for submitting good-quality proposals, the Ministry has extended the deadline for submission of proposals to 27th April, 2024.

The scheme also aims to foster partnerships among industry, academia and government in order to establish an innovation ecosystem for green hydrogen technologies. The scheme will also help the scaling up and commercialisation of green hydrogen technologies by providing the necessary policy and regulatory support.

The R&D scheme will be implemented with a total budgetary outlay of Rs 400 crore till the financial year 2025-26. The support under the R&D programme includes all components of the green hydrogen value chain, namely, production, storage, compression, transportation, and utilisation.

The R&D projects supported under the mission will be goal-oriented, time bound, and suitable to be scaled up. In addition to industrial and institutional research, innovative MSMEs and start-ups working on indigenous technology development will also be encouraged under the Scheme.

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Policy&Politics

India, Brazil, South Africa to press for labour & social issues, sustainability

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The Indian delegation also comprises Rupesh Kumar Thakur, Joint Secretary, and Rakesh Gaur, Deputy Director from the Ministry of Labour & Employment.

India, on Thursday, joined the G20’s two-day 2nd Employment Working Group (EWG) meeting under the Brazilian Presidency which is all set to address labour, employment and social issues for strong, sustainable, balanced and job-rich growth for all. India is co-chairing the 2nd EWG meeting, along with Brazil and South Africa, and is represented by Sumita Dawra, Secretary, Labour & Employment.

The Indian delegation also comprises Rupesh Kumar Thakur, Joint Secretary, and Rakesh Gaur, Deputy Director from the Ministry of Labour & Employment. India has pointed out that the priority areas of the 2nd EWG at Brasilia align with the priority areas and outcomes of previous G20 presidencies including Indian presidency, and commended the continuity in the multi-year agenda to create lasting positive change in the world of work. This not only sustains but also elevates the work initiated by the EWG during the Indian Presidency.

The focus areas for the 2nd EWG meeting are — creating quality employment and promoting decent labour, addressing a just transition amidst digital and energy transformations, leveraging technologies to enhance the quality of life for al and the emphasis on gender equity and promoting diversity in the world of employment for inclusivity, driving innovation and growth. On the first day of the meeting, deliberations were held on the over-arching theme of promotion of gender equality and promoting diversity in the workplace.

The Indian delegation emphasized the need for creating inclusive environments by ensuring equal representation and empowerment for all, irrespective of race, gender, ethnicity, or socio-economic background. To increase female labour force participation, India has enacted occupational safety health and working conditions code, 2020 which entitles women to be employed in all establishments for all types of work with their consent at night time. This provision has already been implemented in underground mines.

In 2017, the Government amended the Maternity Benefit Act of 1961, which increased the ‘maternity leave with pay protection’ from 12 weeks to 26 weeks for all women working in establishments employing 10 or more workers. This is expected to reduce the motherhood pay gap among the working mothers. To aid migrant workers, India’s innovative policy ‘One Nation, One Ration Card’ allows migrants to access their entitled food grains from anywhere in the Public Distribution System network in the country.

A landmark step in fostering inclusion in the workforce is the e-Shram portal, launched to create a national database of unorganized workers, especially migrant and construction workers. This initiative, providing the e-Shram card, enables access to benefits under various social security schemes.

The portal allows an unorganized worker to register himself or herself on the portal on self-declaration basis, under 400 occupations in 30 broad occupation sectors. More than 290 million unorganized workers have been registered on this portal so far.

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Policy&Politics

India to spend USD 3.7 billion to fence Myanmar border

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India plans to spend nearly $3.7 billion to fence its 1,610-km (1,000-mile) porous border with Myanmar within about a decade, said a source with direct knowledge of the matter, to prevent smuggling and other illegal activities. New Delhi said earlier this year it would fence the border and end a decades-old visa-free movement policy with coup-hit Myanmar for border citizens for reasons of national security and to maintain the demographic structure of its northeastern region.

A government committee earlier this month approved the cost for the fencing, which needs to be approved by Prime Minister Narendra Modi’s cabinet, said the source who declined to be named as they were not authorised to talk to the media. The prime minister’s office and the ministries of home, finance, foreign affairs and information and broadcasting did not immediately respond to an email seeking comment.

Myanmar has so far not commented on India’s fencing plans. Since a military coup in Myanmar in 2021, thousands of civilians and hundreds of troops have fled from there to Indian states where people on both sides share ethnic and familial ties. This has worried New Delhi because of risk of communal tensions spreading to India. Some members of the Indian government have also blamed the porous border for abetting the tense situation in the restive north-eastern Indian state of Manipur, abutting Myanmar.

For nearly a year, Manipur has been engulfed by a civil war-like situation between two ethnic groups, one of which shares lineage with Myanmar’s Chin tribe. The committee of senior Indian officials also agreed to build parallel roads along the fence and 1,700 km (1,050 miles) of feeder roads connecting military bases to the border, the source said.

The fence and the adjoining road will cost nearly 125 million rupees per km, more than double that of the 55 million per km cost for the border fence with Bangladesh built in 2020, the source said, because of the difficult hilly terrain and the use of technology to prevent intrusion and corrosion.

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Policy&Politics

ONLY 2-3% RECOVERED FROM $2-3 TN ANNUAL ILLEGAL TRADE THROUGH BANKING: INTERPOL

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However, Stock highlighted the enormity of the challenge, noting that between 40% and 70% of criminal profits are reinvested, perpetuating the cycle of illicit financial activity.

In a press briefing held on Wednesday, Interpol Secretary General Jurgen Stock unveiled alarming statistics regarding the extent of undetected money laundering and illegal trade transactions plaguing the global banking network. Stock revealed that over 96% of the money transacted through this network remains undetected, with only 2-3% of the estimated USD 2-3 trillion from illegal trade being tracked and returned to victims.

Interpol, working in conjunction with law enforcement agencies and private financial sectors across its 196 member countries, is committed to combating the rising tide of fraud perpetrated by illicit traders. These criminal activities encompass a wide spectrum, including drug trafficking, human trafficking, arms dealing, and the illicit movement of financial assets.

Stock emphasized the urgent need to establish mechanisms for monitoring transactions within the global banking network. Currently, efforts are underway to engage banking associations worldwide in setting up such a framework. However, Stock highlighted the enormity of the challenge, noting that between 40% and 70% of criminal profits are reinvested, perpetuating the cycle of illicit financial activity. The lack of real-time information sharing poses a significant obstacle to law enforcement agencies in their efforts to combat money laundering and illegal trade.

Stock underscored the role of Artificial Intelligence (AI) in exacerbating this problem, citing its use in voice cloning and other fraudulent activities. Criminal organizations are leveraging AI technologies to expand their operations and evade detection on a global scale. Stock emphasized the importance of enhanced cooperation between law enforcement agencies and private sector banking groups. Realtime information sharing is crucial in the fight against illegal wealth accumulation.

Drawing inspiration from initiatives such as the “Singapore Anti-Scam Centre,” Stock called for the adoption of similar models in other countries to strengthen the collective response to financial crimes. In conclusion, Stock’s revelations underscore the pressing need for concerted action to combat global financial crimes. Enhanced cooperation between public and private sectors, coupled with innovative strategies for monitoring and combating illicit transactions, is essential to safeguarding the integrity of the global financial system.

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Policy&Politics

FM defends Atal Pension Scheme, highlights guaranteed returns

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Finance Minister Nirmala Sitharaman defended the Atal Pension Yojana (APY) against Congress criticism, asserting its design based on choice architecture and a guaranteed minimum 8% return. She emphasized the scheme’s opt-out feature, facilitating automatic premium continuation unless subscribers choose otherwise, promoting retirement savings. Sitharaman countered Congress allegations of coercion, stating the APY’s guaranteed returns irrespective of market conditions, supplemented by government subsidies.

Responding to Congress’s claim of scheme misuse, Sitharaman highlighted its intended beneficiaries – the lower-income groups. She criticized Congress for its alleged elitist mindset and emphasized the scheme’s success in targeting the needy. Sitharaman accused Congress of exploiting vote bank politics and coercive tactics, contrasting it with the APY’s transparent framework. The exchange underscores the political debate surrounding social welfare schemes, with the government defending its approach while opposition parties raise concerns about implementation and efficacy.

Finance Minister Nirmala Sitharaman’s robust defense of the Atal Pension Yojana (APY) against Congress criticism highlights the ongoing debate over social welfare schemes in India. Sitharaman’s assertion of the APY’s design principles, including its opt-out feature and guaranteed minimum return, underscores the government’s commitment to promoting retirement savings among lower-income groups. The Atal Pension Yojana, named after former Prime Minister Atal Bihari Vajpayee, was launched in 2015 to provide pension benefits to workers in the unorganized sector. It aims to address the significant gap in pension coverage among India’s workforce, particularly those employed in informal and low-income sectors. The scheme offers subscribers fixed pension amounts ranging from Rs. 1,000 to Rs. 5,000 per month, depending on their contribution and age at entry, after attaining the age of 60. Sitharaman’s response comes after Congress criticism alleging the APY’s inefficacy and coercive tactics in enrolment.

Congress General Secretary Jairam Ramesh described the scheme as poorly designed, citing instances of subscribers dropping out due to unauthorized account openings. However, Sitharaman refuted these claims, emphasizing the APY’s transparent and beneficiary-oriented approach. The finance minister’s defense focuses on three key aspects of the APY: Choice Architecture: Sitharaman highlights the opt-out feature of the APY, which automatically continues premium payments unless subscribers choose to discontinue.

This design element aims to encourage long-term participation and ensure consistent retirement savings among subscribers. By simplifying the decision-making process, the scheme seeks to overcome inertia and promote financial discipline among participants. Guaranteed Minimum Return: Sitharaman underscores the APY’s guarantee of a minimum 8% return, irrespective of prevailing interest rates. This assurance provides subscribers with confidence in the scheme’s financial viability and incentivizes long-term savings.

The government’s commitment to subsidizing any shortfall in actual returns further strengthens the attractiveness of the APY as a retirement planning tool. Targeting the Needy: Sitharaman defends the predominance of pension accounts in lower income slabs, arguing that it reflects the scheme’s successful targeting of its intended beneficiaries – the poor and lower-middle class. She criticizes Congress for its alleged elitist mindset and suggests that the party’s opposition to welfare schemes like the APY stems from a disconnect with the needs of marginalized communities. Sitharaman’s rebuttal also addresses broader political narratives surrounding social welfare policies in India.

She accuses Congress of exploiting vote bank politics and coercive tactics, contrasting it with the transparent and inclusive framework of the APY. The exchange underscores the ideological differences between the ruling Bharatiya Janata Party (BJP) and the opposition Congress, with each side advocating for their vision of social welfare and economic development. In addition to defending the APY, Sitharaman’s remarks shed light on the broader challenges and opportunities facing India’s pension sector.

Despite significant progress in expanding pension coverage through schemes like the APY, the country still grapples with issues such as financial literacy, informal employment, and pension portability. Addressing these challenges requires a multifaceted approach involving government intervention, private sector participation, and civil society engagement.

As India strives to achieve its vision of inclusive and sustainable development, initiatives like the APY play a crucial role in promoting economic security and social equity. Sitharaman’s defense of the scheme underscores the government’s commitment to addressing the needs of vulnerable populations and ensuring their financial well-being in the long run.

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Economic

Regulatory steps will make financial sector strong, but raise cost of capital

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India’s financial system regulator, the Reserve Bank of India (RBI), is demonstrating a serious commitment to improving governance and transparency at finance companies and banks, with the RBI’s recent measures aimed at curtailing lenders’ overexuberance, enhancing compliance culture and safeguarding customers.

While the global ratings firm has appreciated the RBI’s “diminishing tolerance for non-compliance, customer complaints, data privacy, governance, know-your-customer (KYC), and anti-money laundering issues”, it has cautioned that increased regulatory risk could impede growth and raise the cost of capital for financial institutions. “Governance and transparency are key weaknesses for the Indian financial sector and weigh on our analysis. The RBI’s new measures are creating a more robust and transparent financial system,” says S&P Global Credit Analyst, Geeta Chugh. “India’s regulator has underscored its commitment to strengthening the financial sector. The drawback will be higher capital costs for institutions,” Chugh cautions.

The RBI measures include restraining IIFL Finance and JM Financial Products from disbursing gold loan and loans against shares respectively and asking Paytm Payments Bank (PPBL) to stop onboarding of new customers. Earlier in December 2020, the RBI suspended HDFC Bank from sourcing new credit card customers after repeated technological outages. These actions are a departure from the historically nominal financial penalties imposed for breaches, S&P Global notes.

Besides, as the global agency points out, the RBI has decided to publicly disclose the key issues that lead to suspensions or other strict actions against concerned entities and become more vocal in calling out conduct that it deems detrimental to the interests of customers and investors. “We believe that increased transparency will create additional pressure on the entire financial sector to enhance compliance and governance practices,” adds Chugh. The global agency has also lauded the RBI’s recent actions demonstrating scant tolerance for any potential window-dressing of accounts.

These actions include the provisioning requirement on alternative investment funds that lend to the same borrower as the bank finance company. Amidst the possibility of some retail loans, such as personal loans, loans against property, and gold loans getting diverted to invest in stock markets and difficulty of ascertaining the end-use of money in these products, S&P Global underlines the faith of market participants that the RBI and market regulator, the Securities and Exchange Board of India, want to protect small investors by scrutinizing these activities more cautiously.

On the flip side, at a time of tight liquidity, the RBI’s new measures are likely to limit credit growth in fiscal 2025 (year ending March 2025). “We expect loan growth to decline to 14 per cent in fiscal 2025 from 16 per cent in fiscal 2024, reflecting the cumulative impact of all these actions,” says Chugh. The other side of the story is that stricter rules may disrupt affected entities and increase caution among fintechs and other regulated entities and the RBI’s decision to raise risk weights on unsecured personal loans and credit cards may constrain growth. Household debt to GDP in India (excluding agriculture and small and midsize enterprises) increased to an estimated 24 per cent in March 2024 from 19 per cent in March 2019. Growth in unsecured loans has also been excessive and now forms close to 10 per cent of total banking sector loans.

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