January 21, 2025

Current Affairs

Buddhist excavations in Ratnagiri

Context: The Archaeological Survey of India (ASI) has made significant discoveries during ongoing excavations at the historic Ratnagiri Buddhist site in Jajpur district, Odisha.

Relevance of the Topic: Prelims: Key facts about Ratnagiri Buddhist site.

Major Highlights:

ASI’s ongoing excavations at the 5th-13th Century Buddhist complex in Ratnagiri have uncovered many ancient Buddhist artefacts, including:
- Buddhist monastery complex (the monastery dates back to 8th CE).
- Hundreds of votive stupas
- Colossal Buddha head and sculptural fragments of Buddhist deities, a massive palm.
  - The Buddha head was 3-4 feet tall and the palm was 5 feet.
- Inscribed stones, pottery, beads, stone pillars
- An ancient brick wall believed to be part of a larger structure.
- Monolithic elephant measuring 5 feet in length and 3.5 feet in height.
Significance:
- The findings enhance Ratnagiri's 1,200-year legacy and solidifies its status as a cornerstone of Buddhist heritage in Odisha. The site experts believe that Ratnagiri rivaled Nalanda as a centre of Buddhist learning.
- The current excavation will greatly enhance understanding of the evolution of Buddhism in Odisha and its connections with Southeast Asia.

Ratnagiri Buddhist Site

Ratnagiri (meaning hill of jewels) is the site of a ruined mahavihara (once the major Buddhist monastery) in Odisha.
Location:
- It is located on a hill between the Brahmani and Birupa rivers in Jajpur district.
- It is close to other Buddhist sites in the area, including Lalitagiri (oldest Buddhist monastery in Odisha) and Udayagiri.
- Ratnagiri is a part of the famous Diamond Triangle of Odisha along with Udaygiri and Lalitgiri.
Developed under the patronage of the Bhauma kara dynasty, the site flourished as a prominent Buddhist centre from the 8th to the 11th centuries CE.
- Buddhist monuments were constructed from the 5th century CE onwards, with the last work in the 13th century. The peak period is dated between about 7th to 10th CE.
- Ratnagiri began to decline in the 13th century CE due to invasions by Muslim rulers. Although some activity at the site persisted until the 16th century CE.
Key fact: Buddha sculptures discovered in Ratnagiri feature intricate and distinctive hairstyles, not found elsewhere in India.

Odisha & Buddhism

Mauryan Emperor Ashoka (304-232 BCE) invaded the kingdom of Kalinga (ancient name for Odisha) in 261 BC, which led him to embrace Buddhism. He helped in spreading the religion to Sri Lanka, and Central and Southeast Asia.
Even though there was no evidence of Buddha visiting Odisha during his lifetime, Kalinga played a great role in popularising Buddhism especially in Southeast Asia, because of its trade link with the region.
- Tapassu and Bhallika, the two merchant brothers who became the first disciples of Lord Buddha, have their origins from Utkala (another ancient name of Odisha).
Odisha has long enjoyed maritime and trade links with Southeast Asian countries.
- Pepper, cinnamon, cardamom, silk, camphor, gold, and jewellery were popular items of trade between the ancient kingdom of Kalinga and Southeast Asia.
- Odisha annually holds Baliyatra, literally ‘voyage to Bali’. It is a seven-day festival to commemorate the 2,000-year-old maritime and cultural links between Kalinga and Bali and other South and Southeast Asian regions such as Java, Sumatra, Borneo, Burma (Myanmar) and Ceylon (Sri Lanka).
Studies suggest renowned Chinese Buddhist monk and traveller- Hiuen Tsang who visited Odisha (during 638-639 AD) might have visited Ratnagiri.
In Odisha, Buddhism is stated to have particularly flourished under the Bhaumakara dynasty, which ruled parts of the state in between the 8th and 10th Century.

Death Penalty in India: Legal Framework

Context: A sessions court in Kolkata has sentenced the convict of the rape and murder of a doctor at RG Kar Medical College and Hospital to life imprisonment. The Central Bureau of Investigation (CBI) had argued strongly for the death penalty, but the court granted life imprisonment. In the RG Kar case, the convict Sanjoy Roy is 35 years old.

Relevance of the Topic: Prelims: Key facts about legal framework related to Death Penalty in India.

Death Penalty in India

The Supreme Court has ruled that a sentence of death should be passed only in the rarest of rare cases, after the court has taken into account possible aggravating and mitigating circumstances (Bachan Singh v. State of Punjab, 1980).

Rarest of Rare Test:

In the Bachan Singh case, the SC upheld the death penalty but emphasised that it should be imposed only in the rarest of rare cases, where there is no possibility of reformation.
SC laid down non-exhaustive lists of aggravating and mitigating circumstances for courts to consider while making the decision.

Aggravating and Mitigating Circumstances:

Aggravating Circumstances: Factors which could tilt decision towards death penalty:

If the murder is pre-planned, calculated, and involves extreme brutality
If the murder involves exceptional depravity
If the accused has been found guilty of murdering a public servant, police officer or a member of the armed forces while discharging their duty.
Mitigating Circumstances: Factors which could tilt decision away from death penalty:
- If the accused was under extreme mental or emotional disturbance at the time of the offence.
- Age of the accused (would not be given death sentence if they are very young or very old)
- Probability of the accused posing a continued threat to society
- Probability of reforming the accused
- If the accused was acting on the directions of another person
- If the accused believed their actions were morally justified
- If the accused suffers mentally and is unable to appreciate the criminality of their actions.

Interpretations of circumstances by the Supreme Court

1. Age of the Accused:

In some cases (E.g., Ramesh v. State of Rajasthan 2011), the Supreme Court considered the young age of the accused persons (below 30 in these cases) as an indication that they could be reformed.
Law Commission of India noted in its 262nd Report (2015) that in the cases of Death Penalty, the courts have used age as a mitigating factor very inconsistently.

2. Nature of Offence:

In the Shankar Khade case 2013, the SC emphasised the courts should compare the case before them with cases concerning similar offences to determine the punishment. This is to avoid subjectivity in the rarest of rare doctrine.
In Machhi Singh v. State of Punjab case 1983, the SC held that death could be given in cases where the “collective conscience” of society is so shocked that the judiciary is expected to impose the death penalty.

3. Possibility of Reform:

In the Bachan Singh case 1980, the SC held that the government must prove there is no possibility of reform.
In Santosh Bariyar v. State of Maharashtra case 2009, the SC said that the court will have to provide clear evidence as to why the convict is not fit for any kind of reformatory and rehabilitation scheme.
The Law Commission Report said the requirement for evidence is essential for introducing an element of objectivity into the sentencing process.

When should the Court consider these Circumstances?

In the Bachan Singh case, the SC said courts must conduct a separate trial after convicting, so that judges can be persuaded why the death sentence should not be imposed (ensure fair trial).
In Dattaraya v. State of Maharashtra (2020), the court held that if such a hearing did not take place that was a valid reason to commute a death sentence to life imprisonment.

India's first Edible Oil Survey

Context: The Union Ministry of Agriculture has launched its first-ever survey to assess edible oil consumption patterns in India, aiming to effectively implement the new Mission on Edible Oils-Oilseeds (NMEO-Oilseeds).

Relevance of the Topic: Prelims: Questions about Palm oil and edible oil data of India; National Mission for edible-oil.

Major Highlights of the Survey:

The Survey involved a 45 days questionnaire from the various stakeholders like consumers and distributors of edible oil.
Aim: To capture the consumption pattern and choice of edible oils, which will help in policy decisions.
Behavioural analysis:
- The survey also analyses the behaviour pattern and influence of advertisement, labelling and willingness to pay for premium oils.
- The survey also explores various aspects like deep-frying frequency, seasonal usage pattern and factors influencing oil selection.
Need for the survey: Report indicates that there is a rise in per capita consumption of the edible oils to over 20kg in India. This reflects the lifestyle and health risks as Indian Council for Medical Research (ICMR) recommends per capita consumption should be less than 12 Kg.

Significance of the Survey

Evaluating pattern: Help in understanding the pattern of consumption of edible oils in India, as India is the largest consumer of oil in the world.
Policy formulation: Understanding consumption patterns will help in regulation of production and import of edible oils by effective policy formulation (implementation of NMEO-Oilseeds).
Controlling advertisement: By understanding the impact of advertisement on buying patterns of consumers, the government can take effective measures to counter fake claims in edible oil advertisements by companies.
Preventive measures: The survey will allow the Ministry of Health and Family Welfare to launch an awareness campaign to counter negative health implications of consumption on health.

Issues in Indian Edible Oil Sector

Import dependency: India imports 55-60% of its edible oil requirement from nations Indonesia, Malaysia, Ukraine, etc.
Dominance of Palm Oil: Palm oil dominates the consumption with 38% share in Indian edible oil consumption.
Health challenges: Rise in oil consumption and prevalence of fast-foods raised oil consumption in India is leading to negative health implications.

Suggestive measures

Diversification of oilseed by replacing the Palm oil with other oilseeds like sesame and groundnut oil. It is beneficial for the balance of trade and health of consumers.
Promoting oil seed cultivation. More efforts like fund devolution and capacity building of farmers to cultivate oil seeds. E.g., National Mission for Edible-Oils Oilseeds programme.
Awareness: Dedicated campaign on the lines of DASH eating plan that emphasises more on the fruits and vegetable consumption by replacing edible oils from diet.
Strengthening norms: Government should make trans-fat norms more stringent under the Eat Right Campaign in line with the World Health Organisation (WHO).
- In India the trans-fat limit is 2% while as per WHO it should not be more than 1%.

About National Mission for Edible-Oils Oilseeds programme

The National Mission on Edible Oils – Oilseeds (NMEO-Oilseeds) is a dedicated initiative for boosting oilseed production in India.
Aim: To boost domestic oilseed production and achieve self-reliance in edible oils.
Implementation Period: 2024-25 to 2030-31
Financial outlay: Rs 10,103 crores
Scheme has the following targets:
- Increasing oilseed production from 39 million tonnes (2022-23) to 69.7 million tonnes by 2030-31.
- Focus on crops like Rapeseed-Mustard, Groundnut, Soybean, Sunflower, and Sesamum, as well as improving extraction from secondary sources.
- Promote high-yielding seed varieties, rice fallow cultivation, and intercropping, aiming to meet 72% of domestic edible oil needs by 2030-31.

What is Securities Transaction Tax?

Context: Despite the volatility in the stock market, the Securities Transaction Tax (STT) collection has shot up by over 75% to Rs 44,538 crore as of January 12, 2025.

Relevance of the Topic:Prelims: Key facts about the Securities Transaction Tax.

About Securities Transaction Tax

Background:
- Finance Act 2004 introduced Securities Transaction Tax (STT), as a clean and efficient way of collecting taxes from financial market transactions.
- Rationale: To prevent people evading capital gains tax by not declaring their profits on the sale of stocks.
What is STT?
- STT is a direct tax levied on every purchase and sale of securities that are listed on the recognised stock exchanges in India.
- STT is an amount to be paid over and above the transaction value. Hence, it increases transaction value.
Regulation:
- STT is governed by the Securities Transaction Tax Act (STT Act).
- STT Act has specifically listed down various taxable securities transactions i.e., transactions on which STT is leviable.
- Rate of STT: Decided by the Government and modified from time to time, if necessary.
Taxable Securities:
- Shares, scrips, stocks, bonds and debentures
- Derivatives (Futures and Options)
- Units of mutual funds and other collective investment schemes.
- Government securities of equity nature
- Equity-oriented units of mutual funds
- Rights or interest in securities
- Securitised debt instruments
Exclusion: Off-market transactions are out of the purview of STT.

Rise in STT Collection:

Securities Transaction Taxcollection has increased by over 75% to Rs 44,538 crore as of January 12, 2025, as against Rs 25,415 crore raised in the same period in 2024.
- The rise in collections comes despite a hike in STT on futures & options (F&O) of securities that was levied to curb speculative market activity in the F&O segment.
- SEBI and RBI had raised concerns over the rise in volumes in the F&O segment, which can pose a risk to macroeconomic stability.
Increased STT collections also adds to the revenue kitty of the government.

Insolvency & Bankruptcy Code: Mechanism and Challenges

Context: Certain issues have cropped up in the Insolvency and Bankruptcy Code, 2016 (IBC). The recent Supreme Court judgment in Jet Airways case highlighted the structural infirmities in India’s insolvency regime.

Relevance of the topic:

Prelims: Key facts about Insolvency and Bankruptcy Code.

Mains: Insolvency & Bankruptcy Code- Issues & Way Forward.

Insolvency and Bankruptcy Code 2016 (IBC)

Rationale: IBC Code was introduced to-
- Consolidate all the existing laws related to Insolvency and Bankruptcy in India.
- Simplify the process of insolvency resolution.
Deals with: All aspects of insolvency and bankruptcy of all kinds of companies, LLPs, Partnerships and Individuals. However, it does not deal with insolvency of banks.

Institutional Mechanism

Insolvency Professionals:
- to administer the resolution process
- manage the assets of the debtor
- provide information for creditors to assist them in decision making.
Insolvency Professional Agencies to conduct examinations to certify the insolvency professionals.
Information Utilities to report financial information of the debt owed to them by the debtor.
Adjudicating authorities:
- National Companies Law Tribunal (NCLT) for companies
- Debt Recovery Tribunal (DRT) for individuals.
Committee of Creditors (CoC):
- Either decide to restructure the debtor’s debt by preparing a resolution plan or liquidate the debtor’s assets.
- However, such a decision has to be approved by at least 66% of the votes. (Earlier threshold: 75%).
Insolvency and Bankruptcy Board:
- to regulate insolvency professionals, insolvency professional agencies and information utilities set up under the Code.

Procedure- Insolvency Resolution Process (IRP)

Liquidation (Sale of Assets)

It takes place if the Committee of Creditors (CoC) fails to come up with a resolution plan within the time limit of 330 days.

Issues in Insolvency Resolution in India

Double burden for Tribunals:
- National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) face the dual burden of handling corporate insolvencies under IBC and cases under Companies Act.
Not aligning with contemporary demands:
- NCLT was conceived in 1999 based on Eradi Committee’s recommendations. However, it was operationalised in 2016.
- NCLT’s structure reflects the economic realities of a bygone era. This leaves it ill-equipped to meet contemporary demands.
Inadequatestrength:
- The sanctioned strength of 63 members divide their time across multiple benches.
- Thus, NCLT has become a bottleneck for insolvency resolutions and corporate transactions such as mergers and amalgamations.
Delay in functioning:
- Several NCLT benches do not operate for the full working day, even when not tasked with handling cases from other benches. As a result, delays have worsened.
- According to the Insolvency and Bankruptcy Board of India (IBBI), average time for insolvency resolutions increased to 716 days in FY2023-24, up from 654 days in FY2022-23.
Lack of domain experience:
- The current method of appointment ignores the need for domain experience. Members often lack the domain knowledge required to understand the nuanced complexities involved in high-stakes insolvency matters.
- This creates a paradox where an institution tasked with resolving complex cases is hindered by a lack of specialized knowledge. (Supreme Court in the Jet Airways case).
Institutional inefficiency:
- There is no effective system in place before the NCLTs for urgent listings. The Supreme Court has highlighted a growing tendency among NCLT & NCLAT members to ignore or defy its orders.
  - This threatens the very foundation of India’s judicial hierarchy.
- This impacts both institutional efficiency as well as institutional integrity.
Sparse use of alternatives:
- The limited use of alternative dispute settlement methods adds to the problems of an already overworked system.

Way Forward: Reform proposals

Mandatory mediation: The initiative for mandatory mediation prior to the submission of insolvency applications.
Hybrid model:There is the need for a hybrid model that values judicial experience and domain expertise.
Specialised benches:
- Creation of specialised benches for different categories of cases could enhance both efficiency and expertise. This also ensures that mergers and amalgamations are cleared in time.
Proper Infrastructure:
- Adequate courtrooms and a qualified, permanent support staff are critical to sustaining these institutions within the broader economic framework.

India’s insolvency regime must evolve beyond mere debt resolution to serve as a proactive driver of economic rejuvenation, especially as the country aims to attract greater foreign investment. The time for a bold reimagining is now.

Why have Private Investments dropped?

Context: Discussions regarding the upcoming Union Budget 2025 highlights the perceived underperformance of the private sector and slowdown of private investments in India.

Relevance of the Topic: Prelims: Private Sector Investments: Key Trends; Gross Fixed Capital Formation.

Historical Context: Public and Private Sector Investments

Period of Public Sector Dominance:
- During Second and Third Five-Year Plans (1956-1966), India had massive public sector investments.
- Tax increases under TT Krishnamachari’s Budget (1958) financed these investments successfully.
Shift in the 1980s:
- From independence to economic liberalisation, private investment largely remained either slightly below or above 10% of the GDP.
- By the mid-1980s, public sector investments stagnated, and the government turned to the private sector.
- Pro-growth reforms like tax cuts in 1985 and the LPG reforms of 1991, spurred private investments, despite challenges like low consumption and high interest rates.
Post-liberalisation Era:
- Post-liberalisation, private investment took the leading role in fixed capital formation.
- Growth in private investment lasted until the global financial crisis of 2007-08. It rose from around 10% of GDP in the 1980s to around 27% in 2007-08.
- From 2011-12 onwards, private investment began to drop and hit a low of 19.6% of the GDP in 2020-21.
Recent Trends:
- Corporate tax rate reduction in 2019 (to 22%) was aimed at attracting private investment, but failed to yield desired results.
- Even with a 15-year high profit-to-GDP ratio of 5% in 2024, private sector investments in India remain sluggish.

Why have private investments dropped?

Structural issues (like policy uncertainty, issues in ease of doing business, delays in land acquisition, lengthy dispute resolution) have led to significant fall in private investment as a percentage of GDP.
High levels of NPAs in the banking sector have constrained credit availability for the private sector.
Crowding out of private investment due to expansionary fiscal policies and increased borrowings of the government.
Narrow corporate bond market due to illiquid secondary market, narrow investor base, lack of diversity of instruments and crowding out by large public issuance impacted corporate investment.
Low private consumption expenditure can also be a reason for reducing demand-driven investment opportunities.

Associated Challenges

Low Private Investment: Declining private investment has been impacting the Gross Fixed Capital Formation (GFCF) in India. Private investment in India declined from 27% of GDP in 2007-08 to 19.6% of the GDP in 2020-21. As per NSO, GFCF in India declined from 34% in 2009-10 to 26% in 2021-22.
- GFCF refers to the growth in the size of fixed capital in an economy.
  - Fixed capital refers to things such as land improvements, buildings, plants, machinery etc. which require investment to be created.
  - GFCF excludes financial assets such as bonds, stocks, and other financial instruments.
- Private GFCF can serve as a rough indicator of how much the private sector in an economy is willing to invest.
Preference to overseas investments:
- Despite benefiting from government initiatives like Make in India (shielding domestic industries), private entities prefer international investments or overseas expansion.
Labour Exploitation Concerns:
- Suggestions by industry leaders for employees to work 72-90 hours per week raise ethical and practical questions about workforce sustainability.

Policy Recommendations

Rebalancing Tax Rates:
- Government could consider revising the tax rates:
  - Increasing corporate tax
  - Reducing personal income tax
- This could increase disposable income and stimulate demand and consumption.
Focus on structural reforms like policy consistency, labour reforms, improving the ease of doing business, ease of land acquisition, early dispute resolution, etc.
Encouraging domestic investment: Introduce incentives for businesses investing in India, such as sector-specific subsidies or reduced compliance burdens for targeted industries.
Strengthen corporate bond markets and diversify financial instruments to ensure adequate capital for private investments.
Strengthening Public-Private Partnerships (PPPs): Foster collaboration in long term projects (like infrastructure) and manufacturing to share risks and benefits equitably.

The biggest cost of low private investment would be slower economic growth as a larger fixed capital base is crucial to boost economic output.