Contents

  1. Cabinet approves President’s rule in Puducherry
  2. Winter pollution rising: CSE
  3. SEBI moots concept of ‘accredited investor’

CABINET APPROVES PRESIDENT’S RULE IN PUDUCHERRY

Context:

The Union Cabinet approved a proposal by the Home Ministry to dissolve the Puducherry Assembly and impose President’s rule in the Union Territory.

The decision comes after the government had lost power during a vote of confidence and no party claimed to form a government following the resignation of the Chief Minister.

Relevance:

GS-II: Polity and Governance

Dimensions of the Article:

  1. When can State Emergency be imposed?
  2. Impact of Imposition of President’s rule: Present
  3. Extension, Lapse and Revocation of President’s Rule
  4. When is it NOT Okay to impose President’s rule?
  5. S. R. Bommai Case Regarding President’s Rule
  6. Administration of Union Territories

When can State Emergency be imposed?

  • When a state government is functioning correctly, it is run by an elected Council of Ministers responsible to the state’s legislative assembly.
  • The council is led by the chief minister, who is the de facto chief executive of the state and the Governor is only a constitutional head.
  • In certain situations- suspension of a state government and the imposition of direct rule of the Centre becomes necessary and such a condition is referred to as “State Emergency” or “Constitutional Emergency”.
  • The Direct rule of the Centre is referred to as “President’s Rule”.

According to Article 356, President’s rule can be imposed when:

The Governor of the State sends a report to the President that he is satisfied that the current situation in the State is such that the government cannot be run in accordance with the provisions of the Constitution and President is satisfied that such a condition is present where the State Machinery or the Legislature fails to run according to the Constitution

                                                        Or

If the President is satisfied of such a situation existing even without the Governor sending any such report.

  • Hence, it can be understood that when the Government or the State Legislature is not functioning according to the Constitution (in a manner that the A.P. High Court is ordering an enquiry into) the State Government can be suspended and the Centre can take control and have the executive authority be exercised through the Governor under Article 356.
  • However, the expression “Breakdown of Constitutional Machinery” or “State Machinery” has NOT been defined in the Indian Constitution.

Impact of Imposition of President’s rule: Present

  • According to Article 356: when the state government is unable to function according to the Constitutional Provisions, the Union Government can take direct control of the State machinery.

When President’s rule is imposed:

  1. The Council of Ministers is dissolved, vacating the office of Chief Minister.
  2. Executive authority is exercised through the centrally appointed governor, who has the authority to appoint other administrators to assist them.
  3. The State Legislative Assembly (Vidhan Sabha) is either prorogued or dissolved, necessitating a new election.
  4. The President gets the power to declare that the State Legislature’s powers can be exercised by the Parliament. When the parliament is not in session, then the President can promulgate ordinances with respect to State Administration.

Following the 1994 landmark judgment in S. R. Bommai v. Union of India, the Supreme Court of India restricted arbitrary impositions of President’s rule.

President can exercise power only when the proclamation of State Emergency (imposing President’s rule) is approved by both Houses of Parliament.

Extension, Lapse and Revocation of President’s Rule

Extension of the President’s Rule

  • When approved by both houses, President’s rule can continue for 6 months.
  • It can be extended for a maximum of 3 years with the approval of the Parliament done every 6 months.
  • If the Lok Sabha is dissolved during this time, the rule is valid for 30 days from the first sitting of the Lok Sabha provided that this continuance has already been approved by Rajya Sabha.

The 44th Amendment Act of 1978 introduced a new provision according to which the president’s rule can only be extended over a year every 6 months under the following conditions:

  1. There is already a national emergency throughout India, or in the whole or any part of the state.
  2. The Election Commission certifies that elections cannot be conducted in the state.

Until the mid-1990s, President’s rule was often imposed in states through the abuse of authority of Governors who were in collusion with the Union government.

The Supreme Court of India in March 1994 established a precedent in S.R. Bommai v. Union of India, due to which such abuse has been drastically reduced.

Lapse of the Proclamation

  • If both Houses of Parliament disapprove or do not approve the Proclamation, the Proclamation lapses at the end of the two-month period.
  • In such a case, the government which was dismissed revives.
  • The Legislative Assembly, which may have been kept in suspended animation gets reactivated.

Revocation of the Proclamation

  • President’s rule can be revoked at any time by the President and does not need Parliament’s approval.
  • Since President’s rule is subject to Judicial Review, it can also be said that the Supreme Court can also revoke the Proclamation of President’s rule upon review.

When is it NOT Okay to impose President’s rule?

It is improper to impose President’ rule:

  • When the Governor recommends imposition of President’s rule (in case of hung assembly, loss of majority or resignation etc.,) WITHOUT probing the possibility of forming an alternative government with coalition.
  • When the Governor makes his own assessment of support of a ministry in the assembly WITHOUT actually allowing for the government to prove its majority on the Floor of the House.
  • When the issue is that of Maladministration in the State or allegations of corruption against ministry or Stringent financial exigencies of the state.
  • When the State government is not given prior warning to rectify itself except in case of extreme urgency leading to disastrous consequences.
  • When the power is used to sort out intra-party problems of the ruling party.

S. R. Bommai Case Regarding President’s Rule

  • S.R. Bommai Case has become one of the cases most referred to whenever there is a ‘hung assembly’ or contention regarding imposition of President’s rule.
  • The S.R. Bommai case is very significant as the verdict concluded that the power of the President to dismiss a State government is not absolute.
  • The case put an end to the arbitrary dismissal of State governments by a hostile Central government.
  • In this case, the Supreme Court also made it very clear that a Presidential Proclamation under Article 356 is subject to judicial review.
  • The verdict ruled that the floor of the Assembly is the only forum that should test the majority of the government of the day, and not the subjective opinion of the Governor.

The Supreme Court in the S.R. Bommai case enlisted the situations where the exercise of power under Article 356 could be used:

  1. When no party secures a majority after elections to the assembly – leading to a situation of a “Hung Assembly” when the government cannot be formed and the legislature is unable to elect a leader as chief minister for a time prescribed by the Governor of that state.
  2. When the party which has majority in the assembly after general elections declines to form a government (ministry) and the governor cannot find a coalition of parties commanding a majority in the assembly and hence being able to form the government.
  3. When the majority party or coalition of parties which have formed the government, lose their majority due to a breakdown of coalition or due to defection – leading to the Chief minister having only minority support in the house and the Chief minister fails / will definitely fail to prove majority, within a time prescribed by the Governor of that state.
  4. When the current government loses majority in the assembly due to a vote of no-confidence in the house, and the governor is unable to form a coalition of parties to prove majority and form the next government.
  5. When Elections are postponed for unavoidable reasons like war, epidemic, pandemic or natural disasters.
  6. When the constitutional direction (instructions) given by the Centre to the State is disregarded by the State Government.

Administration of Union Territories

Articles 239 to 241 in Part VIII of the Constitution deal with the union territories and there is no uniformity in their administrative system.

  • Every union territory is administered by the President through an administrator appointed by him.
  • Administrator of a union territory is an agent of the Central government and is not the head of state like a governor.
  • The President can also appoint the governor of a state as the administrator of an adjoining union territory.
  • Not all the UT’s have an administrator, some are directly governed by president.

 

Power of parliament to make laws in UTs

  • The Parliament can make laws on any subject of the three lists (including the State List) for the union territories.
  • The President can make regulations for the peace, progress and good government of the Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli, and Daman and Diu.
  • A regulation made by the President has the same force and effect as an act of Parliament
  • The Parliament can establish a high court for a union territory

-Source: The Hindu


WINTER POLLUTION RISING: CSE

Context:

Centre for Science and Environment (CSE) reported that the levels of PM 2.5, worsened in 43 out of 99 cities whose winter air was compared for two years, 2020 and 2019.

Relevance:

GS-III: Environment and Ecology

Dimensions of the Article:

  1. Highlights of the CSE Report on Winter Pollution
  2. Causes of the Increase in Winter Pollution
  3. Recently in news: Greenpeace Southeast Asia on Impact of Pollution

Highlights of the CSE Report on Winter Pollution

  • The cities with the worst pollution spikes in 2020 over 2019 include Gurugram, Lucknow, Jaipur, Visakhapatnam, Agra, Navi Mumbai, and Jodhpur. Kolkata is the only mega city in this group.
  • When ranked from the most to the least polluted cities, 23 of the most polluted cities are from north India.
  • There are only four cities (Satna, Mysuru, Vijaypura and Chikkamagaluru) that have met the national 24-hour standard (60 μg/m3) during the winter season.
  • Satna and Maihar in Madhya Pradesh, and Mysuru in Karnataka, are the cleanest cities in the country.
  • In 37 cities that are otherwise showing stable or declining seasonal averages, their peak pollution levels have risen significantly during winter.
  • In North India, other cities, including Delhi, have experienced the reverse, that is, an increase in the seasonal average but decline in the seasonal peak.
  • Emphasised that rather than mega cities, it was the smaller and upcoming cities that were emerging as pollution hotspots.
  • The report findings call for quicker reforms and action in key sectors of pollution – vehicles, industry, power plants and waste management to control winter pollution and bend the annual air pollution curve.

Causes of the Increase in Winter Pollution

  • In the aftermath of the lockdown, several cities reported improved pollution levels but by winter, when lockdowns were significantly eased, pollution levels had clawed back to pre-Covid-19 levels. This underlines the significant contribution of local and regional factors to a city’s pollution levels.
  • During winter, cool and calm weather traps and spikes daily pollution, particularly in north Indian cities located in the Indo Gangetic Plain.
  • In 2020, the average level of PM 2.5 during the summer and monsoon months was considerably lower than the previous year due to the summer lockdown.
  • However, the winter PM 2.5 concentration has risen compared to the 2019 winter in many cities across regions.

Recently in news: Greenpeace Southeast Asia on Impact of Pollution

Click Here to read more about Greenpeace Analysis on Economic Cost of Air Pollution and PM2.5

-Source: The Hindu


SEBI MOOTS CONCEPT OF ‘ACCREDITED INVESTOR’

Context:

Regulator SEBI sought comments on the proposal to introduce the concept of ‘accredited investors’ in the Indian securities market.

Relevance:

GS-III: Indian Economy

Dimensions of the Article:

  1. Who are Accredited investors?
  2. SEBI’s views on ‘Accredited Investors’
  3. About SEBI

Who are Accredited investors?

  • Accredited investors, also called qualified investors or professional investors, are those who have an understanding of various financial products and the risks and returns associated with them.
  • They are able to make informed decisions regarding their investments and are recognised by many securities and financial market regulators globally.
  • Generally, they are allowed to trade securities that may not be registered with financial authorities.
  • They are entitled to this privileged access by satisfying requirements regarding their income, net worth, asset size, governance status or professional experience.

SEBI’s views on ‘Accredited Investors’

  • Currently, the Indian markets have the concept of Qualified Institutional Buyers (QIBs – are those institutional investors who are generally perceived to possess expertise and the financial capacities to evaluate and invest in the capital markets), which include mutual funds, insurance companies or foreign portfolio investors. These investors enjoy greater market access.
  • However, an individual investor cannot obtain the QIB status. The concept of accredited investor will provide QIB-like status to individual investors.
  • SEBI has laid out eligibility criteria for both Indian and non-resident Indians and foreign entities.
  • It has allowed the validity of accreditation for a year from the day it is granted.
  • Such accreditation is to be carried out via ‘Accreditation Agencies’ which may be the market infrastructure institutions or their subsidiaries.

The accredited investor concept may offer benefits to investors and financial product/service providers such as:

  1. Flexibility in minimum investment amount.
  2. Flexibility and relaxation in regulatory requirements.
  3. Access to products/ services offered exclusively to accredited investors.

About SEBI

  • The Securities and Exchange Board of India (SEBI) is the regulator of the securities and commodity market in India owned by the Government of India.
  • SEBI was established in 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992.

SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive.

  1. It drafts regulations in its legislative capacity.
  2. It conducts investigation and enforcement action in its executive function.
  3. It passes rulings and orders in its judicial capacity.
  • Though this makes it very powerful, there is an appeal process to create accountability.
  • There is a Securities Appellate Tribunal which is a three-member tribunal.
  • A second appeal lies directly to the Supreme Court.

The SEBI is managed by its members, which consists of the following:

  1. The chairman is nominated by the Union Government of India.
  2. Two members, i.e., Officers from the Union Finance Ministry.
  3. One member from the Reserve Bank of India.
  4. The remaining five members are nominated by the Union Government of India, out of them at least three shall be whole-time members.

SEBI has to be responsive to the needs of three groups, which constitute the market:

  1. issuers of securities
  2. investors
  3. market intermediaries

SEBI has been vested with the following powers:

  1. to approve by−laws of Securities exchanges.
  2. to require the Securities exchange to amend their by−laws.
  3. inspect the books of accounts and call for periodical returns from recognised Securities exchanges.
  4. inspect the books of accounts of financial intermediaries.
  5. compel certain companies to list their shares in one or more Securities exchanges.
  6. registration of Brokers and sub-brokers

-Source: The Hindu

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