Current Affair-March 15, 2021

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CURRENT AFFAIRS

New NPC amendment

National People’s Congress (NPC) of Chinaapproved amendment to Honk Kong’s electoral system. It  changes  how Hong Kongchooses its leaders.

What are the changes made?

  1. NPC amendment gives Beijing­appointed politicians greater power in running the HKSAR’s politics.
  2. It bestows greater power on a newly expanded Election Committee of 1,500 nominated members, up from 1,200 previously. The 300 new members will include Hong Kong’s representatives to the NPC (the legislature) and the Chinese People’s Political Consultative Conference (the upper house), who are chosen by Beijing.
  3. Thecommittee, which has in the past been responsible for choosing Hong Kong’s Chief Executive, will now also choose the additional Legislative Council members.
  4. Anew “candidate qualification review committee”, has been setup. It is responsible for reviewing and confirmingthe qualifications of candidates for Election Committee members, the Chief Executive, and Legislative Council members. This committee can vet any candidate and disqualify them if it deems they are not “patriots”.

Currently, 35 of the 70 members of Hong Kong’s Legislative Council are directly elected through “geographical constituencies”, while 35 are nominated from “functional constituencies” (referring to a range of special interest groups that are broadly pro­ establishment).

Now, the size of the Legislative Council will be expanded to 90, with the additional 20 members joining the 35 others who are nominated, thus reducing the share of directly elected representatives.

Impact on “one country, two systems” model

  • Under the Basic Law — the Constitution that has governed Hong Kong since 1997 — the SAR is a part of China but enjoys “a high degree of autonomy” and “executive, legislative and independent judicial power”, except in foreign policy and defence. It also says “the socialist system and policies shall not be practised” in Hong Kong for 50 years.
  • If Hong Kong’s pro­democracy parties are concerned about the “two systems” part of the formula, Beijing is now emphasising the importance of “one country”.

Sino­British Joint Declaration

The treaty was signed be­ fore Britain handed Hong Kong back to China in 1997 and was designed to allay fears about its future under Beijing’s rule.

It guarantees the financial hub special status, including a high degree of autonomy to manage its own affairs and the right to freedom of speech.

Honk Kong is Special Administrative Region (SAR) of Chinaand has been ruled under the “one country, two systems” model since its return to China in 1997.

Source: The Hindu

Review of quota cap

Supreme Court will hear all the States on the 50% limit on total reservation imposed by the court in the Indra Sawhney case (1992). It will hear the views of the States on the 102nd Amendment of the Constitution.

Issues to be enquired

  1. Whether the judgment in Indra Sawhney vs Union of India, known as the Mandal verdict, needs to be referred to a larger Bench.
  2. Whether the reservation for Marathas effected through a 2018 Act (the Socially Economically Backward Class Act)and amended in 2019, is covered by the “exceptional circumstances” mentioned in the Indra Sawhney judgment.
  3. Whether the power of State governments to make inclusions and exclusions from the list of backward classes has been taken away by the 102nd amendment of Constitution.
  4. Whether newly introduced Article 342A of the Constitution abridges  State legislatures’ power to enact laws under Articles 15(4) and 16(4), which respectively deal with special provisions for other backward classes and reservation in employment, and whether all this affects federal structure of the Constitution

Past judgments on a ceiling for quotas

  1. M.R. Balaji vs State of Mysore (1962):
    • The special provision for backward classes, should not normally exceed 50%.
    • The order earmarking 68% of seats in engineering, medical and other technical courses was a “fraud” on the Constitution.
    • However, it added that it would not attempt to lay down in an inflexible manner what the proper percentage of reservation should be.
    • The presumption behind the 50% rule was that equality of opportunity was the norm, and any special provision for socially and educationally backward classes or reservation for backward classes in public employment was an exception.

The 102ndamendment (2018) grants constitutional status to National Commission for Backward Classes and says the President would notify the lists of backward classes for all States in consultation with the

2. Kerala vs. N.M. Thomas (1975)

  • It disagreed with the proposition made in Balaji judgement.
  • It said the special measures in favour of backward classes in Articles 15 and 16 were not exceptions to the rule. On the contrary, these were an emphatic way of ensuring equality of opportunity.
  • The 50% norm in Balaji was only a rule of caution and does not exhaust all categories.

3. Indra Sawhney

  • Even though most judges agreed that reservation was not an exception to the equality norm, the court ultimately laid down the 50% limit.
  • It cited Dr. B.R. Ambedkar’s opinion in theConstituent Assembly that reservation should be “confined to a to a minority of seats” and  fixed the maximum permissible quota at 50%.
  • It said that the strict rule could be relaxed in extraordinary situations given the country’s great diversity.
Source: The Hindu

Connection between Martian ‘blueberries and Kutch

A recentresearch paper notes that‘blueberries’ in India and Mars share similar characteristics.

What are Martian blueberries ?

  • In 2004, NASA’s Mars exploration rover ‘Opportunity’ found several small spheres on the planet. These are informally named Martian blueberries.
  • Opportunity’s spectrometers studied the mineralogy and noted they were made of iron oxide compounds called haematites.
  • The widely accepted for­mation mechanism of haematite concretion [hard solid mass] is precipitation from aqueous fluids. Haematite is known to form in oxidising environments, and based on the experience on Earth, it isinferred that water must have al­so played a crucial role in the formation of grey haematite on Mars.

The presence of haematites suggests that there was water present on Mars. They also indicate that the planet had an atmosphere with oxygen as haematites need oxygen to stabilise.

Gujarathaematite

  • Scientists have been studying the Jhuran formation in Gujarat which is between 145 and 201 million years old.
  • Haematite concretions in the area resemble the ones on Mars.They have similar morphology – spherical, often doublet and triplet and similar mineralogy – a mixture of haematite and goethite.

Significance of Kutch

  • Kutch area is a potential Martian analogue locality.
  • It has been argued that the transformation from the wet and humid to dry and arid environment on Mars is mimicked by the history of Kutch.
  • There may be several other localities in Kutch that share a geologic history of the surface to near­surface processes that appear to be­ similar to ancient Mars.
  • The concretions in the Jhuran Formation of Kutch reinforces the need to use the Kutch area for further analogue studies of the Martian surface.

Source: The Hindu

Sebi’s new AT1 bond norms

The decision of Securities and Exchange Board of India (Sebi) to slap restrictions on mutual fund (MF) investments in additional tier-1 (AT1) bondsraised concern in  MF and banking sectors.

 The Finance Ministry has asked the regulator to withdraw the changes as it could lead to disruption in the investments of mutual funds and the fund-raising plans of banks.

What are AT1 bonds? What’s total outstanding in these bonds?

  • AT1 Bonds stand for additional tier-1 bonds.
  •  These are unsecured bonds which have perpetual tenure

( i.e. have no maturity date).

  • They have call option, which can be used by the banks to buy

these bonds back from investors.

  • These bonds are typically used by banks to bolster their core

or tier-1 capital.

  • AT1 bonds are subordinate to all other debt and only senior to common equity.
  • Mutual funds (MFs) are among the largest investors in perpetual debt instruments, and hold over Rs 35,000 crore of the outstanding additional tier-I bond issuances of Rs 90,000 crore.

According to the Sebi, these instruments could be riskier than other debt instruments. The Sebi has probably made this decision after the RBI allowed a write-off of Rs 8,400 crore on AT1 bonds issued by Yes Bank Ltd after it was rescued

Action by SEBI

  • In a recent circular, Sebi told mutual funds to value these perpetual bonds as a 100-year instrument. Thismeans MFs have to make the assumption that these bonds would be redeemed in 100 years.
  • It also asked MFs tolimit the ownership of bonds at 10% of the assets of a scheme.

Impact on MFs

Typically, MFs treated the date of the call option on AT1 bonds as maturity date. Now, if these bonds are treated as 100-year bonds, it raises the risk in these bonds as they become ultra long-term.

This could also lead to volatility in the prices of these bonds as the risk increases the yields on these bonds rises.

  • Higher yield will drive down the price of bond,which in turn will lead to a decrease in the net asset value of MF schemes holding these bonds.
  • Moreover, these bonds are not liquid and it will be difficult for MFs to sell these to meet redemption pressure.

Bond yields and bond prices move in opposite directions.

Impact on banks

  • AT1 bonds have emerged as the capital instrument of choice for state banks as they strive to shore up capital ratios.
  • If there are restrictions on investments by mutual funds in such bonds, banks will find it tough to raise capital at a time when they need funds in the wake of the soaring bad assets.

Why has the Finance Ministry asked Sebi to review the decision?

  • The Finance Ministry has sought withdrawal of valuation norms for AT1 bonds prescribed by the Sebi for mutual fund houses as it might lead to mutual funds making losses and exiting from these bonds, affecting capital raising plans of PSU banks.
  • The government doesn’t want a disruption in the fund mobilisation exercise of banks at a time when two PSU banks are on the privatisation block.
Source: Indian Express

UN Human Rights Council

Context:UNHRC’s Working Group against Arbitrary Detentions (WGAD) adopted an opinion critical of the government’s workings in the case ofJamia MilliaIslamia student SafooraZargar, who was pregnant when Delhi police arrested her in April 2020 over the Citizenship law protests and the Delhi riots and referred the case of  detention of to three Special Rapporteurs for action.

About UNHRC

  • The Human Rights Council is an inter-governmental body within the United Nations system responsible for strengthening the promotion and protection of human rights around the globe.
  • It addresses situations of human rights violations and make recommendations on them.
  • It has the ability to discuss all thematic human rights issues and situations that require its attention throughout the year.
  • The Council was created by the United Nations General Assembly on 15 March 2006 by resolution60/251.
  • The Human Rights Council replaced the former United Nations Commission on Human Rights.
  • It is headquartered in Geneva, Switzerland.The Office of the High Commissioner for Human Rights (OHCHR) serves as the Secretariat of the Human Rights Council.

Membership:

  • The Council is made of 47 Member States, which are elected by the majority of members of the General Assembly of the United Nations through direct and secret ballot.
  • The General Assembly takes into account the candidate States’ contribution to the promotion and protection of human rights, as well as their voluntary pledges and commitments in this regard.
  • Members of the Council serve for a period of three years and are not eligible for immediate re-election after serving two consecutive terms.
  • The Council’s Membership is based on equitable geographical distribution. Seats are distributed as follows:
    • African States: 13 seats
    • Asia-Pacific States: 13 seats
    • Latin American and Caribbean States: 8 seats
    • Western European and other States: 7 seats
    • Eastern European States: 6 seats

Procedures and Mechanisms:

  1. Universal Periodic Review: UPR serves to assess the human rights situations in all United Nations Member States.
  2. Advisory Committee: It serves as the Council’s “think tank” providing it with expertise and advice on thematic human rights issues.
  3. Complaint Procedure: It allows individuals and organizations to bring human rights violations to the attention of the Council.
  4. UN Special Procedures: These are made up of special rapporteurs, special representatives, independent experts and working groups that monitor, examine, advise and publicly report on thematic issues or human rights situations in specific countries.
Source: The Hindu

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