Sovereign Gold Bond Scheme

GS 3: Economy: Discontinuing SGB Scheme

Why is it in the news?

• The government is contemplating the discontinuation of the Sovereign Gold Bond (SGB) scheme due to the high cost of financing it.
• Officials believe that while the scheme was initially designed to boost gold investment, the recent decision to reduce the import duty on gold in the 2024-25 Budget has already achieved that goal by increasing demand for gold.

About Sovereign Gold Bond Scheme

• SGBs are debt securities issued by the Reserve Bank of India (RBI) on behalf of the government, with each bond unit representing one gram of gold. These bonds provide a fixed interest rate of 2.5% per annum on the initial investment.
• Investors can trade them in the secondary market, and the bonds are redeemed in Indian rupees at the prevailing market price of gold on the redemption date, based on the average closing prices of the previous three business days published by the India Bullion and Jewellers Association Ltd (IBJA).
• The scheme offers a safer alternative to physical gold by eliminating storage risks and costs, while investors also receive periodical interest. Though the tenor of the bonds is eight years, they can be redeemed after five years.

Government Concerns about Sovereign Gold Bonds

• One of the main concerns within the government is the high cost associated with financing the fiscal deficit through SGBs, which they feel does not offer substantial benefits for investors.
• Initially, there were 10 tranches of SGBs issued per year, but this number has reduced over time—from 10 to four, and then to two. This reduction reflects the government’s efforts to reduce the fiscal burden associated with the scheme.
• The government’s stance is that while the reduction in the customs duty on gold from 15% to 6% in July 2024 has increased demand for gold, it has also diminished the need for the scheme as an investment tool. Additionally, since the SGBs are not part of social welfare schemes, the government perceives fewer benefits in continuing them.
• In the 2024-25 Budget, the government reduced the gross issuances of SGBs to Rs 18,500 crore, down from Rs 29,638 crore in the interim Budget of February 2024.
• Additionally, the net borrowing through SGBs was cut to Rs 15,000 crore, compared to Rs 26,138 crore previously projected. Notably, no new SGB issuances have been made so far in the current financial year.

The Indian Constitution and Minority Rights

GS 2: Polity and Governance: Upholding Minority Rights

Why is it in the news?

• The Indian Constitution underscores the preservation of diversity as the cornerstone of minority rights. This aligns with Franklin Roosevelt’s belief that democracy cannot survive without recognizing minority rights as fundamental.
• On Minority Rights Day, observed globally on December 18, the significance of safeguarding these rights is reinforced by the United Nations’ 1992 declaration on the Rights of Persons Belonging to National, Ethnic, Religious, and Linguistic Minorities.

Historical Origins of Minority Rights

• The roots of minority rights can be traced to global history. Austria’s Constitutional Law of 1867 was one of the earliest to recognize the rights of ethnic minorities to preserve their nationality and language.
• Hungary’s Act XLIV of 1868 and Switzerland’s Constitution of 1874 also guaranteed equal rights for linguistic groups, ensuring equal access to civil services, legislation, and courts. After World War I, peace treaties with countries like Poland, Romania, and Greece incorporated provisions to protect minority rights.
• Later, Article 27 of the Universal Declaration of Human Rights affirmed every individual’s right to cultural participation and identity.

Minority Rights in the Constituent Assembly

• The framers of India’s Constitution displayed exceptional sensitivity toward the needs of minorities. Pandit G.B. Pant emphasized that satisfying minority aspirations was essential for India’s stability and progress.
• Sardar Vallabhbhai Patel’s Advisory Committee on Fundamental Rights and Minorities played a crucial role in formulating Articles 25 to 30. These articles reflect India’s multiculturalism and advocate substantive equality, going beyond universal rights to address the country’s diverse social fabric.

Rationale for Minority Rights

• The rationale for minority rights is rooted in the preservation of India’s diversity. Articles 14-18 guarantee equality, while Articles 19 and 25 ensure free speech and religious freedom.
• However, these alone cannot safeguard distinct languages, scripts, or cultures, which are protected under Article 29. Minority rights recognize that group identity is essential for individual dignity and the flourishing of cultural practices.
• Article 30 provides religious and linguistic minorities the right to establish and manage educational institutions to preserve their cultural identity. Judicial pronouncements have consistently upheld the importance of Article 30.
• In Xavier’s College (1974) and Keshavananda Bharati (1973), the Supreme Court reinforced minority rights as part of equality and the Constitution’s basic structure. The Aligarh Muslim University (2024) case further emphasized Article 30 as integral to equality and non-discrimination.

Defining Minorities and Their Rights

• Although the term ‘minority’ appears in the Constitution, it is not explicitly defined. The Supreme Court clarified that minorities must be identified at the state level, allowing Hindus in states like Punjab, Kashmir, and the northeastern regions to claim minority status and rights.
• Article 29(1) ensures that groups with distinct languages, scripts, or cultures can preserve their identity. This provision explicitly protects minority cultures from being disadvantaged in a majoritarian society.
• Article 30 guarantees minorities the right to establish educational institutions of their choice, a protection extended even to pre-Constitution institutions, as established in St. Stephens (1992) and Azeez Basha (1967).
• Articles 350A and 350B further support linguistic minorities by mandating education in one’s mother tongue at the primary level and appointing officers to safeguard linguistic minority welfare. Customary laws, such as those of the Nagas, also receive constitutional protection.

Minority Institutions and Governance

• The criteria for minority institutions have evolved through landmark judgments. The TMA Pai Foundation (2002) case left the definition of minority institutions broad and flexible.
• However, the Aligarh Muslim University (2024) case clarified that the founder of a minority institution must belong to the minority community and establish it primarily for their benefit.
• Factors such as fund collection, land acquisition, and governmental approvals are also considered, though administration does not need to remain exclusively with the minority community.
• While Article 30(2) prohibits discrimination against minority institutions in the granting of aid, the Supreme Court has ruled that such institutions cannot misuse their rights. Reasonable regulations may be imposed to prevent maladministration and maintain educational standards.
• In St. Xavier’s (1974), the court emphasized that while minority institutions have autonomy, they must adhere to general standards to ensure institutional excellence.

Conclusion

• By recognizing minority rights, the Indian Constitution seeks to balance equality and cultural diversity.
• These provisions ensure that varied identities can coexist harmoniously within India’s democratic framework, fostering an inclusive and pluralistic society.

One Nation, One Election Bill

GS 2: Polity and Governance: Simultaneous Elections

Why is it in the news?

• The government has introduced two Bills in Lok Sabha, taking the first step towards implementing the current government’s long-standing proposal of holding simultaneous elections for Lok Sabha and state Assemblies, referred to as “One Nation, One Election.”
• Law Minister introduced a Constitution Amendment Bill and a consequential Bill to amend laws governing Union Territories (UTs) and the National Capital Territory of Delhi, enabling simultaneous polls in these regions.

Key Takeaways from the Bills

• The proposed simultaneous polls will currently apply only to Parliament and state Assemblies, excluding municipal corporations. These changes could be implemented by the 2034 election cycle, assuming the 18th and 19th Lok Sabhas complete their full five-year terms.
• The Constitution Amendment Bill states that the President can notify the implementation date after the first sitting of Lok Sabha following a general election, with the earliest such date being in 2029.
• The Bills also address scenarios requiring mid-term elections at the state or central levels. Passing the amendment will require a special majority in Parliament, meeting two conditions under Article 368: a majority in both Houses and two-thirds of members present and voting.
• Municipal elections are excluded to avoid requiring additional ratification by at least half of the state legislatures.

Proposed Constitutional Amendments

• The amendments align with recommendations by the High-Level Committee on One Nation, One Election, chaired by former President Ram Nath Kovind.

Key Provisions in the Constitution Amendment Bill

1. I) Article 82A: This new article facilitates the transition to simultaneous elections.

• Clause 1: The President can notify the implementation date after Lok Sabha’s first sitting.
• Clause 2: State Assemblies’ terms will align with the Lok Sabha’s term, requiring curtailment of some Assemblies’ tenures.
• Clause 3: Mandates the Election Commission of India (ECI) to conduct simultaneous elections.
• Clause 4: Defines simultaneous elections as elections for Lok Sabha and all state Assemblies conducted together.
• Clause 5: Allows ECI to recommend deferring Assembly elections if simultaneous polls are impractical.
• Clause 6: States that deferred Assembly elections will still end with the Lok Sabha’s full term.

1. II) Amendments to Article 83: Addressing Government Dissolution

• If the Lok Sabha is dissolved before its five-year term, the new Lok Sabha will serve only for the unexpired term of the preceding Lok Sabha.
• For instance, if dissolved after three years, the next Lok Sabha will serve for the remaining two years. The new House will not continue the pending Bills from the previous term.

Amendments for State Assemblies

• Similar changes are proposed for Article 172, governing state legislatures. If a state Assembly is dissolved early, the subsequent election will elect members only for the unexpired term of the preceding Assembly.

Consequential Bill for Union Territories

The second Bill, The Union Territories Laws (Amendment) Bill, 2024, proposes amendments to laws governing Union Territories. These include:

• The Government of Union Territories Act, 1963.
• The Government of the National Capital Territory of Delhi Act, 1991.
• The Jammu and Kashmir Reorganisation Act, 2019.

Union Territories follow a constitutional framework distinct from states, necessitating separate provisions for simultaneous elections.

Additional Amendments and Implications

• The Bill also proposes changes to Article 372, which gives Parliament the power to make provisions related to elections. The phrase “conduct of simultaneous elections” will be added to extend this power explicitly.
• These proposed amendments aim to synchronize election cycles across the country, promoting administrative efficiency and reducing electoral fatigue. However, they will require widespread legislative and constitutional consensus to become a reality.

Barley: A Sustainable Alternative for Punjab’s Agriculture

GS 3: Economy: Barley over Wheat as an alternative

Why is it in the news?

• To diversify Punjab’s wheat-paddy monoculture, scientists are advocating the cultivation of barley, which requires significantly less water and offers more health benefits than wheat.
• Barley cultivation in Punjab and India has seen a sharp decline, from 66,000 hectares and 3.20 million hectares in 1960-61 to just 5,000 hectares and 0.54 million hectares, respectively.

Advantages of Barley Cultivation

1. I) Low Water and Input Costs:

• Barley consumes much less water than paddy and wheat. It also requires fewer inputs—35 kg of seeds per acre compared to 40 kg for wheat.
• Fertiliser needs are also lower, with 55 kg of urea and 25 kg of diammonium phosphate (DAP) for barley versus 110 kg of urea and 55 kg of DAP for wheat.

1. II) Nutritional Benefits:

• Barley has less gluten than wheat, which contains about 80% gluten and can lead to health issues like cancer, kidney damage, and leaky gut syndrome.
• Barley is rich in beta-glucan (5-10%), compared to wheat (1.6%) and rice (0.82%), and contains phytochemicals, resistant starch, lignin, ferulic acid, phytosterols, antioxidants, insoluble fibre, vitamins, and protein.

III) Health Benefits:

Diabetes Management

• With a glycemic index of 28, barley is ideal for managing blood sugar levels. Its beta-glucan content enhances insulin effectiveness, stimulates glucagon-like peptide-1 production for glucose management, and reduces hunger, lowering obesity risk.

Cholesterol Control

• Beta-glucan supports health-beneficial bacteria, aiding in the quick formation of short-chain fatty acids (SCFAs) that reduce cholesterol production in the liver and intestines. Barley’s indigestible fibres also promote gut and liver health.

Challenges to Adoption

• Barley, being a rabi crop, can only replace wheat, not paddy. Punjab requires alternatives to paddy to address issues like groundwater depletion and pollution from stubble burning.
• While barley shows promise, more research is needed to establish it as a “superfood”. Further, introducing a new crop also requires significant investment, including developing harvesting machines.

AI Surveillance in India: Legal and Constitutional Concerns

GS 3: Science and Technology: Gaps in AI Surveillance

Why is it in the news?

• In 2019, India announced its plan to create the world’s largest facial recognition system for policing. Over the last five years, AI-powered surveillance has been rolled out at railway stations and in Delhi, with plans to extend this to AI-driven crime patrols.
• The government aims to launch 50 AI-powered satellites, further expanding the country’s surveillance capacity. However, while AI in law enforcement promises to enhance security, it raises serious legal and constitutional concerns, particularly related to the right to privacy.

Global Parallels and Legal Risks

• India’s push for AI surveillance is part of a broader global trend. Similar systems worldwide have often led to “dragnet surveillance,” where personal data is indiscriminately collected, extending beyond suspects or criminals.
• In the S., Section 702 of the Foreign Intelligence Surveillance Act has demonstrated how surveillance laws, though well-intentioned, can infringe on citizens’ rights. India’s growing use of AI-powered surveillance mirrors these global concerns, particularly regarding privacy violations and the potential for government overreach.
• In a concerning breach earlier this year, Telangana Police accessed sensitive personal data from social welfare schemes, such as “Samagra Vedika.”
• This incident underscores the lack of transparency surrounding data collection and its potential misuse by law enforcement. The breach raises alarms about the scope of data collected and the absence of clear guidelines on how such data is stored and used.

Privacy Rights and Legal Safeguards

• India’s surveillance infrastructure, while aimed at crime prevention, lacks sufficient safeguards to protect individual privacy, as enshrined in Article 21 of the Indian Constitution.
• In the landmark 2017 K.S. Puttaswamy judgment, the Supreme Court recognized the right to privacy, including “informational privacy,” but AI-driven surveillance practices have outpaced the legal frameworks designed to protect these rights. There is an urgent need for proportional safeguards to protect citizens from undue surveillance.
• The Digital Personal Data Protection Act (DPDPA), passed in 2023, was intended to regulate personal data collection and ensure accountability. However, the Act has faced criticism for its broad exemptions, particularly provisions that grant the government significant leeway to process personal data without consent.
• Sections 7(g) and 7(i) allow data processing without consent for medical emergencies and employment data, raising concerns about their potential misuse, especially in AI surveillance contexts.

Absence of AI Surveillance Regulation

• Unlike the United States and European Union, which have introduced AI regulations with clear restrictions, India has yet to establish a comprehensive legal framework for AI surveillance.
• Currently, India’s AI surveillance programs, such as facial recognition and public CCTV surveillance, operate with little legislative oversight or risk assessment. This regulatory vacuum leaves citizens vulnerable to privacy violations and unchecked data collection.

Global Approaches to AI Regulation

• The European Union’s Artificial Intelligence Act serves as a potential model for India, categorizing AI risks and restricting high-risk activities, including real-time biometric surveillance.
• Unlike the EU, India has deployed AI surveillance without significant debate or risk assessment. The absence of a regulatory framework has left India’s AI-driven surveillance largely unregulated, exposing citizens to potential privacy infringements.

Addressing Privacy Concerns

• The primary concern with AI surveillance in India is its unchecked application. There is a need for a regulatory framework that ensures transparency in data collection, outlining what data is being collected, for what purpose, and how long it will be stored.
• Additionally, consent mechanisms must be implemented with narrow exemptions, ensuring independent judicial oversight to protect citizens’ privacy rights.
• A risk-based regulatory approach, similar to the EU’s model, could offer a clearer structure for managing AI surveillance while ensuring the protection of civil liberties. By categorizing AI activities based on their risk to privacy, this approach could help mitigate the potential for misuse.

Need for Proactive Regulation

• India is at a critical juncture regarding AI surveillance. To balance technological advancements with constitutional rights, it is essential to embed privacy safeguards before deploying AI in law enforcement.
• Policies should include consent mechanisms, transparency reports, and judicial oversight at all stages of data collection and management. Although the DPDPA addresses some privacy concerns, its broad exemptions and pending rules continue to undermine its effectiveness.
• A proactive regulatory approach is needed to regulate high-risk AI activities, ensuring that AI technologies are used in a way that serves the public interest without compromising civil liberties.

U.S. Bitcoin Strategic Reserve Plan Boosts Bitcoin to Record High

GS 3: Economy: U.S. Bitcoin Reserve

Why is it in the news?

• Bitcoin surged to a record high of over $107,000 on 17^th dec after President-elect Donald Trump reaffirmed his plans to establish a S. bitcoin strategic reserve, fuelling excitement among cryptocurrency enthusiasts.

What is a Strategic Reserve?

• A strategic reserve is a stockpile of a critical resource that can be deployed during crises or supply disruptions.
• The S. Strategic Petroleum Reserve is a well-known example, created in 1975 after the 1973-74 Arab oil embargo destabilized the U.S. economy. This reserve has been used to stabilize oil markets during wars or natural disasters, such as hurricanes affecting oil infrastructure.
• Other examples include Canada’s strategic maple syrup reserve and China’s reserves of metals, grains, and pork products.

How Would a U.S. Bitcoin Strategic Reserve Work?

• The specifics of establishing a U.S. bitcoin reserve remain uncertain. It is unclear whether President-elect Trump could create such a reserve through executive powers or if it would require Congressional approval. Some suggest Trump could direct the U.S. Treasury’s Exchange Stabilization Fund to hold bitcoin via executive order.
• The reserve could potentially start with bitcoin already in government possession, such as the approximately 200,000 tokens worth around $21 billion seized from criminal actors. Trump hinted in a July speech that this existing stockpile could serve as the foundation of the reserve.
• However, it remains unclear if the government would acquire additional bitcoin through open-market purchases, which might require issuing debt. Further, advocates propose selling some U.S. gold reserves to fund bitcoin acquisitions.

Benefits of a Bitcoin Reserve

• Trump argued in his July speech that a bitcoin reserve could help the U.S. dominate the global bitcoin market, especially given competition from China.
• Proponents believe that holding bitcoin, which they anticipate will appreciate over the long term, could reduce the U.S. deficit without increasing taxes. This, in turn, could strengthen the U.S. dollar and provide the country with greater economic leverage over adversaries like China and Russia.

Risks of a Bitcoin Reserve

• Critics highlight significant risks associated with creating a bitcoin reserve. Unlike traditional commodities, bitcoin lacks intrinsic utility and is not essential to the U.S. economy. As a relatively young and highly volatile asset, it is uncertain whether bitcoin’s value will continue to rise in the long term.
• Additionally, crypto wallets are vulnerable to cyberattacks, posing security risks to any reserve. Given bitcoin’s price volatility, government transactions could heavily influence its market value, creating additional economic uncertainties.