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Prelims Booster

4th August – Prelims Booster

Draft Defence Production and Export Promotion Policy 2020

In order to provide impetus to self-reliance in defence manufacturing, a framework under ‘Atmanirbhar Bharat Package’ and to position India amongst the leading countries of the world in defence and aerospace sectors, Ministry of Defence (MoD) has formulated a draft Defence Production and Export Promotion Policy 2020 (DPEPP 2020).

The DPEPP 2020 is envisaged as overarching guiding document of MoD to provide a focused, structured and significant thrust to defence production capabilities of the country for self-reliance and exports.

Objectives –

The policy has laid out following goals and objectives –

  • To achieve a turnover of Rs 1,75,000 Crores (US$ 25Bn) including export of Rs 35,000 Crore (US$ 5 Billion) in Aerospace and Defence goods and services by 2025.
  • To develop a dynamic, robust and competitive Defence industry, including Aerospace and Naval Shipbuilding industry to cater to the needs of Armed forces with quality products.
  • To reduce dependence on imports and take forward “Make in India” initiatives through domestic design and development.
  • To promote export of defence products and become part of the global defence value chains.
  • To create an environment that encourages R&D, rewards innovation, creates Indian IP ownership and promotes a robust and self-reliant defence industry.

Areas covered –

The draft policy has outlined multiple strategies in focus areas which include: Indigenisation & Support to MSMEs/Startups; Procurement Reforms; Optimise Resource Allocation; Innovation and R&D; DPSUs and OFB; Investment Promotion, FDI & Ease of Doing Business; Quality Assurance & Testing Infrastructure and finally Export Promotion.

Background –

  • Currently, the size of the domestic defence industry is of the order of USD 12 billion. Out of which, 80 per cent is the share of the defence public sector units (DPSUs) and 20 per cent is of the private sector. 
  • It is expected that the turnover of the domestic defence industry could go up to USD 25 billion by 2025.

What needs to be done?

In order to substitute defence imports, we must do the following things –

  1. First and foremost step we need to take is develop technical specifications in collaboration with research institutions and labs, followed by the development of manufacturing processes. In case of certain identified materials, we should plan to adopt a mission mode approach led by the DRDO.
  2. Secondly, we should make one procedure under Defence Procurement Procedure (DPP) to develop these identified materials with the support of the government.
  3. Thirdly, we should develop testing and certification facilities. So, we will like to set up a task force under the Directorate of Standardisation for developing these testing and certification facilities in the country.
  4. Last, but not the least, India should try for import of technology under ‘transfer of technology’ route or through inter-governmental agreements to FDI route, especially in those cases where we have got domestic manufacturing capability but the technology is not available at this point of time.

Electronic Vaccine Intelligence Network (eVIN)

The Electronic Vaccine Intelligence Network (eVIN) is an innovative technological solution aimed at strengthening immunisation supply chain systems across the country. This is being implemented under National Health Mission (NHM) by Ministry of Health and Family Welfare.

What is it?

  • eVIN aims to provide real-time information on vaccine stocks and flows, and storage temperatures across all cold chain points in the country.
  • eVIN combines state-of-the-art technology, a strong IT infrastructure and trained human resource to enable real time monitoring of stock and storage temperature of the vaccines kept in multiple locations across the country.
  • eVIN has reached 32 States and Union Territories (UTs) and will soon be rolled-out in the remaining States and UTs of Andaman & Nicobar Islands, Chandigarh, Ladakh and Sikkim.

Significance –

  • The Electronic Vaccine Intelligence Network has helped create a big data architecture that generates actionable analytics encouraging data-driven decision-making and consumption based planning that helps in maintaining optimum stocks of vaccines leading to cost savings.
  • An activity rate of more than 99% reflects high adoption of the technology across all health centres where eVIN is currently operational. While instances of stock-outs have reduced by 80%, the time taken to replenish stocks has also decreased by more than half, on an average. This has ensured that every child who reaches the immunisation session site is immunised, and not turned back due to unavailability of vaccines.
  • To support the Government of India’s efforts to combat COVID-19, eVIN India is helping the State/UT governments monitor the supply chain of COVID response material. Since April 2020, eight States (Tripura, Nagaland, Manipur, Meghalaya, Arunachal Pradesh, Haryana, Punjab and Maharashtra) are using the eVIN application with 100% adherence rate to track State specific COVID-19 material supplies, ensure availability and raise alerts in case of shortage of 81 essential drugs and equipment.
  • This strong platform has the potential to be leveraged for any new vaccine including COVID-19 vaccine, as and when available.

Contempt of Court

Contempt of court, as a concept that seeks to protect judicial institutions from motivated attacks and unwarranted criticism, and as a legal mechanism to punish those who lower its authority, is back in the news. This follows the initiation of contempt proceedings by the Supreme Court of India, on its own motion, against advocate-activist Prashant Bhushan.

How did the concept of contempt come into being?

  • In England, it is a common law principle that seeks to protect the judicial power of the king, initially exercised by himself, and later by a panel of judges who acted in his name.
  • Violation of the judges’ orders was considered an affront to the king himself.
  • Over time, any kind of disobedience to judges, or obstruction of the implementation of their directives, or comments and actions that showed disrespect towards them came to be punishable.

What is the statutory basis for contempt of court?

  • There were pre-Independence laws of contempt in India. Besides the early High Courts, the courts of some princely states also had such laws.
  • When the Constitution was adopted, contempt of court was made one of the restrictions on freedom of speech and expression.
  • Separately, Article 129 of the Constitution conferred on the Supreme Court the power to punish contempt of itself. Article 215 conferred a corresponding power on the High Courts. The Contempt of Courts Act, 1971, gives statutory backing to the idea.

What are the kinds of contempt of court?

  • The law codifying contempt classifies it as civil and criminal.
  • Civil contempt is fairly simple. It is committed when someone wilfully disobeys a court order, or wilfully breaches an undertaking given to court.
  • Criminal contempt is more complex. It consists of three forms: (a) words, written or spoken, signs and actions that “scandalise” or “tend to scandalise” or “lower” or “tends to lower” the authority of any court (b) prejudices or interferes with any judicial proceeding and (c) interferes with or obstructs the administration of justice.
  • Making allegations against the judiciary or individual judges, attributing motives to judgments and judicial functioning and any scurrilous attack on the conduct of judges are normally considered matters that scandalise the judiciary. The rationale for this provision is that courts must be protected from tendentious attacks that lower its authority, defame its public image and make the public lose faith in its impartiality.
  • The punishment for contempt of court is simple imprisonment for a term up to six months and/or a fine of up to ₹2,000.

What is not contempt of court?

Fair and accurate reporting of judicial proceedings will not amount to contempt of court. Nor is any fair criticism on the merits of a judicial order after a case is heard and disposed of.

Is truth a defence against a contempt charge?

For many years, truth was seldom considered a defence against a charge of contempt. There was an impression that the judiciary tended to hide any misconduct among its individual members in the name of protecting the image of the institution. The Act was amended in 2006 to introduce truth as a valid defence, if it was in public interest and was invoked in a bona fide manner.

Real-Estate Investment Trusts

After a year-long gap, the country’s second real-estate investment trust (REIT), Mindspace Business Parks, came out with a public issue recently. Both Embassy and Mindspace are major office REITs in the market. REITs can be structured for any type of real-estate properties such as office REITs, retail (malls), hotel, data centres, infrastructure, and diversified REITs.

What is it?

  • REITs are investment vehicles that own, operate and manage a portfolio of income-generating properties for regular returns. These are usually commercial properties (offices, shopping centres, hotels etc.) that generate rental income.
  • An REIT works very much like a mutual fund. It pools funds from a number of investors and invests them in rent-generating properties.

SEBI regulations –

  • SEBI requires Indian REITs to be listed on exchanges and to make an initial public offer to raise money.
  • Just like MFs, REITs are subject to a three-tier structure — the sponsor who is responsible for setting up the REIT, the fund management company which is responsible for selecting and operating the properties, and the trustee who ensures that the money is managed in the interest of unit-holders.

Investment criteria –

One can invest in REITs in primary and secondary market and exit any time he/she wants. But they will have a minimum investment requirement of ₹50,000 for 200 units; this was reduced from ₹2 lakh (800 units) by SEBI to encourage investor participation.

Significance –

  • The Indian real estate sector has been facing a liquidity crunch on account of unsold inventory and low demand. REITs can help cash-strapped developers to monetise their existing property.
  • Indian investors do not have too many regular income options. SEBI requires REITs to distribute a minimum 90 per cent of their income earned to investors on a half-yearly basis. Similarly, 90 per cent of sale proceeds too are to be paid out to unit holders unless the amount is reinvested in another property. Thus, an investor can get to receive regular income and also get to benefit from price appreciation, thereby boosting returns.
  • In real estate sector, both rent and capital appreciation from property depend on the location, infrastructure and industrial development around that area. REITs juggle these risks through a diversified portfolio of properties.
  • If REITs take off, investors can invest in the property market with a minimum amount of ₹50,000, which is far cheaper than buying property. REITs an be a new asset class to explore.
  • Further, there is transparency as the investor will also know the valuation of the REIT once in every six months. Many investors buy second or third homes for rental income. REITs could turn out to be a better option on account of their diversification.
  • REITs can reduce the risk related to the property investments as 80 per cent of the value of the REIT should be in completed and rent-generating assets. They are required to be run by professional managements with specified years of experience notified by SEBI.

Daily MCQs

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