PRS Capsule - April 2024

• 16 May 2024

Key Highlights of PRS

• Polity and Governance
  • SC rejects petition seeking return to paper ballots, 100% verification of VVPAT slips
  • TRAI releases recommendations on sharing of telecom infrastructure and spectrum
• Social Justice
  • Committee to recommend measures for the welfare of queer persons constituted
• Economy
  • RBI releases circular for transition of small finance banks to universal banks.
  • RBI releases draft guidelines for transparency in loan aggregation in digital lending.
  • RBI issues draft directions on electronic trading platforms
  • Repo rate kept unchanged at 6.5%
• Environment
  • Draft guidelines released for PM Surya Ghar: Muft Bijli Yojana

Polity and Governance

SC Rejects Petition Seeking Return to Paper Ballots, 100% Verification of VVPAT Slips

• The Supreme Court rejected a petition seeking certain reforms in the voting process.
• The petitioners sought:
  • Return to the paper ballot system of voting, or
  • Physical verification of VVPAT slips by voters, and/or
  • 100% counting of VVPAT slips in addition to counting of votes recorded in an Electronic Voting Machine (EVM).
• In the recent judgment, the Court stated that:
  • So far no mismatch between VVPAT slips and electronically recorded votes has been detected.
  • 100% counting of VVPAT slips would cause delays in counting and require manpower involved to be doubled.
  • The EVMs have effectively eliminated issues such as booth capturing and invalid votes, which were prevalent in the paper ballot system.
  • Voters gaining physical access to VVPAT slips will lead to misuse and malpractices.
• The Court issued two directions in this case:
  • After symbols of all candidates are loaded into the VVPAT machine, symbol loading units should be sealed and stored in a room with the EVMs for at least 45 days after results are declared.
  • The burnt memory/microcontroller of 5% of all EVMs in each assembly constituency or segment of a parliamentary constituency should be checked by a team of engineers from the EVM manufacturer for tampering, after results are declared.

TRAI Releases Recommendations on Sharing of Telecom Infrastructure and Spectrum

• The Telecom Regulatory Authority of India (TRAI) has released its recommendations on ‘Telecom Infrastructure Sharing, Spectrum Sharing, and Spectrum Leasing’.
• Telecom infrastructure is broadly divided into two categories:
  • Passive infrastructure: It refers to the non-electronic infrastructure (such as towers, buildings and poles).
  • Active infrastructure: It refers to electronic infrastructure (such as radios and transceivers).
• Spectrum refers to a band of radio frequency used for telecommunication.
• Key recommendations include:
  • Infrastructure Sharing:
    • TRAI has recommended that telecom service licensees should be allowed to share all types of passive and active infrastructure.
    • Passive infrastructure may be shared with all types of licensees; however, active infrastructure may only be shared based on the scope of the services offered.
    • Sharing of core network elements will not be allowed if there will be less than two independent core networks after sharing.
    • There must be mandatory sharing of government-funded passive infrastructure e.g., Universal Service Obligation Fund (now the Digital Bharat Nidhi).
  • Spectrum Sharing and Leasing:
    • TRAI has recommended that access providers should be allowed to share and lease spectrum.
    • The government will also levy a fee equal to 0.5% of the value of spectrum shared.

Social Justice

Committee to Recommend Measures for the Welfare of Queer Persons Constituted

• The Ministry of Law and Justice constituted a committee to recommend measures for the welfare and protection of queer individuals.
• The Committee has been constituted in pursuance of a Supreme Court judgment in October 2023.
  • The Supreme Court examined whether the Special Marriage Act, 1954 violated the fundamental right to equality and liberty by not recognising marriage between queer couples.
• The Committee will be chaired by the Cabinet Secretary.
• Members of the Committee include Secretaries of the Department of Home, Ministry of Women and Child development, and Department of Health and Family Welfare.
• The Committee will examine and recommend measures to ensure that queer persons:
  • Are not discriminated against while accessing goods, services and welfare entitlements,
  • Do not face threats of violence or coercion, and
  • Are not subjected to involuntary medical treatments.

Economy

RBI Releases Circular for Transition of Small Finance Banks to Universal Banks

• The Reserve Bank of India (RBI) released a circular to provide for the voluntary transition of small finance banks to universal banks.
• For transitioning into a universal bank, small finance banks must meet certain conditions.
• Conditions include:
  • A satisfactory track record of performance for minimum five years,
  • Their shares listed on a recognised stock exchange,
  • A minimum net worth of Rs 1,000 crore at the end of the previous quarter, and
  • Net profit in the last two financial years.
• It is not mandatory for small finance banks to have an identified promoter. Any existing promoters must continue as promoters on transitioning to a universal bank.
• Eligible small finance banks with a diversified loan portfolio will be preferred for transitioning to universal banks.

RBI Releases Draft Guidelines for Transparency in Loan Aggregation in Digital Lending

• The Reserve Bank of India (RBI) released draft guidelines on ‘Digital Lending – Transparency in Aggregation of Loan Products from Multiple Lenders’.
• For borrowers to have prior information about potential lenders, the draft guidelines specify certain measures.
• Measures include:
  • The lending service providers must provide a digital view of loan offers to the borrower from all willing lenders,
  • The lending service provider must follow a consistent mechanism to determine willingness of lenders to offer a loan, and
  • The content displayed must be unbiased and should not promote a particular product through dark patterns to mislead the borrowers.

RBI Issues Draft Directions on Electronic Trading Platforms

• The Reserve Bank of India (RBI) issued draft RBI (Electronic Trading Platforms) Directions, 2024.
• Electronic Trading Platforms (ETPs) are electronic systems, other than recognised stock exchanges, for transacting in eligible instruments.
• Key features of the directions include:
  • Authorisation:
    • Entities, residents, or non-residents can operate an ETP after securing authorisation or registering with the RBI.
    • Authorized/registered operators must transact in only those instruments on their platform which have been approved by RBI.
    • Existing ETPs must apply for authorisation/ registration within three months of the directions being issued.
  • Eligibility Criteria:
    • For securing authorisation an entity must meet certain criteria.
    • Criteria include:
      • The entity must be a company incorporated in India,
      • The entity or its key managerial personnel must have at least three years’ experience in operating financial trading infrastructure,
      • The entity must have a minimum net worth of five crore rupees,
      • Have the capability to disseminate trade information on real-time or near real-time basis.
  • Operating Framework:
    • An ETP operator must follow certain requirements.
    • These include:
      • Having an objective and transparent membership criterion,
      • Conducting due diligence while onboarding members,
      • Adopting a comprehensive risk management framework,
      • Putting in place controls to reduce likelihood of erroneous transactions,
      • Designing an arrangement to address disputes between members.
  • Preservation of Data:
    • All data relating to activities on the ETP must be maintained for at least 10 years.

Repo Rate Kept Unchanged at 6.5%

• The Monetary Policy Committee (MPC) of the Reserve Bank of India kept the policy repo rate (the rate at which RBI lends money to banks) unchanged at 6.5%.
• Other decisions of the Committee include:
  • The standing deposit facility rate (the rate at which RBI borrows from banks without giving collateral) has been retained at 6.25%.
  • The marginal standing facility rate (the rate at which banks can borrow additional money from RBI) and the bank rate (rate at which RBI buys bills of exchange) have been retained at 6.75%.

Environment

Draft Guidelines Released for PM Surya Ghar: Muft Bijli Yojana

• The Ministry of New and Renewable Energy released draft guidelines on the implementation of PM Surya Ghar: Muft Bijli Yojana for public feedback.
• It aims to provide for the installation of rooftop solar in one crore households.
• The scheme has an estimated outlay of Rs 75,021 crore.
• It will subsume the existing Grid Connected Solar Rooftop Programme (Phase-II).
• The draft guidelines have been issued for the largest sub-component i.e. Central Financial Assistance (CFA) to residential consumers.
• Key features include:
  • Eligibility for Assistance:
    • Only residential consumers of electricity can avail the scheme. This includes individual households and housing societies.
    • Households will receive CFA for rooftop solar systems with capacity up to three kilowatts.
  • Implementation:
    • Vendors and beneficiaries must register on a national portal.
    • Vendors must upload system offerings, price points, design, and specifications.
    • Once the rooftop solar system has been installed, CFA will be transferred to the beneficiary’s account, or to the loan account (in case of financing).