Articles on 25 December 2024

What’s in today’s article?

• Why in News?
• What is the Enforcement Directorate (ED)?
• What is the Case Background?
• Supreme Court's Order
• Implications for ED Investigations
• Broader Concerns
• Conclusion

Why in News?

• In a landmark decision, the SC has prohibited the Enforcement Directorate (ED) from accessing and copying data from electronic devices seized during a raid on Santiago Martin, known as the "lottery king," his relatives, and employees.
• The decision emphasises the protection of fundamental rights, including the right to privacy, and could influence future guidelines on digital device seizures.

What is the Enforcement Directorate (ED)?

• Background:
  • The origin of the Directorate can be traced back to 1956, when an ‘Enforcement Unit’ was formed, in the Department of Economic Affairs, for handling Exchange Control Laws violations under Foreign Exchange Regulation Act, 1947.
  • In 1957, this Unit was renamed as ‘Enforcement Directorate’ and the administrative control of the Directorate was transferred from Department of Economic Affairs to Department of Revenue in 1960.
• About:
  • Directorate of Enforcement (ED) is a specialised financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India, which enforces the following laws: -
    • Foreign Exchange Management Act,1999 (FEMA) - A Civil Law.
    • Prevention of Money Laundering Act, 2002 (PMLA) - A Criminal Law.
  • The ED (Headquartered at New Delhi) is governed under the Central Vigilance Commission (CVC) Act, 2003.
• Composition:
  • It is composed of officers from the Indian Revenue Service, the Indian Police Service and the Indian Administrative Service, as well as officers promoted from its own cadre.
  • It is headed by the Director of Enforcement, who is appointed by the Central government and has been provided security of two-year tenure in office by the CVC Act, 2003.

What is the Case Background?

• The ED's operation:
  • In November, ED conducted searches at 22 locations across six states based on a complaint by Meghalaya Police.
  • Allegations were made against Future Gaming and Hotel Services Pvt Ltd for illegally monopolising the lottery business in Meghalaya.
  • The raids uncovered ₹12.41 crore in cash.
• Future Gaming’s political contributions:
  • The company was the largest purchaser of electoral bonds, totaling ₹1,368 crore between 2019 and 2024.
  • Donations were made across party lines:
    • Trinamool Congress: ₹542 crore
    • DMK: ₹503 crore
    • YSR Congress: ₹154 crore
    • BJP: ₹100 crore

Supreme Court's Order:

• Content and directives:
  • A two-page order by Justices Abhay S Oka and Pankaj Mithal directed ED not to access or copy data from seized devices belonging to Santiago Martin and his associates.
  • The order also stayed summons under the Prevention of Money Laundering Act (PMLA) requiring individuals to appear for data extraction purposes.
  • The Future Gaming case was ordered to be heard alongside other cases related to digital device seizures, including Amazon India and Newsclick petitions.
• Petitioners’ argument:
  • The plea emphasized the violation of privacy and constitutional rights due to unrestricted access to sensitive personal and business data.
  • It highlighted the absence of procedural safeguards against "fishing expeditions" by investigative agencies.

Implications for ED Investigations:

• ED’s response:
  • Senior officials described the SC's restraint as “unprecedented” but maintained it would not hinder their investigations due to other evidence and property attachments worth ₹622 crore.
  • They cited adherence to CBI guidelines on digital evidence.
• Legal implications:
  • Lawyers, including former Attorney General Mukul Rohatgi, argued for interim relief, highlighting the infringement of privacy and the need for defined procedures in such cases.
  • The decision sets a potential precedent for limiting access to sensitive data and protecting against self-incrimination.

Broader Concerns:

• Nature of seized devices: The petition detailed the seizure of 17 mobile phones, hard disks, pen drives, and email backups containing sensitive financial, medical, and business information.
• Tax compliance: Future Gaming disclosed having paid ₹28,205 crore in GST for operating state lotteries, reinforcing its compliance record.
• Call for guidelines: The petition advocates for clear procedures to ensure privacy rights are respected during digital device seizures and investigations.

Conclusion:

• The Supreme Court’s order underscores the growing importance of safeguarding digital privacy in legal investigations.
• As the case progresses, it may establish new standards for balancing law enforcement objectives with constitutional rights, particularly in an era where personal and business data is increasingly digitised.

Q.1. What is 'Right to Privacy' in India?

In the Justice K.S. Puttaswamy case (2017), commonly known as the Right to Privacy verdict, the SC held that the right to privacy is protected as a fundamental right under Articles 14, 19 and 21 of the Constitution of India.

Q.2. What is the Prevention of Money Laundering Act, 2002 (PMLA)?

The PMLA is a law that prevents money laundering and confiscated property involved in money laundering. It came into effect on July 1, 2005.

Source: Santiago Martin case — SC red line for ED: Can’t copy, access content from laptop, mobile phones

What’s in today’s article?

• Why in News?
• 1924 session

Why in News?

The Congress is organizing a two-day event in Belagavi (previously Belgaum), Karnataka, on December 26-27 to mark the centenary of Mahatma Gandhi presiding over its historic Belgaum session in 1924.

The event includes an extended session of the Congress Working Committee (CWC) and a rally.

1924 session

• Backdrop against which 1924 Belgaum Session was held
  • After his release from prison in February 1924, Mahatma Gandhi was troubled by the lack of Hindu-Muslim unity in the freedom struggle and Congress factionalism.
• Mahatma Gandhi was in prison in February 1924 for his involvement in the Non-Cooperation Movement against British rule.
• He was arrested in 1922 on charges of sedition for writing three articles in Young India that criticized British policies.
• Gandhi was sentenced to six years in prison but was released early in February 1924 after serving about two years due to health concerns.
  • To address these issues, he undertook a 21-day fast from September 18 to October 8 that year.
• Participants in the 1924 Congress session
  • The session was attended by several senior Congress leaders including Jawaharlal Nehru, Sardar Vallabhbhai Patel, Sarojini Naidu, and Khilafat movement leaders Muhammad Ali Jauhar and Shaukat Ali, among others.
• Significance of 1924 Session
  • Mahatma Gandhi presided over the 1924 Congress session in the erstwhile Bombay state, marking the only time he held the position of Congress president.
  • During this session, Gandhi presented his ideas on non-violence, communal harmony, and "swaraj" (self-rule).
  • He served as the Congress president from December 1924 to April 1925.
• Gandhi’s message to the 1924 conclave
• Gandhi on Non-Violence and Non-Cooperation Movement
  • Mahatma Gandhi discussed his philosophy of non-violence.
  • He explained that although the Non-Cooperation Movement was called off in 1922 after the Chauri Chaura incident, it had been an effective strategy for India’s path to independence.
  • He highlighted that the boycotts, such as those of government institutions and foreign cloth, were not fully successful but had reduced the prestige of these institutions.
  • Gandhi emphasized that non-violence, rather than revolutionary violence, was a more effective force for change, as it came from goodwill and gentleness.
• Hindu-Muslim Unity and Untouchability
  • Gandhi stressed that the removal of untouchability was as essential for swaraj (self-rule) as Hindu-Muslim unity.
  • He argued that Hindus could not claim swaraj until they restored the liberty of the suppressed classes, underscoring the importance of social reform in the freedom struggle.
• Self-Rule and Reforms
  • Gandhi suggested reforms to achieve swaraj, including moving the final court of appeals from London to Delhi and adopting Hindustani as the official language in provincial governments and courts.
  • He urged the people to become "perfect satyagrahis," emphasizing that satyagraha (non-violent resistance) was an attainable quality for all, vital for achieving truth and justice.
• Khadi and Self-Reliance
  • Gandhi called on the masses to take up spinning and weaving khadi, asserting that true swaraj could only be achieved when the people embraced self-reliance, symbolized by the use of khadi fabric.
• Impact of 1924 session on the freedom movement
  • Historians believe that the session was a step towards the promotion of peasant consciousness.
  • This resulted in the spread of khadi with village industries getting traction in Karnataka and other parts of the country.
  • It also saw increased participation of peasants in the Congress-led initiatives.

Q.1. Why was Gandhi in prison in 1924?

Gandhi was imprisoned in 1922 for sedition after criticizing British policies in Young India. He was released in 1924 due to health concerns after serving about two years of his six-year sentence.

Q.2. What was the significance of the 1924 Belgaum Session?

The session marked Gandhi’s only term as Congress president, where he emphasized non-violence, Hindu-Muslim unity, and self-rule. It influenced social reforms, including the spread of khadi and increased peasant participation in the independence movement.

Source: IE

What’s in today’s article?

• Why in News?
• What is Quantum computing?
• Significant Milestones in Quantum Computing
• Present Limitations of Quantum Computing
• National Quantum Mission: India’s Commitment (2023)
• The Road Ahead

Why in News?

Quantum computing, rooted in quantum mechanics, promises to solve complex problems beyond the reach of classical computers. Proposed by Richard Feynman in 1982 to simulate quantum systems, it emerged as a solution to classical computers' limitations.

Since then, progress includes the development of qubits (using superposition and entanglement), improved error correction, and scalable hardware, paving the way for applications in cryptography, optimization, and drug discovery.

What is Quantum computing?

• Classical Computing: Bits as Units of Information
  • Classical computers operate based on principles of classical physics.
  • The basic unit of information is the bit, which can be either 0 or 1.
  • All types of information can be represented using combinations of 0s and 1s in the binary system.
• Quantum Computing: Qubits as Fundamental Units
  • Quantum computers rely on quantum bits, or qubits, for computations.
  • Qubits can represent 0, 1, or a state that is partly 0 and partly 1 simultaneously.
  • This ability to exist in multiple states is unique to qubits and enables quantum computations.
• Key Principles
• Superposition: A Key Quantum Principle
  • Qubits can exist in a state of superposition, holding both 0 and 1 at the same time.
  • Example: A spinning coin that represents both heads and tails simultaneously until it collapses to one state when observed.
  • Superposition allows quantum computers to perform multiple computations at once.
• Entanglement: Quantum Correlation
  • Qubits can be entangled, meaning their states are intrinsically linked, even if they are far apart.
  • Measuring one qubit instantly provides information about the other, regardless of distance.
  • Example: If a pair of gloves are kept in separate boxes, opening one reveals the other’s state instantly.
  • Entanglement enables faster information processing through shared states.
• Advantages of Quantum Principles
  • Superposition allows quantum computers to process exponentially more data than classical computers.
  • Entanglement facilitates simultaneous information sharing, speeding up computations.
  • These principles, rooted in quantum mechanics, unlock the immense potential of quantum computing, beyond the scope of classical physics.

Significant Milestones in Quantum Computing

• Quantum Computers vs. Classical Computers
  • Quantum computers are technologically advanced but may not always outperform classical computers in every task.
  • Specific tasks have been developed to demonstrate the unique capabilities of quantum computing.
• Shor’s Algorithm: Revolutionizing Factorization (1994)
  • Created by Peter Shor, this algorithm can factorize large numbers in moments, compared to millions of years required by classical computers.
  • Major implications for data security, as it can quickly solve problems like large-number factorization, which are used to secure encrypted data.
• IBM’s Q System One: The First Commercial Quantum Computer (2019)
  • IBM introduced Q System One, the world’s first circuit-based commercial quantum computer.
  • Circuit-based designs with quantum gates are versatile and suited for general quantum-computing applications.
• Google's Sycamore Processor: Achieving Quantum Supremacy (2019)
  • Google’s 53-qubit Sycamore processor solved a problem in 200 seconds that would take a supercomputer 10,000 years.
  • This milestone marked quantum supremacy, where quantum computers outperform classical counterparts for specific tasks.
• Google’s Willow Quantum Chip: Scaling with Error Correction (2024)
  • Google unveiled Willow, the first quantum processor with error-corrected qubits that improve as they scale.
  • Quantum error correction is critical to maintaining quantum states long enough for meaningful calculations.
  • Willow completed a standard test in 5 minutes, a task that would take the best supercomputers 10 trillion trillion years.
• Progress and Potential
  • These milestones illustrate the rapid advancement of quantum computing, showcasing its potential to solve complex problems far beyond the reach of classical systems.

Present Limitations of Quantum Computing

• High Cost and Complexity
  • Building quantum computers is extremely expensive and technically complex.
  • Maintaining the stability of qubits is challenging due to high error rates and issues like decoherence caused by environmental noise.
• Need for Larger-Scale Quantum Systems
  • Current quantum computers have limited qubits, but solving major problems (e.g., drug discovery, astronomical research) requires millions of qubits.
  • Scaling quantum systems to such levels remains a significant hurdle.

National Quantum Mission: India’s Commitment (2023)

• Recognizing the potential of quantum computing, India launched the National Quantum Mission.
• The government allocated ₹6,000 crore over eight years to advance quantum technology and develop quantum computers.

The Road Ahead

• While the challenges are substantial, the advancements and investments highlight the clear potential and promise of quantum computing.

Q.1. What is quantum computing?

Quantum computing uses qubits instead of bits for computation. Unlike classical bits, qubits can represent 0, 1, or both simultaneously, thanks to superposition, enabling quantum computers to process data exponentially faster than classical computers.

Q.2. What is India’s National Quantum Mission?

Launched in 2023, India’s National Quantum Mission is a government initiative to invest ₹6,000 crore over eight years, advancing quantum technology and developing quantum computers, showcasing India’s commitment to the future of quantum computing.

News: A beginner’s guide to quantum computing | Explained

What’s in today’s article?

• Introduction
• Strategic Policy Measures
• WTO Commitments and Global Trade Concerns
• India’s Import Dependency
• Domestic Production Challenges
• Way Forward

Introduction

• India's heavy reliance on imported IT hardware, such as laptops and PCs, has driven the government to explore strategies to boost domestic manufacturing.
• This includes linking import permissions to domestic capacity expansion and introducing a credit system for imports once production meets critical thresholds.

Strategic Policy Measures

• Import Restrictions Tied to Domestic Manufacturing:
  • The government plans to emulate the successful strategy used in the tyre manufacturing sector.
  • In 2020, restrictions on new pneumatic tyre imports led to global players like Bridgestone, Michelin, and Goodyear investing over ₹1,100 crore in local facilities.
  • A similar conditional easing of import norms is being considered for laptops and PCs, tied to commitments for domestic production.
• Credit System for Imports:
  • A credit system for IT hardware imports may be introduced, with detailed policies expected as domestic production gains momentum.

WTO Commitments and Global Trade Concerns

• WTO Constraints:
  • India cannot impose higher duties on IT products, as they are bound by zero-duty commitments under the WTO’s Information Technology Agreement (1997).
• Global Pressure:
  • China dominates the global IT hardware market, with an 81% share of PCs and laptops and exports worth $163 billion in 2022.
  • Leading US-based companies like Apple, Dell, and HP, which produce in China, have raised concerns about India’s import monitoring system.
  • Japan and China have also formally expressed opposition to India’s laptop import licensing measures.
• India's Security Goals:
  • While trade partners fear trade restrictions, the Indian government emphasizes that its policies aim to achieve self-reliance for national security, not impose undue barriers.

India’s Import Dependency

• In FY24, India imported electronic components worth $34.4 billion, making it the fifth-largest imported commodity.
• Imports from China ($12 billion) and Hong Kong ($6 billion) accounted for over 50% of total electronic imports.
• Over the last five years, imports from China and Hong Kong have far exceeded those from South Korea, Japan, Taiwan, and ASEAN nations combined.

Domestic Production Challenges

• Slow Progress in IT Hardware Manufacturing:
  • Despite initiatives like the revamped Production Linked Incentive (PLI) scheme (2023), domestic production of laptops and tablets has yet to scale up significantly.
  • 27 companies, including Dell, HP, Lenovo, and Foxconn, have been approved under PLI 2.0 but are still in the early stages of production.
• Extended Import Authorizations:
  • Import restrictions under the Import Management System (IMS) have been extended until December 31, 2025, to prevent shortages and price hikes.

Way Forward

• To reduce import dependency and achieve self-reliance, the government is pursuing a multi-faceted approach:
• Strengthening Local Manufacturing:
  • Accelerating PLI incentives and enforcing policies that link imports with domestic capacity expansion.
• Diversifying Trade:
  • Exploring alternative supply chains to reduce dependence on China and Hong Kong.
• Encouraging Investments:
  • Creating a favourable ecosystem for both domestic and foreign players to invest in manufacturing facilities.
• Balancing Global Commitments and Domestic Needs:
  • Aligning policies with WTO obligations while protecting strategic interests.

Q1. When was the WTO established?

The WTO began life on 1 January 1995, but its trading system is half a century older. Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. (The second WTO ministerial meeting, held in Geneva in May 1998, included a celebration of the 50th anniversary of the system.)

Q2. What is the basic difference between Custom Duty and Excise Duty?

Excise duty refers to the taxes levied on the manufacture of goods within the country, as opposed to custom duty that is levied on goods coming from outside the country.

News: Laptop manufacturing: Import nods likely to be linked to local capacity