GS Analyst: Daily Current Affairs

Context:

Drivers’ strike is a test for severity of hit-and-run clause in new penal code.

Scrutiny of BNS Provision

• Introduction of Section 106: Bharatiya Nyaya Sanhita (BNS) introduces Section 106, treating hit-and-run accidents as an aggravated form of causing death by rashness or negligence.
• Truck Drivers' Concerns: Section 106 raises concerns among truck drivers, leading to abstention from work.
• Government's Response: The government assures implementation post-consultation with the All India Motor Transport Congress.

Transporters' Perspective

• Strike Dynamics: Transporters' strike primarily triggered by drivers' fears of additional criminal liability.
• Worker-Centric Issue: The issue shifts from concerns of those running transportation businesses to worries of transport workers.
• Perceived Unjustified Protest: Understanding the strike against the backdrop of road accidents being a major cause of fatalities in India makes it unjustified.

Section 106 Components

• Replacement of IPC Section 304A: Section 106 to replace IPC Section 304A, addressing death caused by rash and negligent acts with enhanced penalties.
• Key Components of Section 106: Overview of Section 106, incorporating prison terms, fines, and reduced liability for medical professionals.
• Hit-and-Run Dynamics: Clause imposes a 10-year imprisonment for failing to report accidents promptly, especially in hit-and-run cases.

Context:

Raised concerns about the long-term sustainability of India’s debts.      

IMF Concerns on India's Debt Sustainability

• Debt Sustainability Alarm: IMF raises concerns over India's long-term debt sustainability, projecting it to be 100% of GDP by 2028, emphasizing the need for prudent management.
• Climate Change and Investments: The report highlights the impact of climate change, urging India to secure concessional financing, enhance private sector investments, and implement carbon pricing for climate resilience.
• Finance Ministry's Response: The Finance Ministry dismisses IMF projections as a worst-case scenario, asserting it is not inevitable.

Global Debt Conundrum

• Debt's Development Role: Government borrowings can accelerate development, yet excessive debt can impede growth, hinder access to financing, and lead to rising borrowing costs and sluggish economic performance.
• Global Debt Trends: Worldwide, public debt has surged, reaching a record USD 92 trillion in 2022, with developing countries, including India, facing challenges exacerbated by the COVID-19 pandemic, cost-of-living crisis, and climate change.
• Debt Burden on Developing Nations: Developing countries, particularly in Africa, face higher borrowing costs than developed nations, impacting debt sustainability and leading to increased interest spending as a share of public revenues.

India's Credit Rating Challenges

• IMF's Rating Context: While India is recognized as the fastest-growing major economy, credit rating agencies maintain a stable outlook of 'BBB-', the lowest investment grade, since 2006.
• Rating Agencies' Perspective: Fitch Ratings and S&P Global Ratings cite weak fiscal performance, burdensome debt, and low per capita income as factors restraining India's credit rating improvement.
• Debt-GDP Ratio and Fiscal Challenges: India's debt-to-GDP ratio remains high, slightly exceeding FRBMA targets. The emerging signs of fiscal slippage in FY24 pose challenges, with increased subsidies and potential budgetary pressures in an election year.

Context:

SC expresses faith in SEBI’s investigation in Adani matter.                          

Supreme Court's Verdict

• Allegations Refuted: The Supreme Court rejects CBI or SIT probe, expressing confidence in SEBI's ongoing investigation into the Adani-Hindenburg controversy.
• SEBI's Conduct Trustworthy: The Court lauds SEBI, stating its conduct "inspires confidence," and perceives no apparent regulatory failure in the current investigation.
• Government's Directive: The Court directs the Centre to investigate if short sellers violated laws causing investor losses, shifting focus to market practices like short selling.

Unanswered Questions and Ongoing SEBI Investigations

• Pending Issues: Not all aspects, such as related party transactions and market manipulation, are fully addressed in SEBI's year-long investigation into Adani Group.
• Doubts about Market Practices: Global market practices like short selling face scrutiny; the Court considers regulatory measures as potential solutions, raising concerns.
• Ownership Complexity: Ongoing SEBI probes face challenges in determining the actual ownership of foreign portfolio investors (FPIs) due to entities in tax havens.

Need for Prudent Allocation of Resources

• Resource Allocation: The Supreme Court's decision lacks a large-scale probe, prompting the need for SEBI to receive additional resources and expertise.
• Time-Bound Probe: Emphasizes the importance of a time-bound and conclusive SEBI investigation to dispel market concerns and restore confidence.
• Call for Action: Urges SEBI to bring ongoing investigations to fruition, addressing market volatility concerns and ensuring a thorough examination of the Hindenburg allegations.