 A very good evening aspirants. Welcome to the Hindu newspaper analysis brought to you by Shankarai's Academy for the date 28th of July 2022. So, displayed here are the list of news articles that we are going to discuss today. Now, without wasting much time, let's get into the first news article discussion. Now, let us take up this front page news article. See, recently amendments were made to the Prevention of Money Launching Act that is PMLA 2002. The issue is that the amendment to the PMLA was made through a finance act. We all know what the finance act is, right? The finance act, as the name suggests, deals with our country's finances in general. The matters dealt by the finance act include taxes, government expenditures, government borrowings, revenues, etc. So, the finance act forms a part of the union budget. The finance act is passed at the end of the budget to give effect to the financial proposals of the government. Another thing you have to know about the finance act is that it is a money bill. So, only the Lok Sabha has a say over it. Now, coming back as I already mentioned, amendments were made to the PMLA through the finance act. So, people petitioned the Supreme Court questioning the validity of the amendments. Here, the Supreme Court, as the news article mentions, upheld the validity of the amendments made. The court also mentioned that the issue of whether the PMLA is a money bill or not will be decided by the larger bench. So, this is above the news article. In this context, let us see the amendments made to the PMLA. Firstly, Section 2 of the PMLA was amended to expand the scope of proceeds of crime. So, what does proceeds of crime mean here? Let me explain with an example. Let us consider a person named Santanam. His profession is dealing drugs, which is an illegal activity. So, what Santanam does is, with the money he makes by selling drugs, he buys a prime real estate in Ananahar, Chennai. This real estate now comes under proceeds of crime. See, the 2019 amendment expanded the scope of proceeds of crime with the expansion of the scope. The enforcement directorate can take action against those properties which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. Here, the scheduled offence includes the offence that are mentioned in the PMLA. So, this is the first major amendment. The amendment is to the Section 2 of the PMLA, which expands the scope of proceeds of crime. Here, expansion of the scope meaning the enforcement directorate can take action against those properties which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. So, the next major amendment is related to the Section 3. The 2019 amendment classified certain activities as independent offences. The activity includes concealment of proceeds of crime or hiding the proceeds of crime. The next thing is position, acquisition, use of proceeds of crime and finally, claiming proceeds of crime as untainted money. See, all these three activities which were earlier dealt as attached crimes, not after the amendment will be dealt with as independent crime. So, before the activities were attached crimes, but after the amendment, they will be dealt with as independent crime. So, this is the second major amendment. The third major amendment is the deletion of Section 17, Sub Section 1 and Section 18, Sub Section 1. See, before the amendment, if the probe relating to the offences listed in the PMLA schedule is done by any agency other than the enforcement directorate, then a FIR or charge sheet is necessary. But after the amendment, the prerequisite of a FIR or charge sheet start cancelled. So, this FIR or charge sheet is no more required if the probe relating to the offences listed in the PMLA schedule is done by any agency other than the enforcement directorate. Finally, changes were made to Section 72 of the PMLA. Now, the central government can step up an Inter-Ministerial Coordination Committee for Inter-Departmental and Inter-Agency Coordination. This Inter-Ministerial Coordination Committee is to ensure policy level cooperation in relation to all anti-many laundering and counter-terror funding initiatives of the government. So, these are the major changes made to the PMLA as part of 2019 amendment and the recent Supreme Court judgment upheld all these changes. In addition to this, the Supreme Court judgment also upheld the other contentious provisions of the PMLA. Let us see these provisions now. First is Section 24. See, according to Section 24 of the PMLA, the burden of proof is on the accused to prove his innocence. Normally, in most cases, a burden of proof must be provided by the government to prove that the accused is guilty. But in the case of offenses under PMLA, the accused is considered guilty and the accused must provide proof that he is innocent. So, this is the first provision. Second contentious provision is Section 45 of the PMLA. See, according to Section 45, all PMLA offenses will be cognisable and non-bailable. So, enforcement directorate can arrest an accused without a warrant subject to certain conditions. And the last major contentious issue regarding PMLA is the issue of EZIR. Here, EZIR means enforcement case information report that is EZIR is equivalent to the FIR and it is issued by the enforcement directorate. See, in case an FIR is filed, the copy of the FIR is given to the accused or a person representing the accused. This is a mandatory procedure. But in case of scheduled crimes under PMLA, it is not mandatory for the ED to give access to EZIR. So, these are the other three contentious provisions which are upheld by the recent Supreme Court judgment. The Supreme Court while uphelding these provisions stated that money laundering is no less heinous than terrorism. The court also mentioned the PMLA as a unique legislation enacted by the parliament to upheld our country's international commitment and to sternly deal with the menace of money laundering. So, that's all regarding this news article. In this news article discussion, we saw about three important amendments which was made to PMLA in 2019 and we saw that the recent Supreme Court judgment upheld all the changes. Along with that, the Supreme Court judgment also upheld other three contentious provisions of the PMLA. We saw that in detail also. So, with these learnt points, now let us move on to the next news article discussion. See this article here. This is just an extension of the article that we discussed earlier. Like I already said, even though on the Wednesday judgment, the Supreme Court upheld the provisions of the PMLA, it stays away from the issue of whether the PMLA amendment can be made via money bill route. The court said that this issue will be discussed by a larger bench of the Supreme Court. So, in this context, let us see some of the points about the money bill in the previous perspective. See, article 110 of the constitution deals with money bills. Here, the article says that any bill can be termed as money bill if it contains any or all of the provisions given in the article. I have displayed the provisions that are given in article 110 here. Just go through it. It mainly deals with the imposition of tax, appropriation, money out of the consolidated fund, government borrowings and custody of the consolidated fund. You can go through the rest of the provisions here. So, if any bill has provisions other than the above mentioned provisions, then that bill cannot be deemed to be a money bill. Article 110 further clarifies that in cases where a dispute arises over whether a bill is money bill or not, the Lok Sabha speakers decision on the issue shall be considered final. Note that the money bill can be introduced only in Lok Sabha and that too, only after getting prior approval of the president. The money bill can be introduced by a minister and it cannot be introduced by a private member. After the money bill is passed in the Lok Sabha, it is presented to Rajesh Sabha. So, when the bill comes to Rajesh Sabha, the Rajesh Sabha has very limited power in regards to money bill. The money bill cannot be amended or rejected by the Rajesh Sabha. Very important point. When the money bill that is passed by Lok Sabha is given to Rajesh Sabha, the Rajesh Sabha must return the bill back to Lok Sabha within 14 days. If the Rajesh Sabha does not return the bill within 14 days, the bill is deemed to have been approved by Rajesh Sabha. So, the maximum time that the Rajesh Sabha can delay the money bill is 14 days. Also note that there is no provision for joint sitting in case of money bill. Finally, after this procedure is completed, the money bill is presented to the president for approval. The president can either accept or reject a money bill but cannot return it for reconsideration. This is because the money bill is introduced only after seeking presidential approval. This is why the money bill cannot be sent for reconsideration. So, the key takeaway point here is when the government fails to pass a money bill in Lok Sabha, the majority of the government in the Lok Sabha comes under question. In such a case, when the money bill fails to get approval, then the government must introduce a confidence motion in Lok Sabha to prove its majority. If the government fails to prove its majority, then the government has to submit its resignation. So, that's all about the money bill and this news article discussion we saw in detail about article 110 of the constitution which deals with money bill. With these key takeaway points, now let us move on to the next news article discussion. Take a look at this text and context news article. This article speaks through graph that is why the name graphically speaking is given to the article. The title of the article is Why is the rupee under pressure? So, in this news article discussion we are going to discuss about the seven distinct points that are the reasons to say why rupee is under pressure. In that the graphs show the consistent fall of the rupee against the dollar between 1994 and 2002. See the value of rupee weakened in two instances. One during the 2008 which is the year of global financial crisis during that time the rupee depreciated by 23 percentage. The second instance is during the 2013 when the tapper tantrum happened. During this tapper tantrum the rupee weakened by 40 percentage. So, what is this tapper tantrum? See whenever an economy is stressed that is the government feels there is a liquidity crunch. What the central bank does is they buys up a pre-determined amount of government bonds and other assets in order to flush the economy with cash. This is known as quantitative easing. For example, even during the COVID virus pandemic all economies across the world crumbled with manufacturing and production coming to a standstill. Most central banks including the US Fed and India's RBI embarked on measures to revive the economy by reducing interest rates and putting more money in the hands of the people. So, this we call it as quantitative easing. So, what does this word tampering mean? See, tampering refers to a banking strategy where the central bank slowly winds up the process of quantitative easing. In simple terms, tampering happens when the central government halts pumping in money into the economy and the banks by lessening its purchase of bonds in a staggered manner to stop their extra support fed to the economy. So, I hope you can understand what this tampering means. But what happened in 2013 is the US Fed announced reducing the quantitative easing program. So, this situation gave birth to a new word called tantrum. Here, tantrum means the overreaction of investors and stakeholders after the government announced tampering of the quantitative easing program. So, this is the whole story. Tampering means a banking strategy where the central bank slowly winds up the process of quantitative easing. Or in other words, the central government halts pumping in money into the economy and bank by lessening its purchase of bonds in a staggered manner. So, the word tamper tantrum means the event which indicates the overreaction of investors and stakeholders after the government announced tampering of quantitative easing program. So, what happened in 2013 is this tamper tantrum made the rupee weakened by 14%. So, these are the two instances in which money got weakened. Now moving on to the first reason, taking a hit. See, this graph shows that not only Indian rupee but also many other historically strong currencies have weakened by more than 10% this year. If you are wondering why there are two reasons for it, first one is the long drawn war in Ukraine. Second is steep hike in interest rates by the US Fed to rein in inflation. So, because of these two reasons, not only Indian rupee, even historically strong currencies have weakened more than 10% this year. For example, in this graph you can see Japanese yen has depreciated up to 18.4%. Then Korean won has depreciated up to 10.6%. So likewise, you can see various examples here. So, this is the first reason. Now moving on to the second reason. The second reason is persistent outflows. See, just now we saw that US Fed has increased its interest rates, right? Now this will have significant impact. If you are asking why, see we receive foreign portfolio investment in dollars. So, when investors find that the US Fed is increasing the interest rates, the profit they gain from investing in US Fed itself will be higher, right? Then what is the need for them to come and invest in India? So, this is why I said US Fed increasing interest rate will have impact on India. Now the situation is like the US Fed has increased the interest rates and advanced economies has also tightened their policies because of these combined effect. The FBI is on a selling spree. Many overseas investors, they withdraw from riskier emerging markets and they opt for safe haven assets. That is, they sell their FBI in emerging economies and they take the money and invest them in the US Fed. So, this exhibits the demand for the dollar and leads to a corresponding excess supply of the rupee. Ultimately, this weakened the local unit. Now the third reason is widening gap. See, just now we saw that the rupee is weakening and in between due to the war in Ukraine, the crude and commodity prices increases and import becomes costlier. So, this is further widening the trade deficit, meaning import growth outpaced that of the exports. One simple words, import is higher than the exports. For example, when imports jumped by 58 percentage in June, the export rose only by 23 percentage. So, here you can see the deficit clearly. The import is double time the export and this further might balloon the trade deficit in financial year 23 to 70 billion dollars when compared to 31 billion dollars in financial year 2022. Now, moving on, the fourth reason is deteriorating CAD. See, CAD is a measure of a country's trade where the value of goods and services it imports exceeds the value of the product it exports. I hope you know that the current account represents a country's foreign transactions and like the capital account, it is a component of a country's balance of payments. So, now this CAD is deteriorating. See, just now we saw that the trade deficit is widening, right? This has caused the CAD to deteriorate, which in turn adds pressure on the local currency. See, spending money on current account deficit itself mean India is importing more goods and services and spending on servicing overseas borrowings than it is exporting or earning through remittances which in turn creates more demand for dollars. So, due to widening trade deficit, the current account deficit is also deteriorating because India is importing more goods and services and spending on serving overseas borrowing than it is exporting or earning through remittances. So, this is the fourth reason. Now, moving on, the fifth reason is muted exports. See, in our 23rd July 2022 discussion, we saw how depreciation will encourage exports. So, the current situation might seem to be encouraging the exports but the reality is export is always dependent on global demand which is being slowing down now. So, only if demand is there, the purpose of exporting will be met, right? So, because of this slowing global economic growth and fears of looming recession, a depreciating currency may not help to increase exports or otherwise the current situation might have boosted the exports meeting the demand in the global level. So, this is the fifth reason. Now, the sixth reason is rising import bills. As I already said, we currency helps to boost exports. It also makes import expensive. But remember, India usually imports items like crude, coal, fertilizer and gold and they almost make up half of India's import bill. But the issue here is these four are price inelastic items. That is, even though the price of these goods increases, the demand remains largely unchanged. So, even though the prices of these goods remain elevated, the demand in India did not decrease. So, this is inflating the import bill. So, this is the sixth reason and the seventh reason is import cover. See, import cover is the number of months of import that could be covered for by a country's international reserves. Import cover is an important indicator of the stability of a currency. Now, this import cover is also decreasing. For example, from a high of $642 billion in October 2021 reserve, it fell to $573 billion in July 2022. Despite India being fifth largest forest reserve, the reserves are currently just enough to finance only 9.5 months of imports when compared with 19 months of import covered in June 2021. See, previously RBI was well positioned to defend the rupee against undue volatility. But this worrying import cover forces a pressure on Indian rupee. So, to put it in simple words, in the middle of the geopolitical tensions and increase of interest rate by the Fed to combat U.S. inflation, the rupee has been on a downward spiral and due to concerns over rising local inflation and the deteriorating current account deficit, foreign portfolio investors have pulled out of Indian equities. Parallely, slowing exports and an inflated import bill have also weighted down the local currency. So, here in order to iron out sharp volatility in the rupee, the RBI has dipped into its reserves. But this has also led to a fall in import cover. So, this is the overall picture which says why there is enormous pressure on Indian rupee. So, these learnt points in mind. Now, let us move on to the next news article discussion. Now, look at this news article. The article says that except for states of Bihar, Mehalaya, Uttar Pradesh, Jharkhand and Manipur, the rest of the states and the union territories have attained replacement level fertility. In the recently concluded National Family Health Survey 5, the total fertility rate of our country has also reached 2.0. Although this is welcome news, our efforts for population stabilization must still continue. This is because in our country, the proportion of the population that is in the reproductive age is still huge. So, government efforts must continue. So, this is the context of the news article given here. In this background, let us see about the term total fertility rate and replacement level fertility. First, let us look at total fertility rate that is TFR. See, total fertility rate that is TFR is the average number of children born to a woman in her reproductive years. The reproductive age for the woman is normally considered to be between 15 to 49 years. So, when the total fertility rate reaches 2.1, the population exactly replaces itself from one generation to the next. This is called replacement level fertility. So, when the population reaches replacement level fertility, the population stabilizes. Now, the third important term is sub-replacement fertility. See, in case of sub-replacement level fertility, the TFR falls below 2.1. In such a case, the population starts declining. When population reaches sub-replacement fertility, the older population starts increasing and the younger population starts decreasing. So, these are the three important terms that you have to know about from this news article discussion. In this news article discussion, we saw about what is this total fertility rate. Total fertility rate is the average number of children born to a woman in her reproductive year. Here, reproductive year means age between 15 to 49 years. When TFR reaches 2.1, the population exactly replaces itself from one generation to the next, which we call it as replacement level fertility. So, when the population reaches replacement level fertility, the population stabilizes. Then, we saw about sub-replacement fertility. So, with these points in mind, now let us move on to the next part of the news article discussion, which is the preliminary practice questions. Now, look at this first question. This question is about PMLA, which of the following acts are enforced by enforcement directorate? Statement 1, the Prevention of Money Laundering Act 2002, that is PMLA. Statement 2, the Foreign Exchange Management Act 1999, FEMA. And the Statement 3 is the Fujitub Economic Offenders Act 2018, that is FEOA. Select the correct answer using the codes given below. Option A, 1 and 2 only. Option B, 2 and 3 only. Option C, 1 and 3 only. And option D, 1, 2 and 3. See, the correct answer for the question is option D, 1, 2 and 3. All these acts are enforced by enforcement directorate. So, the correct answer for the question is option D, 1, 2 and 3. Now, moving on to the second question. Second question is about MONEYBILL, which of the statements about MONEYBILL is correct. Statement 1, speakers decision on whether a bill is MONEYBILL or not is final, and it cannot be taken for judicial review. And statement 2, both appropriation bill and financial bill are both MONEYBILL. You have to select the correct answer using the codes given below. Option A, 1 only. Option B, 2 only. Option C, both 1 and 2. And option D, neither 1 nor 2. See, the correct answer for the question is option B, 2 only. Statement 1 is wrong because speakers decision on the MONEYBILL is actually subjected to judicial review. For example, when the Lok Sabha passed the Aadhar Bill as MONEYBILL, it was taken up to the Supreme Court for review. Statement 2 is correct because both appropriation bill and financial bill are MONEYBILL. So, the correct answer for the question is option B, 2 only. Now, moving on to the quiz question. This question is about TFR, which of the following are the reasons for the falling total fertility rate that is TFR in India. Statement 1, higher level education among women. Statement 2, government promoting contraception. Statement 3, late marriage. And statement 4, decreasing IMR. So, you have to choose the correct answer using the codes given below. Option A, 1, 2, 3 only. Option B, 2, 3 and 4 only. Option C, 1, 2, 4 only. And option D, all of the above. So, this question is the quiz question for you today. Choose the correct answer, post it in the comment section. So, with this, we came to the end of the news article discussion. If you like the discussion, hit like, do share and don't forget to subscribe to Shankarai's Academy YouTube channel. Thank you.