Weekly Current Affairs (15th to 21st November 2022) - 1 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Regulatory Framework for Online Bond Platform Providers

Context: Securities and Exchange Board of India (SEBI) has come out with a regulatory framework for online bond platform providers in a bid to streamline their operations.

• Online Bond Platform Providers (OBPPs) would be companies incorporated in India and they should register themselves as stock brokers in the debt segment of the stock exchange, as per the framework that would be effective immediately.

What is the Need for a Regulatory Framework?

• With the bond market offering tremendous scope for development, particularly in the non-institutional space, there is a need to place checks and balances in the form of transparency in operations and disclosures to the investors dealing with such Online Bond Platforms (OBPs), measures for mitigation of payment.
• During the past few years, there has been an increase in the number of OBPPs offering debt securities to non-institutional investors. Most of them are fintech companies or are backed by stock brokers.
• There has been a significant increase in the number of registered users who have transacted through them.
• Operations of OBPs were outside SEBI's regulatory purview.

What are the New Rules?

• After obtaining registration as a stock broker in the debt segment of a stock exchange, an entity would have to apply to the bourse to act as an OBPP.
• The new rules mandate registration certificate as a stock broker from SEBI to act as an online bond platform provider.
• Those acting as an online bond platform provider without registration certificate provider prior to 9th november 2022 continue to do so for a period of three months.
• People will have to comply with the conditions of registrations as specified by the SEBI from time to time.
• The entity would have to ensure compliance with the minimum disclosure requirements. It would also have to disclose on its platform all instances of conflict of interest, if any, arising from its transactions or dealings with related parties.

What Is the Bond Market?

• Bonds:
  • Bonds are units of corporate debt issued by companies and securitized as tradeable assets.
  • A bond is referred to as a fixed-income instrument since bonds traditionally paid a fixed interest rate (coupon) to debtholders.
  • Variable or floating interest rates are also now quite common.
  • Bond prices are inversely correlated with interest rates: when rates go up, bond prices fall and vice-versa.
• Types of Bonds:
  • Convertible Bond: Unlike regular bonds that are redeemed upon maturity, a convertible bond gives the purchaser a right or an obligation to convert the bond into shares of the issuing company. It features a fixed tenure and pays out interest payments periodically at predetermined intervals.
  • Fixed Coupon Rate Bonds: In these types of bonds, the interest is fixed from the date of issue. Most of the corporate and government bonds are of fixed coupon rate and the interest or coupon is provided annually, semi-annually, quarterly or monthly till the redemption date.
  • Floating Coupon Rate Bonds (FRB): In these bonds, the coupon rate fluctuates at a predefined time till the date of maturity. Here interest rate depends on a benchmark which it follows to determine the coupon rate in each coupon payment. In the case of FRB Bond, the coupon rate depends on the T-bills yield.
  • Zero Coupon Bonds: These bonds are those bonds where the issuer does not provide any coupon payment to the holder till the maturity date. Here the bonds are issued below the face value amount and on the date of redemption or maturity. Bonds are redeemed on the face value amount. Here the difference between the redemption price and the issue price is the return for an investor. In India, Treasury-Bills are the Zero-Coupon Bonds.
  • Cumulative Coupon Rate Bonds: These bonds are issued with a coupon rate but the coupon payment is done at the time of redemption. Usually, corporates issue these types of bonds.
  • Inflation Indexed Bonds: These bonds provide protection from inflation. It is primarily issued by the government. Here the coupon rate is dependent on the inflation rate. Usually, the coupon rate equals the inflation rate and the additional rate provided over the inflation rate.
  • Sovereign Gold Bonds (SGBs): As per the Reserve Bank of India SGBs are government securities denominated in grams of gold. These are the substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.
• Bond Market: The bond market broadly describes a marketplace where investors buy debt securities that are brought to the market by either governmental entities or corporations.
  • National governments generally use the proceeds from bonds to finance infrastructural improvements and pay down debts.
  • Companies issue bonds to raise the capital needed to maintain operations, grow their product lines, or open new locations.
  • Bonds are either issued on the primary market, which rolls out new debt, or traded on the secondary market, in which investors may purchase existing debt via brokers or other third parties.
• Online Bond Platform: As per SEBI, it is an electronic system other than a recognised stock exchange or an electronic book providing platform, on which debt securities are listed or proposed to be listed are offered and transacted. The online bond platform provider means any person operating or providing such a platform.

Religious Conversion

Context:  Recently, the Supreme Court has asked the Centre to step in and make very serious and sincere efforts to tackle the issue of Forced Religious Conversion.

What was Petition and the Court's Ruling?

• The petition sought a declaration that fraudulent religious conversion by “intimidation, threatening, deceivingly luring through gifts and monetary benefits” offends Articles 14, 21, 25 of the Constitution.
• The plea pointed out that in the 1977 ruling in the Rev Stainislaus versus State of Madhya Pradesh case, the Supreme Court had said: “It has to be remembered that Article 25(1) guarantees ‘freedom of conscience’ to every citizen, and not merely to the followers of one particular religion and that, in turn, postulates that there is no fundamental right to convert another person to one’s own religion.
• The SC, while hearing the petition sought directions to the Centre and states to take stringent steps to check such conversions.
• The court has said that forced conversion is very dangerous and may affect security of the nation and freedom of religion and conscience.
• This is because if a person purposely undertakes the conversion of another person to his religion, as distinguished from his effort to transmit or spread the tenets of his religion, that would impinge on the freedom of conscience guaranteed to all the citizens of the country alike.

What is Religious Conversion?

• Religious conversion is the adoption of a set of beliefs identified with one particular religious denomination to the exclusion of others.
• Thus "religious conversion" would describe the abandoning of adherence to one denomination and affiliating with another.
  • For example, Christian Baptist to Methodist or Catholic, Muslim Shi'a to Sunni.
• In some cases, religious conversion "marks a transformation of religious identity and is symbolized by special rituals".

What is the Need for Anti-Conversion Laws?

• No Right to Proselytize: The Constitution confers on each individual the fundamental right to profess, practice and propagate his religion. Proselytizing is the act of trying to convert another individual from the convertee's religion to the converter's religion. The individual right to freedom of conscience and religion cannot be extended to construe a collective right to proselytize. For the right to religious freedom belongs equally to the person converting and the individual sought to be converted.
• Fraudulent Marriages: In the recent past, several instances have come to the notice that whereby people marry persons of other religion by either misrepresentation or concealment of their own religion and after getting married they force such other person to convert to their own religion.
• SC Observations: Recently, the Supreme Court took judicial notice of instances of people marrying by either misrepresentation or concealment of their own religion. According to the court, such incidents not only infringe the freedom of religion of the persons so converted but also militate against the secular fabric of our society.

What is the Status of Anti-Conversion Laws in India?

• Constitutional Provision: The Indian Constitution under Article 25 guarantees the freedom to profess, propagate, and practice religion, and allows all religious sections to manage their own affairs in matters of religion, subject to public order, morality, and health. However, no person shall force their religious beliefs and consequently, no person should be forced to practice any religion against their wishes.
• Existing Laws: There has been no central legislation restricting or regulating religious conversions. However, since 1954, on multiple occasions, Private Member Bills have been introduced in (but never approved by) Parliament, to regulate religious conversions. Further, in 2015, the Union Law Ministry stated that Parliament does not have the legislative competence to pass anti-conversion legislation.
• Anti-Conversion Laws in Various States: Over the years, several states have enacted ‘Freedom of Religion’ legislation to restrict religious conversions carried out by force, fraud, or inducements. Orissa Freedom of Religion Act, 1967, Gujarat Freedom of Religion Act, 2003, Jharkhand Freedom of Religion Act, 2017, Uttarakhand Freedom of Religious Act, 2018, The Karnataka Protection of Right to Freedom of Religion Act, 2021.

What are the Issues Associated with Anti-Conversion Laws?

• Uncertain and Vague Terminology: The uncertain and vague terminology like misrepresentation, force, fraud, allurement presents a serious avenue for misuse. These terms leave room for ambiguities or are too broad, extending to subjects far beyond the protection of religious freedom.
• Antithetical to Minorities: Another issue is that the present anti-conversion laws focus more on the prohibition of conversion to achieve religious freedom. However, the broad language used by the prohibitive legislation might be used by officials to oppress and discriminate against minorities.
• Antithetical to Secularism: These laws may pose a threat to the secular fabric of India and the international perception of our society’s intrinsic values and legal system.

Way Forward

• The governments implementing such laws need to ensure that these do not curb one’s Fundamental Rights or hamper the national integration instead, these laws need to strike a balance between freedoms and malafide conversions.

Third Attempt for Artemis I

Context: National Aeronautics and Space Administration (NASA) has successfully launched its unmanned Moon mission Artemis I on 16th November 2022.

• After multiple delays caused by technological failures and natural disasters spread across two months, the Space Launch System (SLS) rocket has been lifted off from the Kennedy Space Centre in Cape Canaveral, Florida.

What is the Artemis I Mission?

• Artemis I is an uncrewed mission of NASA.
  • Named after the sister of Apollo in Greek mythology, it is NASA's successor to the Apollo lunar missions from fifty years ago.
• It will test the agency’s Space Launch System (SLS) rocket and Orion crew capsule.
  • The SLS is the largest new vertical launch system NASA has created since the Saturn V rockets used in the 1960s and 1970s.
• Artemis I is the first in a series of increasingly complex missions to build a long-term human presence at the Moon for decades to come.
  • The primary goals for Artemis I are to demonstrate Orion’s systems in a spaceflight environment and ensure a safe re-entry, descent, splashdown, and recovery prior to the first flight with crew on Artemis II.
• It is only a lunar Orbiter mission even though, unlike most Orbiter missions, it has a return-to-Earth target.

What is the Importance of Artemis I Mission?

• Artemis I is the first step into that new space age of achieving the promise of transporting humans to new worlds, of landing and living on other planets, or maybe meeting aliens.
• The CubeSats it will carry are equipped with instruments meant for specific investigations and experiments, including searching for water in all forms and for hydrogen that can be utilised as a source of energy.
• Biology experiments will be carried out, and the impact of deep space atmosphere on humans will be investigated through the effect on dummy ‘passengers’ on-board Orion.

What are the Upcoming Artemis Missions?

• Artemis II:
  • It will take off in 2024.
  • Artemis II will have a crew aboard Orion and will be a test mission to confirm that all of the spacecraft’s systems will operate as designed when it has humans on board.
  • But the Artemis II launch will be similar to that of Artemis I. A crew of four astronauts will be aboard Orion as it and ICPS orbit the Earth twice before moving to the direction of the Moon.
• Artemis III:
  • It is scheduled for 2025, and is expected to ferry astronauts to the moon for the first time since the apollo missions.

What are India’s Moon Exploration Efforts?

• Chandrayaan 1:
  • Chandrayaan-1 was India's first mission to Moon under Chandrayaan project.
  • It was launched successfully in October 2008 from Satish Dhawan Space Centre (SDSC) SHAR, Sriharikota, Andhra Pradesh.
  • Indian Space Research Organisation (ISRO) lost communication with Chandrayaan-1 on 29th August 2009.
• Chandrayaan-2:
  • Chandrayaan-2 is India's second mission to the moon and comprises a fully indigenous Orbiter, Lander (Vikram) and Rover (Pragyan).
  • The Rover Pragyan is housed inside Vikram lander.
• Chandrayaan-3:
  • The ISRO recently announced India’s third lunar mission Chandrayaan-3, which will comprise a lander and a rover.

Global Offshore Wind Alliance

Context: Recently, nine new countries sign up for Global Offshore Wind Alliance at COP27.

• Nine new countries: Belgium, Colombia, Germany, Ireland, Japan, the Netherlands, Norway, the UK, and the US.
• Australia announces to sign up with global offshore wind alliance.

What is Global Offshore Wind Alliance (GOWA)?

• It was established to ramp up of offshore wind in order to tackle the climate and energy security crises.
• It was set up by the International Renewable Energy Agency (IRENA), Denmark and the Global Wind Energy Council.
  • GWEC was established in 2005 to provide a credible and representative forum for the entire wind energy sector at an international level.
• Several organizations are supporting the alliance and promoting offshore wind in their respective regions.
  • Both IRENA and the International Energy Agency (IEA) expect that offshore wind capacity will need to exceed 2000 GW in 2050, from just over 60 GW today, to limit the rise in global temperatures to 1.5 degree Celsius and achieve net zero.
  • To reach this target, GOWA will aim to contribute to accelerating growth to reach a total of at least 380 GW installed capacity by the end of 2030.

What is Offshore Wind Energy?

About:

• Wind energy today typically comes in two different “types”: onshore wind farms which are large installations of wind turbines located on land, and offshore wind farms which are installations located in bodies of water.
• Offshore wind energy refers to the deployment of wind farms inside the water bodies. They utilise the sea winds to generate electricity. These wind farms either use fixed-foundation turbines or floating wind turbines.
  • A fixed-foundation turbine is built in shallow water, whereas a floating wind turbine is built in deeper waters where its foundation is anchored in the seabed. Floating wind farms are still in their infancy.
• Offshore wind farms must be at least 200 nautical miles from the shore and 50 feet deep in the ocean.
• Offshore wind turbines produce electricity which is returned to shore through cables buried in the ocean floor.

Status of Wind Energy in India:

• India’s electricity generation from wind reached 39.2 gigawatts (GW) a year in March 2021. An addition of another 20 GW over the next five years is expected to happen soon.
• The compound annual growth rate for wind generation has been 11.39% between 2010 and 2020, and for installed capacity, it has been 8.78%.
• More than 95% of commercially exploitable resources are located in seven states: Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu.

Policies related to Wind Energy:

• National Wind-Solar Hybrid Policy: The main objective of the National Wind-Solar Hybrid Policy, 2018 is to provide a framework for promotion of large grid connected wind-solar PV hybrid systems for optimal and efficient utilization of wind and solar resources, transmission infrastructure and land.
• National Offshore Wind Energy Policy: The National Offshore wind energy policy was notified in October 2015 with an objective to develop the offshore wind energy in the Indian Exclusive Economic Zone (EEZ) along the Indian coastline of 7600 km.

What are the Benefits of Offshore Wind Energy?

• Wind speed over water bodies is high and is consistent in direction. As a result, offshore wind farms generate more electricity per installed capacity.
• Fewer offshore turbines are required to produce the same capacity of energy as compared to onshore ones.
• Offshore wind farms have a higher CUF (capacity utilisation factor) than onshore wind farms. Therefore, offshore wind power allows for longer operating hours.
  • A wind turbine's CUF is equal to the average output power divided by the maximum power capabilities.
• It's possible to build bigger and taller offshore windmills, resulting in increased energy harvest.
• Furthermore, the wind flow is not restricted by hills or buildings.