Daily Current Affairs 01.07.2022 (Concern over shortage of leprosy drug in private sector, Banks have capital to buffer any shock, The free fall of the rupee, A road safety quartet and the road ahead, Do not weaken the anti-defection law, Home and abroad, Should endorsers be held responsible for claims in advertising?)

Daily Current Affairs 01.07.2022 (Concern over shortage of leprosy drug in private sector, Banks have capital to buffer any shock, The free fall of the rupee, A road safety quartet and the road ahead, Do not weaken the anti-defection law, Home and abroad, Should endorsers be held responsible for claims in advertising?)


1. Concern over shortage of leprosy drug in private sector

Doctors write to Ministry seeking urgent intervention in restoring supply of Clofazimine to fight the dreaded disease

Clofazimine, a key drug for treatment of leprosy, which had been in short supply in the Indian market for several months, is now “not available”, with the situation turning into a crisis over the past three months. Fearing the worst for their patients, doctors have written to the Health Ministry for urgent intervention and immediate restoration of the medicine’s supply in the private sector.

“The medicine is available in the government sector [government hospitals and primary health centres]. It is in the private sector that the shortage is being felt and we request the government to help overcome this problem,’’ Rashmi Sarkar, president, Indian Association of Dermatologists, Venereologists and Leprologists, said.

The association’s secretary-general, Dinesh Kumar Devaraj, said that India reports more than 1,25,000 new patients of leprosy every year.

“These official numbers apart, another 50,000 to one lakh patients of leprosy are seen at the private clinics of dermatologists all over India. Alternative three-drug regimens without Clofazimine are very costly and often not feasible. Leprosy is still a dreaded disease with potential risk of transmission,’’ Dr. Devaraj said.

According to the World Health Organization (WHO), leprosy is endemic in several States and Union Territories of India, with the annual case detection rate of 4.56 per 10,000 population.

The prevalence rate of leprosy is 0.4 per 10,000 population in the country. Of the new cases detected during 2020-21, 58.1% were multibacillary, 39% were women, 5.8% were children less than 14 years of age, and 2.41% had visible deformities. The rate of visible deformities was 1.1 per million population

The association has written to the Ministry stating that Clofazimine is needed not just for the therapy/cure of leprosy, but also for controlling acute exacerbations of this disease, which occur frequently.

The association noted, “Clofazimine is one of the three essential drugs in the Multi Drug Treatment of Multibacillary Leprosy (MB-MDT) cases, along with Rifampicin and Dapsone. Under the NLEP (National Leprosy Eradication Programme), the government has been ensuring the steady supply of monthly blister packs for 12 months to all the multibacillary leprosy cases containing these three drugs. But, the present market crisis of Clofazimine is seriously affecting the Indian Leprosy Treatment scenario.”

In the absence of Clofazimine in the market, dermatologists and leprologists are facing a serious challenge in treating leprosy patients who want private treatment.

“In this decade, when India is fighting to eliminate the disease, easy availability of essential drugs like Clofazimine is crucial not only in government set-ups but also with distributors and in pharmacies from the public health point of view,” the association said.

Also, Clofazimine has shown activity against Multi Drug Resistance Tuberculosis and has been recommended by the WHO to treat drug resistance, the association explained in its letter.

It added that many leprosy patients require extended treatment beyond the government’s supply of 12-18 months.

Blister packs may also be lost, misplaced or damaged. In such cases too, medicines might need to be procured privately.

Doctors have said that though the other two drugs are very easily available, non-availability of Clofazimine is a dangerous situation as all three drugs have to be given together to prevent drug-resistant leprosy.


Leprosy is a disease that causes severe, scarring skin sores and nerve damage in the limbs. Leprosy disease has affected people on every continent. Leprosy is actually not that infectious but it spreads when a healthy person comes in regular and close contact with mouse droplets and leprosy patient. Children get more affected by this disease than adults. Almost, 180000 people all over the world get infected with leprosy.

The Leprosy disease mainly affects the peripheral nerves, skin, upper respiratory tract and the eyes. The most prevalent possibility of transmission is through the respiratory route. Leprosy is also transmitted through insects.

Types of Leprosy

There are six types of leprosy and are mainly classified based on the severity of symptoms, which include- Intermediate, Tuberculoid, Borderline tuberculoid, Mid-borderline, Borderline and Lepromatous leprosy.

  1. Intermediate Leprosy

It is the earliest stage of leprosy. In this stage, patients suffer from flat lesions which may heal by themselves without progressing in case of strong immunity.

  1. Tuberculoid Leprosy

It is the mild and less serious type of leprosy. People suffering from this disease have some patches of flat and pale-coloured skin and have no sensation in the affected area because of nerve damage. This is less infectious than other forms. This infection heals on its own, or it can persist and progress to a more severe form.

  1. Borderline tuberculoid Leprosy

The symptoms at this stage are quite similar to the tuberculoid but the infections may be quite smaller and more in number which may continue and revert to tuberculoid, or to any other advanced form.

  1. Mid-borderline Leprosy

The sign and symptoms of this stage are quite similar to the Borderline tuberculoid leprosy. This includes reddish plaques with the numbness which may regress or progress to another form.

  • Borderline Leprosy

This type of leprosy is a cutaneous skin condition and the main symptoms include multiple wounds or scars including plaques, flat, raised bumps that may continue or regress.

  • Lepromatous Leprosy

It is considered a more severe type of disease with many lesions with bacteria. The affected region is full of bumps, numbness, muscle weakness and rashes. Other symptoms include limb weakness, hair loss and other body parts such as kidneys, nose and male reproductive system are also affected. It is more infectious than tuberculoid leprosy which never regresses.

Causes of Leprosy

This disease is caused by bacteria, “Mycobacterium leprae” which is slow-growing. Leprosy is also termed as Hansen’s disease after the name of the scientist – Dr Gerhard Henrik Armauer Hansen who discovered this infectious disease in the year 1873.

Symptoms of Leprosy

Leprosy firstly affects the skin and then moves on to nerves present outside the brain and spinal cord which is known as the peripheral nerves.

Although it takes three to five years for these symptoms to appear after coming in contact with the bacteria, in some cases, symptoms appear after 20 years of being infected.

The time period between being exposed and the appearance of symptoms is known as the incubation period. If this period increases then, it is very difficult for doctors to diagnose the disease.

  • Severe pain.
  • Bleeding Nose.
  • Growth on skin.
  • Enlarged nerves.
  • Stiff, dry, and thick skin.
  • Ulcers on the soles of the feet.
  • Paralysis or muscle weakness.
  • Non-sensitive lesions on the body.
  • Numbness in hands, arms, feet, and legs.
  • Eye problems that might even cause blindness.

Diagnosis of Leprosy

The diagnosis of leprosy is based on signs and symptoms. A skin test or a skin lesion biopsy is advised by the doctors to detect the disease.

Treatment of Leprosy

Leprosy treatment fully depends on the type of leprosy the patient is suffering from. Antibiotics are used by doctors to treat the infection. Long-term treatment includes two or more antibiotics which will carry from 6 months to a year.

People suffering from severe leprosy may need to take antibiotics for a longer time period. But, these antibiotics are unable to treat the nerve damage. There are some anti-inflammatory drugs that are used to control nerve pain and severe damage caused by leprosy.

Complications of Leprosy

  • Blindness.
  • Kidney failure.
  • Muscle weakness.
  • Disfiguration of the face.
  • Infertility and Erectile dysfunction in men.
  • Permanent damage to the nerves within the brain.
  • Permanent damage to the nose from the inside resulting in nose bleeding.

Steps Taken by India to Eliminate Leprosy

  • Govt. of India started the National Leprosy Control Programme in 1955. It was only in 1970s that a definite cure was identified in the form of Multi-Drug Therapy (MDT).
  • The 1st Phase of the World Bank supported the National Leprosy Elimination Project started from 1993-94.
  • In the year 2001, after the global elimination was achieved, India was among the 14 countries that missed the target of eliminating leprosy. 
  • The National Leprosy Eradication Programme that was launched after this, achieved the goal of elimination of leprosy as a public health problem, defined as less than 1 case per 10,000 Population, at the National Level in December 2005.
  • In 2016, the draconian colonial era’s Lepers Act was repealed.
  • In 2017, the SPARSH Leprosy Awareness Campaign was launched to promote awareness and address the issues of stigma and discrimination.
  • The measures included in the campaign like contact tracing, examination, treatment, and chemoprophylaxis are expected to bring down the number of Leprosy cases.
  • The special emphasis on women, children and those with disabilities are expected to flush out more hidden cases.
  • In addition to continuing to administer MDT to patients, new preventive approaches such as Chemoprophylaxis and immunoprophylaxis are being considered to break the chain of transmission and reach zero disease status.
  • In 2019, Lok Sabha passed a Bill seeking to remove Leprosy as a ground for divorce.
  • In commemoration of the 150th birth anniversary of Mahatma Gandhi on 2nd October 2019, the NLEP has prepared the comprehensive plan to reduce the grade to disability to less than one case per million people by October 2019.

2. Banks have capital to buffer any shock

Financial Stability Report underlines improvements in lenders’ asset quality, NBFCs’ capitalisation

India’s scheduled commercial banks as well as non-banking financial companies have sufficient capital buffers to withstand any shock that may emanate from the pandemic or the ongoing geopolitical tensions in Europe, the Reserve Bank of India said in its biannual Financial Stability Report (FSR) released on Thursday.

Banks had bolstered capital and liquidity positions while asset quality had improved. “NBFCs remain well capitalised. Market risks are rising as spells of volatility are unleashed by foreign portfolio investment outflows and the sharp appreciation of the U.S. dollar,” the RBI noted.

Observing that the outlook for the global economy was shrouded by considerable uncertainty due to the war in Ukraine, elevated commodity prices, supply chain disruptions and darkening growth prospects, the RBI said: “Stagflation risks are mounting… as tightening financial conditions threaten to restrain the pace of growth”.

Given the global volatility and spillover risks to the Indian economy, India’s financial system was well capitalised and returning to profitability, RBI Governor Shaktikanta Das wrote in the foreword to the report.

SCBs maintained robust capital positions, with the capital to risk weighted assets ratio (CRAR) rising to a new high of 16.7%, while their gross non-performing assets (GNPA) ratio slipped to a six-year low of 5.9% and net non-performing assets (NNPA) ratio fell to 1.7% in March 2022.

The provisioning coverage ratio (PCR) increased to 70.9% in March 2022, from 67.6% in March 2021

“Macro-stress tests for credit risk reveal that SCBs are well-capitalised and all banks would be able to comply with the minimum capital requirements even under adverse stress scenarios,” the RBI asserted.

Noting that network analysis indicated that the total outstanding bilateral exposures among constituents of the financial system continued to grow, the RBI said the share of SCBs in bilateral exposure remained the largest, although lower than pre-pandemic levels.

Contagion analysis

“A simulated contagion analysis shows that even though losses due to failure of five banks with the maximum capacity to cause contagion increased in March 2022 vis-à-vis their September 2021 position, this would not lead to failure of any additional bank,” the RBI stressed in the report.

“The external sector is well-buffered to withstand the ongoing terms of trade shocks and portfolio outflows,” Mr. Das added.

Non-Banking Financial Company (NBFC)

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).

Difference between banks & NBFCs

  • NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:
  • NBFC cannot accept demand deposits;
  • NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
  • deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.

Different types/categories of NBFCs

Mutual Funds

  1. Mediators between people and stock exchange
  2. Money collected from people by selling their units is called the corpus
  3. Oldest Mutual Fund company in India is UTI ( Unit Trust of India)
  4. Mutual Funds nearly provides all the considerations

Insurance Companies

  1. Collect money from the public through the sale of insurance policies
  2. There are two types of Insurance – Life Insurance and General Insurance
  1. General Insurance includes Loss of property, car, house etc.
  2. It also includes Health Insurance

IRDA Act, 1999

As per the Insurance Regulatory and Development Authority Act, Insurance companies were opened up for private companies. The objective was to promote competition FDI was allowed up to 26% (Recently increased to 49%) IRDA was established as the regulator of the insurance sector

1. LIC – Life Insurance Corporation

  • Set up in 1956 by the government by nationalising all the existing private sector life insurance companies
  • This was done due to large scale defaults

2. GIC – General Insurance Corporation

  • It was established in 1973
  • Subsidiaries of GIC are:-
  • NICL – National Insurance Company of India Limited
  • United India Insurance Company Limited
  • Oriental Insurance Company of India Limited
  • New India Insurance Company of India Limited

3. ULIP – Unit Linked Insurance Plans

  • A mixture of Insurance and Mutual Funds

Hedge Funds

  1. These are mutual funds for rich investors
  2. Funds are raised through the sale of their unit to High net worth Individuals and Institutional Investors
  3. Units of these are usually sold in chunks/groups
  4. There is a lock-in period for Hedge funds before which funds cannot be withdrawn
  5. Corpus is an investment in risky instruments with a long term perspective

Venture Capital Firms/ Companies

  1. They provide finance and technical assistance to firms which undertake a business project based on innovative ventures
  2. They provide finance for the commercial application of new technology

Merchant banks (Investment Banks)

  1. Merchant banks provide financial consultancy services
  2. They advise firms on fundraising, manage IPO of firms, underwrite new issues and facilitate demat trading.

Finance Companies (Loan Companies)

  1. Financial Institutions raise funds from the public for lending purpose
  2. e.g. – Muthoot Finance, Cholamandalam

Micro Finance Institutions (MFI)

  1. Raise funds from the public for lending to weaker sections
  2. In India, they mainly raise funds from banks
  3. e.g. – Basix, Bandhan, SKS Micro Finance.

Vulture Funds

  1. These funds buy stocks of companies, which are nearing bankruptcy at a very low price.
  2. After purchasing such stocks they initiate the recovery process to increase the price of shares and sell it at a later point of time

Islamic Banks

  1. These banks provide loans on the basis of Islamic laws called Sharia.
  2. In the law of Sharia Interest cannot be charged on the loans

Leasing Companies

  1. They purchase equipment and machinery and provide the same to companies on a lease.
  2. These companies charge rent on these machineries which is similar to EMI

3. The free fall of the rupee

Why are countries increasing their interest rates? What are the ways in which the RBI has tried to cushion the fall of the rupee?

The Indian rupee hit an all-time low against the U.S. dollar, weakening past the 79 rupees to a dollar mark and selling as low as 79.05 against the dollar on Wednesday.

Since March this year, the U.S. Federal Reserve has been raising its benchmark interest rate causing investors to pull capital away from emerging markets such as India and back into the U.S. This, in turn, has put pressure on emerging market currencies which have depreciated significantly against the U.S. dollar so far this year.

The RBI has been trying to rein in domestic consumer price inflation, which hit a 95-month high of 7.8% in April, by raising rates and tightening liquidity.

Prashanth Perumal

The story so far: The Indian rupee hit an all-time low against the U.S. dollar this week weakening past the 79 rupees to a dollar mark and selling as low as 79.05 against the dollar on Wednesday. Many analysts expect the rupee to weaken further in the coming months and move past the 80 rupees to a dollar mark. In fact, the International Monetary Fund (IMF) expects the rupee to weaken past the 94 rupees to a dollar mark by FY29.

What is happening with the rupee?

The Indian rupee has been witnessing a steady decline this year, losing more than 6% against the U.S. dollar since the beginning of 2022. India’s forex reserves have also dropped below $600 billion, plunging by more than $50 billion since September 3, 2021, when forex reserves stood at an all-time high of $642 billion. The drop in India’s forex reserves is believed to be largely due to steps taken by the Reserve Bank of India to support the rupee. RBI officials, however, have noted that the drop in forex reserves is due to a fall in the dollar value of assets held as reserves by the RBI. For instance, if a portion of the reserves are in euros and the euro depreciates against the dollar, this would cause a drop in the value of forex reserves.

It should be noted that, as a matter of policy, the Indian central bank has usually tried to slow down or smoothen, rather than reverse or prevent, the fall in exchange value of the rupee against the U.S. dollar. The aim of the RBI’s policy is to allow the rupee to find its natural value in the market but without undue volatility or causing unnecessary panic among investors. State-run banks are usually instructed by the RBI to sell dollars in order to offer some support to the rupee.

By thus selling dollars in the open market in exchange for rupees, the RBI can improve demand for the rupee and cushion its fall.

What determines the rupee’s value?

The value of any currency is determined by demand for the currency as well as its supply. When the supply of a currency increases, its value drops. On the other hand, when the demand for a currency increases, its value rises. In the wider economy, central banks determine the supply of currencies, while the demand for currencies depends on the amount of goods and services produced in the economy.

In the forex market, the supply of rupees is determined by the demand for imports and various foreign assets. So, if there is high demand to import oil, it can lead to an increase in the supply of rupees in the forex market and cause the rupee’s value to drop. The demand for rupees in the forex market, on the other hand, depends on foreign demand for Indian exports and other domestic assets. So, for instance, when there is great enthusiasm among foreign investors to invest in India, it can lead to an increase in the supply of dollars in the forex market which in turn causes the rupee’s value to rise against the dollar.

What is causing the rupee to lose value against the dollar?

Since March this year, the U.S. Federal Reserve has been raising its benchmark interest rate causing investors seeking higher returns to pull capital away from emerging markets such as India and back into the U.S. This, in turn, has put pressure on emerging market currencies which have depreciated significantly against the U.S. dollar so far this year. Even developed market currencies such as the euro and the yen have depreciated against the dollar and the dollar index is up more than 9% so far this year. In fact, some analysts believe that the RBI’s surprise decision to raise rates in May could have simply been to defend the rupee by preventing any rapid outflow of capital from India. In 2013, the rupee fell 15% against the dollar in about three months after investors were spooked by the US Federal Reserve’s decision to trim down its bond purchase program that had helped keep long-term interest rates low.

Moreover, India’s current account deficit, which measures the gap between the value of imports and exports of goods and services, is expected to hit a 10-year high of 3.3% of gross domestic product in the current financial year. This means that India’s import demand amid rising global oil prices is likely to negatively affect the rupee unless foreign investors pour sufficient capital into the country to fund the deficit. But foreign investors are unlikely to plough capital into India when investment yields are rising in the U.S. Yields on U.S. 10-year Treasuries, for instance, have risen from around 0.5% in mid-2020 to over 3% now.

The rupee, it should also be noted, has consistently lost value against the U.S. dollar for several decades now. A major reason for this has been consistently higher domestic price inflation in India. Higher inflation in India suggests that the RBI has been creating rupees at a faster rate than the U.S. Federal Reserve has been creating dollars. So, while capital and trade flows gain a lot of attention in discussions on the rupee’s value, the difference in the rates at which the U.S. Federal Reserve and the RBI regulate the supply of their currencies may play a much larger role in determining the value of the rupee in the long run.

What lies ahead?

Analysts believe that, over the long run, the rupee is likely to continue to depreciate against the dollar given the significant differences in long-run inflation between India and the U.S.

At the moment, as the U.S. Federal Reserve raises rates to tackle historically high inflation in the country, other countries and emerging markets in particular will be forced to raise their own interest rates to avoid disruptive capital outflows and to protect their currencies. It should be noted that inflation in the U.S. hit a 41-year high of 8.6%.

The RBI too has been trying to rein in domestic consumer price inflation, which hit a 95-month high of 7.8% in April, by raising rates and tightening liquidity. As interest rates rise across the globe, the threat of a global recession also rises as economies readjust to tighter monetary conditions.

4. A road safety quartet and the road ahead

What are the key observations made by the new analytical series on road safety published in The Lancet?

A new analytical series on road safety worldwide, published by The Lancet, proposes that India could cut accident-related deaths by 25 to 40% based on evidence that preventive interventions produce good outcomes when applied to well-known risk factors.

Using the Global Burden of Disease data, a statistical model was constructed to estimate the number of lives that could be saved with interventions in the respective areas for each country. An average of 20,554 lives could have been saved in India with a reduction in speeds, 5,683 with helmet interventions and 3,204 with seatbelts. 

The authors of The Lancet point out that legislation without enforcement ends in failure. India amended its law on motor vehicles in 2019, but its implementation by State governments is not uniform or complete.

G. Ananthakrishnan

The story so far: In spite of several years of policymaking to improve road safety, India remains among the worst-performing countries in this area with a toll of 1,47,913 lives lost to road traffic accidents in 2017 as per Ministry of Road Transport and Highways statistics. The National Crime Records Bureau (NCRB) figure for the same year is 1,50,093 road accident deaths. Further, India’s data on road crash mortality are seen as an undercount, and the Global Burden of Disease report for 2017 estimates, based on verbal autopsy sources, that there were 2,18,876 deaths. The persistently high annual death toll brings into question the country’s ability to meet Sustainable Development Goal (SDG) 3.6, which aims to halve the fatalities and injuries from road traffic accidents by 2030. The United Nations is holding a high-level meeting on Global Road Safety on June 30 and July 1, 2022 to review the progress and challenges.

What are the new findings on road safety?

A new analytical series on road safety worldwide, published by The Lancet, proposes that India and other countries could cut accident-related deaths by 25 to 40% based on evidence that preventive interventions produce good outcomes when applied to four well-known risk factors — high speed, driving under the influence of alcohol, not using proper helmets, not wearing seat-belts and not using child restraints. Globally, about 14 lakh people die in traffic accidents annually, and nearly five crore are injured; over half of those killed are pedestrians, cyclists and motorcyclists; Low and Middle Income Countries (LMIC) bear the maximum burden of road fatalities and injuries, with high economic costs — an average of three to five per cent of GDP — suffered by these countries in 2014.

India amended its law on motor vehicles in 2019, but its implementation by State governments is not uniform or complete. A National Road Safety Board was constituted under the Motor Vehicles Act, with advisory powers to reform safety. The focus of State governments, however, remains conventional, with an emphasis on user behaviour (drivers and other road users), education and uneven enforcement. Low emphasis is placed on structural change such as raising engineering standards for roads, signages, signals, training for scientific accident investigation, raising policing skills and fixing responsibility on government departments for design, creation and maintenance of road infrastructure.

How can four factors improve safety outcomes?

The authors of The Lancet study used common predictors for individual countries, such as GDP per capita, population density, and governmental effectiveness measured through the Worldwide Governance Indicators, and built a statistical estimate of how interventions on the identified risk factors would influence injuries and death.

Using the Global Burden of Disease data, a statistical model was constructed to estimate the number of lives that could be saved with interventions in the respective areas for each country. An average of 20,554 lives could have been saved in India with a reduction in speeds, 5,683 with helmet interventions and 3,204 with seatbelts. The savings for curbs on driving under the influence of alcohol were not quantified because the country does not report the percentage of such fatalities.

In addition, the study series in The Lancet also calculates that 17% of road traffic injury-related deaths in LMICs could be avoided if trauma care facilities improved. This is significant as several accidents take place in rural areas on highways, and victims are taken to poorly-equipped district hospitals or medical college hospitals.

While positive user behaviour — slower travel, wearing of helmets, seat belts and so on — could save thousands of lives, the structural problems linked to unplanned motorisation and urbanisation remain. In India, speedy highway construction without reconciling fast and slow-moving traffic, presence of ramshackle vehicles, rampant wrong-side driving, absence of adequate police forces to monitor vehicles and curb drunk driving, and poor trauma care in non-urban centres contribute to high death and disability rates.

According to the Transport Ministry, more than 65% of those killed in road accidents in 2019 were in rural areas. Yet, the substantial death toll in densely populated urban centres — 32.9% — indicates that better engineering and enforcement can easily cut fatalities in the current decade, in the run up to the SDG goal year of 2030. This would be in consonance with the World Health Organization’s (WHO) decade of action on road safety, recognising it as a major public health issue, launched last year.

What can be done to cut death and injury rates?

The ambitious amendments to the Motor Vehicles Act in 2019 (MV Act) have not yielded significant results, although the restrictions on vehicular movement for COVID-19 temporarily slowed the rising graph of fatalities and injuries. In many countries, post-COVID-19 driving has turned more unruly, leading to a rise in pedestrian deaths.

Major interventions in India, first suggested by the Sundar Committee (2007) and ordered by the Supreme Court in S. Rajasekaran vs Union of India have not made a dent in the problem. The measures include setting up of an apex national body for road safety, and fixing decentralised responsibility at the district level.

The Sundar Committee pointed out that India lacked a technically competent investigation arm that could determine the cause of accidents; the National Road Safety Board Rules, 2021, provide for the formation of technical working groups covering, among other things, crash investigation and forensics. There is little clarity on whether the States have formed such units to aid traffic investigation, or whether the insurance industry has pressed for these to accurately determine fault. In the absence of scientific investigation, perceptions usually guide the fixing of liability. The MV Act stipulates only a fine up to one lakh for failure to follow norms and stipulations by the designated authority, contractor, consultant or concessionaire, leading to death or disability, and there is little evidence that even this has been enforced after a public inquiry.

The authors of The Lancet point out that legislation without enforcement ends in failure. Moreover, while proven interventions are proposed by WHO, absorptive capacities vary in LMICs. This is evident even in fast-growing India, since no single department bears responsibility to make roads safe. In the short term, slowing down traffic, particularly near habitations, segregating slower vehicles, enforcing seat belt and helmet use and cracking down on drunken drivers could produce measurable gains.

5. Editorial-1: Do not weaken the anti-defection law

The moral content of democracy cannot be eroded and India expects better compliance of the law by its lawmakers

The political developments in Maharashtra throw up troubling questions about how the political class is emasculating the anti-defection law which was described by the Supreme Court of India as “constitutional correctives against a legislatively perceived political evil of unprincipled defections induced by the lure of office and monitory inducements”. Almost with the farsight of a clairvoyant, the Supreme Court drew the attention of citizens to the very danger of subversion of democracy by unprincipled defection.

The ongoing developments in Maharashtra have once again brought before the country the reality of what the Supreme Court also described as the political evil of unprincipled defection. But the greatest irony is that the order of the Supreme Court, on June 27, on petitions from the dissidents in the Shiv Sena, gives undue advantage to the dissident legislators. The Court has granted them a longer time to submit replies than the rules mandate. This order is going to set in motion certain political developments which will resurrect in a big way what the Supreme Court characterised as political evil; it was to prevent this that the anti-defection law was enacted in 1985.

Important thrust areas

To put the issue in perspective, let us quickly run through the thrust areas of this law. It was enacted as the Tenth Schedule of the Constitution of India, in 1985, under Rajiv Gandhi’s premiership. It was actually the culmination of long years of debate, deliberations, disagreements, formulations and reformulations, with finally a consensus. The law as it was enacted provided for the disqualification of a legislator belonging to a political party if he voluntarily gave up his membership of his party or if he defied the whip of his party by voting contrary to its directions in the legislative house. Initially, there were two exceptions provided in the schedule which would exempt a legislator from disqualification. The first exception was a split in their original political party resulting in the formation of a group of legislators. If the group consisted of one third of such legislators of that party, they were exempted from disqualification. This exception was deleted from the schedule through a Constitution Amendment Act of 2003 because of frequent misuse of this provision.

The second exception was ‘merger’ which can be invoked when the original political party of a legislator merges with another party and not less than two thirds of its legislators agree to such a merger. So, if a legislator shows that his original party has merged with another party and he and his colleagues who constitute two thirds of the legislators of that party have agreed to the merger, then he and his colleagues will be exempted from disqualification.

Interpretation of ‘merger’

It is this exception contained in paragraph four of the schedule which has been taken recourse to by a large number of legislators across States and even in Parliament to defect to the ruling party. These legislators interpreted for themselves the term ‘merger’ to mean the merger of two thirds of legislators. They convinced themselves that the merger of their original party is not necessary, mainly because it is not a possibility. Politics being the art of the possible, they believed that what is not ordinarily possible can be conveniently ignored.

Now, this story is being repeated in Maharashtra. But there is a little difference here. It appears that the dissidents of Shiv Sena believed that if they get the two third number they can form a separate group and topple the government and then form a government with the help of the Bharatiya Janata Party. Although the Maharashtra Chief Minister has resigned and the direction of the Governor to hold a floor test has become infructuous, the issue arising out of the anti-defection petitions is still live and needs to be addressed by the next Speaker.

The law imposes the condition of merger of the original political party (namely, the Shiv Sena) which is not likely to happen now or in the future. If there is no merger of the original party, then these dissidents cannot claim any exception from disqualification no matter whether they are two thirds or three fourths. However, a recent judgment of the Goa Bench of the Bombay High Court (Girish Chodankar vs The Speaker, Goa State Legislative) that held that the merger of two thirds of Members of the Legislative Assembly is deemed to be the merger of the original party seems to have given them a ray of hope. This judgment, unfortunately, does not reflect the correct law and needlessly complicates it. Nevertheless, this judgment too emphasises the need for merger with another party. So, the legal position is if the dissidents do not merge with another party they will be disqualified now or later. They cannot operate as a separate group in the Assembly because the law does not permit them to do so.

On disqualification

Now, disqualification petitions have been filed by the Shiv Sena against 16 of the dissidents under paragraph 2(1)(a) on the ground that they have voluntarily given up the membership of the party. The question of whether they have voluntarily given up the membership of the party is decided on the basis of the conduct of a member. In Ravi S. Naik vs Union of India (1994), the Supreme Court had said “an inference can be drawn from the conduct of a member that he has voluntarily given up the membership of the party to which he belongs”. Wilful non-participation in a crucial meeting of a party whose government is facing a serious crisis because of them, may, in the present circumstances, offer the ground for disqualification.

Point of intervention

However, the notice of no-confidence against the Deputy Speaker has added another piece to the jigsaw puzzle. The intervention by the Supreme Court too has thrown up some crucial questions regarding the operation of the anti-defection law.

The first question is whether the Court can intervene at a stage prior to the decision by the Deputy Speaker. A Constitution Bench of the Supreme Court had held in Kihoto Hollohan (1993) that judicial review cannot be available prior to the making of a decision by the Speaker nor at an interlocutory stage of the proceeding. Giving longer time to the dissidents to submit replies is contrary to this decision. The mandatory period for replying to the charge is seven days under the rule. The court gave them 15 days. It is an intervention at the interlocutory stage which was barred by the Constitution Bench.

Another question of considerable importance is whether the Deputy Speaker can decide the disqualification petition when a no-confidence motion is pending against him. The Supreme Court had held in Nabam Rebia (2016) that the Speaker shall not decide the disqualification cases till the no-confidence motion against him is disposed of. In the Maharashtra case, the Deputy Speaker who had assumed the duties of the Speaker because of the vacancy in the office of the Speaker, did not admit the notice of no-confidence because he had doubts about the authenticity of the notice. The House rules clearly say that the notice of no-confidence against the Speaker/Deputy Speaker needs to be admitted in the first place which is done only by the Speaker. Rules do not recognise any other authority for admitting a notice. But it is the House which takes the final decision on the motion. If the notice of no-confidence does not contain specific charges, it can be disallowed by the Speaker. Therefore, in this case, there is no occasion to say that the Speaker cannot be a judge in his own cause. Disallowing a notice does not prevent Members from giving another notice complying with the requirements of the rule. Further, the notice can be given only if the House is summoned. When the notice was given, the Assembly was not convened. So, the notice against the Deputy Speaker can have no validity under the rules. Therefore, it cannot be said that the notice is pending against the Deputy Speaker.

An observation, its spirit

The anti-defection law is facing many challenges. Since it deals with the political class, the challenges are grave. The law, though not perfect, is a serious attempt to strengthen the moral content of democracy. Piloting the Bill on the Tenth Schedule, then Prime Minister Rajiv Gandhi, said, “There are lots of areas in this Bill which are grey. We are covering new grounds… it is better for us to tread cautiously than to make serious errors and repent later. There will be shortcomings in this Bill but as we see and identify those shortcomings we will try to overcome them.”

Parliament needs to recapture the spirit of this observation. The anti-defection law needs to be strengthened and not weakened. The nation expects better compliance of the law by the lawmakers.

6. Editorial-2: Home and abroad

PM Modi’s G-7 commitments on protecting freedoms will face scrutiny in India

Geopolitics trumped economics at the annual summit of the world’s “most industrialised” countries, as the G-7 is known, at the German resort of Schloss Elmau, a summit Prime Minister Narendra Modi attended, along with other special invitees from Argentina, Indonesia, Senegal, and South Africa. While the G-7 countries did have some economic initiatives on their agenda, including the launch of a $600 billion U.S.-led Partnership for Global Infrastructure and Investment (PGII), commitments on fighting climate change, funding renewable energy changes, mitigating inflation and managing the continued global crisis over the COVID-19 pandemic, it was clear that most of the deliberations took aim at the twin challenges seen from Russia and China. The 28-page communiqué alternated between outlining the challenges to the international order that emanate from Moscow’s war in Ukraine (including tightening sanctions, the impact on energy markets, and cybersecurity threats), and Beijing’s “expansive maritime claims”, rights violations, and unsustainable debt creation in lower income countries. The G-7 countries issued separate statements on support for Ukraine, food security and a ‘Climate Club’. In addition, the G-7 and special invitee “partner countries” issued a statement on “Resilient Democracies”, committing to free and fair elections, protecting freedom of expression, and gender empowerment. The message for Russia and China was made even more pointed at the subsequent NATO Summit in Madrid, where the U.S.’s Transatlantic allies invited the U.S.’s Trans-Pacific allies to discuss security challenges.

Given the targeted nature of the G-7 outcomes, India had its work cut out as a balancing power. Prime Minister Narendra Modi made it clear that it is the developing world that needs the most support, including to weather the “knock-on” effects of the Russia-Ukraine conflict. The Government sought to distance itself from the PGII, pitched as a G-7 counter to China’s Belt and Road Initiative, and made it evident that India had only signed on to the statements on “Resilient Democracies” and a “Just Energy Transition”, and not the many statements castigating Russia and China, much like Mr. Modi had, at the earlier BRICS summit, stayed away from President Putin and President Xi’s stringent criticism of the West. On the global stage, the G-7 outcomes mean New Delhi will have to continue to walk a tightrope between these two blocs that are growing more polarised and inimical towards each other. On the Indian stage, Mr. Modi’s G-7 commitments will be scrutinised for his pronouncements on democracy, and his written assurance that his government will protect civic society, freedoms of expression and “thought, conscience, religion or belief”, which are facing challenges within the country.

7. Editorial-3: Should endorsers be held responsible for claims in advertising?

Monetary penalty is not going to solve the issue, but we should be clear about the grey areas

On June 9, 2022, the Central Consumer Protection Authority (CCPA) notified guidelines for ‘Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’. The guidelines, brought in with immediate effect, are applicable to all forms of advertisements. While the Consumer Protection Act of 2019 does have a provision on misleading advertisements, the CCPA can impose a penalty of up to ₹10 lakh on manufacturers, advertisers and endorsers for misleading advertisements and a penalty of up to ₹50 lakh for subsequent contraventions. It can also prohibit the endorser of a misleading advertisement from making any endorsement for up to one year; for subsequent contravention, prohibition can extend up to three years. In a conversation moderated by Sonam Saigal, Anushree Rauta and Akashneel Dasgupta discuss the need for the new guidelines and how they overlap with the ‘Code for Self-Regulation in Advertising’, which was adopted by the Advertising Standards Council of India (ASCI). Edited excerpts:

According to data released by AdEx India, a division of TAM (Television Audience Measurement) Media Research, in March 2022, celebrity endorsements saw a 44% rise in 2021 over 2020. Why do companies hire brand ambassadors for a product or a service?

Anushree Rauta: In this country people worship certain celebrities. It’s a cinema and cricket-loving nation. A lot of brands these days have either actors or cricketers as brand endorsers. It adds to the credibility of the brand. It’s the trust which people repose in some of the celebrities [that they] pass on to the image of the brand. [Having such brand endorsers] impacts the buyers’ purchasing decisions because of the celebrity’s authority and/or relationship with the audience.

Akashneel Dasgupta: There are all kinds of reasons for hiring a celebrity. Certain brand endorsements happen because of the right reasons, where there is a fit with the brand, a communication objective or even a business objective to solve. When a celebrity comes in, he/she brings in the trust or credibility that is needed. But often the endorsement is also for the wrong reasons, as there is nothing new to say. In mature categories, which have high penetration, established brands that have little to differentiate [among them] and have almost reached a parity stage, celebrities are used as identifiers. Sometimes it’s lazy marketing. When you don’t have an idea, you just take a face, sit back and believe that this is going to do the job.

What onus do you think the recent guidelines put on brand ambassadors?

AR: Endorsers are service providers. They do have responsibilities given the kind of impact they have on the audience. But at the end of the day, it’s not solely on them. They wouldn’t have the technical knowledge to verify the products. Even though the ASCI guidelines provide something similar in terms of the due diligence exercise to be carried out by the celebrities, these guidelines are now an obligation for them. The guidelines require the celebrities to reflect their genuine or current opinion, to disclose any connection which they have with the brand… This will increase instances where brand endorsers may need to take some technical advice, they may need to avail of services like those of the ASCI, which provide a team of dedicated technical experts to verify whether the endorsements are substantiated or not [by the claims they make]. I think with these guidelines there will be an increase in transparency and more responsible advertising.

AD: There are celebrities who do their due diligence and are careful before they endorse a product or a brand. Then there are those who are uninterested in what the brand is, or what the product is, and it’s just about the money they’re making from the endorsement. These guidelines are good, but in the real world it is going to make only so much of a difference because the penalty on the brand ambassadors is so [little], it doesn’t really matter to them.

Since you mentioned penalty, the guidelines levy a fine of ₹10 lakh and can also prohibit an endorser for a year for a misleading advertisement. What do you think about this?

AR: Before the Consumer Protection Act came into place, there was a provision which had contemplated imprisonment as an option for a misleading advertisement. But I think the legislature rightly deleted that and imposed only a fine. The quantum of the fine is debatable. For any subsequent offences, there is also a penalty in terms of the celebrity not being able to endorse for a certain period, which is also loss of reputation, and which is good.

AD: For a celebrity, there is a talent management team, a legal team. There are so many people who do their due diligence, so that conscious decisions are taken to endorse or not endorse a product or a brand. But celebrities get away easily in case of a misleading ad with a public apology. So, a ₹10 lakh penalty is nothing if they had a deal of ₹4 crore. It should have been far more because I don’t think a monetary penalty is going to solve the issue here. There have to be some other yardsticks of accountability, or punishment. Damage to their reputation and prohibiting them from endorsements for a period is the punishment that works for them.

The ASCI and the Consumer Protection Act already have a provision for ‘due diligence’ that needs to be done on the part of those who endorse products. Why were the new guidelines needed then?

AR: Section 21 (power of Central Authority to issue directions and penalties against false or misleading advertisements) of the Act states no endorser will be liable to a penalty if they have exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by them. With the guidelines, they are obliged to do their due diligence, and to make the disclosure of their new material connection with the brand. Now, it’s come as a statutory obligation. Whether these guidelines were required to be there or not is questionable. In my view, the ASCI guidelines were already in place; maybe additional onus has been put now. It will have to be seen whether there is any reduction in misleading advertisements or not, following this new set of guidelines.

AD: It is difficult to define what’s misleading. A lot of things are in the grey area in advertising. It is a little hard to believe that the brand ambassador is not aware of what a brand stands for. For example, some products may claim they make your child stronger, or taller, or provide vitamin C, but how do you prove that… A lot of things are intangibles in advertising. If the product does live up to the claim, to what extent nobody can say, because almost 80% of advertising lies in the grey area regarding claims. So, it’s very difficult for a celebrity to verify claims because sometimes even the clients can’t verify those claims. So, maybe the guidelines will help in that aspect.

Can you explain what sort of ‘due diligence’ can be carried out by brand ambassadors to ensure they do not sign up to misleading advertisements?

AR: There are various aspects to it. As far as technical information is concerned, they would not be equipped to do it on their own, so it will be something which they will have to outsource. They would require the brand to submit certain reports and get them verified, or they would go to the ASCI which has its own team of experts to carry out these exercises. The second is in terms of the experience with the products and goods. I don’t know how this will pan out, because not all celebrities may be comfortable using the products they are endorsing. Nowadays, there is a liability perspective; I’m sure the brands would require them to give an undertaking that they have utilised the products and they affirm what they are endorsing. Celebrities will have to be more vigilant and responsible while endorsing products and services.

Speaking of liability, do any brand ambassadors ensure that there is a clause inserted in their contract that ensures zero responsibility if any part of the claim in the advertisement ends up being false?

AR: It depends on the kind of products or services being endorsed. If the celebrity has a good legal representation, they will definitely add clauses in the representations and warranties and the indemnification which are taken to ensure that whatever statements they are made to say are verified and there is no false statement which the brand is asking the celebrity to make. It also depends on the bargaining power. There are certain creative controls that certain celebrities would want to take. Sometimes the celebrities may want to get the storyboard verified at the scripting level itself. So, the clauses are typically there in all brand endorsement agreements, where representations and warranties are taken from the brands and any indemnification for any claims they mentioned.

AD: Most celebrities these days have these clauses inserted because they are handled by a security management agency. So they ensure that the clauses of no responsibility are there.

In February 2021, the Ministry of Information and Broadcasting informed the Lok Sabha that between 2017 and 2020, more than 12,000 complaints were received by the Grievances Against Misleading Advertisements, which was launched by the Department of Consumer Affairs. The number is appalling. What do you have to say about that?

AR: A misleading advertisement is defined under the statute (Section 2). To put it in simple words, in an advertisement there should be no false description made of any product or service, no false guarantee given, and it shouldn’t constitute what is called an unfair trade practice. During COVID-19, there were a lot of false and misleading advertisements. I am sure the number 12,000 is hugely attributed to the COVID-19 time.

AD: There’s no way to determine whether a claim is misleading or not. You can’t really determine or measure whether a certain cement gives more life than the other. Of course, there has to be proof, but then if it’s in the grey zone, you really can’t prove it. From the number of misleading [advertising] complaints received by the Ministry, I’m sure only a few would be genuine. In our country, we see people and brands being trolled. A lot of it is also exaggerated. The number 12,000 has to be taken with a pinch of salt. Not all of them are genuine. But yes, there are many genuine complaints. Most of the promises are intangibles and lie in that grey area. There are always two ways of looking at it. If promises are not delivered, that’s misleading.

Should brand ambassadors be held responsible for false claims in advertisements?

AD: Absolutely. They should be held responsible and there shouldn’t just be a monetary punishment for that.

AR: The Act already provides for sufficient penalty. Of course, celebrities need to take some responsibility. They cannot shrug off responsibility.

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