Note4Students
From UPSC perspective, the following things are important :
Prelims level: NFTs
Mains level: Paper 3- Taxing the transactions in cryptocurrencies
Context
In the Union Budget speech, Finance Minister Nirmala Sitharaman announced a 30% flat tax rate levied on any gains made from the transfer of virtual assets including cryptocurrencies and Non-Fungible Tokens (NFTs).
What is cryptocurrency?
- Cryptocurrency (crypto) consists of a digital denomination designed to work as a medium of exchange through a distributed computer network (a blockchain) that is not reliant on any central authority such as a government or a bank for its upholding and maintenance.
- Legal status: The announcement of the tax by the Finance Minister now leads to the assumption that crypto is legal in India.
- Foreseeable are changes that would, down the road, legitimize and formally legalize the activities of crypto start-ups and enable them to access the necessary support system which might not have been available previously.
What are the implications of taxing cryptocurrencies in India?
- While critics are right in observing that the 30% flat tax rate is a harsh rate, this is a premium and price well-worth paying in exchange for what is effectively a ruling-out of prospects for a total ban on crypto by the central government.
- Scope for innovation: The high tax rate would inevitably hamper the willingness of investors to convert cryptocurrencies into national fiat, this may, in turn, open up more doors for technologically savvy and innovation-minded investors.
- The extremely high tax rate and the fact that the losses cannot be offset would invariably propel investors to turn to alternative means of storing and undertaking transactions in cryptocurrencies, without foregoing the significant losses involved as they “switch” back into the rupee.
- An inadvertent upside of this, then, is the prospective conversion and reallocation of crypto-funds from one form to another.
- Such transformations would involve DeFi (Decentralised Finance) activities such as staking, lending, and providing liquidity, among others.
Scope for DeFi in India
- DeFi (or “decentralized finance”) is “an umbrella term for financial services on public blockchains.
- With DeFi, one can do most of the things that banks support — earn interest, borrow, lend, buy insurance, trade derivatives, trade assets, and more — but it is faster and does not require paperwork or a third party.
- DeFi is global, peer-to-peer (meaning directly between two people, and not routed through a centralised system), pseudonymous, and open to all.
- The processes highlighted above would drive innovation in the field of Indian DeFi.
Concerns
- Low participation due to high rate: The community of small and medium-sized enterprises (SMEs) and lower-end high net-worth individuals are going to find it most difficult to access the ecosystem given the substantial barriers posed by the tax rates.
- Lack of clarity: Additionally, when it comes to India’s crypto policy at large, there is a fundamental lack of clarity in aspects other than taxation.
- There appears to be a push to treat crypto as purely an asset class than a currency.
- The consolation offered by the Government in the form of the Reserve Bank of India’s CBDC, or Central Bank Digital Currency, will definitely help in pushing for the adoption of digital currencies, but, equally, defeats the fundamental purpose of cryptocurrency, which is decentralization.
Suggestion
- Reduce the tax rate: There is a need to reduce tax rates in the future, though this must be weighed against considerations concerning government revenue and the need to curb speculative bubbles surfacing in relation to the currency.
- Incorporation of insights: The second reform constitutes the incorporation of insights from seasoned partners from international communities, the key should rest with engaging these individuals for their insights and advice on the best practices associated with cryptocurrency policymaking.
Consider the question “What is DeFi (decentralised finance)? What are the implications levying high tax on the cryptocurrencies?”
Conclusion
Systemic reforms are by no means easy, but they are critical as an amplifier of the successes that India has already accrued in the field and as an accelerator of India’s advancement in the sphere of crypto finance and blockchain social policymaking.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Federal structure
Mains level: Paper 2: Federal judiciary
Context
The article examines the need to strengthen the federal nature of our judiciary.
Federalism in India
- India is a union of States.
- Part of basic structure: The Supreme Court of India has held that the federalist nature of our country is part and parcel of the basic structure of the Constitution.
- A midpoint between unitarism and confederalism: Federalism is a midpoint between unitarism which has a supreme center, to which the States are subordinate, and confederalism wherein the States are supreme and are merely coordinated by a weak center.
- Role of judiciary: An integral requirement of a federal state is that there be a robust federal judicial system that interprets this constitution, and therefore adjudicates upon the rights of the federal units and the central unit, and between the citizen and these units.
Nature of judiciary in India: Federal judiciary
- The federal judicial system comprises the Supreme Court and the High Court in the sense that it is only these two courts that can adjudicate the rights of federal units.
- The Indian Federation though a dual polity has no dual judiciary at all.
- Single integrated judiciary: The High Courts and the Supreme Court form one single integrated judiciary having jurisdiction and providing remedies in all cases arising under the constitutional law, the civil law, or the criminal law.
Equality of power of High Court judges and Supreme Court judges
- The Indian Constitution envisaged the equality of power of High Court judges and Supreme Court judges, with a High Court judge not being a subordinate of a Supreme Court judge.
- Superior only in the appellate sense: The Supreme Court has, on many occasions, reiterated the position that the Supreme Court is superior to the High Court only in the appellate sense.
- A delicate balance is required to be maintained between the Supreme Court and the High Courts in order for the constitutional structure to work.
- This balance existed from Independence onwards, until the 1990s. Since then, however, it has been tilting in favor of the central court.
Erosion of standing of High Court
- In recent years, three specific trends have greatly eroded the standing of the High Court, leading to an imbalance in the federal structure of the judiciary.
- 1] Collegium system: The Supreme Court of India today, by playing the role of a collegium, effectively wields the power to appoint a person as a judge to a High Court or to transfer him or her to another High Court, or to appoint (or delay the appointment) of a sufficiently senior High Court judge as chief justice or as a judge of the Supreme Court
- The practical impact of this in the power dynamic between a High Court judge and a Supreme Court judge leaves little to be said or imagined.
- 2] Parallel judicial systems: Successive governments have passed laws that create parallel judicial systems of courts and tribunals which provide for direct appeals to the Supreme Court, bypassing the High Courts.
- These laws lead to the creation of parallel hierarchies of courts and tribunals, whether it be the Competition Commission, or the company law tribunals, or the consumer courts
- In all these cases, the High Courts are bypassed.
- Laws have been drafted such that the High Court has no role to play and the Supreme Court directly acts as an appellate court
- 3] Interventionist Supreme Court: The Supreme Court has been liberal in entertaining cases pertaining to trifling matters.
- This has inevitably led to the balance tipping in favor of the centralization of the judiciary.
- An aggressively interventionist Supreme Court leads many to approach it directly as a panacea for all ills befalling the nation.
- We see the Supreme Court interfering in matters which are clearly of local importance, having no constitutional ramifications.
Impact on the federal structure
- The greater the degree of centralization of the judiciary, the weaker the federal structure.
- In the United States, empirical research shows that the U.S. Supreme Court is far more likely to strike down a state statute as unconstitutional than a federal statute.
- Courts face much weaker constraints when they strike down state legislation, especially state laws that are disapproved of by national political majorities.
- In Nigeria, a similar federal country, research has shown that the Supreme Court favours the jurisdiction of the central government over the State units.
Conclusions
- Federalism is a midpoint between unitarism which has a supreme centre, to which the States are subordinate, and confederalism wherein the States are supreme, and are merely coordinated by a weak centre.
- An integral requirement of a federal state is that there be a robust federal judicial system which interprets the constitution
- The federal judicial system comprises the Supreme Court and the High Court in the sense that it is only these two courts which can adjudicate the above rights.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tribunals, NCLT
Mains level: Issues with appointments in Tribunals
The Supreme Court has warned that even after the judicial intervention, the government made abrupt efforts to fill vacancies in tribunals some time back and nothing after that.
What is the case?
- The apex court said that it is getting requests for extension of time for NCLT (Nation Company Law Tribunal) matters, etc.
- Some knee-jerk appointments took place and nothing after that.
- The govt earlier had introduced Tribunal Reforms Bill in 2021, which abolishes nine appellate tribunals and revives provisions of an ordinance struck down by the Supreme Court.
What are Tribunals?
- Tribunals are specialist judicial bodies that decide disputes in a particular area of law.
- They are institutions established for discharging judicial or quasi-judicial duties.
- The objective may be to reduce the caseload of the judiciary or to bring in subject expertise for technical matters.
Do you know?
The Income Tax Appellate Tribunal was established as the first Tribunal in India back in 1941.
Creation of Tribunals
In 1976, Articles 323A and 323B were inserted in the Constitution of India through the 42nd Amendment.
- Article 323A: This empowered Parliament to constitute administrative Tribunals (both at central and state level) for adjudication of matters related to recruitment and conditions of service of public servants.
- Article 323B: This specified certain subjects (such as taxation and land reforms) for which Parliament or state legislatures may constitute tribunals by enacting a law.
- In 2010, the Supreme Court clarified that the subject matters under Article 323B are not exclusive, and legislatures are empowered to create tribunals on any subject matters under their purview as specified in the Seventh Schedule.
SC stance on Tribunals
- The Supreme Court has ruled that tribunals, being quasi-judicial bodies, should have the same level of independence from the executive as the judiciary.
- Key factors include the mode of selection of members, the composition of tribunals, and the terms and tenure of service.
- In order to ensure that tribunals are independent of the executive, the Supreme Court had recommended that all administrative matters be managed by the law ministry rather than the ministry associated with the subject area.
- Later, the Court recommended the creation of an independent National Tribunals Commission for the administration of tribunals.
- These recommendations have not been implemented.
Issues with tribunals
- Pendency: Whereas the reasoning for setting up some tribunals was to reduce the pendency of cases in courts, several tribunals are facing the issue of a large caseload and pendency.
- No appointment: With over 240 vacancies in key tribunals where thousands of cases were pending, not a single appointment had been made by the government in any of these tribunals till date.
Back2Basics: National Company Law Tribunal
- The NCLT is a quasi-judicial body that adjudicates issues relating to Indian companies.
- The tribunal was established under the Companies Act 2013 in 2016 and is based on the recommendation of the V. Balakrishna Eradi Committee.
- All proceedings under the Companies Act, including proceedings relating to arbitration, compromise, arrangements, reconstructions and the winding up of companies shall be disposed off by the NCLT.
- The NCLT bench is chaired by a Judicial member who is supposed to be a retired or a serving High Court Judge and a Technical member who must be from the Indian Corporate Law Service, ICLS Cadre.
- It is the adjudicating authority for the insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SEED Scheme, DNTs, Criminal Tribes Act
Mains level: Welfare of the Denotified and Nomadic Tribes
The Minister of Social Justice and Empowerment has launched the Scheme for Economic Empowerment of De-notified, Nomadic, and Semi Nomadic Communities (SEED).
Who are the DNTs?
- The term ‘De-notified Tribes’ stands for all those communities which were once notified under the Criminal Tribes Acts, enforced by the British Raj between l87l and I947.
- These Acts were repealed after Independence in l952, and these communities were “De-Notified”.
- The DNTs (of whom most are the medieval period Banjaras) are the most neglected, marginalized, and economically and socially deprived communities.
- Most of them have been living a life of destitution for generations and still continue to do so with an uncertain and gloomy future.
SEED Scheme
- Under the scheme, the government seeks to provide free coaching to students for civil services examinations, competitive exams for admission to professional courses; health insurance; livelihood support and housing.
- It has been formulated for families having income from all sources of Rs.2.50 lakh or less per annum and not availing any such benefits from similar Scheme of Centre Government or the State Government.
- The Scheme will be implemented through a portal, developed by the Department of Social Justice & Empowerment.
- Post verification, the funds will be transferred directly to the beneficiaries in their account.
- The other implementing agencies are Ministry of Rural Development, National Rural Livelihood Mission (NRLM) and National Health Authority (NHA).
Components of the scheme
The Scheme will have the following four components:
[I] Free Coaching
- A component of free Coaching for DNT Students has been envisioned for the educational empowerment of these communities.
- The objective of this component is to enable them to appear in competitive examinations/ admission to professional courses like medicine, engineering, MBA, etc for obtaining an appropriate job in the Public/Private Sector.
- The selection of the candidates for each course will be based on system generated merit list through the portal.
- Approximately, 6250 students will be provided free coaching under this component in five years. The total funds spent in the five years will be Rs.50 crore.
[II] Health Insurance
- Members of these communities are likely to have little or no access to medical facilities and other benefits available under the mainstream health policies.
- The primary objective of the scheme is to provide financial assistance to National Health Authority (NHA) in association with State Health Agencies (SHAs).
- These agencies will provide a health insurance cover of Rs.5 lakhs per family per year for families as per norms of “Ayushman Bharat Pradhan Mantri Jan Arogya Yojana.
[III] Livelihood Initiatives
- The decline of traditional occupations of DNT/NT/SNT communities has exacerbated their poverty.
- A focus to support livelihood generation for these communities is required.
- The primary objective of the scheme is to provide financial assistance to National Rural Livelihood Mission (NRLM).
- It would enhance productivity growth in key livelihood sectors for employment generation through investments in institutional support, technical assistance.
[IV] Financial support for Housing
- Considering the shortage of houses for DNTs, it has been proposed to earmark a separate outlay for PMAY to support specific importance in providing houses only for DNTs living in rural areas.
- It is for those who have not taken benefit of the Pradhan Mantri Awas Yojana as SC, ST, OBC and are living below the poverty line.
- The admissible support is Rs 1.20 lakhs in plains and 1.30 lakhs in hilly areas (per unit assistance).
Why need such a scheme?
- DNTs escaped the attention of our developmental framework and thus are deprived of the support unlike Scheduled Castes and Scheduled Tribes.
- Historically, these communities never had access to private land or homeownership.
- These tribes used forests and grazing lands for their livelihood and residential use and had “strong ecological connections.
- Many of them are dependent upon various types of natural resources and carve out intricate ecological niches for their survival.
- The changes in ecology and environment seriously affect their livelihood options.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: New India Literacy Programme
Mains level: Basic literacy and numeracy amongs adults
The Union Government approved a new scheme “New India Literacy Programme (नव भारत साक्षरता कार्यक्रम) for the period FYs 2022-2027 to cover all the aspects of Adult Education to align with National Education Policy 2020.
New India Literacy Programme
- The scheme will cover non-literates of the age of 15 years and above in all states/UTs in the country.
- The target for Foundational Literacy and Numeracy for FYs 2022-27 is 5 (five) crore learners @ 1.00 crore per year by using “Online Teaching, Learning and Assessment System (OTLAS)”.
- A learner may register him/herself with essential information like name, date of birth, gender, Aadhaar number, mobile number, etc.
- The scheme will be implemented through volunteerism through online mode.
- The training, orientation, workshops of volunteers, maybe organized through face-to-face mode.
- All material and resources shall be provided digitally for easy access to registered volunteers.
Objectives of the scheme
The objectives of the scheme are:
- To impart foundational literacy and numeracy
- To cover other components which are necessary for a citizen of the 21st century such as critical life skills (including financial literacy, digital literacy, commercial skills, health care and awareness, child care and education, and family welfare)
- Vocational skills development (with a view towards obtaining local employment)
- Basic education (including preparatory, middle, and secondary stage equivalency)
- Continuing education (including engaging holistic adult education courses in arts, sciences, technology, culture, sports, recreation, etc.)
Salient features of the scheme
- The school will be a Unit for implementation of the scheme
- Schools to be used for conducting a survey of beneficiaries and Voluntary Teachers (VTs)
- Foundational Literacy and Numeracy will be imparted through Critical Life Skills to all non-literates in the age group of 15 years and above
- Performance Grading Index (PGI) for State/UT at the district level
- CSR/Philanthropic Support may be received by hosting ICT support, providing volunteer support
Need for this scheme
- As per Census 2011, the absolute number of non-literates of the country in 15 years and above age group is 25.76 crore (Male 9.08 crore, Female 16.68 crore).
- Even after the Saakshar Bharat program was implemented during 2009-10 to 2017-18, it is estimated that currently around 18.12 crore adults are still non-literate in India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: OROP Policy
The Supreme Court has said that the Centre’s hyperbole on the One Rank One Pension (OROP) policy presented a much “rosier picture” than what is actually given to the pensioners of the armed forces.
What is OROP Policy?
- OROP means the same pension, for the same rank, for the same length of service, irrespective of the date of retirement.
- The concept was provoked by the then decision by Indira Gandhi-led government, in 1973, two years after the historic victory in the 1971 Bangladesh war.
How did the issue escalate?
- The Rank pay was a scheme implemented by the Rajiv Gandhi-led govt in 1986, in the wake of the 4th Central Pay Commission.
- It reduced the basic pay of seven armed officers’ ranks of 2nd Lieutenant, Lieutenant, Captain, Majors, Lt. Colonel, Colonels, Brigadiers, and their equivalent by fixed amounts designated as rank pay.
How was it reviewed?
- In 2008, Manmohan Singh led Government in the wake of the Sixth Central Pay Commission (6CPC), which discarded the concept of rank-pay.
- Instead, it introduced Grade pay, and Pay bands, which instead of addressing the rank, pay, and pension asymmetries caused by ‘rank pay’ dispensation, reinforced existing asymmetries.
Issues with this pension policy
- The causes that inform the OROP protest movement are not pension alone, as armed forces veterans have often tried to make clear, and the parliamentary committee recorded.
- The issues, veterans emphasize, are of justice, equity, honor, and national security.
- The failure to address the issue of pay-pension equity, and the underlying issue of honor, is not only an important cause for the OROP protest movement but its escalation.
Present status
- PM Modi-led government has accepted the OROP.
- It has already released Rs. 5500 crores to serve the purpose, but still, there are some grievances from the veterans’ side.
- It refined Pensions for all pensioners retiring in the same rank as the average of the minimum and maximum pensions in 2013.
- The veterans noted governments’ proposal as one rank many pensions since the review of 5 years would lead to differences in pension between senior and a junior.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: REC, RPO
Mains level: Renewable Energy in India
Telangana CM in harsh words has criticized the Prime Minister over Renewable Purchase Obligations (RPO).
Why such a gesture by Telangana CM?
- Telangana has been particularly vocal about the “increasing burden” forced upon states by the Centre on account of the clean energy cess imposed on coal and the RPOs (Renewable Purchase Obligation).
What are RPOs?
- Renewable Energy Certificates (REC) is a policy instrument to catalyze the development of renewable energy.
- It is a market-based mechanism that will help the states meet their regulatory requirements (such as RPOs) by overcoming the geographical constraints on existing renewable potential in different states.
- Under RPO, power distribution companies purchase a certain percentage of their requirements from renewable energy sources.
REC Mechanism
- REC mechanism is a market-based instrument to promote renewable energy and facilitate compliance of renewable purchase obligations (RPO).
- It is aimed at addressing the mismatch between availability of RE resources in state and the requirement of the obligated entities to meet the RPO.
- 1 REC is treated as equivalent to 1 MWh.
How many types of RECs are there?
There are two categories of RECs, viz., solar RECs and non-solar RECs.
- Solar RECs are issued to eligible entities for the generation of electricity based on solar as a renewable energy source.
- Non-solar RECs are issued to eligible entities for the generation of electricity based on renewable energy sources other than solar.
Issues highlighted by Telangana
- Mandatory purchase: The CM has raised the issue of mandatory purchase of renewables reducing the Plant Load Factor (PLF) for existing thermal power projects.
- Only solar RPO: The CM questioned the mandate to procure a certain percentage of power from solar energy noting that Telangana had hydropower projects producing over 2,500 MW of power from rivers.
- Not all states have ample renewables: States have thus far not been able to meet RPO targets, with over a dozen states and UTs achieving less than 60% of RPOs.
- Penalty for non-compliance: There is a (small) penalty for not meeting RPO obligations. The Centre has proposed to increase penalties on states for non-compliance with RPOs in the draft electricity amendment bill.
Clarification from the centre
- States were free to hold their own bids and buy green energy from any developer instead of procuring power based on bids by the SECI.
- They can choose to have their own bids.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Eat Right Movement
Mains level: Food habits and prevalence of NCDs
Four police stations of New Delhi district have been certified as ‘Eat Right Campus’ by the Food Safety and Standards Authority of India (FSSAI).
Eat Right Campus
- Eat Right India is a flagship mission of FSSAI, which aims at ensuring that the citizens of the country get safe and nutritious food.
- The ‘Eat Right Campus’ initiative led by FSSAI aims to promote safe, healthy and sustainable food in campuses such as schools, universities, colleges, workplaces, hospitals, tea estates etc. across the country.
- The objective is to improve the health of people and the planet and promote social and economic development of the nation.
- The initiative is not mandatory to adopt.
Evaluation Criteria
- Benchmarks have been created on four different parameters based on which campuses are evaluated and certified as ‘Eat Right Campus’.
- These parameters include
- Food safety measures, steps to ensure the provision of healthy, Environmentally sustainable food, and Building awareness to make the right food choices.
- These practices include mandatory steps such as licensing and registration of food service providers in the campus and compliance to food safety and hygiene standards as per Schedule 4 of the Food Safety and Standards (FSS) Act, 2006.
Benefits of Eat Right Campus
- It can provide immense benefits to the campus and the individuals on the campus not only in terms of health but also economics.
- Safe, healthy, and sustainable food on the campus would reduce the incidence of food-borne illnesses, deficiency diseases, and non-communicable diseases among the people on the campus.
- This means less absenteeism and loss of working hours and greater wellbeing, motivation, and productivity of people.
- This would also reduce the burden of healthcare costs for the workplace, institution, hospital, jail, or tea estate.
Back2Basics: Food Safety and Standards Authority of India (FSSAI)
- The FSSAI is an autonomous body established under the Ministry of Health & Family Welfare, Government of India.
- It has been established under the Food Safety and Standards Act, 2006 which is a consolidating statute related to food safety and regulation in India.
- It is responsible for protecting and promoting public health through the regulation and supervision of food safety.
- It is headed by a non-executive Chairperson, appointed by the Central Government, either holding or has held the position of not below the rank of Secretary to the Government of India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tarapur Massacre of 1932
Mains level: NA
Bihar CM has announced that February 15 would be celebrated as “Shahid Diwas” in memory of the 34 freedom fighters who were killed by police in Tarapur town of Bihar’s Munger district 90 years ago.
Why such move?
- The Tarapur massacre was the biggest carried out by the British police after the one in Jallianwala Bagh in Amritsar in 1919.
- The freedom fighters had never got their due, the CM said.
- PM Modi too had referred to the Tarapur massacre in his Mann ki Baat radio address of January 2021.
Tarapur Massacre: Course of events
- On February 15, 1932, a group of young freedom fighters planned to hoist an Indian national flag at Thana Bhavan in Tarapur.
- Police were aware of the plan, and several officers were present at the spot. Around 2 pm, even as the police carried out a brutal lathicharge, Gopal Singh succeeded in raising the flag at Thana Bhavan.
- A 4,000-strong crowd pelted the police with stones, injuring an officer of the civil administration.
- The police responded by opening indiscriminate fire on the crowd.
- After about 75 rounds were fired, 34 bodies were found at the spot, even though there were claims of an even larger number of deaths.
Trigger for protest
- The hanging of Bhagat Singh, Sukhdev, and Rajguru in Lahore on March 23, 1931, sent a wave of grief and anger around the country.
- Following the collapse of the Gandhi-Irwin Pact, the Mahatma was arrested in early 1932.
- The Congress was declared an illegal organization, and Nehru, Patel, and Rajendra Prasad were also thrown in jail.
- In Munger, freedom fighters Srikrishna Singh, Nemdhari Singh, Nirapad Mukherjee, Pandit Dasrath Jha, Basukinath Rai, Dinanath Sahay, and Jaymangal Shastri were arrested.
- A call given by the Congress leader Sardar Shardul Singh Kavishwar to raise the tricolour over government buildings resonated in Tarapur.
Back2Basics:
Explained: Jallianwala Bagh Massacre
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