Day: February 23, 2022

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WTO and India

India risks being left out of TRIPS waiver

| Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- TRIPS waiver for Covid-19 treatment issue

Context

When the Covid-19 pandemic pounded the globe, India, with South Africa, piloted a proposal to waive key provisions of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement on Covid-19 vaccines.

Significance of TRIPS waiver for Covid-19 related  medical products

  • The TRIPS agreement is part of the international legal order on trade enshrined in the World Trade Organization (WTO).
  •  The core idea behind the proposal is that intellectual property (IP) rights such as patents should not become a barrier in scaling up the production of medical products like vaccines, diagnostics and therapeutics essential to combat Covid-19.
  •  However, the WTO has failed to adopt a TRIPS waiver to date.
  • Geographically limited waiver: The developed world is talking of a TRIPS waiver that would be geographically limited and exclude India.
  • This is a failure of India’s economic diplomacy.
  • There are also attempts at limiting the waiver to vaccines alone, leaving out diagnostics and therapeutics.

Domestic factors that affected India’s global campaign for TRIPS waiver

1] India failed to use provisions under Indian Patent Act

  • During the entire pandemic, India rarely made use of the existing flexibilities under the Indian Patent Act, such as compulsory licences (CL), which are consistent with the TRIPS agreement, to increase the supply of Covid-19 medical products despite being nudged by the judiciary to do so.
  • On the contrary, during the peak of the second Covid wave, the central government filed an affidavit in the Supreme Court stating that the main constraint in boosting the production of key drugs is the unavailability of raw materials, not IP-related legal hurdles.
  • .This stand completely contradicted India’s argument internationally that views IP as an obstacle to augmenting the supply of Covid-19 medical products.

2] Lack of national strategy

  • India did not proactively develop a national strategy to implement the TRIPS waiver as and when it is adopted.
  • In other words, a TRIPS waiver at the WTO would only be an enabling framework.
  • It would then require member countries to amend their domestic IP laws to implement the waiver.

3] Failure to involve Indian pharma industry

  • The government failed to get the Indian pharmaceutical industry on board.
  • Pharmaceutical bodies are a divided lot with many Indian companies speaking against the waiver, thus denting India’s global campaign.

4] Failure to walk the talk on indigenously developed Covaxin

  • India should have unlocked the technical know-how of Covaxin to the world.
  • While technology transfer agreements for Covaxin have been inked with domestic companies, making the vaccine technology available to anyone interested globally, at a minimal price.
  • This would have exhibited India’s resolve to walk the talk on the TRIPS waiver.

Conclusion

While India would oppose the attempted exclusion, the lesson is that for economic diplomacy to flourish, it should be backed by concrete actions on the domestic front.

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Corruption Challenges – Lokpal, POCA, etc

Untangling Kerala’s Lokayukta controversy

| Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Lokpal and Lokayuktas Act

Mains level: Paper 2- Lokpal Acts of states

Context

The controversy surrounding the amendment to the Lokayukta Act of Kerala — effected through an ordinance —has raised the political temperature in the State.

The background of the Lokayukta

  • The term Lokpal was first used in a report of the Administrative Reforms Commission headed by Morarji Desai as far back as in 1966.
  • The first Bill on Lokpal was introduced in the Lok Sabha in 1968 which lapsed with the dissolution of the House.
  • Finally, after 45 years the Lokpal and Lokayuktas Bill was passed by Parliament in 2013.
  • The Lokpal and Lokayukta Act delegates the power to States to establish by law the Lokayukta to deal with complaints relating to corruption against public functionaries.
  • The Lokpal has jurisdiction to inquire into allegations of corruption against the Prime Minister, Ministers, Members of Parliament, Group A, B, C and D officers and officials of the central government.
  • After the conclusion of the investigation, the Lokpal may file a case in the special court in case the findings disclose the commission of offence under the Prevention of Corruption Act by the Prime Minister, Ministers or Members of Parliament.
  • Some States already have established Lokayuktas. For example, Maharashtra in 1971, and Kerala in 1999.

How Lokpal is different from other investigative bodies

  • The Lokpal is no ordinary investigative body.
  • Connection with judiciary: It is headed by the incumbent Chief Justice of of India or a retired judge.
  • It has eight members, four of whom are judicial members.
  • The Lokpal has an inquiry wing and a prosecution wing to deal with investigation and prosecution, respectively.
  • The director of prosecution files the case in the special court based on the findings of the Lokpal.

Issue in Kerala

  • In order to get a clearer perspective on the Kerala Lokayukta controversy, it is necessary to understand the scheme of the Lokpal and Lokayuktas Act enacted by Parliament.
  • The long title of the Act says: “An Act to provide for the establishment of a body of Lokpal for the Union and Lokayukta for States to inquire into allegations of corruption against certain public functionaries….”
  • Investigative body: Thus, the Lokpal is conceived of as a body which will inquire into allegations of corruption.
  •  Section 14 of the Lokayukta Act in Kerala which has now been amended said that if  the Lokayukta is satisfied on the complaint against the public servant being substantiated that he should not continue to hold the post held by him.
  • In other words, if the public servant is the Chief Minister or a Minister, he shall forthwith resign his office.
  • It may be noted here that such a provision does not exist in any of the State laws or the Lokpal Act of the Centre.
  •  An investigative body does not have the legal authority to direct the public servant to resign his post on the basis of its findings.
  • The Chief Minister or a Minister holds office during the pleasure of the Governor (Article 164).
  • The Constitution of India does not contemplate any external pressure on the Governor to withdraw his pleasure.
  • The Sarkaria Commission had suggested that the Governor can dismiss a Chief Minister only when he loses his majority in the Assembly and refuses to step down.
  • The Supreme Court has accepted this recommendation of the Sarkaria Commission.
  • No agency created by a law made by the Assembly, particularly an investigative body, can declare that its decision be carried out by the Governor.
  • It would amount to a violation of the Constitution.
  • State law includes the office bearers of political parties within its definition of ‘public servant’. 
  • The Lokayukta law was enacted to inquire into cases of corruption of public functionaries such as Ministers, legislators, etc. who are covered by the Prevention of Corruption Act.
  • This Act does not include office-bearers of political parties in its definition clause.
  • Another problematic provision in this law is the one which deals with the reports of Lokayukta (Section 12).
  • It says that the Lokayukta shall, on the allegation of corruption being substantiated, send the findings along with recommendation of action to the competent authority who is required to take action as recommended by the Lokayukta.
  • It further says that if the Lokayukta is satisfied by the action taken by the competent authority, he shall close the case.
  • There is no provision in the central law under which the Lokpal can close the case before it reaches the court.
  • The Lokayukta not being a court does not have the legal capacity to close the corruption case under any circumstances.

Conclusion

The Kerala Lokayukta Act should be re-examined by a committee of the Assembly and should be brought on a par with the Lokpal Act. A legislation which seeks to punish corrupt public functionaries should be placed above controversies.

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Foreign Policy Watch: India-Russia

Russia-China Axis

| International Relations | Mains Paper 2: India & Its Neighborhood - Relations
Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: China-Russia axis and implications on India

Russian President Vladimir Putin’s visit to China this month, as well as the Ukraine crisis, have turned the spotlight on Russia’s relations with China.

News: China-factor in Ukraine Crisis

  • Many in the west have blamed the Russia-China axis for motivating Moscow’s recent moves and ensuring it will not be completely isolated in the face of western sanctions.
  • At the same time, Beijing has found itself walking a tightrope in its response and has so far stopped short of endorsing Russia’s actions.

Russia-China Relations: A backgrounder

  • Relations between China and the former Soviet Union were frosty, marked by mistrust and doctrinal differences for most of the Cold War decades.
  • The change came in 1989, when Mikhail Gorbachev became the first Soviet leader to land in Beijing since Nikita Khrushchev in 1958.
  1. Economic dependency: A decade after the Soviet Union broke up, disappointed and humiliated and deep in economic crisis, Russia under Putin’s first presidency turned to China under President Jiang Zemin.
  2. Neighborhood: In 2001, the two countries signed the Treaty of Good-Neighbourliness and Friendly Cooperation, paving the way for expanding economic and trade ties.
  3. Technological support: For the new People’s Republic of China, the Soviet Union was the most important source of financial and technological support.
  4. Respect for sovereignty: Russia’s backing for China’s position on Taiwan is also a benchmark.

Current state of ties

  • Last year, Russia’s Foreign Minister has described relations as the “best in their entire history”. Both premiers have met 38 times (in person and virtually) since 2013.
  • The biggest factor behind their current closeness is:
  1. Shared discomfort with the US and its allies
  2. NATO and its ideological cold war approaches
  3. Indo-Pacific strategy and QUAD
  4. One-China Principle

Military closeness

  • China in 2014 became the first foreign buyer of the S-400 missile defence system, which India has also purchased (although there have been reported delays in delivery for reasons unknown).
  • Their joint exercises have also grown in scope.
  • Last year, a third “joint strategic air patrol” was held over the East China Sea.

Trade and Commerce

  • Russia is China’s largest source of energy imports and second largest source of crude oil.
  • Energy set to account for 35% of trade in 2022.
  • China has been Russia’s biggest trading partner for 12 consecutive years and accounts for close to 20% of Russia’s total foreign trade (Russia, on the other hand, accounts for 2% of China’s trade).
  • But Russia is, for China, a key market for project contracts besides energy supplies.
  • Chinese companies signed construction project deals worth $5 billion last year — for the third straight year.

Chinese response to the Ukraine Crisis

  • Given these deep trade linkages, China does not want instability (or, for that matter, a spurt in energy prices).
  • China has iterated that the sovereignty, independence and territorial integrity of all countries should be respected and safeguarded.
  • China has preferred resolution to the current crisis through diplomacy and a return to the Minsk Agreement.
Minsk Agreement: They were a series of international agreements which sought to end the war in the Donbas region of Ukraine.

Implications for the world

  • China has repeatedly underlined that it is sympathetic to Russia’s concerns on NATO, which mirror its own opposition to America’s allies in the Indo-Pacific.
  • As strategic back-to-back fraternal partners, China is obliged to bolster Russia in time of need.
  • With consistent support from China, the Russian economy has become increasingly resilient following years of sanctions imposed by the US and other Western developed countries.
  • A strong economy will back up Moscow to deflect ruthless economic coercion from the US.

Implications for India

  • Strategists in the west and in India have often questioned the robustness of the relationship as well as Russia’s possible unease at being the “junior partner” and increasingly beholden to Chinese interests.
  • The Russian President’s invite to Pak PM Imran Khan is the recent unwelcomed moved for India.
  • In this regard, New Delhi expects Sino-Russian closeness to continue, which poses its own challenges.
  • This is not, however, an entirely new situation, as history reminds us, on how the Soviet Union responded to China’s attack on India in 1962.

Conclusion

  • It is no doubt that India would restrict its foreign policy choices and undermine its own status as a rising power of global standing by taking sides in a conflict that has nothing to do with it.

 

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Right To Privacy

IT Ministry pitches for Data Monetization Policy

| Governance | Mains Paper 2: Government Scheme/Policies
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Data Monetization

Mains level: India Data Accessibility and Use Policy, 2022

The Ministry of Electronics and Information Technology’s proposal to monetise data collected at the central level has data policy and other experts divided.

Backgrounder to this policy

  • The idea of monetising citizens’ data for greater public good was first floated by the government in the Economic Survey of 2018-19.
  • It had noted that since such data is generated and belongs to the people, it should be used for the people.
  • The survey had also noted that private sector could be granted access to “select databases” for commercial use.

India Data Accessibility and Use Policy, 2022

Key Propositions:

  • Sale of Public Data: The data, which has been collected by the central government and undergone some value addition be allowed to be sold for some price.
  • Identifying value data: The draft of the policy suggests new framework for identifying “high value data-set” on the basis of the data’s degree of importance in the market.
  • Establishment of India Data Office: The draft has also suggested setting up of a central India Data Office will be created under MeitY.
  1. Chief Data Officer: All the central government’s line ministries will have to form their respective Data Management Unit, which will be headed by a Chief Data Officer.
  2. India Data Council: These chief data officers along with the India Data Officer will together form the IDC, which will decide on the policy matters of data accessibility and its usage.
  • Data sharing toolkit: It will be the broad umbrella to help respective central or state government ministries and departments “assess and optimally manage” the risks associated with the release and sharing of such data.

Significance of the move

  • Non-personal data as national resource: The thought process to consider non personal data as community or national resource, in itself is commendable.
  • Revenue generation: The core problem with the government selling citizens’ data is the revenue generation.
  • Boosting investments: The new policy will encourage data sharing among government departments and potentially help the investor ecosystem.

Issues flagged with the Policy

  • Individual privacy: Data monetization may happen at cost of individual privacy. The most sought-after datasets are those that contain sensitive personal data of individuals, ex. medical history, financial data.
  • Absence of Data Protection Law: The new draft policy has been announced at a time when the country is yet to finalise the countours of a data protection law.
  • State interference: The policy could also face pushback from big tech companies whose business model is based on the monetisation of large-scale data collection model.
  • Political risks: When the govt starts selling citizen data, even if anonymised, the government gets into business its making money.
  • Un-regulation: Once the govt starts making money, its very hard to reduce that activity or to regulate it in a manner where it is impartial to the public.
  • Anonymisation of data: There is a lack of proper standard and framework on data anonymisation leading to a possible that such data may be “reverse-engineered”.

Way forward

  • This policy is a good intent in which the government can monetise the wide range of data it currently holds.
  • However it remains to be seen how the pricing mechanism would work.
  • It is important to understand that datasets cannot be priced uniformly, and the value of a particular dataset varies depending on the context in which it is solved.

 

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Armed Forces (Special Powers) Act

Panel on AFSPA removal misses ‘45-day’ deadline

| Security Issues | Mains Paper 3: Various Security Forces, Agencies & Their Mandates
Note4Students

From UPSC perspective, the following things are important :

Prelims level: AFSPA

Mains level: Read the attached story

A committee constituted by the Union Home Ministry to study the withdrawal of the Armed Forces (Special Powers) Act, or AFSPA, from Nagaland, slated to submit a report within 45 days is yet to conclude its findings.

AFSPA: A Backgrounder

  • The AFSPA, 1958 came into force in the context of insurgency in the North-eastern States decades ago.
  • It provides “special power” to the Armed Forces applies to the Army, the Air Force and the Central Paramilitary forces etc.
  • It has been long contested debate whether the “special powers” granted under AFSPA gives total immunity to the armed forces for any action taken by them.

Armed Forces (Special Powers) Act, 1958

  • Armed Forces Special Powers Act, to put it simply, gives armed forces the power to maintain public order in “disturbed areas.”
  • AFSPA gives armed forces the authority use force or even open fire after giving due warning if they feel a person is in contravention of the law.
  • The Act further provides that if “reasonable suspicion exists”, the armed forces can also arrest a person without warrant; enter or search premises without a warrant; and ban the possession of firearms.

What are the Special Powers?

The ‘special powers’ which are spelt out under Section 4 provide that:

(a) Power to use force, including opening fire, even to the extent of causing death if prohibitory orders banning assembly of five or more persons or carrying arms and weapons, etc are in force in the disturbed area;

(b) Power to destroy structures used as hide-outs, training camps, or as a place from which attacks are or likely to be launched, etc;

(c) Power to arrest without warrant and to use force for the purpose;

(d) Power to enter and search premises without a warrant to make arrest or recovery of hostages, arms and ammunition and stolen property etc.

What are the Disturbed Areas?

  • A disturbed area is one that is declared by notification under Section 3 of the AFSPA.
  • As per Section 3, it can be invoked in places where “the use of armed forces in aid of the civil power is necessary”.

Who can declare/notify such areas?

  • The Central Government or the Governor of the State or administrator of the Union Territory can declare the whole or part of the State or Union Territory as a disturbed area.
  • A suitable notification would have to be made in the Official Gazette.

Presently ‘Disturbed Areas’

  • AFSPA is currently in force in Assam, Nagaland, Manipur, 3 districts of Arunachal Pradesh, and areas falling within the jurisdiction of 8 police stations in Arunachal Pradesh bordering Assam.
  • In Jammu and Kashmir, a separate law Armed Forces (Jammu and Kashmir) Special Powers Act, 1990 has been in force.

 Is it a License to Kill?

While the operation of the Section has been controversial in itself, it has attracted much criticism when actions have resulted in the death of civilians.

  • Power to kill: Section 4 of the Act granted officers the authority to “take any action” even to the extent to cause the death.
  • Protection against prosecution: This power is further bolstered by Section 6 which provides that legal can be instituted against the officer, except with the previous sanction of the Central Government.

Supreme Court’s Observations over AFSPA

  • These extra-judicial killings became the attention of the Supreme Court in 2016.
  • It clarified that the bar under Section 6 would not grant “total immunity” to the officers against any probe into their alleged excesses.
  • The judgment noted that if any death was unjustified, there is no blanket immunity available to the perpetrator(s) of the offense.
  • The Court further noted that if an offense is committed even by Army personnel, there is no concept of absolute immunity from trial by the criminal court constituted under the CrPC.

Constitutionality of AFSPA

  • Attempts have been made to examine the constitutionality of the Act on the grounds that it is contravention to the:
  1. Right to Life and Personal Liberty (Article 21) and
  2. Federal structure of the Constitution since law and order is a State subject

Recommendations to repeal AFSPA

(1) Justice B.P. Jeevan Reddy Commission

  • The 2004 Committee headed by Justice B.P. Jeevan Reddy, the content of which has never officially been revealed by the Government, recommended that AFSPA be repealed.
  • Additionally, it recommended that appropriate provisions be inserted in the Unlawful Activities Prevention Act, 1967 (UAPA) instead.
  • It also recommended that the UAPA be modified to clearly specify the powers of the armed forces and paramilitary forces and grievance cells should be set up in each district where the armed forces are deployed.

(2) ARC II

  • The Administrative Reforms Commission in its 5th Report on ‘Public Order’ had also recommended that AFSPA be repealed.
  • It recommended adding a new chapter to be added to the Unlawful Activities Prevention Act, 1967.
  • However, the recommendation was considered first and then rejected.

Controversies with AFSPA

(1) Sexual Misconduct by Armed Forces

  • The issue of violation of human rights by actions of armed forces came under the consideration of the Committee on Amendments to Criminal Law (popularly known as Justice Verma Committee) set up in 2012.
  • It observed that- in conflict zones, legal protection for women was neglected.

(2) Autocracy

  • The reality is that there is no evidence of any action being taken against any officer of the armed forces or paramilitary forces for their excesses.

Caution given by the Supreme Court

A July 2016 judgment authored by Justice Madan B. Lokur in Extra Judicial Execution Victim Families Association quoted the “Ten Commandments” issued by the Chief of the Army Staff for operations in disturbed areas:

  1. Definite circumstances: The “power to cause death is relatable to maintenance of public order in a disturbed area and is to be exercised under definite circumstances”.
  2. Declaration preconditions: These preconditions include a declaration by a high-level authority that an area is “disturbed”.
  3. Due warning: The officer concerned decides to use deadly force on the opinion that it is “necessary” to maintain public order. But he has to give “due warning” first.
  4. No arbitrary action: The persons against whom the action was taken by the armed forces should have been “acting in contravention of any law or order for the time being in force in the disturbed area”.
  5. Minimal use of force: The armed forces must use only the “minimal force required for effective action against the person/persons acting in contravention of the prohibitory order.”
  6. Empathy with perpetrators: The court said that: the people you are dealing with are your own countrymen. All your conduct must be dictated by this one significant consideration.
  7. People friendliness: The court underscored how the Commandments insist that “operations must be people-friendly, using minimum force and avoiding collateral damage – restrain must be the key”.
  8. Good intelligence: It added that “good intelligence is the key to success”.
  9. Compassion: It exhorted personnel to “be compassionate, help the people and win their hearts and minds. Employ all resources under your command to improve their living conditions”.
  10. Upholding Dharma (Duty): The judgment ended with the final Commandment to “uphold Dharma and take pride in your country and the Army”.

Conclusion

  • Despite demands by civil society groups and human rights activities, none of the recommendations have not been implemented to date.

 

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Corruption Challenges – Lokpal, POCA, etc

What are Swiss Banks?

Prelims Only | Economics | Mains Paper 3: Money-Laundering & Its Prevention
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Swiss Banks

Mains level: Corruption and money laundering

A whistleblower has leaked information on more than $100 billion held in 30,000 accounts of Zurich-headquartered Credit Suisse, one of the world’s most infamous banks which hold black money.

What is the news?

  • The investigation refocused attention on Swiss banks and their famous, century-old culture of secrecy.
  • This swiss tradition is under pressure as countries around the world try to get their super-rich to pay legitimate taxes on their wealth.

Swiss Banks: Defined by Secrecy

  • Since at least the beginning of the 18th century, Geneva had become a favoured destination of French royalty and other European elites seeking discreet havens to stash their wealth.
  • In 1713, Swiss government authorities announced laws prohibiting bankers from giving out information about their customers.
  • Thus began a powerful culture of silence and secrecy that went on to become the defining feature of Swiss banking.
  • In 1934, Switzerland passed the Federal Act on Banks and Savings Banks, commonly known as the Banking Law of 1934 or the Swiss Banking Act.

What’s behind this upmost secrecy?

  • Article 47 made it a crime to reveal details or information of customers to almost anyone — including the government — without their consent and in the absence of a criminal complaint.
  • Violators can get five years in prison; Article 47 lies at the heart of some of the most stringent banking secrecy laws anywhere.

Why are they favourite destination to park black money?

  • As wealth became easily mobile across international borders, the safety and stability of Swiss banks, located in a peaceful country presented an irresistible attraction for the super-rich.
  • Switzerland itself is a politically neutral country.
  • Swiss bank accounts are attractive to depositors because they combine low levels of risk with very high levels of privacy.
  • The Swiss economy is extremely stable, and the banks are run at very high levels of professionalism.
  • Almost any adult in the world can open an account in a Swiss bank. Opening an account is not difficult, and requires not much more than basic KYC, including a proof of identity such as a passport.

Question of ‘black money’

  • “Black money” allegedly stashed away by Indians in Swiss banks is a political issue in India, and parties and political functionaries have often made promises to “bring it back”.
  • Swiss authorities have maintained that they cooperate with the Indian government to fight tax evasion and fraud.

Indian motives and moves

  • The two countries have had a system of automatic exchange of information in tax matters since 2018.
  • Under this, detailed financial information on all Indian residents with accounts in Swiss financial institutions was provided for the first time to Indian authorities in September 2019.

 

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Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

Who are the Angadias?

Prelims Only | Economics | Mains Paper 3: Indian Economy
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Angadias

Mains level: NA

An FIR has been registered against some Mumbai Police officials last week for allegedly threatening Angadias and extorting money from them in south Mumbai.

Who are Angadias?

  • The Angadia system is a century-old parallel banking system in the country where traders send cash generally from one state to another through a person called Angadia that stands for courier.
  • It is by and large used in the jewellery business with Mumbai – Surat being the most popular route as they are two ends of the diamond trade.
  • The cash involved is huge and it is the responsibility of the Angadia to transfer cash from one state to another for which they charge a nominal fee.
  • Generally, it is the Gujarati, Marwari and Malbari community that are involved in the business.

How does the system work?

  • The Angadia system works completely on trust as large sums, at times in crores, are involved.
  • Generally, traders have the same Angadias for decades together.
  • If a trader from Zaveri Bazaar in south Mumbai wants to pay a diamond trader in Surat, he will send an Angadias who usually delivers the money within 24 hours.
  • They also have fixed trains that leave from Mumbai at night and reach Gujarat by early morning.
  • Usually, to verify authenticity, the trader will, for example, will give a Rs 10 note to the Angadia and provide the number of the note to the recipient.
  • It is only after the recipient confirms the note number that the Angadia will hand over the money to the person.
  • After making the payment, the Angadias return to Mumbai the same day.

Is the system legal?

  • While the Angadia system per se is legal, there hangs a cloud over the activity as it is suspected that a lot of times it is used to transfer unaccounted money.
  • Since the business deals in cash and there is no account maintained for the same, there have been suspicions that it is also used for transfer of black money like the hawala.

 

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