A ESSAY ON SCIENCE AND RELIGION

Science and religion are commonly perceived to be mutually exclusive-a contradiction in terms, as it were. Both the method and the aims of science and religion seem to be different. While Science is linked to the material, religion is concerned with the spiritual. On the face of it the scope, sphere and the method of science and religion are different and exclude each other. Science is objective while Religion is subjective; Science relies on experiment, Religion on experience.

Science deals with the world that we know, the material world that is comprehended by the senses; religion is concerned with a supra-mundane world, a world that we cannot be said to know. Science believes in things that can be proved; religion is pre occupied with ideas that have to be accepted without proof. Science depends on reasons; religion on intuition. The scientist works in the laboratory of the material world; the religious teacher works within the recesses of his personal experiences. Religion begins where science ends. Science says that the first cause is unknowable. Religion says that it can be known through the discipline of religion, for it is God who is not only self existent but self revealed. Hence, there is bound to be hostility between the man of science and the man of religion. Science end when matter ends. Over the ages the conflict has developed between science and religion. But science does not have the answer of everything. Science without religion gives rise to materialism and other ills of life.

As the words ‘experience’ and ‘experiment’ connote, the worlds of religion and science are pole apart. Science is concerned with ‘how’ of reality whereas religion is concerned with the ‘why’ of reality. Science takes up the tangible entities and analyses them into their minutest parts, and then comes to conclusions regarding the way in which tangible realities are organized. In brief, Science is analytical. On the other hand, Religion takes for granted the reality. The path of religion is metaphysical. The rationalists of religion pursuing the path of metaphysics postulate the concept of God: But even then, at the highest level religious consciousness, the concept of God is a matter of faith. This faith enables the religious man to attribute a design or meaning to the reality. 

Thus, Science is analytical in approach whereas Religion is synthetical. Religion is subjective, as religious enlightenment has to be felt by once own experience. Unless and until religious experience is felt by an individual himself, he cannot reap any pleasure out of it. The morale and religious rule are allied and have to be followed by individuals in appropriate ethical situations. Science, on the other hand, deals with the objective side of the life. Scientific discoveries are common properties. They are open to common man and not shrouded in mystery or haziness. They are truths, universally accepted and subject to scientific calculations. A systematic scholarship and concentration is needed to get at scientific truths which are subsequently tested and approved by hypothesis and experiment.

But so long as scientific knowledge is imperfect, the place of religion and God will continue to be highly relevant. So long as scientific theories do not reach perfections, humans have to fall back upon their own reasoning and secondary powers of their own sole and spirit. In this sense, Science and Religion actually converge. Both scientist and saints have to undertake solitary travels into the regions unknown and to depend on themselves only and nobody else. But once a line is drawn between them, their ways bifurcate and takes separate routes. Religious truths remain essentially the properties of the individuals who experience and realize them through their own inward soul and mind and not through external manifestation of things which have a physical behavior. Scientific truths, on the other hand, become the property of the whole world and goes out to inflate the store house of the human knowledge.

Religion is perhaps as old as mankind. Even in the earliest times man had some idea of the higher power, a superior unknowable force prevailing and controlling the universe. Science is of more recent growth. Earliest phases of science may not be more than four or five thousand years old, while modern science began only in the 15^thcentury.

The conflict between science and religion shows how truth has to suffer in order to establish its claims. Pioneers of science had to face numerous difficulties. Galileo, for instance, was thrown into prison for his new theories about heavenly bodies. No better was the fate of Copernicus who pointed out that it is the earth which moves around the sun. In the nineteenth century Darwin’s Theory of Evolution gave rise to angry opposition from the Christian Church, since his theories cut across the biblical version of the creation of mankind from Adam and Eve. But truth eventually prevailed and science held its ground. Before the nineteenth century had run its course, the triumph of science was complete.

The rapid progress of science changed the face of the world beyond recognition. It conferred unheard of comforts and conveniences on mankind. The wonders of Science bewildered man and he began to enjoy numerous blessings in life. Religion seemed to be unnecessary and began to lose the respect and power it had once enjoyed.

But the path of science did not ultimately proved as smooth as its worshippers had thought it to be. It turned out to be a mixed blessing. It did provide bodily comforts, but at the cost of man’s moral and spiritual development. It ruined man into a sceptic, a creature without any faith and lofty ideals to inspire and guide him. The loss of such faith brought the baser side of his nature into freeplay. Man became dishonest, selfish and proud. It destroyed man’s simple faith, fellow feeling, affection and kindness. Besides, the blessing of science gave rise to new social problems. The gulf between the rich and the poor became wide then ever before. The widespread use of machinery subjected millions of human beins to the evils of economic expoitations, unemployment, crowded congested citiesand the growth of slums. The average worker lost his

independence  and happiness and was reduced with the position of mere clog in the vast organization of modern industry.

        Thus, we notice that there is no anti thesis worth speaking between the two all through the ages. Besides, intuition plays a vital role in the apprehension of God or in any religious belief. Similarly, great scientists never plans what he is about to discover.

The conflict between science and religion is superficial. There approach towards life is ,ofcourse different but their goal is the same. Science follows the path of reason and intellect, religion travels the road of faith and belief. But both aim at the discovery of the truth. Science and religion have apparently different aims and objects, yet in fact they are closely related and act an react on each other.

Science and religion, the two terms have come to signify a contradiction in terms. On the face of it, it seems difficult to find a compromise between science and religion, for their scope is different and excludes each other.

written by -Ravi Sharma,

NOTA in context of India

In the last couple of years India seems to be going through a sort of awakening process. The wide spread reach of internet, proliferation of news channels, newspapers, proactive journalism and mobile phones made social forums and discussions a routine thing in even the far flung areas of the country. This has made the ordinary person aware of the deep routed sickness of corruption in the Indian bureaucratic and political system. Political corruption is more a matter of debate in the nation because of the sheer size of it. 2G, CWG, Land Scams, Coalgate, Adarsh, Porngate, Bhanwri Devi kidnap and murder, Tatra Truck controversy are all household terms nowadays.

Amidst all this a PIL was lodged in the Supreme Court demanding cleansing of politics. The Court has answered the need of the hour by a very much debatable ruling by interpreting the RPA act. Further in a separate ruling the bench headed by CJI himself has declared right to reject implicit in the fundamental rights. These two rulings of the court are supposed to go a long way in changing the face of Indian politics. It can be hoped that once politics is clean the rest of the machinery will improve rapidly.

However these rulings are not without their controversies. The first of the rulings says that any legislator or a candidate for legislature will be disqualified immediately if a court of law has convicted or found accused, such a person, in offences as defined in the RPA act as offences, conviction in which can be awarded for two or more years of sentence and/or fine for the term of the conviction and further 6 years. The existent law gave the convict a window of three months to make an appeal in the higher court and if such an appeal lies, he can carry on as a legislator, as long as the higher court does not find him guilty. The ruling of the court has eliminated the window and the tainted legislator is disqualified immediately.

This ruling will have two major impacts. First after this ruling the old scourge of criminalization of politics will get cured. It is a welcome change. Every citizen wants to see a clean legislature. There has been a resentment of law breakers holding the place of law makers. Second impact is negative, that it gives an opportunity to innovative politicians wage their political war. A politician can just get lodged an FIR against a rival politician and get him disqualified, investigations notwithstanding. Considering the influence a sitting MLA or MP has on the police and other law enforcement agencies, it is a walk in the park for them. This can disrupt the democratic functioning of our system. While in the first system it is easy for a criminal to make his way into the legislature, after the ruling it will be impossible for people with tainted record to reach the legislature, but at the same time hard for anyone to challenge the sitting legislature.

The one side of the coin is so bright that it outshines the other in the eyes of a common man. A clean legislature, MP’s and MLA’s who command people’s respect from their honesty in life and actions seemed to be a distant dream but the ruling of the court has made it realistic. But does a clean legislature guarantee the fulfillment of the nation’s dreams, elimination of poverty, hunger, disease, grievance of the tribals, a dutiful police, early justice, corruption free bureaucracy and so on. In words of Hitler, in politics, the good intentions of a man can not make up for his incompetence. There is no guarantee that even a clean legislature can be competent enough to answer the grievances of this nation, which are so difficult to handle. There is no such guarantee, only a hope. But as long as there are criminals right in the parliament, even such  hope does not exist.

There are costs which the nation will have to pay for such a clean legislature. A really potent politician who is well capable of leading his people out of the misery of circumstances might become the victim of false accusations, engineered investigation, and influenced judgment and his career may get ruined. The ruling has provided powerful people a very dangerous weapon to eliminate their rivals. It is not beyond one’s imagination that many a political careers will be sacrificed for this dream of clean legislature. Furthur a tainted powerful man can always field people on his behalf such as his son or wife and reap all the benefits. This ruling can clean the legislature for the purpose of paper but not necessarily for the purpose of conduct. The prospect of a clean legislature on record are bright by this ruling but a clean legislature in intentions can by no means guaranteed.

In my opinion the criminalization of politics is not a result of loopholes in the law, but it’s a result of bovine and careless nature of the common man. There are criminals in the parliament not because the law has permitted them to contest but because we have chosen criminals to represent us. For decades we have been voting on caste lines, communal lines, language and resemblance. People in India vote an image, not a personality. Without knowing a sinlge thing about the real character of a candidate we have been voting all our lives for his caste, religion and language. At best we vote the party, but only very rarely we vote the man. We all get blown by the propaganda. Propaganda is driven by the finance and muscle of criminals. We never try to look for the real truth for ourselves, we only trust the propaganda. The result is before us, 33% criminal in our apex legislature. Even the new ruling can eliminate the criminals from the legislature but not crime from politics. Criminal may be in the jail, but his son or wife will ride the propaganda and reach the legislature. Nothing will be solved until the common man looks into his own conscience, puts away the lure of caste and religion and votes the righteous irrespective of his background.

The court has given its best by giving this ruling, but I don’t see upside down changes in the political gamut until the voting behavior changes. The role of the media is paramount in unmasking the truth behind the propaganda, and the media is doing a commendable job indeed. However, the drive behind the activeness of the media is not an urge to strengthen the democracy but TRP. I don’t mind this as long as awareness about the real character of those who rule us keeps on spreading.

Lets move on to the second ruling of the court. In a landmark judgment the court has declared that the right to reject all the candidates in an election if the voters don’t find any of the candidate worthy of his vote, is a fundamental right implicit in the right to expression. Earlier, one had to vote at least one of the candidates whether he like it or not. In the ruling the court has directed the election commission to add the choice NOTA as an option. If a voter finds none of the candidates worthy of his support he can reject them all by NOTA. The right to reject exist in many other democracies like USA, UK. However the NOTA will not change in the election results since a person exercising NOTA will amount to not voted for anyone. It will add zero votes to all of the candidates. However, in the true right to reject if a sufficient number of voter choose NOTA, the election will become void and fresh election will be held considering the earlier candidates were hated by so many voters that it will amount to tyranny if any one of them reached legislature.

So in those term the new ruling will not have a substantial impact on the outcome of the election, however many people believe that the coming election will be more democratic because of the NOTA option. Many of the people do not go to vote simply because they do not like any of the candidates. This new option is supposed to increase the ballot substantially. I see the importance if this ruling in paving the way for real right to reject since no big change comes at once but step by step. Once the people at large become aware of the NOTA they will demand the full right to reject. The way I see it, the constitutional duty of the Supreme Court as being the protector of the social revolution has been duly fulfilled in paving the way for a new instrument of democracy. I can imagine the NGO’s and other sections of the people demanding full fledged right to reject once the NOTA becomes a wide phenomenon.

As we have seen the series of ruling by the EC and Supreme Court have come a long way in democratic process in the country. But these rulings like mandatory disclosure by the candidates of their assets and liability, declaration of criminal record if any, monitoring of the election spending, stringent codes of conduct, prohibition of liquor, disclosures of large sums of donations received by parties have not changed by a great dealthe ground realities. Most of the grievances of the people still remain unsolved. Many new grievances appear. The recent rulings of the court are, in my opinion new chapters in the book of electoral reforms. This book is a book after all, it cannot change much until the reader adopts the noblel reading in his life. Not much will change if the common man does not apply his mind and use his vote as if it was a valuable asset, because a vote is valuable indeed.

“What greater luck for the rulers than those whom they rule do not think.” Adolf Hitler

Neeraj Gaur 

CAPITAL PUNISHMENT

Capital Punishment or the death penalty is a legal processs whereby a person is put to death by the state as a punishment for a crime.The term capital originates from the Latin capitals literally  means “regarding the head”.

The system of death penalty originated as far back as the Eighteenth Century B.C.,in the Code of King Hammaurabi of Babylon which codified the death penalty for 25 different crimes .The death penalty was also part of the Fourteenth Century B.C. ‘s Hittite Code; in the Seventh Century B.C.’s Draconian Code of Athens, which made death the only punishment for all crimes. Death sentences were carried out by such means as crucifixation,drowning,beating to death,burning alive &impalement.In the Tenth Century A.D.,hanging became the usual method of execution in Britain.

Now-a-days capital punishment is reserved for murder,espionage,treason or as a part of military justice.In China human trafficking & serious cases of corruption are punished by the death penalty.

In India capital punishment is given on the basis of ‘Rarest of the Rare ‘cases. What is ‘the Rarest of the Rare’? According to Supreme Court the rarest cases are those in which the collective conscience of the community is so shocked that it will expect the holders of the judicial power to inflict death penalty. The court said where cases in which a murder is committed in an extremely 

brutal,grotesque,diabolical,revolting,or dastardly manner so as to arouse intense & extreme indignation of the community.InIndia,the number of people executed since independence in 1947 is a matter of dispute,official government statistics claim that only 52 people had been executed.However the People’s Union for Civil Liberties cited information from Appendix 34 of the 1967 Law Commision of India report showing 1422 executions took place in Indian states from 1953 to 1963,and has suggested that the total number of executions since independence may be as high as 3000 to 4000.In December 2007,India voted against United Nations General Assembly resolution calling for a moratorium in death penalty.In November 2012,India again upheld its stance on capital punishment by voting against United Nation’s General Assembly draft resolution seeking to ban death penalty.In India as per Article-21 of the Constitution of India no person can be deprived of his life except according to procedure established by law.Although India is one of a number of countries around the world which still practises capital punishment,it is rarely used.A 1983 ruloing by the country’s Supreme Court stated that the death penalty should be imposed only in the ‘rarest of the rare cases’

Capital Punishment has been used in almost every part of the world,but in the last few decades many countries have abolished it.Among the countries in which highest rate of capital punishment is carried out,China tops the list. Capital Punishment in China has widespread support ,especially for violent crimes,no group in government or civil society vocally advocates for its abolition.The rate of executions in China is higher than Pakistan and U.S.A. Capital Punishment in China is usually administered to offenders of serious and violent crimes such as aggravated murder,drug trafficking etc. 

In 2009 Amnesty International counted 1718 executions as having taken place during 2008,but Amnesty International believed that the total figure is likely to be higher.The region with the second highest number of executions is the Middle East and North Africa.Top 10 countries which still practice the capital punishment are China,Iran,North Korea,Yemen,U.S.A.,sAUDIArabia,Libya,Bangladesh,Somalia.According to Amnesty International,140 countries have abolished the death penalty.In 2012,only one country Latvia has abolished death penalty for all crimes.The countries who have abolished death penalty for all crimes,to name a few are Albania,Andorra,Angola,Armenia,Australia,Bhutan,Bosnia-Herzegovinia,Canada,Cambodia,Denmark,Portugal,Italy,Turkey,Tukmenistan etc.Countries which have abolished death penalty for ordinary crimes are Bolivia,Brazil,Chile,ElSalvador,Fiji,Israel,Kazakhstan,Peru.

On October 21,2009,the World Coalition launched its ratification of United NationaPrtocol on the abolition of death penalty by all state parties to the International Convention On Civil and Political Rights(ICCPR).The international covenant was adopted in 1989 by General Assembly and it is a second optional protocol to ICCPR.The protocol seeks to ensure that executions become definitely illegal and explicitly asserts the principle that death penalty is violation of human rigts and especially right to life.At the end of 2007 the United Nations General Assembly adopted resolution establishing a moratorium on execution with the goal of abolishing death penalty.Some of the world’s most respected leaders have also called for an end to the death penalty including Pope John Paul,Nelson Mandela and UNHRC.According to Amnesty International’s opinion everyday, all over the world, prisoners – men, women and even children – face execution. The death penalty is cruel, inhuman and degrading.Theyopposed  its use, everywhere in the world, for whatever reason – it is never acceptable, ever.

Whatever form it takes – electrocution, hanging, beheading, stoning or lethal injection – the death penalty is highly condemned.There are many arguments that oppose the heated issue of capital punishment. The first argument that can be made that opposes the death penalty is that there is a possibility for error. There have been many cases around the U.S. and the world where an inmate was falsely accused of murder, rape, and other serious crimes. A justice system that would kill an innocent man or woman is a brutal system DNA evidence can convict someone but it can also free that person penalty is a violent punishment that has no place in today’s criminal justice system.An additional argument against the death penalty is its cost. Financially it just doesn’t make sense to give an inmate the lethal injection. The cost of capital punishment varies from state to state, but as a whole, it costs more than not having the death penalty.

A religious stance can also be taken against the death penalty. Capital punishment is similar to playing God because executing a person kills them before the time of their natural death. Some Christians believe that God places people on Earth for a purpose. Hinduism opposes violence, revenge, and killing. Hindus believe in the principle of ahimsa, which is non-violence. Even though they go against violence and killing India currently has the death penalty in place. Their death penalty is used for very rare cases and not used like it is here in the United States. The death penalty in India is so rare in fact that there are roughly 100 people on death row and the number that are actually executed is very low.

 Like Hinduism, Buddhists believe in nonviolence and compassion for life. They also believe in Samsara, which is the idea of re-birth and the cycle of birth. Because of this, if capital punishment is put into place then it would affect future incarnations of the punisher and the offender.
Views on the death penalty in Christianity run a spectrum of opinions, from complete condemnation of the punishment, seeing it as a form of revenge and as contrary to Christ's message of forgiveness, to enthusiastic support based primarily on Old Testament law.

Among the teachings of Jesus Christ in the Gospel of Luke and the Gospel of Matthew, the message to his followers that one should "Turn the other cheek" and his example in the story PericopeAdulterae, in which Jesus intervenes in the stoning of an adulteress, are generally accepted as his condemnation of physical retaliation (though most scholars[134][135] agree that the latter passage was "certainly not part of the original text of St John's Gospel"[136]) More militant Christians consider Romans 13:3–4 to support the death penalty. Many Christians have believed that Jesus' doctrine of peace speaks only to personal ethics and is distinct from civil government's duty to punish crime.

Historically, women have not been subject to the death penalty at the same rate as men. From the first woman executed in the U.S., Jane Champion (hanged in James City, Virginia in 1632) to the present, the executions of women have only constituted of about 3% of U.S. executions. In fact, only ten women have been executed in the post-Gregg era

‘An eye for an eye makes the world blind’ said by Mahatma Gandhi.Today we feel so true his words were,capital punishment cannot make a convict feel what he has done.It will not give him a chance to realize his mistake and to become a good human being.Capital punishment is not a proper answer to crime.By giving death penalty we are committing the same crime which the criminals have done,taking life of somebody be it a innocent person or a criminal we are not doing justice.Death cannot bring back anything nor it can provide any solace.Scientific studies have also proved that death penalty failed to deter people from committing crime.So for what reason should we involve in this crime.Rather if we give him a second chance he may become a good person and help others to be not involved in criminal activities.

written by - Debalinabiswas

MONEY LAUNDERING AND ITS PREVENTION

What is Money Laundering?

MONEY LAUNDERING is the process by which large amounts of illegally obtained money is given the appearance of having originated from a legal source.

Stages of Money Laundering  –

It has three stages,

1.      Placement stage – at this stage, vast amount of money generate from an illegal source(e.g., drug dealing, terrorist activity or other serious crimes) placed into the financial system or retail economy or smuggled out of the country. The aim of this stage is to remove the cash from the location of acquisition and then transform it into other assets.

2.      Layering stage – at this stage, complex layers of financial transactions designed to disguise the audit trail and provide anonymity.

3.      Integration stage – at this stage, money is integrated into the legal economic and financial system and is adopted with all other legal assets in the system.

Methods of MONEY LAUNDERING –

1.      Structuring or Smurfing  - in this method cash is broken into small deposits to prevent the suspicion of MONEY LAUNDERING.

2.      Casinos – in this method, an individual transform its illegal money into legal money by playing for a while, and get all his cash back as gambling winnings.

3.      Real Estate – in this method, an individual buy property from illegal money and then sell it to gets his money back in a legal way.

4.      Cash intensive businesses – in this method, a business typically involved in receiving cash uses its account to deposit both legal are illicit money, claiming all of it as legitimate earnings. Examples are strip clubs, casinos, parking buildings, etc.

5.      Black salaries – a company may have unregistered employees without a written contact and pay them cash salaries. Black cash might be used to pay them.

Above list is not exhaustive.

Prevention of MONEY LAUNDERING –

At international level –

1.      United Nation Convention in 1988 against the Illicit Traffic in Narcotic Drugs and Phychotropic Substances is the first international legal instrument to embody the MONEY LAUNDERING. Also the first international which criminalizes MONEY LAUNDERING.

2.      UN convention against TransationalOrganized Crime in 2003 and UN convention against Corruption in 2005 came into force.

a.       Both convention states that MONEY LAUNDERING should not only apply to the proceed of drug trafficking, but should also cover the proceeds of all serious crimes.

b.      Both convention urge states to create domestic supervisory and regulatory regime for banks and non-financial institutions

c.       Both conventions also call for the establishment of Financial Intelligence Units (FIUs).

3.      Financial Action Task Force(FATF) –

a.       FATF is an inter-governmental body that sets standards, develops and promotes policies to combat MONEY LAUNDERING and terrorist financing for countries around the world.

b.      In 1990, FATF issued a set of 40 recommendations for improving national legal systems. These recommendations were revised and updated in 1996 and in 2003.

c.       FATF on MONEY LAUNDERING has identified certain choke points in its process. These choke points are –

·         entry of cash into financial system

·         transfers to and from the financial system

·         cross border flow of cash

Prevention in India -

1.      The financial intelligence unit-India (FIU-India) which is the nodal agency in India for managing the anti-MONEY LAUNDERING ecosystem. It helps in co-coordinating and strengthening efforts to reduce MONEY LAUNDERING and related crimes in India.

2.      Prevention of MONEY LAUNDERING Act, 2002 has been the core framework for combating it.

3.      In 2010, India admitted as the 34^th country member of FATF.

4.      This membership helped Indian enforcement agencies to exchange information and financial institutions to gain much better access to markets of other member countries.

5.      Prevention of MONEY LAUNDERING (Amendment) Bill, 2012 passed in LokSabha and Rajyasabha.

6.      The Enforcement directorate carries out investigations. The ED is also empowered to attach property entities involved in money laundering.

7.      The investigation begins with filing an Enforcement Case Information Report(ECIR), which is comparable with an FIR. The adjudicating authority under prevention of MONEY LAUNDERING act then decides whether the attachment is valid or not. The courts take the final call on punishment.

Key amendments to the Prevention of MONEY LAUNDERINGAct –

Ø  Expanded the definition of offence of MONEY LAUNDERING to include activity like concealment, acquisition, possession, and use proceeds of crime.

Ø  Removed the upper limit of fine of Rs. 5 lakh.

Ø  Expanded the scope and duration of attachment of property to 180 days.

Ø  Introduced the concept of reporting identity.

Ø  Increased the powers of the director to call for records and conduct enquiries.

Ø  Clarified that prosecution extends not only to individuals but also to the company.

Current status of money laundering in India -

·         India has considerablystepped up its investigations into money laundering and terror funding with the number of cases under probe rising to 1704, even though a low conviction level remains a "serious effectiveness issue".

·         The current status of money laundering in India can also be evaluated by looking at the Basel index prepared by the Basel Institute on governance, Switzerland. The Basel AML index scores countries on the basis of AML laws, financial regulations, political disclosure, etc. in that country. The overall score, which ranges from 0 (low risk) to 10 (high risk) .Out of 140 countries, India has been ranked 93^rd(score- 6.05) .

Recommendations –

1.      To strengthen international co-operation on information exchange and law enforcement

2.      Proper mechanisms for handling suspicious reports

3.      To increase public awareness of the threat from MONEY LAUNDERING

4.      To focus on new technologies and increase counter measures to combat their use for MONEY LAUNDERING

5.      Introduce measures that make the movement of money more visible

6.      Increasing co-ordination b/w the multiple agencies involved and to improve the limited intelligence sharing

written by - Neha Mittal

MONEY LAUNDERING - A detailed exlaination

Money is the prime reason for engaging in almost any type of criminal activity.

Money-laundering is the method by which criminals disguise the illegal origins of their wealth and protect their asset bases, so as to avoid the suspicion of law enforcement agencies and prevent leaving a trail of incriminating evidence.

Terrorists and terrorist organizations also rely on money to

1)      sustain themselves and

2)      to carry out terrorist acts.

 Money for terrorists is derived from a wide variety of sources. While terrorists are not greatly concerned with disguising the origin of money, they are concerned with concealing its destination and the purpose for which it has been collected. Terrorists and terrorist organizations therefore employ techniques similar to those used by money launderers to hide their money.

The ability to prevent and detect money-laundering is a highly effective means of identifying criminals and terrorists and the underlying activity from which money is derived. The application of intelligence and investigative techniques can be one way of detecting and disrupting the activities of terrorists and terrorist organizations.

As they deal with other people's money, financial institutions rely on a reputation for probity and integrity. A financial institution found to have assisted in laundering money will be shunned by legitimate enterprises. An international financial centre that is used for money-laundering can become an ideal financial haven.

Developing countries

1)      Attracting "dirty money" as a short-term engine of growth can find it difficult, as a consequence, to attract the kind of solid long-term foreign direct investment that is based

2)      Only stable conditions and good governance can help them sustain development and promote long-term growth.

3)      Money-laundering can erode a nation's economy by changing the demand for cash, making interest and exchange rates more volatile,

4)      By causing high inflation in countries where criminals are doing business.

5)      fuels corruption and organized crime

6)      Corrupts public officials

7)      Terrorist groups use money-laundering channels to get cash to buy arms. The social consequences of allowing these groups to launder money can be disastrous.

In recent years, the international community has become more aware of the dangers that money-laundering poses in all these areas and many Governments and jurisdictions have committed themselves to taking action. The United Nations and other international organizations are committed to helping them in any way they can.

Criminals are now taking advantage of the globalization of the world economy by transferring funds quickly across international borders.

Money-laundering is the process that disguises illegal profits without compromising the criminals who wish to benefit from the proceeds. There are two reasons why criminals - whether drug traffickers, corporate embezzlers or corrupt public officials - have to launder money: the money trail is evidence of their crime and the money itself is vulnerable to seizure and has to be protected. Regardless of who uses the apparatus of money-laundering, the operational principles are essentially the same. Money-laundering is a dynamic three-stage process that requires:

• placement, moving the funds from direct association with the crime;
• layering, disguising the trail to foil pursuit; and,
• integration, making the money available to the criminal, once again, with its occupational and geographic origins hidden from view.

These three stages are usually referred to as placement, layering and integration.

MONEY LUNDERING & GLOBALISATION

Rapid developments in financial information, technology and communication allow money to move anywhere in the world with speed and ease. This makes the task of combating money-laundering more urgent than ever.

The deeper "dirty money" gets into the international banking system, the more difficult it is to identify its origin. Because of the clandestine nature of money-laundering, it is difficult to estimate the total amount of money that goes through the laundry cycle.

The estimated amount of money laundered globally in one year is 2 - 5% of global GDP, or $800 billion - $2 trillion in current US dollars. Though the margin between those figures is huge, even the lower estimate underlines the seriousness of the problem governments have pledged to address.

There have been a number of developments in the international financial system during recent decades that have made the three F's-finding, freezing and forfeiting of criminally derived income and assets-all the more difficult. These are the "dollarization" (i.e. the use of the United States dollar in transactions) of black markets, the general trend towards financial deregulation, the progress of the Euro market and the proliferation of financial secrecy havens.

Fueled by advances in technology and communications, the financial infrastructure has developed into a perpetually operating global system in which "megabyte money" (i.e. money in the form of symbols on computer screens) can move anywhere in the world with speed and ease.

The Financial Action Task Force (FATF) on Money Laundering has identified certain ‘choke’ points in the money laundering process that the launderer finds difficult to avoid and where he is vulnerable to detection. The initial focus has to be on these areas if the war against the launderer is to proceed successfully.

The choke points identified are:

1. entry of cash into the financial system;  
2. transfers to and from the financial system; and  
3. cross-border flows of cash

written by - Ravi Kunal Nayyar

Diesel Pricing in India

·        I usually come across many terms in news like Subsidy, Under-Recovery, and more recently EPP (Export Parity Price) & IPP (Import Parity Price). 

·        Let’s understand how the retail price of Diesel is calculated in India?

Ø Let crude is imported by IOC (Indian Oil Corporation) from a company of Saudi Arab. The price at which this crude is purchased is called FOB Price i.e. free On Board Price. In simple words this is the price at which Saudi Arab Company will bring the crude from its Well and deliver it at a nearby international port.

Ø Now this crude will be transported on ships from aforementioned port to some Indian Port. For this a charge will be paid to transporter. This charge is called Ocean Freight. When Ocean Freight is added to FOB Price we get resultant as C & F Price i.e. Cost & Freight Price. Thus

C & F Price = FOB Price + Ocean Freight

Ø Now the crude has reached an Indian Port. Here a term called Import Charges comes into picture. It consists of three charges -

'  Insurance charges i.e. premium paid to an insurance company for the insurance cover it provided to the crude

'  Port Dues i.e. fees paid in lieu of using the facilities of a port

'  Ocean Losses i.e. to compensate for the oil lost during transportation

Ø On the imported crude Govt of India imposes a tax called Custom Duty. It is 2.5 % of theC & F Price i.e. if IOC purchases crude whose C & F Price is Rs. 100 per Litre then Custom Duty will be Rs 2.5 per Litre.

Ø When we add C & F Price , Import Charges and Custom Duty we get a very important term called IPP i.e. Import Parity Price. In very simple words IPP is the price of crude paid by IOC at an Indian Port. Hence

IPP = C & F Price + Import Charges + Custom Duty

Ø One more term becomes worth mentioning here which is EPP i.e. Export Parity Price. It is basically a hypothetical term. It is equal to the FOB price realised by IOC if it WOULD HAVE exported its Diesel to international market.

Ø In India the weighted average of IPP and EPP is used. Thus we get another popular term called TPP i.e. Trade Parity Price. It is calculated as follows-

TPP = 0.8 X IPP + 0.2 X EPP

Ø Now the imported crude moves towards Refinery and processed into Petrol/Diesel/kerosene etc. Here a term called RTP i.e. Refinery Transfer Price comes into scene. It is the price paid by OMC (Oil Marketing Company) to Refinery for the purchase of Diesel and in case of diesel it is equal to TPP. In other words

RTP = TPP

Ø This refined Diesel is transported by Rail / Road to different retail outlets. For this Inland Freight is paid. OMC spend a lot of money on marketing its product. When we add them we get TDP i.e. Total Desired Price. In other words

TDP = RTP + Inland Freight + Marketing Cost

Ø But OMC sells aforementioned Diesel to retail outlet at a price which is less than TDP. This price is called Depot Price.

Ø Now the Diesel has reached retail outlet. Here Central Govt imposes Excise Duty, State Govt imposes Value Added Tax (VAT) and Retail Outlet / Petrol pump add its margin.

Ø Hence finally we get the retail price of Diesel.

·        Lets now understand above definitions in the light of latest available data -

S.No	Factor	Value
1	FOB Price	$ 124 / Barrel
2	Ocean Freight	$ 2 / Barrel
3	C & F Price  (1 + 2)	$ 126 / Barrel  = Rs. 48 / Litre (1 Barrel = 159 Litres and $1 = Rs 62)
4	Import Charges	Rs. 0.5 / Lt
5	Custom duty	Rs. 1.5 / Lt
6	IPP (3 + 4 + 5)	Rs. 50 / Lt
7	EPP	Rs. 48 / Lt
8	TPP	Rs. 49 / Lt
9	RTP	Rs. 49 / Lt
10	Inland Freight + Marketing Cost of OMC	Rs. 3 / Lt
11	Total Desired Price (8 + 10)	Rs. 52 / Lt
12	Depot Price	Rs. 42 / Lt
13	Excise Duty + VAT + Dealer Commission	Rs. 10 / Lt
14	Retail Price (13 + 14)	Rs. 52 / Lt

·        Let’s find out the answers of some Basic Questions-

Ø What is Under Recovery?

Under Recovery is the difference between Total Desired Price & Depot price. Mathematically –

Under Recovery = TDP – Depot price

Ø Are Under Recovery and Loss are similar terms?

OMC’s are selling Diesel at Rs.10 /Lt Loss. But they are getting the same amount from Govt as Subsidy. So OMC’s are not incurring any loss. The Govt too is taking almost Rs.10 /Lt as tax on Diesel so they too are not incurring any loss.

Hence Under- Recovery and Loss are not the same terms.

Ø What is presently used in India EPP /IPP /TPP?

Presently for the pricing of diesel TPP is used.

Ø Why Finance Ministry is insisting on using EPP?

From the above table it is crystal clear that if EPP is used instead of TPP then TDP will become 51 instead of 52. Hence Under-Recovery will become Rs.1/ Lt lesser. So Govt will have to give lesser subsidy to OMC’s. But Govt will continue to get same amount as Taxes. Therefore Govt Deficit will come down.

Ø Why OMC’s and Petroleum Ministry are insisting on using TPP?

It is clear from the above answer that if EPP is used instead of TPP than OMC’s will get lesser subsidy from Govt. But their expenditure will remain exactly same as earlier. Hence their financial health will deteriorate.

written by - KAVI DEEPENDRA