THE HINDU – CURRENT NOTE 06 March
Centre launches survey on Gangetic dolphins
•The Centre has launched the first ever across-the-river survey in the Ganga to determine the population of aquatic life, including that of the endangered Gangetic doplhin.
•The survey will create a baseline scientific data for the government to take suitable measures to improve quality of the river water, the National Mission for Clean Ganga (NMCG) has said.
•The first leg of the census was launched on March 1 from Narora in Uttar Pradesh to Bijnor (covering distance of nearly 165 km) to establish the number of the national aquatic animal.
•Counting in the Allahabad to Varanasi stretch (close to 250 km in length) is expected to be launched this week.
Fish species
•A study to figure out fish species composition in the 2525-km-long river has been also been kick started from Harshil in Uttarakhand.
•The authority is conducting the survey through Wildlife Institute of India (WII),, under the Namami Gange programme.
•A specialist in the area, Sandeep Behera, noted with concern the disappearing of Gangetic dolphins, one of the four freshwater dolphins in the world, from the river stretch in Narora to Kanpur due to pollution.
•“The study will, therefore, find out stretches where dolphin is habitating, what are the conditions there and the level of threat the long-snouted species is facing in a particular belt,” he added.
•Apart from number of dolphins, number of ghariyals and turtles in the river will also be ascertained after summer sets in fully , NMCG has said.
•“All the surveys carried out in Ganga previously were conducted in bits and pieces or were rapid. This is for the first time a comprehensive and scientific study is being conducted,” Mr. Behera said.
Aadhaar data not misused: UIDAI
•Dismissing reports of misuse of Aadhaar biometrics for identity or financial thefts, the Unique Identification Authority of India (UIDAI) on Sunday said personal data held by it were secure.
•“There has been no incident of misuse of Aadhaar biometrics leading to identity theft and financial loss during the past five years when more than 400 crore Aadhaar authentication transactions have taken place,” an official statement said.
•Recently, a breach of Aadhaar data was reported after the UIDAI sent a notice to three firms for possible unauthorised authentication attempt and storing of biometric data. The notice it had served was shared widely on social media and questions were raised over the safety of Aadhaar data.
•Describing the incident as an “isolated case of an employee working with a bank’s business correspondents’ company”, the authority said the employee had attempted to misuse his own biometrics. This was detected by the UIDAI internal security system and subsequently action under the Aadhaar Act was initiated.
•The UIDAI said it had “carefully gone into these reports”, and asserted that the “Aadhaar system has the capability to inquire into any instance of misuse of biometrics and identity theft and initiate action. UIDAI uses one of the world’s most advanced encryption technologies in transmission and storage of data. As a result, during the past seven years, there has been no report of breach or leak of residents’ data out of UIDAI.”
•Further, the authority said it continuously updated the security parameters and undertook security audits.
Criminal offence
•On reports that there were no extant regulations to prevent storage and misuse of e-KYC data, the UIDAI clarified that there were “stringent provisions in the Aadhaar (Authentication) Regulations governing the usage of e-KYC data, including storage and sharing, resident consent being paramount in both the cases.” Any unauthorised capture of iris or fingerprint data or storage or replay of biometrics or their misuse is a criminal offence under the Aadhaar Act.
•Further, addressing concerns over private agencies hired by mobile operators and banks for e-KYC leading to creation of parallel database, the statement said Aadhaar authentication or e-KYC was only available to authorised agencies whose appointment, responsibilities and statutory obligations, and penal provisions for contraventions were clearly provided for in the Aadhaar Act and the regulations.
Customer consent
•“Banks or mobile operators have to become UIDAI’s authentication user agencies and authentication service agencies to obtain e-KYC data of their customers from the UIDAI. The e-KYC data can be given by the UIDAI to these agencies only after they obtain consent of their customers and can be used only for the purpose for which it was obtained,” it said.
•“Violations of the provisions attract strict penalties under the Aadhaar Act which will be enforced strictly,” the statement said.
•More than 111 crore people have Aadhaar in India, covering more than 99% of the adult population. According to official data, more than 4.47 crore people have opened bank accounts using Aadhaar e-KYC.
•Aadhaar has helped the government transfer LPG subsidy under the PAHAL scheme, MGNREGS payments, scholarships and pensions directly into the accounts of beneficiaries eliminating diversion and leakage of funds by middlemen. The direct benefits transfer has saved the government Rs. 49,000 crore during two-and-a-half years, the release added.
Computer OS, short movie successfully stored in DNA
•Scientists have successfully stored a computer operating system, a short movie along with other data in DNA, an advance that may usher the next generation of ultra-compact, biological storage devices which will last hundreds of thousands of years.
•In a new study, researchers from Columbia University and the New York Genome Centre (NYGC) in the U.S. showed that an algorithm designed for streaming video on a cellphone can unlock DNA’s nearly full storage potential by squeezing more information into its four base nucleotides.
•They also showed that the technology is extremely reliable.
•DNA is an ideal storage medium because it is ultra-compact and can last hundreds of thousands of years if kept in a cool, dry place, as demonstrated by the recent recovery of DNA from the bones of a 4,30,000-year-old human ancestor found in a cave in Spain.
•“DNA won’t degrade over time like cassette tapes and CDs, and it won’t become obsolete - if it does, we have bigger problems,” said Yaniv Erlich from Columbia University.
•Researchers chose six files to encode, or write, into DNA: a full computer operating system, an 1895 French film, “Arrival of a train at La Ciotat,” a 50 USD Amazon gift card, a computer virus, a Pioneer plaque and a 1948 study by information theorist Claude Shannon.
•They compressed the files into a master file, and then split the data into short strings of binary code made up of ones and zeros.
•Using an erasure-correcting algorithm called fountain codes, they randomly packaged the strings into so-called droplets, and mapped the ones and zeros in each droplet to the four nucleotide bases in DNA: A, G, C and T.
•The algorithm deleted letter combinations known to create errors and added a barcode to each droplet to help reassemble the files later.
•The researchers showed that their coding strategy packs 215 petabytes of data on a single gram of DNA, which according to Erlich was the highest-density data-storage device ever created.
•“We believe this is the highest-density data-storage device ever created,” said Erlich.
No time for complacency
•The Indian economy continues to outperform the prognosis of its critics. This is clearly true of the GDP growth estimates in the third quarter; quite at variance with what the critics of the demonetisation exercise had assumed. No doubt there could be correction in the fourth quarter, primarily to factor the impact of the informal sector. It has never been easy to capture real time data on economic activity in the informal sector. It is recognised that apart from leads and lags, the conclusions are derivative using surrogates which detract both from their timeliness and accuracy. This is not a new problem and past estimates of GDP numbers have also suffered from multiple ex-post corrections as and when data becomes unavailable.
Digitisation dividend
•Hopefully, moving towards greater digitisation and reducing dependence on cash transactions will accelerate the pace of financial inclusion and formalisation of the informal economy. Notwithstanding these, the dark prognosis of a collapse of GDP growth numbers, widespread unemployment and displacement of job workers coupled with rural distress now looks clearly misaligned with actual outcomes. The GDP estimates are supported by two other crucial independent international assessments last week. The first from the Article IV Consultations 2017 of the International Monetary Fund (IMF) and the second from the biennial Economic Survey of the Organisation for Economic Cooperation and Development (OECD). Both these have distinct commonalities. Both conclude that Indian economic growth is robust, propelled by consumption demand and accelerated structural reforms. Both favourably allude to a rule-based framework of aligning macroeconomic policies with global standards.
•The overall macroeconomic framework, notwithstanding challenges, remains robust and credible. Continued fiscal consolidation, a modest current account deficit, subdued inflation, enhanced public and private consumption somewhat offsetting the depressed private investment support this conclusion. These augur well for continued growth buoyancy. The downside risks of exogenous shocks from sharp increases in commodity prices, particularly oil, a sudden global slowdown impacting remittances and exports or unpredictability relating to the Chinese economy now look modest. The growth projection of 7.5% (the higher side of the 6.75-7.5% range forecasted in this year’s Economic Survey) for the next fiscal is however contingent on resolving several short-term challenges.
Macro policies
•First, the OECD’s survey raises concerns about India’s large interest payments due to the high levels of public debt as compared to other emerging economies. This is in consonance with the suggestions of the Fiscal Responsibility and Budget Management (FRBM) Review Committee chaired by me, which projects a declining debt-to-GDP ratio to approximately 60% by 2023. Analysts believe this may be our near optimum debt levels. While the Committee’s report is not yet in the public domain, there is broad consensus that the preferred trajectory of debt with enabling fiscal deficit targets is central to macroeconomic stability. India has come a long way in discouraging fiscal profligacy. The realisation that we are best served by improving the quality of public expenditure than enhancing budgetary outlays reflects responsible leadership. It is increasingly cognisant of the inherent vulnerabilities of a fragile economy like ours. No doubt fiscal rectitude must be combined with space to enhance public outlays, particularly in infrastructure, health and education.
•Second, the health of the banking and financial sector. The twin balance sheet problem of both corporates and banks, highlighted in the Economic Survey, has a relationship but would need differentiated actions. Easing one will no doubt ameliorate the other but policy frameworks are not necessarily symmetrical. The concept of a centralised Public Sector Asset Rehabilitation Agency (PARA) envisaged as a ‘Band Bank’ spin-off model has gained some traction. It would, however, be naïve to believe that this represents a systemic solution to the ailments of the banking sector. The classic issues of not confusing between the stock and the flow would need to be addressed. Besides, it is not easy to overlook moral hazard questions when it comes to taking an ‘appropriate haircut’ by all stakeholders and without assigning responsibility for the ills of the past.
•Are we assured that they will not resurface in altered garbs? The governance architecture embedded in several actions and intended autonomy cannot be totally divorced from the ownership pattern. Creating an enabling political milieu for deeper reforms is inescapable. Expecting the ruling party alone to invest excessive political capital in this endeavour will have little traction. At the same time, a belief that the present trajectory of banking reforms is adequate to address the deeper malaise of the sector would be misplaced. The Indradhanush I has distinct positives. The Indradhanush II is in the offing, post the Asset Quality Review to be completed by March 31.
Rule-based management
•In this context, creating an institutional framework or mechanism to seek broader consensus has some advantages. This also ties up with what the OECD’s Economic Survey and the IMF’s report describe as a progressive move to a more rule-based management of the economy. The constitution of the Monetary Policy Committee, GST Council, Banks Board Bureau, are robust examples. Could we, for instance, consider the constitution of a Banking Council to facilitate a dialogue with political parties and stake holders on a new banking road map? Extensive analytical work by several committees and commissions like the Narasimham Committee, P.J. Nayak Committee, Gopalakrishna Committee, to mention a few, have critically examined the past and suggested future actions. This Council could debate, discuss, and seek to fortify the ingredients of the ongoing initiatives. In this endeavour, seeking consensus on a forward banking reform path would be the principal mandate of the Banking and Finance Council. The problem is somewhat complicated, by the Reserve Bank acting as the principal banking ombudsman with inherent conflict of interest. In the long run, we need an alternative mechanism for the banking sector. This will not happen overnight; far-reaching structural changes need perseverance and tenacity. Fortunately, this government has the mindset to move away from micromanaging the economy.
The GST transformation
•Finally, for a change, balanced regional development and combining growth with employment has received extensive attention in both these reports. No doubt, the GST (Goods and Services Tax) regime and decisive move towards formalisation of the economy using technology would reduce disparities.
•Local government entities need greater empowerment. These go beyond the enhanced devolution of resources based on the recommendation of the Thirteenth Finance Commission, more importantly of the Fourteenth Finance Commission. Making grants available in two parts — a basic grant and performance grant — will make a difference. Enabling local bodies to impose and realise property taxes and other levies would strengthen their financial viability. In fact, the Fifteenth Finance Commission, yet to be constituted, while reviewing the implementation of past recommendations can consider incentivising States on empowerment and delegation of powers to local bodies. Seeking to replicate best governance practices in labour and product markets among the States could also prove beneficial in mitigating inter-State growth divergence. There are other recommendations in the IMF and OECD reports relating to education, health, and tax changes, to name a few, which deserve separate treatment.
•It would be dangerous if the decision-making ethos is stymied by growing complacency. The future may look bright but pursuing and deepening structural reforms is the way forward. The political leadership is sagacious in recognising this. After all, as Albert Einstein once said, “We cannot solve our problems with the same thinking we used when we created them.”
•N.K. Singh is a former Member of Parliament and Chairman, FRBM Committee. The views expressed are personal
Saving the Ghats
The hesitation shown by the Central government in deciding upon full legal protection for one of its most prized natural assets, the Western Ghats in their totality, is a major disappointment. The idea that whatever is left of these fragile mountainous forests should be protected from unsustainable exploitation in the interests of present and future generations, while presenting sustainable ways of living to the communities that inhabit these landscapes, is being lost sight of. Quite unscientifically, the issue is being framed as one of development-versus-conservation. Given the weak effort at forging a consensus, there is little purpose in the Centre returning to the drawing board with another draft notification to identify ecologically sensitive areas. What it needs is a framework under which scientific evidence and public concerns are debated democratically and the baseline for ESAs arrived at. It is accepted, for instance, that the Ghats play an irreplaceable role in mediating the monsoon over the country and the forests harbour a rich biodiversity that has not even been fully studied. New species continue to emerge each year in an area that has endemic plants and animals, although, as the scientist Norman Myers wrote nearly two decades ago, only 6.8% of primary vegetation out of the original 182,500 sq km remains in the Western Ghats and Sri Lanka taken together. The ecologically sensitive nature of the forests stretching 1,600 km along the western coast as a global biodiversity hotspot was emphasised by the Western Ghats Ecology Expert Panel headed by Madhav Gadgil, while for conservation purposes, the Kasturirangan Committee identified only a third of the total area. Both expert groups have encountered resistance from State governments and industries, although they mutually differ in their recommendations.
The question that needs speedy resolution is how much of the Western Ghats can be demarcated as ecologically sensitive, going beyond the system of national parks and sanctuaries that already exist. As a corollary, are other areas free to be exploited for industrial activity, including mining and deforestation, with no environmental consequences? A frequently cited example of destruction is the loss of ecology in Goa due to rampant, illegal mining. More complicated is the assessment of ecosystem services delivered by the forests, lakes, rivers and their biodiversity to communities. Mr. Gadgil, for instance, has underscored the unique value of some locations, such as those with fish or medicinal plant diversity peculiar to a small area, which should not get lost in the assessment process. All this points to the need for wider and more open consultation with people at all levels, imbuing the process with scientific insights. The sooner this is done the better. Several options to spare sensitive areas will emerge, such as community-led ecological tourism and agro-ecological farming. A national consultative process is urgently called for.
Elusive reconciliation
A united Nations report released last week on the progress of reconciliation efforts by the Sri Lankan government should be a wake-up call for President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe. Raising serious concerns about the delay in addressing allegations of war crimes and in meeting other promises Colombo made when it co-sponsored a resolution at the UN Human Rights Council in 2015, the report warns the government that the lack of accountability threatens the momentum towards lasting peace. It also alleges that cases of excessive use of force, torture and arbitrary arrests still continue in Sri Lanka, almost eight years after the country’s brutal civil war ended. Mr. Sirisena came to power on a promise that he would restore the rule of law, end the country's international isolation and take steps towards reconciliation with the Tamil ethnic minority. The political momentum was also in favour of the government as it had the support of the dominant sections of the two largest parties in the country. In 2015, when Sri Lanka agreed to a host of measures at the UNHRC, including a judicial process to look into the war crimes, hopes were high.
Undeniably, the government has made some slow progress in addressing the issue of reconciliation. Compared to the previous regime of Mahinda Rajapaksa, the Sirisena administration has reached out to Tamils and initiated constitutional and legal reforms. It has also passed enabling legislation to establish an Office of Missing Persons to help find some of the 65,000 people reported missing during the war. But on key issues such as establishing a hybrid judicial mechanism with domestic and foreign judges and returning the military-occupied lands to Tamil civilians in the north and east, there has been no tangible progress. The latest UN report comes at a time when over a hundred displaced Tamil families are protesting at administrative offices in the north and east asking for their lands to be returned. For its part, the government may be wary of taking quick decisions for fear of giving some leeway to Sinhala nationalist factions at a time when Mr. Rajapaksa is trying to revive his political fortunes. But this delay is alienating the government’s allies, eroding the faith of the public, especially war victims, and giving more time to the opposition to regroup itself. And issues such as continuing use of excessive force and arbitrary arrests suggest that the government is either not serious in changing the way the police system works or is incapable of doing so. The Sirisena-Wikremesinghe government should seize the moment and start addressing the core issues, keeping reconciliation and the future of Sri Lanka in mind.
Policy drags e-commerce exports
•India had woken up to the huge potential of e-commerce exports from the country when the Centre decided to provide incentives in the Foreign Trade Policy (FTP) 2015-20 to promote exports of goods hosted on a website and dispatched through courier or postal mode.
•However, exporters have now identified several ‘restrictions’ under the FTP and related norms as ‘challenges’ that are preventing them from maximising the potential of e-commerce exports.
•The FTP incentives for e-commerce exports are only for low-value goods -- “falling in the category of handloom products, books and periodicals, leather footwear, toys and customised fashion garments, having free-on-board value up to ₹25,000 per consignment and finalised using the e-commerce platform.” As per the norms, the payment for goods purchased on e-commerce platform shall be done through international credit or debit cards and as per the Reserve Bank of India norms.
•According to an assessment by the commerce ministry and the apex body for exporters in the country - the Federation of Indian Export Organisations (FIEO), there are more than 25,000 Indian exporters, small and medium firms and entrepreneurs present on the American multinational e-commerce company eBay alone, exporting their items directly to the consumers across the world. It is estimated that there are more than two lakh such Indian business-to-bonsumer (B2C) exporters making use of their own websites or other e-commerce platforms and social media sites.
•According to FIEO, there is a market opportunity of about $5 billion in the near-term, say in the next 2-3 years, for Indian e-commerce retail exports - provided the concerns of such exporters are addressed expeditiously by the government. Since a survey had pointed out that those selling their items using eBay employ about 6.5 employees on an average, further promotion of Indian e-commerce exports is also expected to lead to greater direct and indirect employment generation.
•There is intense competition in the e-commerce exports space, and several countries are actively promoting e-commerce exports. For instance, the U.K. government’s Department for International Trade (DIT) has an ‘E-Exporting Programme’ to help U.K. companies sell their products or services overseas through e-commerce. According to the U.K. government’s website, the programme enables U.K. companies to to get expert international trade advice and support through a free meeting with DIT e-commerce advisers. The programme also helps U.K. companies to develop and implement an international e-commerce strategy, as well as to “set up on e-marketplaces and identify new e-marketplaces around the world to sell through, with the DIT’s ‘Selling online overseas’ tool.” It also enables U.K. companies to “access better than commercial rates to list on some e-marketplaces, including lower commission fees and ‘try for free’ periods.”
Facing competition
•India’s e-commerce retail exporters are also facing major competition from their counterparts in China and South Asia. According to the World Trade Organisation, in 2015, e-commerce in goods and services was worth about $22 trillion globally, and has grown the fastest in emerging economies.
•As per India’s FTP 2015-20, the incentives for e-commerce exports are under the Merchandise Export from India Scheme (MEIS). The rewards are in the form of freely transferable duty credit scrips (that gives duty benefits for imports of inputs / import of goods including capital goods / domestic procurement of inputs and goods including capital goods, etc). The FTP, however, states that “if the value of exports using e-commerce platform is more than ₹25,000 per consignment, then MEIS reward would be limited to free-on-board value of ₹25,000 only.”
•It adds that “Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai. Export of such goods under Courier Regulations shall be allowed manually on pilot basis through airports at Delhi, Mumbai and Chennai as per appropriate amendments in regulations to be made by Department of Revenue.” The FTP further says that the Department of Revenue shall fast track the implementation of Electronic Data Interchange (EDI) mode at courier terminals.
‘Raise incentives, lower fees’
•According to the exporters, though e-commerce is a great medium for them to expand their product lines, the FTP currently limits incentives to just a handful of items, thereby restricting the growth of Indian exporters using the e-commerce mode. They said the list of items for incentives should be expanded to include jewellery, which is among the biggest finished product exports from India, as well as health & beauty items, auto spare parts and musical instruments. Also, in order to promote exports from the country’s micro, small and medium enterprises through e-commerce, the value limit for availing MEIS benefits should be enhanced up to ₹five lakh from the current level of ₹25,000 per consignment.
•In addition, they pointed out that the clearance process under the MEIS scheme is currently manual and not EDI-enabled. Therefore, it is necessary to open EDI-based clearance for e-commerce export categories including leather, apparel, home-décor, ayurveda, organic food, sports goods and fashion jewellery. Besides, they said, through their apex body FIEO, that the application fee was too high for e-commerce exports to avail benefits under MEIS. For instance, if an exporter currently exports four consignments each worth ₹25,000 for a product attracting 2% duty benefit under MEIS, he gets a benefit of ₹2,000 (for a total export of ₹ 1 lakh). But on that amount, he has to pay an application fee of ₹1,000, thereby reducing the actual benefits. “The fee may be reduced substantially or waived off to give encouragement to this new and emerging mode of exports,” the FIEO said.
•A major disincentive is that currently, when a buyer sends an item back to e-commerce exporter, import duty is charged. However, in the case of exports other than through the e-commerce route, customs duties are exempted on return of exported goods. Therefore, exporters feel that unless return of goods is exempted from customs tariff, e-commerce retail exports will not take off in India in a big way.
•Also, there is no provision for ‘commercial shipment’ in the forms provided by Customs in Foreign Post Office of India Post. The options currently available are only ‘gift’, ‘sample’, ‘documents’, ‘commercial samples’ and ‘others’. Most Customs authorities are reluctant to allow e-commerce exports under the ‘others’-category. The exporters also said presently, the Courier Shipping Bill (CSB-II) did not support commercial small-value, single-item shipment. The Bill only supports gifts or samples, and has no provision for ‘commercial shipments’. Besides, the CSB–II is highly cumbersome as it has multiple fields and requires lots of information to be furnished even for low-value shipments, the FIEO said.
•“The exporter is also unable to claim any FTP or tax input related benefits if he wishes to do so,” it said, suggesting that a new CSB form be introduced and notified at the earliest. Another difficulty being faced by e-commerce exporters is that such exports through India Post or via the commercial courier mode are ticked as “samples” or “gifts” and not as ‘Commercial Shipment’. Therefore, such documents are not “recognised” or “acknowledged” by Value Added Tax (VAT) authorities, despite proof of receipt of foreign exchange through bank realisation certificate. This leads to a situation where VAT and service tax are not refunded in such cases of e-commerce exports as there are no Custom-stamped documents in such cases to prove ‘Commercial Shipment’, thereby reducing the competitiveness of Indian products. Also, an irritant is the requirement of multiple copies of invoice, making the export clearance process for a seller via the e-commerce export route difficult, expensive, paper-centric and time-consuming especially in a technology-enabled environment, according to FIEO.
•“Sellers need to sign and attach multiple physical documents and pay a commercial clearance charge of ₹1,000 to ₹1200 for every shipment,” said Ajay Sahai, director-general and CEO, FIEO. “A single-product shipment via private courier requires seven copies of invoices (self-declaration), while India Post requires three copies of invoices (self-declaration),” the exporters’ body said.
