THE HINDU – CURRENT NOTE 23 March
Law coming to enforce dam safety regulations
•The Centre is contemplating an institutional mechanism to improve safety in India’s 5300-odd dams. Currently, guidelines in this regard are not effectively enforced by the States. The new law, which has been vetted by the Union Law Ministry and will now go to the Union Cabinet for approval, proposes a Central authority and State-level bodies that will enforce regulation. Dam and project proponents falling short could face a fine, though they are unlikely to face imprisonment.
•“We have had discussions with all the States and most of them have been fairly supportive,” said Amarjit Singh, Secretary, Water Resources Ministry.
•There are around 4900 large dams in India and several thousand smaller ones. About 300 are in various stages of construction. However, large reservoirs and water storage structures, in the past few decades, are not seen as a model of safety. Kerala, for instance, continues to fight with Tamil Nadu over threats posed by the Mullaperiyar dam on the river Periyar. More recently, the Chennai floods of 2015, due to unusually-heavy winter rains, were thought to have been compounded by an unprecedented release of water from the Chembarambakkam dam into the Adyar River. In 2014, an unscheduled release of water from the Larji hydroelectric project into the Beas river drowned 25 students from Hyderabad.
•According to a Water Ministry official familiar with the dam safety bill, recent analysis of the state of India’s dams found that half of them did not meet contemporary safety standards. “This does not mean the dams are unsafe, but that we have much stricter safety criteria now than we did when these dams were built 50 or 100 years ago,” the official told The Hindu.
•The safety criteria include increasing the spillway (a design structure to ease water build-up) and preventing ‘over-topping’ in which the dam overflows and causes it to fail. The 1979 Machchu dam failure in Morbi, Gujarat, is estimated to have killed at least 25,000.
Superpower dreams
•India’s rank of 131 among 188 countries on the UNDP’s Human Development Index for 2015 and its ‘medium’ performance pose the uncomfortable question: would not the score have been significantly better if the higher economic growth trajectory of two and a half decades of liberalisation had been accompanied by a parallel investment in people? Few will argue that the rise in incomes that came with a more open economy has not translated into a higher quality of life for many Indians and raised overall life expectancy at birth by more than 10 years from the 1990 level, to reach 68.3 years. Progress has also been made in raising awareness about issues affecting women’s empowerment, such as public safety, acid attacks, discrimination in inheritance rights and lack of equal employment opportunity. Policy reforms have been instituted in some of these areas as a result. But as the HDI data show, significant inequalities persist, particularly between States and regions, which act as major barriers to improvement. The percentage of women in the workforce is the lowest in India among the BRICS countries, and the national record on the population that lives in severe multidimensional poverty is also the worst in the bloc. These are clear pointers to the lost decades for India, when universalisation of education and health care could have pulled deprived sections out of the poverty trap.
•A central focus on social indicators is necessary for India to break free from its position as an underachiever. The fiscal space now available has been strengthened by steady economic growth, and more should be done to eliminate subsidies for the richest quintile — estimated by the UNDP to be $16 billion in 2014 in six consumption areas including gold and aviation fuel. The rise in revenues from all sources should go towards making public education of high standards accessible to all and delivering on the promised higher budgetary outlay for health care. Bolstered by a conscious effort to help traditionally backward regions, such policies will help eliminate the losses produced by inequalities that lower national human development indices. One crucial metric that gets insufficient attention in the measurement of development is the state of democracy, reflected among other things in access to justice. It is relevant to point out that India has not ratified UN conventions on torture, rights of migrant workers and their families, and protection against enforced disappearance. This is a serious lacuna for a country that otherwise has a commitment to democracy and the rule of law. With the growing realisation that development is a multidimensional achievement, the gains of economic reforms must help build capabilities and improve the health of all sections. Sustaining and improving the quality of life will depend on policies crafted to handle major emerging challenges such as urbanisation, the housing deficit, access to power, water, education and health care.
Breathing life into health care
•The new National Health Policy (2017) released last week presents a clear vision of how India’s sluggish health system can be galvanised to deliver health and well-being to all by 2030, to meet the Sustainable Development Goal on health. The real challenge lies in its operational amplification and effective implementation which call for cementing consensus, catalysing commitment and channelling close coordination for steering Centre and the States together to deliver on this vision.
•After a gestation period of over two years, that saw extensive public comment and sharp debate within the government, the policy has finally emerged as a well-crafted document that lays the path for Universal Health Coverage (UHC). Though the right to health proposed in the earlier draft has been disappointingly deleted, effective implementation of the various measures proposed in the NHP should place us on the path towards the realisation of that right. While espousing a strong public health approach and commitment to strengthening the public sector, the policy aims to draw upon the diverse systems of medicine and the different sectors of health-care providers that characterise our mixed health system, for providing much-needed health services across India.
A rise in spending
•The policy acknowledges the need for increasing the level of public financing for health, stating that the government must spend 2.5% of GDP by 2025. While this is sub-optimal and projects a farther date than public health advocates had hoped for, the promise to double public financing over next eight years is still welcome, given that government funding was virtually stagnant for several decades. However, Central budgets from now on must reflect a steady rise annually, to give credence to this promise. It also remains to be seen how States will conform to the recommendation that spending on health must rise above 8% of their budgets by 2020. Primary health care is rightly prioritised for two-thirds or more of all public funding. Free drugs, diagnostic and emergency services would be provided to all in public hospitals.
•There is an assurance of primary health services which are needed for comprehensive care and promotion of well-being. These are to be available anywhere in the country on the basis of a family card, which also connects them to a ‘health and wellness centre’ that provides basic services, referral linkages and performs a gatekeeper function for advanced care. AYUSH systems would be mainstreamed. The much-delayed National Urban Health Mission is to be imparted speed and scale to address the unmet needs of urban primary health care while reaching out to the urban poor.
•Secondary and tertiary health care will be provided through strengthened public services, with gap filling through strategic purchasing of services from private providers. While a ‘capitation’ fee model — of fixed annual payment for full health care of a person — has been proposed for primary health care, a ‘fee for service’ system has been proposed for secondary and tertiary care. It remains to be seen how these will gel in an integrated model.
Strengthening health care
•District hospitals are to be strengthened, to provide several elements of tertiary care alongside secondary care. Sub-district hospitals too would be upgraded. A National Healthcare Standards Organisation is proposed to be established to develop evidence-based standard management guidelines. A National Health Information Network also would be established by 2025. A National Digital Health Authority would be set up to develop, deploy and regulate digital health across the continuum of care.
•Expanded institutional capacity as well as new courses and cadres are proposed to overcome the shortages of skilled human resources in the health system. Public Health Management cadres are to be created in all States. BSc in Community Health and MD in Family Medicine are marked for scale-up and a variety of specialised nursing and paramedical courses are proposed, even as Accredited Social Health Activists (ASHAs) can career-track to become auxiliary nurse midwives.
•A variety of disease control measures and targets have been proposed to tackle challenges ranging from HIV-TB co-infection to trauma and screening for chronic conditions such as hypertension, diabetes and common cancers. Control of indoor and outdoor air pollution has been accorded high priority with water, sanitation and nutrition, while multi-sectoral action will be aided by analytic capacity for health impact assessment.
•All of these augur well for moving the health agenda forward. However, the real challenges lie in how quickly the government can strengthen the public sector, how well it can regulate the partnering private sector, how effectively it can ramp up the health workforce to reach all sections of the population and how efficiently the Central and State governments can team up. Fingers crossed!
Bankruptcy board spells out ‘eligibility’
•The first order issued by the recently-established Insolvency and Bankruptcy Board of India (IBBI) is expected to set in motion a chain of events at many firms, including well-known consultancies that are eyeing the huge market for stressed assets and debt resolution.
•In its March 2 order, IBBI rejected an application for registration as an Insolvency Professional (IP) by an individual who works with one of the so-called Big Four consultancy firms. “... an IP must not ‘engage in any employment’, repeat ‘any employment’. It envisages that a person must not play two roles — profession and employment — simultaneously,” according to the order.
•Practitioners in the segment say that the order has made it clear that IBBI is not going to grant registration to individuals in such a scenario and so entities that want to be registered will have to form a separate subsidiary with dedicated resources related to insolvency and bankruptcy work.
Dedicated resources
•“Most firms, including ours, are considering forming a separate entity or an LLP where we have such dedicated registered resources,” said Ashish Chhawchharia, Partner, Grant Thornton Advisory. “The law does allow insolvency professional entities or IPEs wherein the majority of partners are registered IPs.”
•In a similar context, Sumit Khanna, Partner and National Head Corporate Finance & Restructuring Services, Deloitte said that while it was too early to comment on the possible restructuring that firms would have to undertake to participate in this segment, they had already started strengthening their in-house resources.
•“Deloitte is one of the most active players in this segment though it is too early to conclude if we need to set up a separate entity to house the practice as the final engagement will be in the name of a registered IP only,” Mr. Khanna said. “We will take a call once business reaches a critical threshold. We are augmenting our strong domestic team with in-house expertise in this practice area from overseas markets such as U.K. and U.S., where we are large players in this segment.”
•It is clear that the firms are betting big on a segment that is showing enough signs of having a huge business potential. In the one-year period ended September 2016, gross non-performing assets (NPAs) as a percentage of gross advances jumped to 9.1% from 5.1%, as per Reserve Bank of India (RBI) data.
•“This segment is going to be extremely large in the future. There is around Rs. 6.6 lakh crore worth of recognised NPAs in the banking sector as of today,” said Mr Khanna. “While the smaller loans could go to the regular firms, large stressed assets would require the expertise of large firms. The initial number of cases could well over be 2,000.”
‘Same direction as SEBI’
•Legal experts say that the first order from IBBI has set a tone on how it is going to interpret the provisions of its regulations and is in line with the views of other regulators.
•“It has held that the insolvency professional work requires full time attention and would not countenance an IP riding two horses or more at a time,” said Sumit Agrawal, Partner, Suvan Law Advisors. “The order brings clarity on eligibility norms to be an IP and is in the same direction as SEBI or other regulators expect a person who is a registered intermediary.”
Russian connection
•The first open hearing into the alleged links between the campaign of Donald Trump and unnamed parties associated with the Russian government kicked off this week, even as the President put out a series of social media posts that seemed to mischaracterise statements coming out of that hearing. Ground-shaking revelations have come from the grilling of FBI Director James Comey and NSA Director Michael Rogers by the House of Representatives’ Intelligence Committee. The first was from Mr. Comey, who confirmed that the FBI was investigating Russia’s efforts to interfere in the presidential election, including links between specific individuals associated with the Trump campaign and the Russian government. Last month Mr. Trump’s nominee for National Security Adviser, Michael Flynn, resigned from his post after it emerged that he had withheld information about being in contact with Russia’s Ambassador in Washington prior to Mr. Trump’s inauguration. This month, Attorney General Jeff Sessions recused himself from the probe into alleged Russian meddling when it came to light that he had met the Ambassador prior to the election. Yet he continues to head the institution charged with the inquiry. Mr. Comey revealed that the FBI investigation began in July 2016, when evidence emerged that the Democratic National Committee had been hacked by Russia-related entities and emails handed over to WikiLeaks.
•Even as the U.S. intelligence community scrambles to put together the pieces of the Trump-Moscow puzzle, it has, ironically, found itself in the crosshairs of exposure. Earlier this month WikiLeaks released a trove of confidential CIA documents , a series labelled “Vault 7”, which showed the Agency’s penetration of the security systems of household electronic devices that could then be used for covert surveillance. While such timed “leaks” are meant to target his political opponents, Mr. Trump’s own tweets are at odds with revelations in the House hearing. In early March, he accused former President Barack Obama of ordering wiretaps on Trump Tower — yet Mr. Comey said neither the FBI nor the Department of Justice had any information to support that allegation. Mr. Rogers dismissed the White House suggestion that Mr. Obama had asked British intelligence to spy on Mr. Trump, a claim the U.K. has denied. The last straw came when the U.S. President’s account tweeted, as the hearing proceeded, “The NSA and FBI tell Congress that Russia did not influence electoral process,” only to have this statement debunked by Mr. Comey at the hearing, live on TV. Mr. Trump’s tendency to resort to unsubstantiated, even misleading, claims to stall a probe into alleged collaboration with a foreign power is not helping his credibility, which is already low in the eyes of so many Americans.
