THE HINDU – CURRENT NOTE 25 March
Centre seeks banks’ turnaround plans
•Future capital infusion dependent on a time-bound plan from the 10 lenders
•The Finance Ministry has written to 10 public sector banks, including IDBI Bank, Bank of Maharashtra, United Bank of India, Andhra Bank and Indian Overseas Bank, making it clear that the lenders would only get further capital infusion once they submit a time-bound turnaround plan.
•The Centre, which has mandated State Bank of India’s merchant banking arm SBI Caps to vet each bank’s plan, wrote to the state-owned lenders last week stipulating that they would each have to sign a Memorandum of Understanding (MoU) with the government, agreeing to stick to the turnaround plan.
•“The government wants 10 public sector banks to turn around in the next three years, and we are preparing the plan for that,” a public sector bank chief executive, who did not wish to be identified, told The Hindu.
•The government’s move to crack the whip on lenders comes after some banks reported losses in financial year 2015-16 as well as for the nine-month period of the current financial year. Bad loans zoomed following the Reserve Bank of India’s asset quality review, which required banks to classify many accounts identified by the banking regulator as ‘bad’. The RBI said it wanted to clean up banks’ balance sheets by March 2017.
•In its financial stability report, RBI had said banks may remain risk averse in the near future as they clean up their balance sheets and their capital position may remain insufficient to support higher credit growth.
•According to RBI data, gross non-performing assets of commercial banks increased to 9.1% of their gross advances as of September 2016, from 5.1% a year earlier. Public sector banks share a disproportionate burden of this stress.
•In 2015, under the Indradhanush plan, the government had announced capital infusion of ₹70,000 crore in public sector banks for four years, starting from 2015-16. In the first two financial years, ₹25,000 crore had been earmarked per year with ₹10,000 crore to be disbursed in each of the remaining two years. Credit rating agencies had pointed out that the sum was insufficient as banks needed to meet Basel-III norms as well as make provisions for rising bad loans.
•Last week, United Bank of India, Andhra Bank, IOB and Dena Bank informed the stock exchanges that they had received capital “as part of turnaround-linked infusion plan”.
•Interestingly, for the first time, the employees’ unions have been made a party to the proposed agreement. The employees’ unions of these 10 banks met on Friday to decide the future course of action.
•The other lenders included in the list are Allahabad Bank, Bank of India, Central Bank of India, Dena Bank and UCO Bank
Drug-resistant TB a concern
•In India, Health Ministry’s targets are unrealistic due to current budgets
•In connection with World Tuberculosis (TB) Day on Friday, a candlelight vigil was organised at India Gate, paying tribute to the nearly 5 lakh patients who succumbed to the disease last year. The tuberculosis epidemic affects 28 lakh Indians; another 79,000 people suffer from type of TB resistant to most antibiotics.
•India has come under criticism from the global public health community for giving inaccurate estimates of the tuberculosis burden between 2000 and 2015. In a TED Talk on ‘India’s Tuberculosis crisis’, Zarir F Udwadia, a leading expert on TB and chest physician at the Hinduja Hospital & Research Centre, Mumbai, called it, “Ebola with wings.”
Contagious infection
•Tuberculosis is a contagious infection caused by Mycobacterium tuberculosis and it usually attacks the lungs. It can also spread to other parts of the body like the brain and spine. Tuberculosis is contagious and spreads through the air, much like cold or flu. Public health experts maintain that the unchecked rise of multidrug-resistant tuberculosis (MDR TB) in India will threaten the progress made globally. “Our real crisis is drug resistance and nearly 1 in every 5 cases I see has primary resistance. We do not have any preparation to deal with DR TB. I feel optimistic that the government is showing interest but the Health Ministry’s targets are unrealistic with current budgets and strategies. There is no way India will eliminate TB by 2025,” said Chapal Mehra, a public health specialist.
•According to the Health Ministry, 17.5 lakh TB patients and 33,820 DR TB patients were notified in 2016 from public and private health. The two new WHO recommended drugs for DR TB, Delaminid & Bedaquiline, are not currently available in Indian national TB programme. While Delaminid is yet to be registered in India, Bedaquiline is available at only 6 States in the country, under compassionate use. “People living with MDR and XDR-TB are not receiving adequate treatment in India. One drug is not registered at all. The other one is available only in 6 States and all too often patients die before they can access the medication,” said Paul Lhungdim, a patient activist with The Delhi Network of Positive People.
National plan
•Meanwhile, the Indian government will soon be releasing the National Strategic Plan for TB Control (2017-2025), with an overarching framework to achieving the elimination goal. Speaking on the occasion of World TB Day, Kalikesh Singh Deo, a Member of Parliament engaged with TB, said that, “India cannot address its TB epidemic until it increases its budgets and transforms the TB programme. With an Indian dying of TB at every minute we can no longer wait,” he says in his message.
Plea to bar convicts from politics: SC seeks govt. view
•Court posts matter for further hearing on April 18
•The Supreme Court on Friday asked the Centre to respond to a petition seeking to bar convicted persons from contesting polls for life and preventing their entry into the judiciary and the executive.
•A Bench comprising Justices Ranjan Gogoi and Navin Sinha asked the government to file its reply in two weeks and posted the matter for further hearing on April 18.
•Recently the Election Commission had endorsed the plea filed by advocate Ashwini Upadhyay, agreeing that a uniform ban would be in the spirit of fundamental rights of the Constitution, including the right to equality.
•As of now, a person, on conviction, is debarred from contesting any elections for the period of his or her prison sentence and six years thereafter.
•The Commission in its affidavit had said that it was “alive to the issues that concern the conduct of free and fair elections and functioning of healthy democracy and as such asserting for bringing in electoral reforms which further the cause of free and fair elections.”
•The Election Commission said it has already submitted details proposal for poll reforms.
INS Vikramaditya fires surface-to-air missile
•Newly installed Barak missile tested
•Over three years after joining the Navy, the country’s sole aircraft carrier INS Vikramaditya on Friday successfully carried out the maiden test of the newly installed Barak short range surface-to-air missile.
•“During the firing carried out in the Arabian Sea, the missile was fired against a live, low-flying, high-speed target. The target was successfully engaged and destroyed,” a Navy officer said.
•The 44,500 tonne carrier was commissioned into the Navy in November 2013 at Severodvinsk in Russia and was originally scheduled to have the long range surface- to-air missile system under joint development with Israel. But delay in its development resulted in the carrier being inducted into the force without its own air defence system, and forcing it to rely on support ships in the carrier battle group for air cover.
•The firing was conducted as part of the operational readiness inspection of the Western Fleet by Vice-Admiral Girish Luthra, Flag Officer Commanding-in-Chief of the Western Naval Command, from March 21-23, the Navy said in a statement.
Cloak of invisibility
•Changes in political funding regulations are a setback to efforts to bring in transparency
•Well before financial year 2017-18 begins, the Lok Sabha has signed off on the Budget with the passage of the Finance Bill of 2017. It includes multiple amendments proposed by the government that did not figure in Arun Jaitley’s speech of February 1, either in letter or in spirit. For instance, while the speech devoted 420 words to proposed measures to improve transparency in electoral funding, amendments have been made to the Companies Act of 2013 that actually turn the clock back on existing disclosure standards. Till now, companies could only contribute up to 7.5% of their average net profits in the past three financial years to political parties. They were required to disclose in their profit and loss accounts the amount of contributions and the names of political parties to which they were made. The ceiling has now been dropped, paving the way for a firm to deploy unlimited capital into political coffers irrespective of its own financial and operational health. Companies would still have to reveal the extent of their financing of parties, but no longer have to name their preferred parties. For the sake of argument, one could say the 7.5% limit was arbitrary and restricted willing and able corporate donors’ ability to influence political activity. But doing away with the limit makes firms susceptible to funding ‘requests’ from local, regional or national political formations while taking away excuses — such as it being a loss-making unit, or breaching the funding cap.
•This would open up new opportunities in crony capitalism. Pressure could be exerted on a company awaiting government clearances, or a loan restructuring from public or cooperative sector financiers. Even a publicly listed company can set up subsidiaries just to fund parties. This removes any pretence of transparency in the process as the donor will not have to disclose who he paid; the recipient has no such obligation either. It is not surprising that India Inc. has remained stoically silent so far. This abandonment of the 7.5% requisite comes in tandem with the proposal to float electoral bonds to give anonymity to political donors. The scheme for such ‘bearer’ bonds is still being worked out with the central bank, but how this will meet the objective of transparency isn’t clear yet. The push for cashless modes for political contributions sounds worthy, but reducing the ₹20,000 limit on cash donations to ₹2,000 does nothing to guarantee that monetary muscle power will dissipate from electoral processes. Instead of, say, a lakh of such donors, a party can now share 10 lakh random names to justify cash holdings. Transparency is not synonymous with anonymous transactions, unlimited corporate donations, relaxed disclosure norms and the persistence of cash. The Budget’s promise of “reform to bring about greater transparency and accountability in political funding, while preventing future generation of black money”, truly rings hollow.
One India, two time zones
•The insistence on observing IST vis-à-vis Northeast India’s needs ignores its social and economic impact
•In a two paragraph order delivered by Chief Justice Ajit Singh, the Gauhati High Court has dismissed a public interest litigation filed by Rita Mozumder seeking a direction from the Central government to notify a separate time zone for the Northeast. The court cites a high-level committee study, constituted by the Ministry of Science and Technology, that recognised the difficulties faced by a single time zone in eastern India but concluded that Indian Standard Time (IST) should nonetheless be retained. The issues raised by the petition demanded more than a cursory order dismissing the petition given the importance of the issue. Legislators, activists, industrialists and ordinary citizens from the Northeast have often complained about the effect of IST on their lives, and pursued the issue of having a separate time zone with the Central government, without much success. The petition arose after repeated rejections by the government.
•The idea of a standard time zone has become so integral to our lives that we often take it for granted and assume it to be a part of natural phenomena. We tend to forget the complex contestations — including legal ones — that go into its making. The creation of a time zone signals the victory of time over space with geographical areas being brought under a single time zone rather than relying on local solar time. It entails a denial of local time — or a separation of time from space — a very significant fact if you consider what it means to the experience of social and economic lives. In the case of India, the time difference between the westernmost part of India and the easternmost point is approximately two hours, the effect of which is that the sun rises and sets much earlier than it does in the rest of the country. The journalist, writer and academic Sanjoy Hazarika describes the Northeast as being stuck in “trapped in a time zone that makes neither common sense nor social and economic sense”.
There is a strong case
•In the Northeast, the sun rises as early as four in the morning and in winter it sets by four in the evening. By the time government offices or educational institutions open, many daylight hours are already lost. In winter this problem gets even more accentuated and the ecological costs are a disaster with much more electricity having to be consumed. Profs. D.P. Sengupta, and Dilip Ahuja of the National Institute of Advanced Studies claim that advancing IST by half an hour would result in saving 2.7 billion units of electricity every year. None of the other proposals such as the introduction of daylight saving time in India has met with any approval and it is felt that having two time zones would be unsuitable. There is of course a strong political dimension to granting a separate time zone in the Northeast given the region’s long history of self-determination movements. The unstated assumption is that the grant of a different time zone is only the first temporal step towards conceding spatial autonomy. This appears to me to be a short-sighted perspective. If socioeconomic development is indeed one of the formulae to combat insurgency, might it not be worthwhile to consider the disastrous impact that IST has on productivity and efficiency in the region?
•A few years ago, then Assam Chief Minister Tarun Gogoi, frustrated with the decision of the Centre not to have a separate Northeast time, unilaterally decided that Assam would follow ChaiBagaan time. Bagaan time or tea time is a reference to an informal practice followed in tea gardens in Assam which is an hour ahead of IST. It alerts us to the fact that there is indeed a long history of the application of different time zones in India. We find evidence of this in the Constituent Assembly debates. On December 28, 1948, responding to an amendment proposed by Naziruddin Ahmad, Dr. Ambedkar asked him what system of timing he had in mind: “Is it the Greenwich time, the Standard time, Bombay time or Calcutta time?”
•Ambedkar’s reference to “Bombay time” and “Calcutta time” reminds us of an interesting aberration in the history of IST. It was instituted in 1905 but after it had been adopted, Bombay traders found it difficult to convert to IST. Because the conversion to IST was sought to be effected at a time when there was considerable public resentment over the Tilak sedition trial, the government found little support for this shift among the people in Bombay. Bombay Time was maintained right up to 1955 with Bombay following its own time zone which was 38 minutes ahead of the rest of the country.
Our use of time
•While the court may have been reticent to intervene in what it saw primarily as an executive prerogative, it also passed an opportunity to examine a fascinating dimension of temporal justice that Indian courts have not had an opportunity to address, but other jurisdictions have had to contend with. In the U.S., battles over daylight-saving time regularly went to court and it was not until 1966 with the passing of the Uniform Time Act that they had a uniform national period of daylight-saving time. Todd D. Rakoff in his work on the invisibility of time in structuring the law argues that there is a normative dimension of time that seems to underwrite a number of legal arrangements, and the question of how we, as a society, structure our time is mirrored in the question how we structure our laws. He terms this the ‘laws of time’ and includes within this ambit a range of regulatory norms from the standardization of time to the length of work day and the creation of holidays and social time. But as with any other normative systems, the ‘chrononormative’ (in Elizabeth Freeman’s memorable characterisation) functions by invisibilising its own structures of power and control.
•Responding to the various objections raised about a separate time zone, journalist, writer and academic Sanjoy Hazarika raises critical questions and asks us to consider why it is that the development index leans considerably in favour of western India as opposed to the east, and what impact differential time may have on it. This I believe is a question that has a significant impact on the interpretation of ‘life’ in Article 21 of the Constitution. Even if the Gauhati High Court were unwilling to issue a substantive order, it certainly had the discretion to ask for a study on the legal impact of a single time zone on the fundamental rights of people. This is perhaps a question that the Law Commission may find worthy of investigating further. In the meantime, we will have to be content with the tweaking of local orders changing office timings etc. And, most of east India will continue to feel the vagaries of IST an inconvenience while the further you go to the Northeast, it will be experienced as the caprice of the state.
Aadhaar now needed for mobile connection
•The move will impact more than 100 crore customers
•The Department of Telecommunications on Friday issued a notification, directing all phone service providers to reverify details for all existing subscribers through Aadhaar-based e-KYC (Know Your Customer) process.
•This follows a Supreme Court order last month in which it had approved the government’s plan to record the identification details of mobile subscribers through an e-KYC mechanism linked to Aadhaar.
•The move will impact more than 100 crore mobile phone subscribers in the country, 90% of whom are prepaid card users.
•The process is likely to cost about ₹2,500 crore which will be borne by the service providers, according to industry body COAI.
•“All licensees shall re-verify all existing mobile subscriber (prepaid and postpaid) through Aadhaar based e-KYC process,” the department said in a notification, adding that the process should be complete by February 6, 2018.
Data services
•Mobile connections used for data services will be verified using the alternate number.
•The department’s decision comes two days after Union Finance Minister Arun Jaitley moved an amendment to the Finance Bill 2017 to make Aadhaar mandatory for individuals to apply for a PAN (Permanent Account Number) card and for filing income tax returns from July 1 this year.
•Earlier this week, the Centre made it mandatory for beneficiaries to quote their Aadhaar number to avail themselves of benefits under the Pradhan Mantri Kaushal Vikas Yojana for skill development, and the Self Employment Scheme for Rehabilitation of Manual Scavengers.
Grains to pension
•The Centre had identified 31 schemes in which the Aadhaar could be made mandatory. Notifications have been issued in recent months by departments to make Aadhaar compulsory for getting subsidised grains under the National Food Security Act, jobs under the MGNREGA and pension benefits under the Employees’ Pension Scheme.
•The Department of Telecommunications in the notification has instructed that the industry intimate their existing subscribers through advertisement in print and electronic media as well as SMS “about the orders of the Supreme Court for reverification activity and shall upload the complete details of this activity on their website.”
•The department has also asked that companies devise a mechanism to avoid public inconvenience as well as long public queues.
•“Once a subscriber is reverified and the details in the subscriber base are updated successfully as the eKYC process, the licensee can destroy the old customer application forms of such reverified subscribers unless the licensee is directed to preserve the same by the licensor or law enforcement agencies or judicial forums,” the notification stated.
Address proof
•It added that any subscriber acquired through proof of identity or proof of address documents during the period of reverification will also need to be reverified.
•In January this year, the Telecom Regulatory Authority of India (TRAI) had recommended the use of Aadhaar-based e-KYC for verification of existing mobile subscribers.
•It had, however, proposed that this process should be optional to the service providers as well as mobile subscribers.
‘PSU banks hold key to financial sector rejig’
•Former Reserve Bank of India Governor Y.V. Reddy said that the issue of non-performing assets, most of which are with public sector banks, needed more than just recapitalisation as a cure, and that the public sector banks were key to the modernisation of India’s financial sector.
•“The common thread between fiscal policy, monetary policy, and financial sector policy is public sector banks,” Mr. Reddy said while delivering the Sixth Dr. Raja Chelliah Memorial Lecture organised by the National Institute of Public Finance and Policy.
•“The future of the financial system and indeed modernisation of the financial sector of India depends on how we overcome the intractable problem of the public sector banks.”
•“There seems to be a political economy consensus for no change or minimal change,” Mr. Reddy added.
•The former RBI Governor and chairman of the 14th Finance Commission said that the effectiveness of monetary policy depended not only on the actions of the monetary authority but also on other related policies and the efficiency of transmitting institutions.
•“With over 70% of the banks and overwhelming proportion of the financial sector in the public sector, there are issues of incentives and accountability and political interference,” Mr. Reddy said.
•“The fact that the overwhelming proportion of the non-performing assets are with the public sector banks shows that the reform will have to go beyond simply recapitalising the banks.”
•The former RBI governor added that a professional approach and a capacity to evaluate lending proposals could not be expected from public sector institutions that are bailed out from time to time with taxpayers’ money.
