📰 India joins quantum computing race
DST to fund development of machines that run faster
•Keen to tap into the next big advance in computing technology, the Department of Science and Technology (DST) is planning to fund a project to develop quantum computers.
•A quantum computer, still largely a theoretical entity, employs the principles of quantum mechanics to store information in ‘qubits’ instead of the typical ‘bits’ of 1 and 0. Qubits work faster because of the way such circuits are designed, and their promise is that they can do intensive number-crunching tasks much more efficiently than the fastest comparable computers.
•For instance, to sort a billion numbers, a quantum computer would require 3.5 million fewer steps than a traditional machine, and would find the solution in only 31,623 steps, says a Morgan Stanley analysis last August. Solving other problems, many having to do with computing physics, becomes possible on quantum machines, the authors say, whereas they might never be possible on traditional computers.
•While the Physics departments at the Indian Institute of Science, Bangalore, and the Harish Chandra Research Institute, Allahabad, have only forayed into the theoretical aspects of quantum computing, a DST official said that “the time has come to build one.”
•Experts from across the country are expected to gather this month in Allahabad for a workshop to develop such a computer, and to discuss the costs and the time it would take to build one. Internationally, Canada’s D-Wave Systems, is a pioneer in developing quantum computers and has sold machines to Lockheed Martin and Google.
•Experts, however, say that ‘true quantum computers’ are still years away, and existing systems use principles of quantum computing to solve very limited problems. The DST official, who didn’t want to be identified, said the project was part of a forthcoming mission in the DST to fund research areas that would create the next generation of technology jobs in India.
📰 A ‘Boat Lab’ to study Brahmaputra
Focus on hydrology and water quality
•Soon, it will be possible to cruise along the Brahmaputra along while doing some serious science.
•The Department of Biotechnology will commission a two-tiered barge that will roughly be the size of two large conference rooms and host scientists and a full-fledged lab that will allow those on board to collect samples from various stretches of the river, perform tests on water quality and biodiversity of the wider ecosystem. The proposed vessel, now only known as the Brahmaputra Biodiversity Biology Boat (B4), would also be linked to smaller boats and research labs, said Union Science Minister Harsh Vardhan at a press conference.
•The first experiments will likely begin this December and will have the boat — a re-purposed one — trawl Pasighat, Dibrigarh, Neemati, Tejpur and Guwahati in Assam and managed by the Indian Institute of Technology, Guwahati. The “B4” will also have a teaching laboratory for school and college children.
•Specifying that this wouldn’t be just a show boat, officials said there would also be ‘mobile labs’ that would run along the tributaries of the Brahmaputra to feed in data to the B4.
•“For a river of the size and diversity of the Brahmaputra, there is very little research done to understand its hydrology, water quality and biodiversity,” said K. Vijay Raghavan, Secretary, Department of Biotechnology. “The idea for it came from a scientist who’s of Chinese and Indian-origin and based in Shillong.”
‘A few precedents’
•He added that a boat of this nature would be one of its kind in the world though there were a few precedents in China and mobile laboratories that studied the Amazon river.
•He didn’t specify a budget for the boat but said the government aimed to spend Rs. 200 crore across a range of programmes.
📰 Call to wipe out modern slavery
Activists seek plan to meet SDG 8.7
•On the same day that the International Labour Organisation (ILO) released new global estimates of modern slavery, a group of over 40 activists and academics from different parts of the world have released a 25-point signed statement urging India to ensure a more effective implementation of labour law protections to eliminate modern slavery and forced labour in line with the Sustainable Development Goals (SDGs).
•Noting that “dominant international discourses on modern slavery do not adequately reflect the extreme exploitation and precarious nature of employment in India today”, the statement said “an undue emphasis on sensationalist accounts of modern slavery deny the widespread prevalence of economic exploitation, even now based on social customs, cultural traditions and hereditary obligations, and obfuscate the continuum between extreme and ‘everyday’ forms of such exploitation.”
•“A multi-pronged strategy that responds to the needs of all affected constituencies, including bonded labourers, contract workers, domestic workers, intra- and inter-state as well as international migrant workers, and sex workers is necessary in order to achieve SDG 8.7,” the statement said.
•Observing that “the current targets and indicators proposed by the Ministry of Statistics and Programme Implementation as of March 8, 2017 for the realisation of SDG 8.7 are wholly inadequate,” the statement noted that “a more robust labour governance system in the form of increased inspections and better resources for the labour inspectorate is essential for the realisation of SDG 8.7.
•The SDG 8.7 calls for “immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking, and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms.”
Collective bargaining
•The most effective and durable way to prevent all forms of extreme exploitation lies in the self-organisation of workers and in their efforts at collective bargaining, especially through trade unions and workers’ collectives,” the statement said
•Expressing concerns over the proposed anti-trafficking law, the academics pointed out that “the problem of trafficking can only be addressed through a multi-faceted legal and economic strategy that strengthens the implementation of labour protections such as those guaranteed by the Constitution”.
•Among the signatories to the statement were activists from organisations such as Aid et Action, The Global Alliance Against Traffic in Women, Open Democracy, Self-Employed Women’s Association (SEWA), and National Network of Sex Workers.
📰 Bound by Paris deal, says India
We are willing to work above and beyond the pact to reduce emissions: Sushma
•India on Tuesday reaffirmed its commitment to the landmark Paris climate change agreement, saying it was willing to “work above and beyond” the pact to reduce greenhouse gas emissions.
•External Affairs Minister Sushma Swaraj, during a UN ‘Leadership Summit on Environment Pact’, said India had been at the forefront of the debate on environment and development.
•Her remarks came amid uncertainty over the U.S. role in the deal after President Donald Trump in June announced that America was withdrawing from the Paris deal, arguing that it gave undue advantage to countries like India and China.
•India, which is the world’s third largest carbon polluter, reached a pact, along with more than 190 nations, in December 2015 with an aim to prevent an increase in the global average temperature and keep it well below 2 degrees Celsius.
•The deal, which replaced the 1997 Kyoto Protocol, was ratified last October.
•Participating in the UN meet hosted by Secretary-General Antonio Guterres, Ms. Swaraj said India was willing to work “above and beyond” the Paris agreement. “Understanding our responsibility towards Planet Earth,” External Affairs Ministry spokesperson Raveesh Kumar tweeted.
Solar alliance
•The summit was presided by French President Emmanuel Macron. India takes the climate change issue very seriously, Mr. Kumar said.
•“We also mentioned that India and France are working together on the international Solar Alliance,” he said.
•During the day, Ms. Swaraj had a series of bilateral meetings with leaders from Mexico, Norway and Belgium. She also called on Mauritius Prime Minister Pravind Jugnauth.
•“There were some discussions on the possibility of a high-level visit from Belgium to India later this year,” Mr. Kumar said.
•Later in the evening, Ms. Swaraj attended a reception hosted by British Prime Minister Theresa May for the Commonwealth Heads of Government delegations. Ms. Swaraj is scheduled to hold meetings with her counterparts from San Marino, Brazil, Morocco and Moldova and call on Afghan President Ashraf Ghani. She is also scheduled to participate in several multilateral meetings including that of the G-4 (Brazil, Germany, India, and Japan) and the Shanghai Cooperation Organisation Foreign Ministers.
📰 A time of strategic partnerships
Alliances are passé and only a few continue gingerly from the Cold War era
•India pulled out all the stops last week to welcome Japanese Prime Minister Shinzō Abe on the occasion of his fourth annual summit with Prime Minister Narendra Modi. The India-Japan “Special Strategic and Global Partnership” — a designation and status New Delhi accords to no other partner — has reached new heights under the stewardship of the two leaders.
•The rise of China and questions about America’s commitment in Asia have drawn them into a deepening security-cum-economic relationship. How deep is it? As Mr. Abe wrapped up his visit last Thursday, speculation arose on the possibility of an evolving “alliance” between the two countries given just how much their interests converge. Such analyses, though pointing in the right direction, may not capture the true nature of the India-Japan “strategic partnership.”
•The India-Japan synergy has two key elements. Japan is investing heavily in strengthening its critical infrastructure to enhance its economic and potential defence capabilities. Simultaneously, the two countries have begun working on a joint infrastructure development and connectivity drive traversing the Indian Ocean, from Myanmar to Sri Lanka to Iran and encompassing the Asia-Africa Growth Corridor. On defence matters, Japan and India have agreed to establish regular consultations in the “2+2” format of their defence and foreign ministries. Their navies exercise regularly together with the U.S. Navy. And negotiations on arms sales — notably, the ShinMaywa US-2i amphibious aircraft — are on. Japanese investment in the strategically placed Andaman and Nicobar Islands is likely to help New Delhi establish a major security sentinel in the eastern Indian Ocean.
Strategic partnerships
•But this is not an alliance in the making. Alliances are passé and only a few continue gingerly from the Cold War era. We live in a world today driven by “strategic partnerships”. States find themselves in an interdependent system where the traditional power politics of yesteryear doesn’t quite fit. After all, every major relationship characterised by strategic tension such as U.S.-China, Japan-China, India-China is simultaneously one of economic gain. The U.S. and China are each other’s chief trading partners, while China ranks at the top for Japan and India. Besides, India might confront China at Doklam but it also wants Chinese investment.
•Strategic partnerships carry certain characteristic features falling short of alliances. First, unlike alliances, they do not demand commitments to a partner’s disputes with other countries. New Delhi does not take a strong position on Japan’s territorial disputes with China and Russia. Likewise, Tokyo does not openly side with India in its quarrels with China and Pakistan. For instance, Japan’s reaction to the Doklam stand-off, though critical of China implicitly, did not go beyond saying that “all parties involved should not resort to unilateral attempts to change the status quo by force.” India’s reaction to the verdict of the arbitral tribunal on the South China Sea last year, urging “all parties to show utmost respect for the UNCLOS”, reflected a similar dispensation despite Japan’s push for a stronger statement. There was also no explicit mention of the South China Sea in the latest joint statement.
•Strategic partnership means, first, that both retain the flexibility to continue political engagement and economic cooperation with their common adversary. Second, they avoid “entrapment”, or being dragged into a partner’s disputes and potentially into conflict, which happened in the First World War. Third, regular high-level political and military interactions facilitate a collaborative approach to strategic policies over a range of economic and military activities. India and Japan, for instance, are not only moving forward on economic and defence cooperation but are also cooperating on other important issues such as civil nuclear energy and Security Council reform.
•Given that resort to war is undesirable owing to economic interdependence as well as the presence of nuclear weapons, the aim of major strategic partnerships is to strengthen defences against marginal conflict, convey a determination to stand up to a strategic adversary and, overall, generate a persuasive environment that discourages potential intimidation. Occasionally, as between India and China, a “strategic partnership” is a way of opening a channel of communication and minimal cooperation intended to stabilise and develop the potential for a détente and conceivably something warmer. In this particular case, not much has been accomplished thus far, but it remains a low-cost option for expanding cooperation in the event the political fundamentals of the relationship show an upward swing.
Looking ahead
•India’s two main strategic partnerships, with the U.S. and Japan, are dovetailing nicely. For New Delhi, the U.S. will remain its chief backer both to enhance India’s conventional defence capabilities and to draw political support in global political institutions, for example in components of the nuclear non-proliferation regime. Japan, in the meantime, is becoming its primary collaborator in developing its economic sinews and for building a geostrategic network that offers Indian Ocean states an alternative to dependence on China. Together, the emerging structure of triangular cooperation should give Beijing pause to think.
📰 A big broom
Each shell company must be duly investigated, instead of a ‘name and shame’ data dump
•The decision by the Ministry of Corporate Affairs to crack down on so-called ‘shell companies’, disqualify select directors in these entities and debar them from taking board positions for a specified period of time cannot be faulted. This would begin the clean-up of the Augean stables of firms set up in many cases with less than bona fide intent and having virtually no business operations. However, the Union government’s move to publicise the identities of some of these individuals with a view to ‘naming and shaming’ them is fraught with risk; the devil, as always, is in the detail. While the underlying motive for this action, as cited by the ministry, of “breaking the network of shell companies” in the government’s fight against black money is laudable, there is a real danger of inadvertently tainting genuine firms and individuals. This was in evidence when the Securities Appellate Tribunal recently gave relief to some entities over trading curbs hastily imposed on them by SEBI. Also, given the sheer scale of the task at hand, with the ministry identifying more than 1.06 lakh directors for disqualification, it is imperative that there be great care and diligence to ensure that the authorities do not penalise anyone who for non-mala fide reasons failed to comply with the relevant provisions of the Companies Act. After all, when the intention is to create “an atmosphere of confidence and faith in the system” as part of improving the climate for ease of doing business, the onus must be on taking to task only those who intend to subvert the law.
•At a broader level, the Centre and the regulatory arms need to address the underlying systemic shortcomings that have allowed so many companies, both listed and unlisted, to become vehicles of malfeasance. For one, as so many entrepreneurs establishing medium, small or micro enterprises have found to their chagrin, it is far easier to register a firm than it is to dissolve or wind it up. Similarly, in the case of public limited companies, a major portion of the extralegal activities including price rigging of shares, insider trading and other questionable practices have been found to occur in the large mass of smaller companies. The problems of acute illiquidity, weak governance and regulatory oversight have combined with the difficulty in delisting to make these firms prime targets for financial fraudsters and money launderers. The solutions, therefore, need to be targeted at addressing the deep-rooted maladies rather than just the symptoms, making it easier for entrepreneurs to deregister and/or delist a company. The government has already shown it is prepared to act in terms of enacting the necessary legislation to address banking sector stress by adopting the Insolvency and Bankruptcy Code. A simplified process, possibly online, to dissolve or delist would usher in significant benefits, including improved governance, and ensure that all stakeholders from small retail investors to corporate promoters have an enabling atmosphere to operate freely by remaining compliant with the law or risk facing stringent penal action.
📰 Taxpayer rights and obligations
Shifting tax administration from an enforcement to a service-based model will lead to higher yields
•“It is better to be roughly right than precisely wrong.” These words of British economist John Maynard Keynes best sum up the wave of reforms in the domain of tax administration in India in the last few years. While tax administration has seen some paradigm shifts both in the domain of direct and indirect taxes, the taxpayer still seems to be wanting for greater certainty and fairness in the levy, assessment and collection of taxes. This is where an internationally recognised concept such as taxpayer rights holds well even in the Indian context.
•The Central government has development strategies in the form of campaigns like ‘Make in India’ and ‘Startup India’. The recent introduction of the Goods and Services Tax (GST), which is the most significant overhaul of the taxation system in India ever, also aims to achieve a unified market across the nation for the first time. The intent of the government is clear. It wants to transform India into a manufacturing, investment and research and development hub and consequentially, there would also be an increase in revenue generation. In the light of such economic aspirations, a fair balance between taxpayer rights and obligations will only ensure a higher degree of trust between the tax collector and taxpayer, thus leading to a higher tax yield. But one may ask, isn’t the level of trust already there? Well, not entirely.
Epicentre of tax disputes
•India has seen key tax disputes ever since a similar growth-oriented road map was adopted by the government in the early 1990s. For instance, in order to attract investments, the government signed Double Taxation Avoidance Agreements (DTAAs) with states like Singapore and Cyprus on similar treaty terms as the India-Mauritius DTAA signed in 1983. As ambitious as these agreements were, they proved to be detrimental in the long run for India. Multiple disputes relating to capital gains surfaced due to exploitation of legal loopholes in these DTAAs. Another example is of ‘transfer pricing’ mechanism (the rules and methods for pricing transactions between enterprises under common ownership or control), where there was little clarity with respect to international transactions between associated enterprises before April 2001. Even after the introduction of a dedicated transfer pricing segment in the Income Tax Act, the chaos could not be curtailed as the determination of arm’s length price (the price of such international transactions in open market conditions) would almost always be a contentious exercise. India ended up being party to more than half of the global transfer pricing disputes by 2014.
•After the debacle the government had to face when it lost to Vodafone on a capital gains dispute in the Supreme Court, it came up with an aggressive set of corrective measures not only to augment its revenue generation capabilities but also to counter any such abusive avoidance strategies by taxpayers henceforth. Retrospective amendments were made to the Income Tax Act to supersede the adverse judgment of the Supreme Court in 2012, which were not limited in effect to only Vodafone but several such disputes relating to taxation of capital gains and deemed income of numerous MNCs having their interest or investments in India, directly or indirectly. A step further was the implementation of General Anti-Avoidance Rules (GAAR) in India. The GAAR provisions have been made effective in India from April 1, 2017, and they can be considered as the latest chapter on the mismatch between taxpayer rights and obligations. Some major concerns with respect to taxpayer rights are left grossly unaddressed. A major example is the revocation of ‘presumption of innocence’ of the taxpayers. It is now a burden ab initio on these business entities to prove that their tax mitigation techniques do not qualify as ‘impermissible avoidance arrangements’. This goes against the fundamental principle of ‘innocent unless proven guilty’.
•As for the GST, while the government has apparently achieved a balanced model of fiscal federalism through a dual GST system, the path ahead is simple neither for the taxpayer nor the tax collector. For example, the GST Network will process billions of invoices every month, with its concomitant economic and fiscal impacts of technical glitches and other such situations. These snags will impact traders with genuine transactions, as the processing of their tax collections, input tax credit claims and tax refunds might get affected. A precedent is the GST in Malaysia which was implemented in 2015: cash crunch woes due to the delayed refunds were among the prominent grievances of the trading community.
Service-based strategies
•Clearly, the whole economic perception of India is at stake due to some fault lines in its fiscal administration. What is positive to note though is the constructive approach of the government, aiming to improve tax administration and as a result ensuring better tax compliance. The recommendations of the Tax Administration Reform Committee, submitted to the Finance Ministry in 2014, tried to reintroduce a fair balance between the rights and obligations of taxpayers. Several of these recommendations, such as improvement in taxpayers’ service, enhanced use of information and communication technology, exchange of information with other agencies, expansion of tax base, compliance management, etc. have either been accepted or implemented to ensure a better relation between the taxpayer and the tax collector.
•Tax administrators in India have for long implemented enforcement-based strategies and it is only in recent years that there has been a shift in stance to service-based strategies. They have further propagated the same intent by the introduction of a citizen’s charter in both direct and indirect tax statutes of India. Though the charter does not by itself create new legal rights, it surely helps in enforcing existing rights. India has also renegotiated the much-abused provisions in some of its DTAAs, namely with Switzerland, Mauritius, Cyprus and Singapore. Capital gains-related issues and exchange of information on taxation matters have been better addressed in these amended agreements.
•Taking everything into account, at least the awareness on taxpayers’ obligations and rights seems to be clearer than before. While attempts are there to increase the rights and to provide better service for genuine taxpayers, the taxpayers who deliberately abuse tax provisions should not expect much leniency. A quest for balance between the rights and obligations of a taxpayer is evidently on, though it still needs to be seen when the right equilibrium between the two is achieved.
📰 Beyond social media
More regulation is required to ensure the credibilityof the GI protection process
•On September 4, the Cell for IPR Promotion and Management (CIPAM) under the aegis of the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, launched a social media campaign to promote Geographical Indications (GIs) with the hashtag #LetsTalkIP.
•The press release says that GIs are of utmost importance to the country as they are an integral part of India’s rich culture and collective intellectual heritage and that their promotion is in line with the Government’s ‘Make in India’ campaign. It adds that it is an area of strength and optimism for India as the “GI tag” has accorded protection to several handmade and manufactured products, especially in the informal sector. CIPAM proposes to talk about interesting facts and stories on GIs using social media.
Can boost rural development
•With legislation enacted in 2003 — the Geographical Indications of Goods (Registration & Protection) Act, 1999 (the GI Act) — for their protection and 295 names registered with the Geographical Indications Registry, GIs today need no introduction.
•The proposed campaign is certainly heartening because goods branded as GIs can be made indigenously by local communities independently and in a self-sustaining manner. And India, with its rich cultural heritage and diversity, has GIs. It is an added advantage that if protected the correct way, GIs can promote rural development in a significant manner and could be fitted in as the most ideal intellectual property right to bolster a programme such as ‘Make in India’.
•But there is a catch. A GI is supposed to convey to a consumer the assurance of a certain quality, reputation or other characteristics of the goods on which it is applied, which are essentially attributable to its geographical origin. For example, when you see the name Scotch for whisky, a registered GI under the GI Act, on a bottle of whisky, you expect it to originate from Scotland and possess certain qualities that you would not associate with other whiskies. Does the GI Act ensure that all the GIs registered thereunder meet such expectations?
•The keywords here are “quality control”. This is the sine qua non of any GI protection. In fact, the European Community Regulation 1151/2012 for the protection of GIs is titled as a regulation “on quality schemes for agricultural products and foodstuffs”. The emphasis laid on quality must be underscored here. Recital 46 of this regulation states that the added value of GIs is based on consumer trust and that it is only credible if accompanied by effective verification and controls. Further, the quality schemes should be subject to a monitoring system of official controls to ensure verification of compliance with the law and rules relating thereto, and should include a system of checks at all stages of production, processing and distribution.
The Indian context
•In the Indian scenario, the question arises whether the GI Act provides for quality control measures and verification of compliance. The word ‘quality’ itself appears in the GI Act only in two instances, first in Section 2(1)(e) which defines a GI, and second, in connection with Section 11(2) that stipulates that the application should state as to how the GI serves to designate the goods in respect of, inter alia , quality. Unlike the European Regulation, the GI Act does not provide for monitoring mechanisms at multiple levels. In fact, there is no single reference to an inspection or monitoring structure in the Act. Though there is a mention of it in Rule 32(1)(6)(g) which lists what should be the content of the statement of case, it is quite perfunctory in that it states, “particulars of the inspection structure, if any, to regulate the use of the geographical indication”. In contrast, the European Regulation stipulates multiple monitoring measures, both within the GI-controlling body and outside it.
•Currently, there is a proliferation of GI registrations in India without any legal provisions stipulating post-registration quality control measures that are to be employed in the production of goods branded as GIs. This is detrimental not only to the protection process of GIs in India but also to the very existence of these GIs, because prolonged failure to meet consumer expectations would dilute the premium and credibility of GI-branded goods. Why would a customer pay a premium to a GI branded product if there is no difference in quality as compared to similarly placed goods?
•While the campaign is a wonderful idea to promote awareness, there is more work that is required at the legislative level to ensure credibility of the GI protection process in India. To make such efforts more meaningful and worth the passion put in by bodies such as CIPAM, we need to first fill the legislative gap in ensuring quality control through monitoring mechanisms.
