📰 Why don’t you trust PM, Law Minister asks judiciary
CJI responds to Ravi Shankar Prasad, says judges repose trust in the popularly elected leader
•In sharp criticism of the National Judicial Appointments Commission (NJAC) judgment which revived the Supreme Court collegium, Union Law Minister Ravi Shankar Prasad said on Sunday that at the core of the verdict is the judiciary’s distrust in the capability of the Law Minister and the Prime Minister to appoint a “fair judge.”
•“The people of India trust the Prime Minister with the obligation to secure the unity and integrity of India. As I once said in the Parliament, the Prime Minister possesses the nuclear button... that’s how much the people trust him. The Prime Minister through his Ministers can do so much work, yet the Prime Minister through the Law Minister cannot be trusted to have a fair judge appointed is a question ... Some day we trust the judiciary and the polity of the country will look into this,” Mr. Prasad said in his address at the valedictory function of the Law Day celebrations.
•Mr. Prasad said a “very loaded statement” has been made by the Supreme Court in the NJAC judgment if it thinks that the mere association of the Law Minister in the Commission would lead to appointments of a “doubtful” character.
Trust in PM
•Chief Justice of India Dipak Misra responded to Mr. Prasad by pointedly saying that the judiciary reposed as much trust in a popularly elected PM as the public does. “The Prime Minister is the repository of constitutional trust... Trust is reposed in the Prime Minister. That is the language of the Constituent Assembly and we are not going to add anything. We also repose the same trust in the Honourable Prime Minister,” Chief Justice Misra said.
•Under the now struck down Article 124A of the Constitution, the Law Minister was an ex officio member of the NJAC and the Prime Minister was part of the three-member panel which nominated the two eminent persons to the NJAC, which was meant to give the political class an equal say in judicial appointments to the Supreme Court and the High Courts.
•In the gathering at Vigyan Bhawan was former Chief Justice of India J.S. Khehar, who authored the majority judgment in the NJAC case in October 2015.
•Though repeatedly saying that the government respects the NJAC verdict, Mr. Prasad asked why doubts were raised in the judgment about the Prime Minister’s role in appointing a fair judge when the Constitution had already given him the “principal player” role in the appointments of the President, the Vice-President, the three Armed Forces chiefs, the Chief Election Commissioner and other constitutional bodies.
•“Many things we have accepted with mutual respect. We are absolutely conscious where we can intervene and where we cannot. One institution should not claim supremacy over the other,” Chief Justice Misra said as Prime Minister Narendra Modi watched on from the dais.
•But Mr. Prasad continued to be on the offensive, calling for “greater scrutiny, greater screening in judicial appointments and a greater pool from which selection can be made for judicial appointments.”
•Mr. Prasad cited the case of the jailed Calcutta HC judge C.S. Karnan as an example of how the Supreme Court collegium has failed. “The Supreme Court sent a sitting judge (Karnan) to jail for contempt. He was an appointee of the collegium. When I went through the records, I found to my dismay that the then collegium had found him well-versed in all branches of law... Obviously, he was not well-versed in contempt law,” Mr. Prasad said, tongue-in-cheek.
•The Karnan case should compel the collegium to do an “audit” of its performance.
•“Since 1993, the collegium has appointed judges...Is an audit required on ‘what have we lost? What we have gained? Why did we make such appointments?’” Mr. Prasad asked.
📰 A toolkit to think local
The findings of the India State-Level Disease Burden Initiative will aid in decentralised health planning
•Policymakers in India need reliable disease burden data at subnational levels. Planning based on local trends can improve the health of populations more effectively. Till now, a comprehensive assessment of the diseases causing the most premature deaths and ill health in each State, the risk factors responsible for this burden and their time trends have not been available. To address this crucial knowledge gap, a team of over 250 scientists and others from around 100 institutions who are part of the India State-Level Disease Burden Initiative has analysed and described these trends for every State from 1990 to 2016. Its report was released by the Vice President of India, and a technical paper published in the journal Lancet recently.
•The findings of the study are based on analysis of data from all available sources. This includes vital registration, the sample registration system, large-scale national household surveys, other population-level surveys and cohort studies, disease surveillance data, disease programme data, administrative records of health services, disease registries, among others. The estimates were produced as part of the Global Burden of Disease Study 2016, which uses standardised methods in a unified framework. The key metric used to assess burden is disability-adjusted life years (DALY), which is the sum of the number of years of life lost due to premature death and a weighted measure of the years lived with disability due to a disease or an injury. This allows comparisons of health loss between diseases, risk factors, States, sexes, age groups, and over time.
Inequalities among States
•The per person disease burden, measured as DALY rate, has dropped in India by 36% from 1990 to 2016, but there are major inequalities among States with the per person DALY rate varying almost twofold between them. The burden of most infectious and childhood diseases has fallen, but the extent of this varies substantially across India. Diarrhoeal diseases, lower respiratory infections, iron-deficiency anaemia, neonatal disorders, and tuberculosis still continue to be major public health problems in many poorer northern States.
•The contribution of most major non-communicable disease categories to the total disease burden has increased in all States since 1990. These include cardiovascular diseases, diabetes, chronic respiratory diseases, mental health and neurological disorders, musculoskeletal disorders, cancers, and chronic kidney disease. The contribution of injuries — the leading ones being road injuries, suicides, and falls — to the total disease burden has also increased in most States since 1990.
•The continuing high burden of infectious and childhood diseases in poorer States along with the rising tide of non-communicable diseases and injuries poses a particularly ominous challenge for these States. Substantial increases in health spending by the government and expansion of suitable preventive and curative health services are necessary to prevent this potentially explosive situation. It is important to note that the State-specific DALY rates for many leading individual diseases varies five- to tenfold between States. Major differences are also observed for individual diseases between neighbouring States that are at similar levels of development. This points to the need for State-specific health planning instead of generic planning.
The leading risk factors
•Disease burden can be reduced by addressing the risk factors for major diseases. The findings of the study reveal that three types of risks – undernutrition, air pollution, and a group of risks causing cardiovascular disease and diabetes – are akin to national emergencies as these have the potential to significantly blunt the rapid social and economic progress to which India aspires.
•First, it is remarkable that even though there is a declining trend in child and maternal undernutrition, this is still the single largest risk factor in India, responsible for 15% of the total disease burden in 2016. Undernutrition increases the risk of neonatal disorders, nutritional deficiencies, diarrhoeal diseases, and lower respiratory and other common infections. This burden is 12 times higher per person in India than in China. While this risk factor is relatively worse in the major northern poor States and Assam, it is amazingly the leading risk in over three-fourths of the States across India.
•Second, air pollution levels in India are among the highest in the world, making it the second leading risk factor in 2016, responsible for 10% of the total disease burden in the country. Air pollution increases the risk of cardiovascular diseases, chronic respiratory diseases, respiratory infections, and cancer. The burden of outdoor air pollution has increased in every part of India since 1990 because of pollutants from power production, industry, vehicles, construction, dust and waste burning. Air pollution is higher in the northern States, but is considerable even in the southern States. The unacceptably high disease burden due to undernutrition and air pollution in most of India must be brought to an end through systematic large-scale interventions with robust short- and long-term goals.
•Third, a group of risks that include unhealthy diet, high blood pressure, high blood sugar, high cholesterol and overweight, which increase the risk of ischaemic heart disease, stroke and diabetes, contributed a tenth of the total disease burden in India in 1990, but increased to a quarter of the total burden in 2016. While these risks are currently higher in the relatively more developed States, their phenomenal increase in every State over the past quarter of a century poses a grave threat. Unless serious attempts are made soon to address this surge through massive upscaling of interventions in the health, food, agriculture, housing and urban development sectors, these risks can result in major deterioration in the health status across all States, rich and poor. An important point to note related to undernutrition, air pollution, and the risks causing cardiovascular disease and diabetes is that the interventions needed to address them have to involve extensive collaborations between the health sector and other relevant sectors.
Inputs for health planning
•These findings reported by the India State-Level Disease Burden Initiative provide the most comprehensive mapping so far of the magnitude of diseases and risk factors in every State, their age and sex distributions, and trends over a quarter century — all in a single standardised framework. The chances of achieving the overall health targets for India and of reducing health inequalities among States would be higher now if the biggest health problems and risks identified for each State are tackled on priority basis rather than with a more generic approach that does not take into account these State-specific trends. This new knowledge base and the annual updates planned by the India State-Level Disease Burden Initiative will provide important inputs for the data-driven and decentralised health planning and monitoring recommended by the National Health Policy 2017 and the NITI Aayog Action Agenda 2017-2020.
📰 WHO releases guidelines on responding to child sex abuse
UN agency puts forward recommendations to be followed by frontline health care providers
•In a first, the World Health Organisation has formulated clinical guidelines on responding to children and adolescents who have been sexually abused. The guidelines put forward recommendations for the frontline health care providers — general practitioners, gynaecologists, paediatricians, nurses and others — who may directly receive a victim of sexual abuse or may identify sexual abuse during the course of diagnosis and treatment.
•While Indian doctors have welcomed the new guidelines, they feel that there is more than just guidelines required in the country.
•“We welcome the WHO guidelines. These should be followed with ground training of all first line respondents,” said Dr. Samir Dalwai, president of Indian Academy of Pediatrics (IAP), Mumbai chapter.
•However, Dr. Dalwai says guidelines and training is not the end of the issue. “The victims and their families face the worse in terms of investigation and its outcome. It is not adequate to pass on the burden on the healthcare sector. The government needs to adopt a policy that will streamline all the other aspects as well,” he said, adding that in 2010, the IAP released similar guidelines on ‘recommendations on recognition and response to child abuse and neglect in the Indian setting.
Disclosure by child
•Like the IAP guidelines, the new WHO guidelines too focus on the recommendations and good practice suggestions in terms of disclosure made by the child, obtaining medical history, conducting physical examinations and forensic investigations, documenting findings, offering preventive treatment for HIV post exposure, pregnancy prevention, and other sexually transmitted diseases, psychological and mental health interventions among others.
•The guidelines highlight that child sexual abuse has a short-term as well as long-term mental health impact like lifetime diagnosis of post-traumatic stress, anxiety, depression, externalising symptoms, eating disorders, problems with relationships, sleep disorders and suicidal and self-harm ideation and behaviours. Health consequences of the abuse include the risk of pregnancy, gynaecological disorders such as chronic non-cyclical pelvic pain, menstrual irregularities, painful periods, genital infections and sexually transmitted infections, including HIV.
Re-traumatisation
•Forensic expert Dr. Shailesh Mohite, who heads the Multi-disciplinary Child Protection Centre (MCPC) in Nair Hospital, Mumbai Central, says the presence of guidelines and following them is extremely essential.
•“One of the most commonly seen mistakes in handling child sexual abuse cases is re-traumatising the child as well as his parents with questions. Such mistakes can be avoided if those dealing with such cases are well trained,” Dr. Mohite said, adding that the staff at his centre undergoes regular trainings.
📰 Coral transplant raises Barrier Reef survival hopes
Researchers converted species’ eggs into larvae for method
•Coral bred in one part of the Great Barrier Reef was successfully transplanted into another area, Australian scientists said on Sunday, in a project they hope could restore damaged ecosystems around the world.
•In a trial at the reef’s Heron Island off Australia’s east coast, the researchers collected large amount of coral spawn and eggs late last year, grew them into larvae and then transplanted them into areas of damaged reef.
•When they returned eight months later, they found juvenile coral that had survived and grown, aided by underwater mesh tanks.
•“The success of this new research not only applies to the Great Barrier Reef but has potential global significance,” lead researcher Peter Harrison of Southern Cross University said.
Contrasting approach
•“It shows we can start to restore and repair damaged coral populations where the natural supply of coral larvae has been compromised.”
•Mr. Harrison said his larval-restoration approach contrasts with the current “coral gardening” method of breaking up healthy coral and sticking healthy branches on reefs in the hope they will regrow, or growing coral in nurseries before transplantation. He was optimistic that his approach, earlier successfully trialled in the Philippines in an area of reef highly degraded by blast fishing, could help reefs recover on a larger scale.
•“The results are very promising and our work shows that adding higher densities of coral larvae leads to higher numbers of successful coral recruits,” he added.
•The Great Barrier Reef is reeling from an unprecedented second-straight year of coral bleaching because of warming sea temperatures linked to climate change.
📰 Surge in oxygen levels led to explosion of life: study
This biodiversification took place between 445 and 485 million years ago
•A boost in levels of oxygen may have caused a three-fold increase in biodiversity during between 445 and 485 million years ago, a study has found.
•The explosion of diversity, recognised as the Great Ordovician Biodiversification Event, brought about the rise of various marine life, tremendous change across species families and types, as well as changes to the Earth, starting at the bottom of the ocean floors.
•“This oxygenation is supported by two approaches that are mostly independent from each other, using different sets of geochemical records and predicting the same amount of oxygenation occurred at roughly the same time as diversification,” said Cole Edwards, assistant professor at Washington University in the U.S.
•“We made another link between biodiversification and oxygen levels, but this time during the Ordovician where near-modern levels of oxygen were reached about 455 million years ago,” said Mr. Edwards.
•“It should be stressed that this was probably not the only reason why diversification occurred then. It is likely that other changes — such as ocean cooling, increased nutrient supply to the oceans and predation pressures - worked together to allow animal life to diversify for millions of years,” he said.
Chemical signatures
•Using geochemical proxies, high-resolution data and chemical signatures preserved in carbonate rocks formed from seawater, researchers were able to identify an oxygen increase during the Middle and Late Ordovician periods.
•They found a nearly 80% increase in oxygen levels where oxygen constituted about 14% of the atmosphere during the Darriwilian Stage (Middle Ordovician 460-465 million years ago) and increased to as high as 24% of the atmosphere by the mid-Katian (Late Ordovician 450-455 million years ago).
‘Major pulses’
•“This study suggests that atmospheric oxygen levels did not reach and maintain modern levels for millions of years after the Cambrian explosion, which is traditionally viewed as the time when the ocean-atmosphere was oxygenated,” Mr. Edwards said.
•“In this research, we show that the oxygenation of the atmosphere and shallow ocean took millions of years, and only when shallow seas became progressively oxygenated were the major pulses of diversification able to take place,” Mr. Edwards said.
📰 ‘Drought, heatwaves increasing in frequency’
Increase is most significant in parts of Maharashtra and Southern Gujarat, Karnataka and Andhra Pradesh
•The cocktail of drought and heatwaves is engaging several researchers in the country.
•Analysing rainfall and temperature data of 50 years, researchers from Indian Institute of Science (IISc) have found that the frequency of heatwaves accompanied by drought has increased not only in magnitude but in area too over the past three decades – particularly in Gujarat and Central India.
•While heatwaves (or, a prolonged period when temperatures approach record extremes) and droughts are destructive even when occurring in separate events, their concurrence is far more serious.
•“A single extreme event may not be critical, but two extremes occurring at once is much more significant in the distress it causes,” said Pradeep Mujumdar, Professor at the Department of Civil Engineering, IISc who along with his doctoral student Shailza Sharma published the study in the journal Scientific Reports — an online open access journal from Nature — on November 14.
Heating up fast
•Researchers calculated the Heatwave Magnitude Index daily (HWMId) — which combines duration and magnitude of heatwaves — and the Standardized Precipitation Index (SPI), which defines meteorological drought from 1951 to 1981.
•Using that as the base, they compared it with the HWMId and SPI between 1981 and 2010.
•In all combinations of drought (moderate or severe) and heatwaves (3.5 and 10-day events) that were analysed, the percentage increase in frequency was most significant in parts of Maharashtra and Southern Gujarat, Karnataka and Andhra Pradesh.
•Even the extreme of extreme scenarios – of 10-day long heatwave where temperatures are above the 95th percentile of range recorded – has been found on the rise in Gujarat and mid-South India. The longest was in 1983 when a heatwave lasted 63 days; while, in 1998, heatwave conditions affected nearly 49% of the country’s area. In both, central India was largely affected.
•While the rest of the country, too, showed increases in frequency, a surprising decrease was seen in Rajasthan and West Bengal.
•Researchers believe this could be due to the intricate relationship of land surface processes, soil moisture, evapo-transpiration and local climate. (Evapo-transpiration is the sum of evaporation and plant transpiration from the Earth’s land and ocean surface to the atmosphere).
•A spatial analysis reveals the area affected by the twin calamities is starkly increasing. The area affected by the ‘extreme of extreme’ incident has gone from almost nothing in 1951, to nearly 4% by 2010. Nearly 18% of the country’s area on average has been facing at least three days of temperatures above 85th percentile.
•Ms. Sharma said the next step would be to factor in soil moisture along with the data to develop models that could predict where the extreme events could occur. “With certain accuracy, we can predict these incidents. This could contribute to policy making and ensure preparedness,” she said.
•Both phenomena have a serious bearing on water resources, affecting agriculture and human settlements.
📰 IAF banks on Tejas, new fighter to bolster fleet
It has a sanctioned strength of 42 squadrons and a projected requirement of 45 to face the threat of a two-front war
•As the deal with the French government for 36 Rafale jets lands in the middle of political maelstrom, the Indian Air Force (IAF) is looking at Tejas, the indigenously developed light combat aircraft, and a single-engine fighter to be procured soon to arrest the dramatic fall in its squadron strength.
•“The rate of decommissioning of aircraft is way higher than the planned and even proposed inductions. Tejas is a good aircraft, and 123 of them will be inducted in the force as planned. But the numbers are not coming fast enough, and the requirement is much beyond that in other categories,” a Defence Ministry source said.
•The IAF has a sanctioned strength of 42 squadrons and a projected requirement of 45 to face the anticipated threat of a two-front war. Now, the force has 33 squadrons and by December-end, it will be down to 31.
•With the planned induction of 36 Rafales between 2019 and 2022, the remaining Sukhoi-30MKIs and some Tejas jets, the strength will be 30 till 2027. In the subsequent five-year term, it will fall to 27. If there are no new inductions, it will slide further to 19 by 2042.
•“The IAF is upgrading most of the aircraft in its inventory. But from 2025, most of those aircraft such as the Jaguars and the MiG-29s will start going out,” the source said.
•In a month, the IAF is expected to issue the Request for Information (RFI) for over a 100 single-engine fighter aircraft under the Strategic Partnership model. Lockheed F-16 and Saab Gripen are in the race for the order and have already tied up with the Tatas and the Adani group, respectively, to build the jets locally with technology transfer.
•The IAF has placed orders for 40 jets in two batches of which the first 20 are in the initial operational configuration and the remaining 20 in the final operational configuration.
•The order for 83 Tejas Mk-1A jets is expected soon.
📰 Smart-balancing China
India must have a clear vision for a regional order, and nudge China towards it
•How do you deal with an inscrutable, revisionist and rising superpower next door with whom you have had a historical rivalry and whose brazen inroads into your traditional sphere of influence leave you embittered, but whose trading relationship is important to you? There are no easy answers even though we often come across many ‘simple and straightforward’ solutions: ranging from military options to cutting off trade ties. The recent revival of the ‘Quadrilateral’ (or Quad) and the consequent talk of an ‘Asian NATO’ have brought the India-China rivalry back to the limelight. Let’s be clear: how to ‘balance’ China will occupy a great deal of India’s strategic attention in the years ahead as China charts its course towards superpower status. Any such strategising by India needs to be prudently thought out.
In perspective
•For President Xi Jinping’s new China, the days of “hiding capabilities and biding time” of the Deng era are finally over — it’s time to become “a global leader in terms of composite national strength and international influence”. If it utilises the power vacuum left by Donald Trump’s ‘reluctant superpower’, China’s superpower ambitions are bound to have a system-shaping impact on the Asian region. There will be China-led alliances, Chinese client states and the establishment of Chinese spheres of influence. The alleged China connection to the recent ‘regime change’ in Zimbabwe is perhaps a harbinger of things to come.
•Moreover, it would ensure that its access to overseas resources/markets and the oceanic trade routes are unhindered. In doing so, it is increasingly seeking to build military facilities overseas and offset the U.S.-led coalition in the region. In this big picture of Chinese grand strategy, New Delhi, seen increasingly aligned with the U.S., is a spoiler. Denying India entry into the Nuclear Suppliers Group, repeatedly blocking UN sanctions against Pakistan-based terrorists, and ignoring India’s sensitivity over the China-Pakistan Economic Corridor are outcomes of this vision.
•There are several sources of increasing Sinophobia in India. For one, Chinese revisionist claims in the land and oceanic space have been a major source of concern. Beijing’s deployment of naval assets to enforce its claims across the South China Sea, construction of artificial islands in the region, and the rejection of a UN tribunal judgment on a complaint filed by the Philippines, last year have only strengthened this feeling. China has also been increasing its naval presence, including dispatching its nuclear submarines on patrol, in the Indian Ocean. Would this eventually lead to a more permanent Chinese naval presence in the region? It is in this broader context that China’s revisionist statements on Sikkim and Arunachal Pradesh are worryingly viewed in New Delhi.
•Second, along with military assertion, Beijing has also been stepping up its political and economic footprint in the region, dismissing New Delhi’s protests. Third, and perhaps most importantly, what worries New Delhi is the ever-strengthening China-Pakistan military alliance and its implications for the country: the insecurity stemming from a so-called ‘nutcracker’ situation.
Dilemmas of checkmating
•The current Indian strategies to ‘checkmate’ China seem more zero-sum and less efficient. To be sure, New Delhi has chosen to adopt an unequivocal U.S.-centric strategy to deal with Beijing, most recently the Quad. There are several problems with this approach: the U.S. is a quickly-receding extra-regional power whose long-term commitment to the region is increasingly indeterminate and unsure; U.S.-China relations are far more complex than we generally assume; and Australia is caught between the U.S. and China. While India may have shed its traditional reticence about a strategic partnership with the U.S., it would still not be what Japan is to the U.S., nor should it.
•The second broad policy direction seems to be to compete with China for regional influence in South Asia. Let’s be realistic: trying to match the powerful yuan, backed by vigorous political support from Beijing, with our humble rupee is a losing battle. Military preparedness to offset any potential Chinese aggression is something that India can and should invest in. But again, Chinese military aggression has really not been India’s central concern, but a China-dominated region in which India is hemmed in and forced to play second fiddle. Military preparedness, in which we will inevitably lag behind China, alone cannot address such a concern.
•Some have suggested that India should use its $70 billion-strong trading relationship with China as a bargaining chip to check Chinese behaviour. However, doing so would hurt both sides. While it is true that India-China bilateral trade is heavily skewed in favour of China, let’s not forget that China’s exports to India comprise under 3% of its total exports (and India’s exports to China is 3.6% of its total exports). Boycotting Chinese goods would also mean Indian consumers paying more to get them from elsewhere. Clearly then, trade as a bargaining chip vis-à-vis China is just a popular urban myth.
•So what then are our options? Adopting a straightforward balancing strategy (which is what states normally do when faced with a stronger neighbour) may become costly, counter-productive, and not deliver the desired results. Bandwagoning (jumping on board the wave of the future, in this case, China), on the other hand, may be both undesirable and insufficient for obvious reasons. Neither of these two mutually exclusive options are ideal for serving India’s current and future interests vis-à-vis China. Hence New Delhi would be better served by adopting a more nuanced balancing strategy, a strategy of ‘smart-balancing’, towards Beijing, one that involves deep engagements and carefully calibrated balancing, at the same time.
A possible road map
•Let’s examine some elements of such a strategy. First of all, it would involve co-binding China in a bilateral/regional security complex: that is, view China as part of the solution to the region’s challenges (including terrorism, climate change, piracy, infrastructural/developmental needs) than as part of the problem, or the problem itself. Some efforts in this direction are already under way such as India-China joint anti-piracy missions in the Gulf of Aden. The two countries could consider initiating regular, structured consultations in this regard. In other words, enhancing security cooperation with China is a sure way of alleviating the persistent security dilemma between them. A mutual ‘complex interdependence’ in economic, security and other domains should be strengthened and front-loaded over zero-sum competition.
•This security cooperation should most certainly be enhanced in the Indo-Pacific where India should, even while being part of the Quad, talk of cooperating with China. Language is important: talk about security community and joint efforts than containing China.
•Second, India should cooperate with and trust China while at the same time keeping its (gun) power dry, for after all, in the anarchic international system that we inhabit, the role of military strength in guaranteeing national security cannot be underestimated.
•Third, New Delhi’s response to Beijing’s refusal to act against Pakistan-based terrorists needn’t be strait-laced. However, while Beijing is unlikely to make Islamabad politically uncomfortable by public terror-shaming, the more China gets involved in Pakistan, the less it can afford to ignore terrorism within Pakistan. Around 30,000 Chinese nationals currently reside in Pakistan (and over 71,000 Chinese nationals visited Pakistan last year) and these numbers will only increase over time which will perforce motivate Beijing to ‘work with’ Islamabad on the terror question. That is precisely where New Delhi should use its diplomatic skills to make an impact.
•India urgently needs to develop a clear vision for a stable regional security order and work out what role India would like China to play in that vision and how it can nudge China towards that. Keeping China out of the regional security order is not realistic, letting China dominate it is not desirable: smart-balancing China within such an order is indeed the optimal strategy.
📰 Messy fix: the amended insolvency code
The amended insolvency code risks hurting the key aims of the original law
•Less than 12 months after the Insolvency and Bankruptcy Code came into force with the goal of easing the resolution of corporate insolvency, the Central government has passed an ordinance that significantly amends the original law. The aim of the changes is clearly stated in the preamble: “...to strengthen further the insolvency resolution process, it has been considered necessary to provide for prohibition of certain persons from submitting a resolution plan, who, on account of their antecedents, may adversely impact the credibility of the processes.” The ordinance then specifies the categories of persons who are deemed ineligible to participate in resolving a corporate entity’s debt once it has been put under the process of insolvency resolution by creditors. Here lies the nub. While there is no quibble about the need to deny unscrupulous and wilful defaulters who have put banks and other creditors to substantial financial hardship the opportunity to regain control of corporate assets that have been put under resolution, the category of people barred is too broad and risks the very objectives of the original code. It is germane to remember here that the IBC is not intended to serve as a mere instrument of liquidation. Instead, it is to provide an enabling legal framework for the “reorganisation and insolvency resolution of corporate persons... in a time bound manner for maximisation of value of assets of such persons” and to promote entrepreneurship, among other goals.
•By including promoters and those in management whose loan accounts are classified as non-performing assets for one year or more, as well as any person disqualified to act as a director under the Companies Act, the amendment risks becoming an instrument of blunt force that hurts more than it helps. As policymakers and central bankers have often pointed out, not all bad loans are a result of mala fide intent on the borrower’s part. Specifically, in cases where companies have ended up struggling to service debt as a result of unpredictable external factors that adversely impacted their operations and financials, barring the promoters of such firms from a chance to restructure and turnaround the business, merely because the loans have turned sour, is unfair to both the entrepreneur and the enterprise itself. For instance, steel companies were among the worst hit in the wake of the global downturn in commodity prices and depressed demand. It has been reported that the promoters of some of these debt-laden steelmakers were considering participating in bids to restructure the debt and businesses and hoping to run them again. By widening the scope and definition of those it considers ineligible to participate in the resolution process and, worse, making the amendments retrospective to cover even those cases already referred to the National Company Law Tribunal, the Centre may have ended up, unintentionally, throwing the baby out with the bathwater.
