📰 U.S. President Donald Trump recognises Jerusalem as Israel’s capital
Orders plan for U.S. embassy to move to Jerusalem
•U.S. President Donald Trump reversed decades of policy on Wednesday and recognised Jerusalem as the capital of Israel, despite warnings from around the world that the gesture will further drive a wedge between Israel and the Palestinians.
•“I have determined that it is time to officially recognise Jerusalem as the capital of Israel,” Mr. Trump said. “While previous Presidents have made this a major campaign promise, they failed to deliver. Today, I am delivering.”
•In a speech at the White House, Mr. Trump said his administration would also begin a process of moving the U.S. embassy in Tel Aviv to Jerusalem, which is expected to take years.
•Trump aides contend the move reflects the reality of Jerusalem as the centre of Jewish faith and the fact that the city is the seat of the Israeli government.
‘Long overdue’
•Mr. Trump also called his decision “a long overdue” step to advance the peace process. He said his decision marked the start of a “new approach” to solving the thorny conflict between Israel and the Palestinians.
•A Palestinian envoy said the decision was a declaration of war in the region.
•Senior administration officials said on Tuesday evening that the formal recognition of Jerusalem as Israel’s capital did not prejudice a possible settlement between the two parties on its status later. The construction of a new embassy in Jerusalem would be a matter of years, not months, an official said. They said the location of the U.S. embassy had no bearing on the peace process.
•Mr. Trump’s predecessors — from Bill Clinton to George Bush — made similar promises on the campaign trail, but quickly reneged upon taking office.
📰 Back India’s entry into NSG, China told
Panel to decide the country’s membership to the Wassenaar Arrangement today
•Russia is speaking to China at “all levels” for India’s membership at the Nuclear Suppliers Group, and hopes that India will win membership to the Wassenaar Arrangement, another multilateral technology regime India has applied to, Russia’s deputy Foreign Minister Sergey Ryabkov said here on Wednesday.
•Mr. Ryabkov disclosed that the political committee of the 41-member Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, that is meeting in Vienna on Wednesday and Thursday, is likely to decide on India’s membership request, and said he hoped for some “positive action, fingers crossed.”
•“This is an example and reflection of Russia’s unwavering support to India’s membership of international nuclear control regimes,” he added, speaking to journalists after meeting Foreign Secretary S. Jaishankar, and Secretary (Economic Relations) Vijay Gokhale, who is now the Sherpa for the BRICS grouping as well.
Unwavering support
•Taking a dig at the United States for not pushing China to remove its objections to India’s membership at the NSG as Russia had, Mr. Ryabkov said, “Unlike some other countries that only speak of support, Russia takes actual steps to help and actions speak more than words…We make this point in the contacts with the Chinese at different levels, and India should be confident of Russia’s assistance.”
•Mr. Ryabkov was in Delhi for bilateral negotiations ahead of a spate of visits from Moscow over the next few weeks. On Monday, Russian Foreign Minister Sergey Lavrov will meet with External Affairs Minister Sushma Swaraj before a Russia-India-China (RICS) meeting along with Chinese Foreign Minister Wang Yi, and Russian Deputy PM Dmitry Rogozin later this month.
•Russia’s role is considered more important this year as it retains close ties with both India and China, two countries who have tense ties with each other. This will be the first visit to India by the Chinese Foreign Minister since the Doklam standoff as well. The meeting is also being seen as an attempt by India to balance a perceived pro-U.S. tilt, coming after the first meeting of the U.S.-Japan-Australia-India “Quad” last month, and the upcoming India-Japan-Australia trilateral, also due to take place next week.
BRI initiative
•Another key issue likely to be discussed during the RIC will be China’s $1 trillion Belt and Road initiative (BRI) that India opposes, but Russia is a major partner in. “We are happy that we are discussing connectivity issues in an open-minded and constructive manner with both India and China. I hope our work at BRICS would help assuage such concerns,” he said.
📰 ‘India must tap changing trends in manufacturing’
Bring out policies to help Indian firms use their success in IT, says World Bank official
•India needs to consider bringing out appropriate policies soon to help its companies use their success in Information Technology and Information Technology-enabled Services to take advantage of the growing trend of “servicification” of manufacturing, according to a World Bank official.
•Services are now often embodied in goods as part of the manufacturing process, as well as more services such as after-sales support and add-on services are being embedded in goods during post-production, the Bank had said, referring to the process called the “servicification” of manufacturing, in a September 2017 report titled ‘Trouble in the Making? The Future of Manufacturing-Led Development’.
•Speaking to The Hindu, Gaurav Nayyar, Economist in the World Bank Group’s Trade and Competitiveness Global Practice and the report’s co-author, said India may not have as many opportunities in the outsourcing industry as it had in the past couple of decades due to increasing competition from countries such as Philippines and owing to the impact of automation on the segment.
•Therefore, India would need to swiftly announce suitable policies to help its companies to take advantage of the “opportunities in servicification of manufacturing by leveraging their success in software,” he added.
•According to the Bank’s report, “Evidence from… India …shows that this servicification of manufacturing has improved manufacturing productivity.” The report also said the servicification of manufacturing is further enabled by using data that will play an increasingly important role in “smart” manufacturing. It added that interconnected manufacturing --or the Internet of Things (IoT), where networks, machines, and computers are connected to the Internet-- requires the sending and receiving of data across the entire production chain.
•Mr. Nayyar said in another 12-15 years, when Industry 4.0 (the trend of data exchange and automation in manufacturing-related technologies) is much more firmly entrenched in Global Value Chains, companies across the world would look for countries with more skilled workers and professionals as well as uninterrupted and quality power supply for technologies such as 3D printing, in addition to a strong Intellectual Property Rights (IPR) regime. Therefore, India will need to undertake reforms in these areas, in addition to more initiatives on ease of doing business and infrastructure development, if it wants to attract more investment, he added.
•According to the Indian government, the new ‘future-ready’ Industrial Policy, which is to be announced soon, will incorporate measures to facilitate the use of modern smart technologies such as IoT, artificial intelligence and robotics for advanced manufacturing. “The Industry 4.0 bouquet of technologies has blurred the line between manufacturing and services and is predicted to impact all industries,” the discussion paper on the Policy had said.
•Mr. Nayyar backed India’s push in the bilateral, regional and multilateral trade negotiations for relaxing norms on movement of skilled workers and professionals across borders for short-term work. “In the longer term horizon, skills will become more important than anything else… Most firms struggle to get people with good management capabilities as well as knowledge on using modern production processes.. Easier movement of professionals across borders is the key,” he said.
📰 PSU banks: reforms with recap
Lenders that have their managed balance sheets ‘well’ to get priority: RBI’s Patel
•The proposed recapitalisation of public sector banks will include a package of reforms, Reserve Bank of India (RBI) Governor Urjit Patel said on Wednesday, adding that the finance ministry would release the details in the coming days.
•“This will be a reform and recap package... so as to ensure this money is used to strengthen public sector bank balance sheets and that we don’t sow the seeds of the next boom and bust cycle of lending,” Dr. Patel said after announcing the monetary policy review. “Governance reforms in all public sector banks will also feature as a big part of the overall plan.”
•The Centre had announced a ₹2.11 lakh crore recapitalisation plan for PSU banks, of which ₹1.35 lakh crore would be raised through recapitalisation bonds. Reeling under the pressure of poor asset quality over the last three years, these banks have seen their capital erode. Apart from making provisions for bad loans, the lenders would need capital to meet the Basel-III norms and to support their business growth.
Priority for infusion
•Dr. Patel said banks that had managed their balance sheets ‘well’ would be given priority for capital infusion while others would have to show the resolve to reform.
•“The plan will be differentiated across banks,” he said. “Recap bonds will be front loaded for banks that have managed their balance sheet strengths more prudently and can use injected capital to lend besides providing for legacy asset losses.”
•The RBI had been working closely with the department of financial services to finalise the plan for each bank: the aim was to determine the extent of funding to be raised by the bank and the amount of recapitalisation bonds to be placed on its balance sheet as the government’s equity contribution.
•“Other banks will receive government’s contribution based on their resolve and progress toward reform in a significant and time bound manner such as becoming slim and trim through adoption of simpler, better focused business strategies and also possibly non-core asset sales,” he added.
📰 Solar Alliance comes into existence
•India’s global initiative, the International Solar Alliance (ISA) that aims at increasing solar energy deployment in member countries, came into legal, independent existence Wednesday. It is the first treaty-based international intergovernmental organisation to be based out of India.
•So far, 19 countries are part of the compact — Bangladesh, Comoros, Fiji, France, Ghana, Guinea, India, Mali, Mauritius, Nauru, Niger, Seychelles, Somalia, South Sudan, Tuvalu, Australia, Cuba, Malawi and Peru. The ISA, also sees itself as on a mission to mobilise more than $1000 billion in investments needed by 2030 for “massive deployment” of solar energy, pave the way for future technologies adapted to the needs of moving to a fossil-free future and keep global temperatures from rising above 2C by the end of the century. India has committed itself to having 175,000 MW of renewed energy in the grid by 2022.
•As part of the agreement, India will contribute $27 million (₹175.5 crore approx) to the ISA for creating corpus, building infrastructure and recurring expenditure over five years from 2016-17 to 2020-21. In addition, public sector undertakings of the Government of India, Solar Energy Corporation of India (SECI) and Indian Renewable Energy Development Agency (IREDA), have made a contribution of $1 million (₹6.5 crore) each for creating the ISA corpus fund.
•The ISA is an Indian initiative, jointly launched by PM Narendra Modi and the president of France on 30th November 2015 in Paris, on the sidelines of COP-21, the UN climate conference.
📰 Let us be realistic about the UNSC
If a permanent Security Council seat is unavailable, India must not spurn other proposals on the table
•Our recent victory in the hotly contested election to the International Court of Justice seems to have lifted our spirits as a nation. We are justifiably proud of our success and of the skill and determination with which our diplomacy was deployed. It would be prudent, however, not to interpret this in a way as to raise hopes of a permanent seat in the Security Council.
The UNSC election
•The two most prestigious organs of the United Nations are the Security Council and the International Court of Justice. While the Security Council has 15 member states, the ICJ has 15 judges. Election to the UNSC is conducted only in the General Assembly and requires two-thirds majority to get elected. Election to the ICJ is held concurrently in the UNGA and UNSC and requires absolute majority of the total membership in each organ. Veto does not apply for election to the ICJ. India has lost elections to both these organs in the past.
•Of the two, the UNSC is by far more important from the national interest point of view. It deals with questions of peace and security as well as terrorism and has developed a tendency to widen its ambit into other fields, including human rights and eventually environment. In addition to the Kashmir issue, which Pakistan forever tries to raise, there are other matters in which India would be interested such as the list of terrorists — Hafeez Saeed for example. Since it is in permanent session, we have to try to be its member as often as possible.
•The ICJ is required to represent the principal civilisations and legal systems of the world. The judges sitting on ICJ are expected to act impartially, not as representatives of the countries of their origin. That is why they are nominated, not by their governments but by their national groups in the Permanent Court of Arbitration based in The Hague. To have an Indian judge at the ICJ, when we have an active case on its agenda regarding our national in illegal custody of Pakistan might be of some advantage, though it would be wrong to assume that the final judgment will go in our favour simply because an Indian is on the bench. He will surely act in an objective manner. We will win because we have an excellent legal case and are ably represented by an eminent lawyer.
•There are other bodies in the UN that are not as well known but are important enough to be represented on like the ACABQ (Advisory Committee on Administrative and Budgetary Questions) and the Committee on Contributions. The former consists of 16 members elected by the UNGA on the recommendation of the Fifth Committee of the UNGA dealing with the budget of the UN. Usually, the members are officers of the permanent missions serving on the Fifth Committee. Most often, they are of the rank of first secretary or counsellor; Ambassadors rarely offer their candidatures.
•The Committee on Contributions recommends the scale of assessments to the budget and the share of each member. This is a very important function, since the share decided by the UNGA applies to all the specialised agencies, etc. Even a 0.1 % change can make a difference of hundreds of thousands of dollars. We have had distinguished persons serving on both these committees, such as G. Parthasarathy, S.K Singh, as well as our current permanent representative, ambassador Syed Akbaruddin. Some stalwarts have also lost these elections. There is also the Human Rights Council; we have had almost continuous representation on it. The U.S. lost the election to it a few years ago; there is widespread resentment against the P-5’s presumption to a permanent seat on all bodies.
The veto question
•Primarily at our initiative, the question of Security Council reform, euphemism for expansion, has been under consideration since 1970s. There is near unanimous support for increasing the number of non-permanent seats. The controversial question is about the increase in the category of permanent seats. The rationale for expansion has been accepted in-principle by nearly all, but the difficulty arises when the actual numbers and their rights are discussed.
•India, along with Brazil, Germany and Japan, has proposed an increase of six additional permanent seats, the other two being for Africa. The African group is demanding two permanent seats, recognised as reasonable by every member, but there are at least three and perhaps more claimants for the two seats. Then there is the question of the rights of the additional members. The G-4’s initial position was for the same rights as the present permanent members, essentially the veto right. Over the years, they have become more realistic and would be willing to forego the veto right. The firm position of the Africans is that the new members must have the same rights as the existing ones. This is a non-starter.
The larger picture
•The P-5 will never agree to give up their veto right, nor will they agree to accord this right to any other country. (France supports veto for additional permanent members.) Also, the general membership of the UN wants to eliminate the existing veto; they will never agree to new veto-wielding powers. Variants of the veto provision have been suggested, such as the requirement of double veto, i.e. at least two permanent members must exercise veto for it to be valid. The P-5 are not willing to dilute their self-acquired right.
•Many member-states have been pledging support for our aspiration for permanent membership. This is welcome and should be appreciated; it would come in useful if the question ever comes up for a vote in the UNGA. Several P-5 countries have also announced support. The principal P-5 member opposing us is China. We should not be misled by their ambiguous statements on the subject. It has to be underscored that there is no way that India alone, by itself, can be elected as permanent member. It will have to be a package deal in which the demands of all the geographical groups, including the Latin America and Caribbean group which, like Africa, does not have a single permanent member, will have to be accommodated.
•Even if the Americans are sincere in their support for us, they will simply not lobby for India alone; it will be unthinkable for them to try to get India in without at the same time getting Japan also in. It is equally unthinkable, for a long time to come, for China to support Japan’s candidature. The P-5 will play the game among themselves but will stand by one another, as was evident recently at the time of election to the ICJ.
•So, we should be realistic. If a permanent seat is not available, there are other proposals on the table. One proposal is for the creation of ‘semi-permanent’ seats, according to which members would be elected for six-eight years and would be eligible for immediate reelection. Given India’s growing prestige and respect, it should not be difficult for us to successfully bid for one of these seats; it might be a better alternative than to unrealistically hope for a permanent seat.
📰 Island hopping — on Maldives-China FTA
The Maldives’ FTA with China signals a drift in Delhi-Male ties
•The announcement of a free trade agreement between the Maldives and China is another sign of Beijing’s success in its outreach in South Asia. After its push for maritime linkages across the Indian Ocean, including naval exercises and port projects, and for the enhancement of regional connectivity through the Belt and Road Initiative, China seems to be ready to ramp up business ties across South Asia. China already has an FTA with Pakistan, and is exploring or negotiating FTAs with Bangladesh, Sri Lanka and Nepal. The negotiations with the Maldives took about three years and were completed in September this year; it was ratified overnight by Parliament in Male. The agreement is expected to be signed this week, during President Abdulla Yameen’s first state visit to China. While New Delhi has made no public statement, it has reportedly made its displeasure known, particularly on the speed and stealth with which the negotiations were completed. However, apart from the actual FTA, the rapid growth in China-Maldives ties has not been hidden from anyone. This is driven by massive infrastructure projects, including the development of Hulhule island and the “Friendship” bridge connecting it to Male. Apart from investments of $1 billion, Chinese companies are exploring tourism prospects in the Maldives, leases to resort islands, and reclamation projects.
•While this can be seen as a natural outcome of the Maldives’ development plans, there are reasons for India to worry. The Yameen government also said this week that it is not satisfied with the working of the FTA with India. That statement, made by the Fisheries Minister at a press conference in Colombo, is likely to be discussed in detail between New Delhi and Male. Second, the manner in which the FTA was rushed through Parliament in a matter of minutes at midnight, with opposition members complaining they had not received enough notice, suggests a haste that would naturally worry India. The move also shows that the Yameen government is not inclined to pay much heed to international concerns over internal unrest. One reason for Mr. Yameen keeping India out of the loop on the FTA talks may be New Delhi’s new policy of engaging with the Maldivian opposition, especially former President Mohammad Nasheed. The biggest worry for India is that the FTA will draw the Maldives more closely into China’s security net. Although Mr. Yameen has categorically stated that the Maldives will remain a “demilitarised zone”, there are concerns that the PLA-Navy might be looking for a military base in the islands linked to projects in Djibouti, Gwadar and Hambantota. The docking of three Chinese naval warships in Male harbour in August, the first such “goodwill visit”, was significant in this respect. China’s growing presence in the Indian Ocean presents a challenge to India as it looks to define its place in the U.S.-led “Indo-Pacific” realignment.
📰 Recognise the technology constraints
India’s reliance on imported digital technologies cannot be levelled overnight to make way for a uniform data law
•Can law fix what technology has cast in stone? This is the question that the committee of experts led by Justice B.N. Srikrishna must wrestle with as it sets out to craft a data protection law for India. The committee’s recent White Paper has commendably surveyed the landscape of rights and principles that could populate this new legislation.
Perils of one law
•What is missing from the paper, however, is an understanding of the many technologies that come together currently to protect data in India. A digital economy — such as India’s — that relies overwhelmingly on imported technologies cannot be levelled overnight to make way for a uniform data protection law. For instance, more than 80% of Indian smartphone users today rely on Google’s Android operating system. But the majority of those mobile devices are sold by Samsung, Xiaomi or Oppo. Does the committee believe an operating system designed in Silicon Valley and a mobile phone manufactured in China’s Guangdong Province have similar rules to protect data? Or better still, can they be made to comply with a single, catch-all set of data protection standards?
•The issue of data protection is one over which the Indian state has, unfortunately, little say. Major players in the country’s digital economy are not only based abroad, but also export data to other jurisdictions. Perhaps, if the data of every citizen were to be held inside the country, the state could probably enforce rules for its storage and sharing. But to demand “data localisation” would be unwise (the Srikrishna Committee too acknowledges this). Many of the world’s giant data centres are located in northern climes near water bodies, since they require mild temperatures and enormous quantities of water to cool thousands of servers.
•The U.S. Department of Energy in 2015 estimated that data centres in the country took about 2% of its overall power supply. Can India, with its round-the-year warm climate and scarce natural resources, really afford to divert electricity and water to maintain data centres? State and central governments will also need to spend substantial amounts on physically securing these installations. The theory of comparative advantage tells us that India is better off relying on servers located elsewhere, while gaining in connectivity and access to high-quality digital products.
•There is, however, a trade-off: India’s inability to localise data means its digital economy is governed by hundreds of “private” data protection policies, some of which even contradict each other. For this reason, the Srikrishna committee cannot follow the same legal strategy used in the Aadhaar Act, which lays down strict rules for the collection and sharing of biometric and sensitive personal data. In that case, the Unique Identification Authority (UIDAI) is the custodian not only of Aadhaar data, but also data servers and secure lines that store and transport them. It is possible, therefore, to have a uniform law that can be strictly enforced. With a data protection statute, this may not be entirely feasible.
•Take the issue of “sensitive” personal data: the Srikrishna Committee has provisionally recommended that current definitions of “sensitive” information be re-evaluated in the light of India’s socio-economic context. This is a laudable objective. But how does it sit with the way mobile devices and operating systems in the market define the term? The Google Developer Policy -- which app developers must comply with if they want their products featured on Android phones -- requires “sensitive” data to be collected only for a “core capability”. In other words, if such data is absolutely critical for the app’s functioning, it may be sought from a user. Even if India’s data protection law were to determine that some health data is too sensitive to be shared under any circumstance, it is very likely that an Android app somewhere would still permit its collection. “Genetic testing” apps – used to predict the kind of hereditary ailments a user may be susceptible to — are becoming increasingly popular and collect precisely such information. Would the Indian state, then, ask Google to block such an app? How would the law be enforced?
•Android phones also have “layers” of permissions written into them that determine the kind of sensitive data an application can collect. An app could tap into a phone’s fingerprint authentication hardware with only a “normal” permission, which is automatically given at the time of its download. But to access the user’s location from the phone, the app requires a “dangerous” permission, meaning the affirmative consent of the user. Were Indian law to prohibit apps from accessing the fingerprints of users without their consent, will it declare the Android system of ‘permissions’ unlawful? Classifications aside, the point here is that data protection rules are embedded into technologies by software developers according to their beliefs, which may not reflect India’s statutory considerations.
•On the other hand, the Chinese smartphone manufacturer Huawei candidly acknowledges it may transfer the data of users to locations with no data protection laws at all. Huawei’s End User License Agreement merely suggests it will provide “similar and adequate” levels of protection as the country of origin. But how would Indian regulators ensure that the data of citizens is treated uniformly, even after it has been exported to, say, China? In this case, the very nature of the data flow is a limit on the implementation of a data protection law.
The way forward
•This is not to say the Srikrishna Committee is performing an exercise in futility. Current data protection rules under the Information Technology Act urgently need an update and should reflect modern trends. For instance, India can and should enact safeguards for data collected through known points of vulnerability in its digital economy: a mobile phone’s camera software, public Wi-Fi spots, firmware updates, QR codes, and so on. But the committee will find it difficult to conceive watertight definitions of “sensitive” data, or lay down guidelines to determine what data should be collected, when the user’s consent is required, or even the kind of encryption to protect such data.
•Perhaps, this is just as well. India’s data protection laws should not foreclose options for its own software developers — who need country and community-specific data — as they build products tailored for the digital economy.
•A modest solution could be to allow companies to pursue independent data protection policies (guided by baseline norms), but monitor their enforcement through a national, multi-stakeholder agency. There is precedent for such an institution: the United States Federal Trade Commission performs such a role, investigating data breaches often according to best practices within the industry. In 2013, for example, it found the smartphone manufacturer HTC guilty of circumventing Android’s own installation checks and allowing the download of “insecure” apps. Pitting businesses against their own data protection standards and those of their competitors will create a “name and shame” environment, and weed out poor practices that compromise users’ data. When the Indian digital ecosystem is mature enough, there could be more comprehensive guidelines on the storing, sharing and collection of data.
📰 Universal health coverage is the best prescription
UHC provides the framework in which the issues of access, quality and cost can be integrated
•Three recent incidents involving the health-care sector in Delhi have sparked widespread outrage over the alleged mercenary motives and callous conduct of high-profile corporate hospitals. Two cases involved children with dengue who died soon after leaving these hospitals in a serious condition after their families were presented huge hospitalisation and treatment bills. The third case involved a live premature baby being “declared dead” and handed over to the parents wrapped in plastic.
Distrust and despair
•Questions have been raised, and rightly so, about the lack of professional standards in terms of competence and compassion. The medical bills, running into huge figures, also stoked anger at perceived corporate addiction to profit maximisation. The government, the hospital managements and the Indian Medical Association have begun inquiries. Even as these go on, there is deep public distrust and despair over health care in private and public sector hospitals.
•Three major issues are involved when we assess health care: access, quality and cost. Each of these needs to be addressed with clarity, and not in isolation. Solutions have to be those that fit into a common system architecture, or a system best designed and delivered as Universal Health Coverage (UHC), now enshrined in the Sustainable Development Goals.
•Access to readily reachable, trustworthy and affordable health care is a major challenge before poorly served rural areas and overcrowded urban areas. Also, the inadequacy of organised primary health services here is compounded by a weakness at the intermediate level of care in many district hospitals and nursing homes. While corporate hospitals boast of high quality advanced care and compete with each other for a significant share of medical tourism, they are mostly inaccessible to the rural population and the urban poor. Government institutions of advanced care suffer from low budgets and a lack of managerial talent.
Steps to improving access
•The pathway to improving access lies in expanding the network of public sector facilities at all levels. This calls for higher levels of public financing, investment in training and incentivised placements of more health personnel and improved management through the creation of a public health management cadre. These measures have been envisaged in the National Health Policy, 2017 and need urgent and earnest implementation. Health-care providers in the private and voluntary sectors should be empanelled to fill the gaps through carefully crafted contracting mechanisms that best serve public interest.
•Quality of care is determined by the extent to which appropriate care is provided in each clinical context. Here there must be an emphasis on the benefit and safety of tests and treatment, and ensuring that satisfaction levels of patients, families, care providers in the nature of institutional processes as well as human interactions are met. This requires ensuring conformity to accepted scientific and ethical standards. Here, the Clinical Establishments Act is a good beginning, in moving health-care facilities towards registration, ensuring compliance with essential standards of equipment and performance, adopting standard management guidelines, grievance redress mechanisms, and respecting encoded patient rights.
Managing cost
•Cost of care is a major challenge in a system where patients and families have to bear the burden. High out-of-pocket spending on health care leads to unacceptable levels of impoverishment. With high levels of poverty and a very large segment of the working population in the informal sector, both private insurance and employer provided insurance can cover only small population segments. With a small risk pool, these schemes can only provide limited cost coverage to subscribers. Government-funded social insurance schemes do increase access to advanced care. But they have not been shown to provide financial protection as they cover only part of the hospitalisation cost and none of the expenses of prolonged outpatient care which forms a higher percentage of out-of-pocket spending.
•The solution lies in doubling the level of public financing to at least 2.5% of GDP by 2019, rather than 2025, as proposed in the National Health Policy, and by pooling tax funding, all Central and State insurance schemes and employer-provided health insurance into a “single payer system”. That can be managed by an empowered autonomous authority which purchases services from a strengthened public sector and, as necessary, from empanelled private health-care providers. Quality is promoted through audited insistence on implementation of standard management guidelines by all service providers who enter this system, and cost is controlled by the negotiating power of the single payer. Since the risk pool is very large, there is a high level of cross- subsidisation of the sick by the healthy, the poor by the rich and the elderly retired by the young employed. The burden on an individual is greatly minimised.
•Implemented piecemeal, these three areas of action will yield only limited results as access alone cannot assure appropriate or affordable care and cost subsidy will be meaningless if there is limited access or undependable quality. The UHC provides the framework in which all three elements can be integrated. The cry for stronger regulation of quality and cost is justified but regulation will fail to deliver needed health care to all if the health system architecture does not adopt UHC. Similarly, the success of UHC depends on effective regulation. Now, there is a disconnect between these two in ongoing health system reforms. It is time to bridge that gap if tragic tales of terrible health care are not to cause recurring lament.
📰 Unwavering caution — on RBI holding repo rate
The RBI’s decision to hold rates reflects its expectations of faster inflation
•For the Reserve Bank of India there is just one economic indicator that dominates its policymaking calculus: price stability. With inflation-targeting as its main mandate — the consensus position that was articulated when the RBI Act was amended in May 2016 was that “price stability is a necessary precondition to sustainable growth” — the Monetary Policy Committee (MPC) has opted yet again to keep interest rates unchanged. It is not hard to follow the rationale. Price gains as measured by the Consumer Price Index had accelerated to a seven-month high in October and the RBI’s survey of household expectations for inflation over both the three-month and one-year horizons showed a “firming up”. The RBI’s bimonthly policy statement also spelt out the data points and trends that informed its decision-making. For one, the moderation in core inflation in the first fiscal quarter has largely reversed. Price gains excluding the volatile food and fuel categories are particularly at risk from “the staggered impact of HRA increases by various State governments” that could push up housing inflation in 2018 and generate second-order ripples. Given India’s reliance on imports for a bulk of its fuel needs, the latest OPEC decision to maintain output cuts to keep global crude oil prices from softening can hardly provide much comfort.
•Taking into account all factors, including some that may lend respite, such as the wide-ranging cuts to the goods and services tax rate, the RBI raised its estimate for inflation over the third and fourth fiscal quarters by 10 basis points from its October projection: headline CPI inflation is now expected to accelerate and range between 4.3% and 4.7% in the second half. The MPC is, however, more confident about the prospects for growth, concerns over higher oil prices and shortfalls in kharif crop output and rabi season sowing notwithstanding. The Centre’s move to recapitalise public sector banks has won a vote of confidence from monetary policymakers for its potential to revive credit flows. Buttressing the confidence in the economy are the findings in the RBI’s survey, which posit an improvement in demand in the services and infrastructure sectors and an uptick in the overall business environment in the January-March quarter. Ultimately, though, the central bank has once again proffered a word of circumspection to fiscal authorities: taken together, the farm loan waivers implemented by some States, the partial reduction of excise duty and VAT on petroleum products and the GST rate cuts could result in fiscal slippage with accompanying consequences for price stability. For the RBI, caution continues to remain its credo.
📰 Unable to see the bamboo for the trees
Deregulating bamboo production does not address the issue of building a transparently governed forest sector
•Governments everywhere tend to look for quick-fixes, overlooking complexities and ignoring the big picture. The move by the Centre to “de-regulate” bamboo production by amending the definition of “trees” under the Indian Forest Act (IFA), 1927, is a great example of this tendency. In November 2017, the Central government issued an ordinance whereby “bamboo” was deleted from the clause that defines “trees” in the IFA. Since bamboo is biologically a grass, its inclusion under “trees” was scientifically an anachronism. The amendment was, therefore, long overdue.
•The British mis-definition was a blatant appropriation of people’s resources. By including bamboo under trees (Section 2(7)), and felled trees under timber (Section 2(6)), and timber in forest produce (Section 2(4)(a)) regardless of its origin, the British established state control on all tree and bamboo growth. Felling, sale and transport of any of these species then required state permission. Post-independence India continued this policy. Removing bamboo from “trees” amounts to removing it from state control, and should be a huge step in favour of restoring people’s rights. But is it?
Multiple laws and caveats
•In fact, the IFA no longer holds a pre-eminent position in Indian forest law. Most States have passed their own forest Acts and Rules. Many have also passed other Acts that, for instance, regulate tree felling outside forest areas, such as the Karnataka Preservation of Trees Act, 1976, or regulate the movement of forest produce, such as the Madhya Pradesh Van Upaj (Vyapar Viniyaman) Adhiniyam 1969. Each of these Acts and Rules defines forest produce and trees, and includes bamboo in them. Amending the IFA does not affect these State laws and, therefore, changes nothing on the ground. Moreover, even as it amended the definition, the Central government introduced a caveat that this de-regulation applied only to bamboo grown on non-forest lands.
•First, this contradicts the letter of the amendment which makes no such distinction. Second, how are guards at forest checkposts to know where a particular truckload of bamboo is coming from? This means that trucks carrying bamboo from private lands will still need transit passes, which means that forest officials will have to monitor the felling. How is that different from the current situation?
Point of ownership
•Worst of all, by supposedly deregulating only privately grown bamboo, the government is dodging the real problem. The bulk of bamboo in the country today is on forest lands. But “forest lands” is an umbrella term that includes, for instance, community forest lands in Northeast India. Following the Supreme Court’s Godavarman judgment, tree harvest in all these lands is regulated by the forest department. If the amendment does not deregulate bamboo grown on these lands, then how will it unleash the vast economic potential of bamboo in that region?
•Similarly, “forest lands” also includes community forest resources to which title has been granted under the Forest Rights Act (FRA), 2006. Tens of thousands of gram sabhas have now received such titles, and many thousands more await it. The FRA explicitly grants rights over bamboo and other non-timber forest products such as tendu patta to forest dwellers. Nevertheless, forest officials have constantly (illegally) denied bamboo harvesting and transport rights to communities, citing the IFA. Only in Maharashtra, due to the intervention of the then Environment Minister Jairam Ramesh, were gram sabhas able to auction their bamboo. Subsequently, the Maharashtra Governor unequivocally amended the IFA as well as other State Acts to exclude bamboo and tendu patta from State control, facilitating a mini-revolution in forest-based livelihoods in eastern Maharashtra in the past few years.
•The need of the hour therefore is to follow in Maharashtra’s footsteps and remove any caveats accompanying the amendment of the IFA, and amend all other State-level Acts and Rules to remove any contradictions with the FRA. The removal of obstacles to the exercise of community rights will open up an alternative form of forestry, managed and regulated by communities rather than the department. On the other hand, bamboo forestry on private lands may not be remunerative enough for farmers nor desirable from a food production perspective. The hurriedly issued ordinance, with its caveats, is infructuous. The government would do well to address the real challenge of building a productive, bottom-up managed and transparently governed forest sector.
