📰 India yet to find reason for darkening Siang
Minister says the government has conveyed its views and concerns to the Chinese authorities
•The Union government has conveyed its views and concerns to the Chinese authorities, including at the highest levels of the government, on the unusual darkening of the Siang river in Arunachal Pradesh, Union Minister of State for Water Resources Arjun Ram Meghwal said in reply to a question in the Lok Sabha on Thursday. The change in colour came to light in November, and China holds an earthquake in Tibet responsible for it.
•Official reports of the colour of water in the Siang changing emerged from the Arunachal Pradesh office of the Central Water Commission (CWC) on November 10, attributing it to excess silt. What caused a deluge in silt however was not specified, but the water at Tuting was still potable, the CWC said.
•However another report from the Arunachal Pradesh Water Supply Department showed that iron levels were beyond permissible limits and samples from the river beyond Pasighat and Jonai showed higher aluminium and iron levels. A public outcry prompted leaders, including Chief Minister, Pema Khandu, to write to Prime Minister Narendra Modi to launch a thorough investigation.
Possible reasons
•“The reason for change in water of River Siang may possibly be because of any landslide/earthquake/any other activity in upstream region of Tuting site across the international border with China for which information is not available. Exact reason is not known as yet,” Mr. Meghwal told the House.
•The Siang enters India from Tibet, where it flows for about 1,500 km as the Tsangpo and becomes the Brahmaputra after it flows into Assam.
•Reports from Arunachal Pradesh and Assam blamed tunnel construction by China in Tibet. India nevertheless broached the issue with Wang Yi, Foreign Minister of the People’s Republic of China, during his visit to India on December 11, 2017, Mr. Meghwal said in his reply. “Government has conveyed its views and concerns to the Chinese authorities, including at the highest levels of the Government of the People’s Republic of China, and has urged them to ensure that the interests of downstream States are not harmed by any activities in upstream areas,” he said.
📰 Rajya Sabha likely to send talaq Bill to select panel
Cross-party consultations on the cards
•The House of Elders is likely to send the legislation making instant triple talaq or talaq-e-biddat a criminal offence, with a jail term of up to three years, to a select committee.
•Cross-party consultations are likely to be held on the issue before the Bill comes to the Rajya Sabha on January 2.
•Leader of the Congress in the Lok Sabha Mallikarjun Kharge had pressed for the Bill to be sent to a standing committee. The Congress is likely to a make similar demand in the Upper House too. In the Lok Sabha, Congress MPs Sushmita Dev and Adhir Ranjan Chowdhury had moved amendments seeking an independent corpus for affected women and to remove the “criminality” clause in the legislation.
•According to a senior Congress leader, in the Rajya Sabha too, the party will press for these amendments.
•“We are not against the triple talaq Bill, but we are against the draft presented by the government. We want a legislation that will be a bulwark for Muslim women. At the same time sending Muslim men to jail will not necessarily help the cause,” a Congress MP said.
•According to sources, the government had initially planned to table the Bill on Friday, as it is usually a lean day for Parliament with most MPs leaving for their constituencies by afternoon. “We got a whiff of the government’s plan to table the Bill when the Opposition benches would have been thinly occupied. We phoned up Opposition party leaders to press Chairman M. Venkaiah Naidu to assure that the Bill will not be tabled on Friday,” a senior Congress leader said.
•The AIADMK, the BJD, the Samajwadi Party, the Bahujan Samaj Party and the Left parties are clear that the legislation should be sent to a select committee.
•If the Congress does join them, together they will have 109 votes. “This legislation will have far-reaching implications. It should have been sent to a standing committee, but the government does not believe in Parliamentary processes. So, we will push it to be sent to a select committee,” CPI MP D. Raja said.
•The Trinamool Congress, which remained quiet during the debate in the Lok Sabha, continues to keep its own counsel. It is a remarkable departure for the TMC which has been voluble on all major legislations. “What is the point of revealing your strategy or stand in the Lok Sabha where it would have no impact. It is a sensitive issue and we will take a considered stand in the Rajya Sabha,” the TMC said.
📰 Punish the guilty for their crimes, not their poverty: Supreme Court
•A convict’s poverty should not be the reason for him to spend years in prison even after serving a substantial prison sentence, that too, merely because he is unable to pay the fine amount the criminal court had imposed on him, the Supreme Court said in a humanitarian judgment.
•The Supreme Court held the financial condition of the convict after a long period of incarceration and the plight of his “innocent” family should be taken into consideration to prevent, if at least reduce, the time he would spend behind bars for not being able to pay the fine imposed on him at the time of sentencing by the trial court.
•Penal laws, besides sentencing a person to prison, also mandate him to pay a fine, which could run to lakhs of rupees, as punishment. If the fine is not paid, or if the convict cannot afford it, as an alternative, he is made to suffer another prison term of up to one-fourth of the period of his substantial sentence. This second prison term for defaulting in payment of fine begins immediately after his substantial sentence for the crime committed comes to an end.
•A Supreme Court Bench led by Justice Kurian Joseph urged a humane approach to this punishment.
•Citing a 2013 apex court judgment, Justice Kurian observed that suffering another extended period of imprisonment solely due to inability to pay the fine because of poverty causes serious prejudice not only to the convict but also to his family.
📰 Taking on the gatekeepers: on the Censor Board
As long as courts affirm ‘community’ claims, don’t expect the Censor Board to protect free speech
•Earlier this week, the Central Board of Film Certification (CBFC) announced that a six-member panel was being constituted to review the film Padmavati,before it could be granted a censor certificate and publicly exhibited. Members of the panel include historians as well as representatives of the royal family of Mewar. The announcement of the panel has caused both bemusement and amusement. What, after all, do professional historians have to do with a piece of entertainment that is historical fiction at best, and the retelling of a myth at worst? And why has the royal family seemingly acquired a veto over the clearance of a film? The task of the Censor Board is to ensure that a film complies with the laws of the land and the guidelines of the Cinematograph Act, a task that does not require it to judge “historical accuracy”, or to subject a film to the scrutiny of self-appointed community gatekeepers. It is a legal and constitutional task, not a sentimental or popular one.
Requirements of any work
•Unfortunately, however, the Censor Board’s actions represent an approach towards the freedom of expression that, despite its evident wrong-headedness, has been sanctioned by the Supreme Court on a number of recent occasions. This approach has two distinct aspects. First, that in order to qualify for constitutional protection, a work must have an objectively defined social value — that is, it must be good for something, whether it is spreading scientific or historical knowledge, inculcating patriotic values, or advocating good social habits. Second, if the work refers to or is about a certain segment of society, then that segment automatically acquires the power to decide whether or not it has been “offended” by it — a power that is exercised by the self-appointed gatekeepers of the community.
•As an example of the second, take the recent travails of Jolly LLB 2, a well known satirical film about the Indian legal system. Before the film could be released, there was an uproar because it was alleged to have “insulted” lawyers and the legal system (although there is no law – and probably with good reason – that prohibits people from insulting lawyers). A petition was filed in the Bombay High Court. Ignoring what the CBFC itself had to say about this, the Bombay High Court appointed a three-member panel of lawyers, to “review” the film. Where the High Court found the power to do so, and why lawyers were appointed to review a film that satirises lawyers are questions that have no answer. In any event, the panel suggested four deletions. In the meantime, the producers had rushed to the Supreme Court, which, however, declined to interfere. Faced with the delayed release of their film, and the possibility of an eventual defeat in the Supreme Court, the producers swallowed their pride, accepted the four cuts, and received clearance for the film in the nick of time.
•There is something uniquely grotesque about appointing lawyers to vet a film that makes fun of lawyers, just as it is uniquely grotesque to invite members of the royal family to vet a film that allegedly besmirches Rajput honour. The idea underlying the actions of both the court and the Censor Board is that every self-identified “community” – no matter how loosely- or ill-defined – has an automatic right of veto over any work of art, expressed through its self-proclaimed and most noisy gatekeepers. This, in turn, goes back to the pre-constitutional idea that India is not a nation of individual citizens, but an agglomeration of homogenous, clearly defined “communities”, and that it is these communities that come to be the measure of all values. The Constitution, however, clearly repudiated this view when it placed the individual – and individual rights – at its heart. Unfortunately, however, that lesson remains to be learnt, and especially by the Supreme Court which, in 2007, upheld a book ban on the ground that in a country as diverse as India, no community should feel offended or have its feelings hurt. The court didn’t see fit to say that in a country as diverse as India, everyone should learn spirit of tolerance; that apart, who can claim the right to project their personal hurt or offence onto their community as a whole is itself a difficult and complex question, which the court has so far failed to answer.
‘Useful art’
•Let us now go back to the first aspect of Indian free speech jurisprudence. Ever since the Supreme Court upheld the constitutionality of obscenity law in 1964, it has given a clear indication that “useful art”, or art that can serve a “social purpose”, may be exempted from the penal consequences of obscenity, or other similar speech-restricting laws. In assessing the famous movie Bandit Queen, for example, the Court pointed out that certain disputed scenes – involving sexual assault – were actually meant to instil revulsion and disgust in the minds of the readers, and in that sense, the film was serving a socially useful purpose in depicting such scenes. And it is that motivation which, presumably, has driven the Censor Board to rope in historians to screen Padmavati. IfPadmavati, according to the historians, is historically accurate, it will pass muster. But if it is “distorting history” (to echo the most famous complaint against it), then it serves no feasible social role, and the state is justified in refusing it screening permission.
•There are, however, two serious mistakes in this approach which undermine the entire system of freedom of speech and expression itself. First, even if we concede that art ought to have a social purpose (which we shouldn’t), the task of deciding whether a particular work of art is “socially useful” or not will be left to judges who, with the best intentions, will only end up reproducing the dominant conceptions of what is useful. For example in Ranjit Udeshi (the obscenity case), Justice M. Hidayatullah embarked on a two-paragraph critique that questioned the merits of D.H. Lawrence’s writing, and probably everybody will agree that those two paragraphs are a standing embarrassment in the annals of our constitutional history. However, this does mean that truly heretical or rebellious work – precisely the kind of subversive work that a free speech guarantee is supposed to protect – will always be persecuted. And second, there is simply no way of knowing what uses a work might be put to in the future. The Churchmen who sentenced Galileo to house imprisonment were no doubt sure that the Sun revolved around the Earth, and that Galileo’s research, apart from being heretical, was simply useless. That predication, however, did not age well. Similarly, to decide – as this screening committee will do – whether Padmavati has “distorted” history and therefore cannot be redeemed by the social purpose of art would be to declare authority over all possible uses that art may have now or in the future.
A larger battle
•The Supreme Court’s own ambivalence towards the freedom of speech was best exemplified earlier this year, when, in upholding a book ban imposed in the State of Karnataka, the court refused to give any reasons for its opinion. The CBFC is, of course, an independent body with an independent mandate. However, we need to remember that it is the Supreme Court which, in the last analysis, sets the norms, principles and values that trickle down the judicial ladder. Consequently, as long as the freedom of speech continues to be treated as a minor inconvenience that needs to be regulated and controlled in the “public interest”, and as long as the court continues to affirm “community” claims as having priority over individual freedoms, we cannot really expect the CBFC to protect free speech in a meaningful way. The battle for free speech must be waged both at the bottom and at the top.
📰 A necessary reform: on conflict of interest
We need to make disclosure of conflicts of interest mandatory
•In 1990, B.G. Deshmukh, who was Principal Secretary to Prime Minister Chandra Shekhar, asked whether he could join a large conglomerate, post-retirement. He had served for decades in the government and wanted to move out, if permitted, towards a corporate role. Discretion marred the approval process, ranging from verbal assurance to written disapproval. While the reasons for declining might be varied, such incidents highlight the need for removing discretion and codifying the conflict of interest inherent in having senior bureaucrats assuming corporate roles post-resignation or retirement.
Best practices elsewhere
•The idea of conflict of interest should naturally be linked with the aim of preventing corruption. In the West, conflict of interest is seen to be at the root of all abuse of power by public officials for private ends. For most of Britain’s history, conflict of interest with the rulers and their officials was rife — everyone expected such leaders to take advantage of their position. Even Samuel Pepys, the great diarist and reformist of the Royal Navy in the 1660s, was alleged to have been involved in smuggling. However, over time, the culture was changed. The Crown’s ministers sought to increase bureaucratic efficiency, especially in the collection of taxes, in order to fight the rising number of wars that Britain was involved in. A flourishing press and an independent judiciary placed limits of the executive’s power and its potential for abuse. The spread of education made people more aware of their rights, and the establishment of a national auditor’s office led to limitation on corrupt behaviour in governance. By the 20th century, corruption weakened considerably.
•Some bureaucrats seem to have meshed the virtues of public service with private profit in retirement. They expose themselves to a potential conflict of interest — which when working in government is not automatically linked, in actions and perceptions, to corruption. Instead, when whistleblowers and leaders with a conscience ask pertinent questions, terms such as “anti-growth” and “anti-investment” are used to target them. To solve this conundrum, it is important to understand the scale of the problem, determine the right legal mechanism to deter and work towards changing our lackadaisical cultural norms on conflict of interest.
•Vested interests have increasingly captured regulatory boards — consider the case of the Food Safety and Standards Authority of India. This regulator is theoretically supposed to be independent in monitoring food safety and yet, until 2014, industry representatives were regularly been appointed to scientific committees. It’s not that there are no policies against this on the books. India has an official policy, regulated by the Ministry of Personnel, whereby senior bureaucrats have to seek permission for commercial employment after their retirement. However, such grants of permission within cooling-off period depend primarily on government discretion, with no codified mechanism. There is nothing wrong in letting experienced bureaucrats utilise their expertise in the private sector — if adequate rules are framed and followed that enable the elimination of any conflict of interest.
•We need legislation to make non-disclosure of a conflict of interest punishable. As with E.M.S. Natchiappan’s private member’s bill (The Prevention and Management of Conflict of Interest Bill, introduced in 2012), the legislation ought to cover all arms of governance, including the judiciary, the legislature and the executive. The recommendation of the Parliamentary Standing Committee on the Department of Personnel and Training (Report No. 60 dated May 3, 2013), calling for early retirement if interested in post-retirement private service is established, needs to be implemented, besides increasing the mandatory cooling period to five years so that no undue influence can be exerted by the retired bureaucrat. Also, the reasons for declining their requests for joining such firms need to be laid out clearly, to limit political concerns.
Towards transparency
•Finally, a culture of transparency needs to be fostered. It is not enough to simply have a non-public register of member’s interests for legislative representatives. Bureaucrats, retired and current, should talk openly about their post-retirement plans. Public disclosure of their interests would clear the air, enabling their views to be given appropriate merit. An open, public data platform enlisting all post-retirement appointments of civil servants will increase transparency. If we seek acknowledgement of conflict of interest in the corporate world, with significant oversight through consumer watchdogs, credit rating agencies and activist shareholders, we should also the same in our governance.
•Perhaps some of this is cultural. We, as a nation, reacted differently to the Rajat Gupta case, with its inherent conflict of interest concerns, compared to prosecutors in the U.S. Such conflicts should be codified in a stringent legal framework, making compromise of the public interest a serious crime. Cleaning up business interests, and strengthening a moral code over such conflicts is needed. Without such transformation, India’s society, governance and its private sector will remain open turf for insider trading.
📰 Women hail bill against instant triple talaq
‘A new beginning has been made, now the practice of polygamy too should be bannned’
•A day after the Lok Sabha passed the contentious bill on instant triple talaq, the development was hailed by several Muslim women involved in the judicial war against the practice, with a rider that the government should have also banned polygamy.
•The women, including those who waged the war against the practice in the Supreme Court, said with the passing of the Muslim Women (Protection of Rights on Marriage) Bill in the lower House, “a new beginning has been made” and it will prove to be a deterrent for the husbands from saying talaq-e-biddat to their wives.
•They said the new law should have also banned the practice of polygamy among Muslim men which, they said, was “worse than triple talaq.”
•The women, advocate Farah Faiz, Rizwana, Razia, who were associated in the fight against triple talaq and polygamy in the apex court, expressed satisfaction that at least “a start” has been made by the present NDA dispensation.
•The same opportunity had come in 1985 when the Shah Bano case happened, but was lost by the then Central government, they claimed.
•“A new beginning has been made, which would protect Muslim women from the immoral practice of nikah halala,” said Ms. Faiz, whose view was shared by Ms. Rizwana and Ms. Razia with a slight variance.
•‘Nikah halala’ is a practice intended to curb incidence of divorce. Under this, a man cannot remarry his former wife without her having to go through the process of marrying someone else, consummating it, getting divorced, observing the separation period called ‘Iddat’ and then coming back to him.
•Ms. Rizwana and Ms. Razia were of the view that the government should have dealt with the issue of polygamy by banning it in the same Bill.
•“I welcome the move but now men will take undue advantage of the law and indulge in polygamy openly as it is still in practice. With polygamy still in practice, abolition of triple talaq alone won’t help us,” said 33-year-old Rizwana, a victim of polygamy.
•Ms. Razia, 24, whose husband divorced her over phone citing birth of daughters, hailed the law brought by the government and hoped that women like her would get justice.
•Married at the age of 16, Ms. Razia said: “I was given triple talaq by my husband on the phone as he did not want to bring up our two daughters. Triple talaq is a crime and has spoilt many lives. I pray that all women like me get justice with this new law.”
•Advocate Chandra Rajan, who had represented All India Muslim Women Personal Law Board (AIMWPLB), also hailed the legislation.
•“If this new law is implemented in true spirit then it will go a long way and prove to be a deterrent for the husbands from saying ‘talaq-e-biddat’ to their wives,” she said.
📰 Bankruptcy Code law amended
Aim is to prevent wilful defaulters from taking part in insolvency proceedings
•The Lok Sabha amended the Insolvency and Bankruptcy Code law to prevent wilful defaulters and existing promoters from taking part in insolvency proceedings of stressed assets of companies unless they make their bad loans operational by paying up interests.
•The bill will replace an ordinance that was brought in November to prevent unscrupulous promoters from misusing the provisions of the Insolvency and Bankruptcy Code (IBC).
•Replying to the debate, Finance Minister Arun Jaitley said the government can't allow loan defaulters to "merrily walk back" and take part in bidding proceedings.
•A defaulter, however, can become "eligible to submit a resolution plan" if they clear all dues with interest and other charges relating to their NPA accounts.
•Responding to Congress member Gaurav Gogoi who had pointed that gross Non Performing Assets of banks had gone up from 2.7 per cent in 2011 to 9.2 per cent in 2016, Mr Jaitley said,"Gogoi ji has studied in good educational institutions of the world and he must have many times heard of the proverb that there were three types of lies -- lies, damned lies and statistics. Today he has himself become a victim of the third one."
•The Finance Minister said NPAs are a legacy issue and during the UPA regime, banks resorted to "window dressing and ever-greening of loans."
•While moving the bill, Mr Jaitley had said the IBC law has been learning process for the government as changes have had to be made to ensure that ineligible people don't find loopholes to walk back into the companies against who insolvency proceedings were initiated.
•Commenting on the changes to the IBC, tax experts said that while the intention of the government is good, all bad loans may not be the result of wilful default, diversion or misappropriation of funds.
•"In a market driven economy, failure can be for various reasons like change in market conditions, severe competition, change in technology, change in Government policies, stay by Supreme Court, bona fide management decisions (which later proved to be incorrect) and many others,"V.S. Datey of Taxmann, a consultancy service.
📰 Govt. injects funds into 6 public banks
Some public lenders, with high NPAs, were on the verge of breaching minimum capital norms
•The Centre has released the much-required equity capital to six stressed public sector banks (PSBs) as some of these lenders were on the verge of breaching minimum capital norms on December 31, 2017.
•The PSBs are Bank of India (₹2,257 crore), Central Bank of India (₹323 crore), Dena Bank (₹243 crore), IDBI Bank (₹ 2,729 crore), Bank of Maharashtra (₹650 crore) and UCO Bank (₹1,375 crore). These lenders would be asked to improve on parameters such as bad loans and recovery to which effect a communication would be sent shortly.
•According to bankers, some of these lenders could have breached the minimum regulatory capital requirement, as mandated by the RBI, at the end of the third quarter. “By infusing capital, the government wants to give a strong signal to the public that it will not allow its banks to go down,” said a senior banker from a PSB.
•Banks are mandated to maintain minimum 9% capital adequacy ratio (CAR) plus a capital conservation buffer of 2.5%. Within the CAR, minimum common equity tier-I (CET 1) capital ratio is prescribed at 5.5%. The Kolkata-based UCO Bank has informed stock exchanges that the Centre, in its letter dated December 28, ‘communicated its sanction for release of ₹1,375 crore towards preferential allotment of equity shares.’ IDBI Bank has also informed the exchanges about the capital infusion.
•According to latest RBI data, capital adequacy ratio of PSBs as on September 30 was 12.2% while the CET 1 ratio was 4.7%. UCO Bank, for example, had a CET 1 of 6.64% and gross non-performing asset ratio of 19.74% as on 30 September.
•All these banks are saddled with huge non-performing assets and are under the prompt corrective action (PCA) framework of the Reserve Bank of India — which means certain operations of these banks have been curtailed by the regulator.
Deny claims
•There were rumours circulated on social media, after PCA was imposed on banks, that due to poor financial health, some of them could be closed down. Both, the RBI and the Centre, strongly denied these claims.
•While the RBI clarified that PCA was imposed to encourage banks eschew certain riskier activities and focus on conserving capital, Financial Services Secretary Rajiv Kumar also tweeted recently saying there was no question of closing down any PSB and added the Centre was strengthening its banks by infusing capital.
📰 ‘E-way bill to boost GST compliance’
New system to spur revenues: Adhia
•The mandatory implementation of the e-way bill system from February 1 for all inter-State movement of non-exempted goods will help boost compliance under the Goods and Services Tax (GST) regime, according to Hasmukh Adhia, Finance Secretary.
•“All we want to do is using information technology and a simple self-declaration saying you moved so much goods... be able to then ask so why didn’t you file a GST return,” Mr. Adhia said at a briefing on Friday. “Our intention is to make the filing of a simple e-way bill — which, either the supplier, the buyer or even the transporter can file – a habit that is adopted by everyone.”
•The July 1 implementation of GST has seen revenue collections from the new nationwide indirect tax falter in recent months and the Centre, already struggling with a wider than budgeted fiscal deficit, is keen to tighten tax compliance under the new regime. The decision to advance the roll-out of the nationwide e-way bill system to February 1 is line with this objective.
‘No’ inspector-raj
•Mr. Adhia sought to allay fears that the implementation of the e-way bill system would result in a return of ‘inspector-raj’ and said only in the initial period would a few random vehicles be stopped en route to check if the goods being transported were accompanied by an e-way bill. Also, once a vehicle had been stopped and checked it would not face any further inspections along the rest of its route, even if it traversed multiple States. The number of exemptions for complying with the requirement of an e-way bill was also extensive, including about 50% of the CPI (Consumer Price Index) basket of goods, he said. Given the experience of States which had implemented similar e-way bills as part of the earlier VAT regime, there is clear evidence that tax collections jumped following implementation of the system.
•“Some of these States had not only intra-State but they also had inter-State requirement of e-way bills. These States saw a 15% to 20% increase in revenue the year after they implemented it,” Mr. Adhia said.
•About 15-16 lakh e-way bills are likely to be filed daily for inter-State movement of goods, with the combined number inclusive of filings for intra-State transportation estimated to be about 40 lakh, according to Prakash Kumar, CEO, GST Network.
•Separately, Mr. Adhia said initial data on GST collections under the composition scheme — where small businesses self-declare turnover and pay a flat rate varying from 1% for traders to 5% for restaurants — had revealed “outright under-reporting.” With 6 lakh returns filed under the scheme, the revenue receipts amounted to a paltry ₹251 crore.
📰 Fiscal deficit breaches FY18 target at Nov.-end
Lower GST collections is a cause
•India’s fiscal deficit at the end of November breached the target and touched 112% of the budget estimate for 2017-18 mainly due to lower GST collections and higher expenditure.
•In absolute terms, the fiscal deficit — the difference between expenditure and revenue — was ₹6.12 lakh crore during April-November 2017-18, according to the data by the Controller General of Accounts (CGA).
•During the same period a year earlier, the deficit stood at 85.8% of that year’s target. For 2017-18, the government aims to bring down the fiscal deficit to 3.2% of GDP. Last fiscal, it had met the target of 3.5% of GDP. The CGA data showed that the government’s revenue receipts were at ₹8.04 lakh crore in the eight months to November, which works out to 53.1% of the budget estimate (BE) of ₹15.15 lakh crore for 2017-18.
•The receipts, comprising taxes and other items, were at 57.8% of the target in the year-earlier period.
•The Goods and Services Tax (GST) collections slipped to their lowest in November as rates were cut on dozens of goods to make the new national sales tax regime more acceptable. Total GST collections in November slipped to ₹80,808 crore, from over ₹83,000 crore in October.
📰 New highs in FDI inflow likely this year, in FY19
‘However, Centre needs to address reporting problems’
•With government data showing that Foreign Direct Investment (FDI) worth $33.75 billion has already flowed into India in the first half of this fiscal, the country is poised to see FDI inflows in 2017-18 surpassing even the record $60 billion it received in the last financial year.
•However, researchers have found ‘severe’ delays as well as ‘serious’ omissions and commissions in FDI reporting, and that these “problems were quite pronounced in the record-breaking year of 2016-17.”
•Meanwhile, consultants said the government would need to consider the enormous foreign investor interest in sectors such as Multi-Brand Retail Trade (MBRT), insurance and pension and look at ways to further open up these sectors. It also needs to tweak policies in segments such as pharmaceuticals, spend more money on improv infrastructure as well as addressing red-tape if it wanted India to attract even more FDI in the coming years.
‘Only 2% of global flows’
•Incidentally, according to CARE Ratings, “India fetched (a) mere 2% of the total world FDI inflows in 2016.” It said India’s share was “very low compared with the other peers”, adding that “Hong Kong had a share of 5%, ...while Brazil witnessed inflows of 4% of the world’s net FDI inflows.”
•A study initiated by the Institute for Studies in Industrial Development and conducted by Prof. K.S. Chalapati Rao and Prof. Biswajit Dhar, which analysed the reported inflows after September 2014, showed that “due to prevailing reporting practices and some deep flaws, the available aggregates are extremely unsuitable for drawing straightforward conclusions.”
•It said, “At another level, there is not much of a correspondence between the FDI policy changes, selection of thrust sectors under Make in India and the reported inflows,” adding that “incidentally, the problems were quite pronounced in the record-breaking year of 2016-17.” The report further said, “besides [the government’s] ‘Ease of Doing Business’ [initiatives], there should be emphasis on ‘Ease of Doing Policy Relevant Analysis’ also.”
•However, the NDA government made a comparison of FDI from the time it took over till now (2014-17) as against 2011-14 (during the UPA regime), and recently informed Parliament that FDI grew in aviation and mining (both, six times), automobile and auto-components (1.7 times), gems and jewellery (3.5 times), electronics and IT (4.4 times), information and broadcasting (1.9 times), sea transport and ports (6.8 times), as well as textiles and apparel (2.2 times).
•Meanwhile, Deepak Bagla, MD and CEO, Invest India (the government’s investment promotion and facilitation agency), said the agency currently has $80.5 bilion worth of FDI proposals under “active facilitation,” adding that FDI in FY18 is likely to be about $70 billion. In the next fiscal, significant levels of investments are expected from countries including the U.S., South Korea, Taiwan, Italy, Germany and the U.K. in sectors including food processing, railways, defence, infrastructure, automobiles and ‘Electronic System Design and Manufacturing’.
•India could attract more FDI by further opening up sectors including insurance, pension, MBRT (retail trade in products manufactured in India) and pharma (liberal policy on over-the-counter medicines to boost local manufacturing capacity), besides addressing red tape and logistical problems, according to Akash Gupt, partner and national leader (regulatory services and tax markets), PwC India.
📰 Finance Ministry follows RBI, warns about cryptocurrencies
Likens such currencies to ponzi schemes; flags risk of loss
•The government has joined the Reserve Bank of India in cautioning potential customers about investing in cryptocurrencies like bitcoin, likening them to ponzi schemes where investors risk losing their money.
•“There has been a phenomenal increase in recent times in the price of virtual ‘currencies’ (VCs) including Bitcoin, in India and globally,” the Finance Ministry said in a statement on Friday.
‘No intrinsic value’
•“VCs don’t have any intrinsic value and are not backed by any kind of assets. The price of bitcoin and other VCs therefore is entirely a matter of mere speculation resulting in spurt and volatility in their prices. There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money,” the statement added. “Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes.”
•Private sector cyrptocurrency players agree with the Finance Ministry’s call for caution, adding that the bulk of the cryptocurrencies in the market are not reliable.
•“The Finance Ministry’s statement makes total sense,” Kumar Gaurav, CEO of Cashaa told The Hindu. “Because, right now, Bitcoin has not gained enough trust. It is still exotic and difficult to understand exactly what it is, either for the Finance Ministry or the Enforcement Directorate or tax authorities.”
•“It becomes more challenging for us to build a credible image,” Ashish Agarwal, founder of Bitsachs said. “I won’t say the Finance Ministry is wrong. Apart from the major currencies like Bitcoin, about 90% of the other currencies are scams. It is the responsibility of the Finance Ministry to warn consumers.”
•The government added that since VCs are stored in an electronic format, this makes them vulnerable to hacking, loss of password, malware attacks, etc, which could also result in a permanent loss of money.
•“As transactions of VCs are encrypted they are also likely being used to carry out illegal/subversive activities, such as, terror-funding, smuggling, drug trafficking and other money-laundering acts,” the statement said.
•Mr.Gaurav also said that the price fluctuations in Bitcoin over the last few months show the extent of speculation and market manipulation taking place.
•“The way the market has been reacting for the past six months, it is very clear that there has been speculation and market manipulation at work,” Mr. Gaurav said. “In the current window of three months, I would strongly go with the Finance Ministry’s warning. It is the right time for people to take a break and rethink their investments.”
•The Reserve Bank of India has issued three warnings, two of them this year, about the potential financial, operational, legal, customer protection, and security related risks associated with investing in virtual currencies.
📰 NGT orders closure of 19 tanneries
Discharging pollutants into drains
•The National Green Tribunal has ordered closure of 19 tanneries for discharging pollutants including heavy metals into drains in Punjab’s Jalandhar district which was resulting in serious environmental hazards.
•A Bench headed by former Chairperson Justice Swatanter Kumar constituted a high-powered committee to inspect 61 industries and directed it to prepare a complete and comprehensive report on tanneries.
•The report would submit on source of water of these tanneries, consumption of water, whether any flow meters to the conveyor belts have been fixed and if they have permission from Central Ground Water Authority.
•“We direct that the 19 industries which according to the Punjab Pollution Control Board, are non-compliant and are polluting and they have been found to be violating various parameters they are directed to be closed forthwith.
•“They would not be permitted to carry their manufacturing or any other tannery activity unless they submit appropriate application for obtaining the consent of the Board,” the Bench said.
•The high powered committee would comprise Member Secretary of State Pollution Control Board, senior most environmental engineer, nominated by the chairman of the Central Pollution Control Board, representative not below the rank of scientist from Environment Ministry and others.
Comprehensive report
•“This committee shall personally inspect all the 61 industries, prepare a complete and comprehensive report stating inter-alia source of water, consumption of water, whether any flow meters to the conveyor belts have been fixed or not, whether unit has permission from Central Ground Water Authority or not.
•“The number of tanning hides that are processed by the industry, whether the unit is providing primary treatment and it has its own chromium recovery plant. If the chromium is recovered, how it is utilised, mode of management and disposal of sludge and ultimate point of discharge,” the Bench said.
📰 Majuli island to be protected from erosion, says Gadkari
Minister lays foundation stone of a new scheme for the island
•Union Minister Nitin Gadkari on Friday expressed hope that people living on the shrinking Majuli island will be able to put their worries to rest once the Central and State government schemes to prevent the isle from erosion are successfully implemented.
•The projects, if properly handled, will be able to reclaim lost land, the Union Shipping and Road Transport Minister said after laying the foundation stone of a new scheme for the island.
•“With proper land management system, it will be possible to reclaim the lost land...” he said.
•Majuli island is surrounded by the Brahmaputra on the south and the Kherkatia Suti, Luit Suti and Subansiri rivers on the North.
•The Assam government had in the past constructed embankments to protect the island from floods. These measures, however,could offer marginal protection, official sources said.
•The Union Minister said that the Brahmaputra Board - set up under the Ministry of Irrigation - has been taking initiatives to protect the island since 2004 in line with the recommendations of an expert committee.
•“Due to unprecedented floods, massive land erosion had taken place in lower Majuli in 2007. The Brahmaputra Board then took several pro-siltation measures along the banks,” the Minister said.
•The expert committee, constituted by the Union Water Resources Ministry, had extensively toured the island in March, and suggested more steps to prevent erosion. Based on those suggestions, the Brahmaputra Board prepared a detailed project report for an estimated cost of Rs. 233.54 crore, he said.
•The Ministry of Development of North Eastern Region (MoDONER) has agreed to allocate Rs. 207 crore for the project.
•The remaining amount will be borne by the Brahmaputra Board, the Minister added.
•Mr. Gadkari also laid the foundation stone of the Brahmaputra Board office complex worth Rs. 40 crore at Majuli.
📰 ISRO to launch 31 satellites in one go aboard PSLV
First PSLV mission after failure of IRNSS-1H.
•The Indian Space Research Organisation (ISRO) on Friday said it would launch 31 satellites, including India’s Cartosat-2 series earth observation space craft, in a single mission on January 10.
•The mission will be the first ‘Polar Satellite Launch Vehicle’ (PSLV) mission after the unsuccessful launch of the navigation satellite IRNSS-1H in August this year.
•“The launch is tentatively scheduled for January 10,” a senior ISRO official said.
•The mission’s main payload would be India’s Cartosat-2 series earth observation satellite. The high-profile Mission Readiness Review committee and Launch Authorisation Board is scheduled to meet soon to take the final call.
•PSLV-C40 will be used for the launch from the spaceport in Andhra Pradesh’s Sriharikota, about 100 kilometres from Chennai.
•The mission would be a combination of 28 nano satellites from abroad, including Finland and the U.S., one micro and one nano satellite from India along with one Cartosat satellite, the official said.
•On August 31, India’s mission to launch its backup navigation satellite IRNSS-1H on board PSLV-C39 was unsuccessful after a technical snag on the final leg.
•In February this year, PSLV-C37 launched the first Cartosat-2 series satellite along with 103 co-passenger satellites in a single flight.
📰 Photovoltaic road tested in China
•China successfully tested its first photovoltaic highway based on home-grown technology in the country’s eastern Shandong province on Thursday, according to reports from Xinhua. The road has wireless charging systems for electric vehicles.
•The road is constructed using solar panels which have a thin sheet of clear concrete on top of them, protecting the surface.
•The panels were built to transfer energy to electric vehicles passing on top of them.
•The one-kilometre segment of solar-powered highway covers a surface area of 5,875 sq.m. The stretch has three layers. At the bottom is an insulator to prevent moisture from getting to the photovoltaic devices in the middle layer, and on top is the layer of transparent concrete.
•The tested segment of highway can generate 817.2 KW of power and is expected to generate 1 million KW hours of electricity each year. The electricity generated will be connected to China’s national power grid.
•China has become the second country to construct a photovoltaic highway. France was introduced the world’s first photovoltaic road fitted with solar panels in late 2016.
📰 No safety precautions
•The N.M. Joshi Marg police have found that even basic safety precautions were not followed and this could have played a role in the number of fatalities. Soon after the blaze was extinguished around 6.23 a.m., fire officials, along with police and civic officials, entered the remains of the Trade House, where the pub was located, to conduct inquiries. Police teams were also sent to the KEM Hospital in Parel, where the survivors were taken for treatment and the more seriously injured were admitted, to record their statements.
📰 Violators must pay: on fire tragedies
Mumbai’s fire tragedies must be thoroughly probed, and fire safety enforced countrywide
•The loss of at least 14 lives in the fire in a Mumbai rooftop restaurant on Thursday night must compel a relentless campaign for safety in buildings. Earlier this week, in another tragedy in the city, at least 12 migrant labourers were killed in a fire in an industrial area. This is a catastrophe that can befall anyone, which is why the fires in the upmarket building in the Kamala Mills compound and the snacks shop in Saki Naka in India’s financial capital need to become examples: of fixing of accountability of owners, managers and official agencies; punishment for those guilty of breaking rules; exemplary compensation for families of the dead and for the injured; and zero-tolerance enforcement of safety requirements. It should sting the conscience of governments that they learnt nothing from the Uphaar cinema hall fire in New Delhi in 1997 that killed 59 people. In that episode, the exits had been blocked by unauthorised seating. An impartial inquiry is needed to determine what building and other rules were violated in Mumbai, and to identify the officials who allowed them. It would be wrong to categorise deliberate acts as instances of mere negligence. Those responsible must be prosecuted without leniency.
•Assessing a fire professionally involves an inquiry that focusses on established construction codes: whether the possibility of igniting it was actively reduced, whether provision was made for controlling the spread of fire and smoke, whether the design enabled occupant escape and firefighter access, and whether the structure was built to avoid collapse. The inquiry ordered by the Maharashtra government must produce a public report on all these parameters. It must be followed up with meticulous prosecution. Given how the Uphaar case played out, it is important to see that the guilty do not use every device available to prolong the judicial process. It would ill-serve the cause of justice to the victims if the judiciary takes a lenient view of such a crime. The urgent need is to make examples of violators, invoking the most stringent provisions. Long as it has been, the struggle waged by the families of Uphaar victims who came together to form an association is in itself a commendable effort that has exposed the indifference of the executive. The absence of a strong law of torts accompanied by a slow criminal justice process and rampant bureaucratic and political corruption have contributed to the brazen violation of building norms and a system of special schemes to regularise such death traps for a fee. It is wrong for courts to take a benign approach to such blatant, complicit measures. On the other hand, they should be concerned that their orders issued to ensure public safety — road safety is one example — remain mostly on paper. It should worry us that the lives of Indians seem to be of little value.
