📰 Artefacts of ‘pre-Iron Age’ excavated in Odisha
ASI discovery in Jalalpur includes stone tools, potteries
•Archaeological Survey of India, which has been excavating a mound at Jalalpur village of Odisha’s Cuttack district, has now come across stone and bone tools believed to be of early Iron Age.
•“The discovery includes faunal remains, carbonised grains and stone and bone tools of early iron age to prehistoric period. Interestingly, we have found continuity in different periods,” said D. B. Garnayak, superintending archaeologist of ASI’s excavation branch in Bhubaneswar, on Monday.
•“Yellow and dark grey colour soil noticed during the excavation signifies the rural settlement flourished in different eras. Circular wall, semi-circular wall, crescent shape wall and mud platforms of different size and shape have been discovered,” said Dr. Garnayak.
•Following fresh discovery, the ASI has now proposed to involve scientists from Institute of Physics in Bhubaneswar and reputed geologists to study the tools. Recently, teeth of three types of sharks, stone tools were unearthed from the site.
•Among the artefacts retrieved from the site include red ware, red slipped ware, grey and black wares, pots of different shapes, bowls, bowl-on-stand, ring based bowls, miniature pots, storage jars, pots.
•Similarly, other antiquities retrieved from the site are polished stone axes and adzes, terracotta sling balls.
📰 SC seeks data on child sex abusers
High Courts told to hand in details in four weeks
•As an eight-month-old rape survivor from Delhi battles for her life at the AIIMS, the Supreme Court on Monday ordered a nationwide inquiry into how many child sex abusers had actually been punished.
•A three-judge Bench, led by Chief Justice of India Dipak Misra, ordered data from the High Courts on the number of pending cases of child abuse booked under the Prevention of Children from Sexual Offences Act, 2012. Public interest litigation petitioner and advocate Alok Alakh Shrivastava said there was a 95% pendency rate, as per the statistics of the National Crime Records Bureau.
Fresh figures
•Chief Justice Misra said the court wanted fresh and independent data collected by a team constituted under the supervision of the Chief Justices of the High Courts.
•The Bench said it wanted to know the status so as to set a deadline for the completion of trials in special courts. The court gave the High Courts four weeks to submit the data to the Supreme Court Registry.
•Though Mr. Srivastava urged the court to prescribe the noose for child abusers, rapists and paedophiles, the Centre in February said: “The death penalty is not the answer for everything.”
•The case concerns the sexual assault of the child in the national capital. The child was shifted to the AIIMS for intensive care under the court’s January 31 order.
📰 The cost of education
There is a lack of jurisprudential clarity on the fees charged by private schools
•Regulating school fees is one of the most significant legal and political challenges policymakers in India face. The issue of fee regulation finds itself at the intersection of constitutionally protected freedoms enjoyed by private schools and the need for making quality education affordable and accessible. Over the years, the issue of skyrocketing tuition fees has confronted parents. Adding to their burden is the annual and steep hike in tuition fees along with additional costs such as fees for transport, extra-curricular activities and sports. Every academic year sees the media reporting instances of unhappy parents expressing their anger against what they perceive to be unjust hikes. The managements of such schools claim that these hikes are reasonable and justified as the costs of maintaining a fully functional private school with quality teaching and world-class infrastructure are quite steep. In this context, balancing the autonomy of private schools and their public welfare function becomes a contentious issue.
•So can private schools arbitrarily hike fees? In T.M.A. Pai Foundation v. State of Karnataka (2002), the Supreme Court held that regulatory measures imposed on unaided private educational institutions must, in general, ensure the maintenance of proper academic standards, atmosphere and infrastructure and the prevention of mal-administration by the school management. Subsequently, in Islamic Academy of Education and Anr. v. State of Karnataka and Ors (2003), a Constitution Bench of the Supreme Court held that these institutions have the autonomy to generate “surplus” which must be used for their betterment and growth. While private schools are ‘entitled to a reasonable surplus for development of education and expansion of the institution, there has to be a balance between autonomy of such institutions and the measures taken to prevent commercialisation of education’. However, there is not much clarity on what the terms “surplus”, “reasonable surplus” or “commercialisation of education” entail.
Weak laws
•In order to prevent private schools from charging unreasonably high fees and to prevent misuse of funds, several State governments have either enacted fee regulation laws or are in the process of framing them. States such as Tamil Nadu follow the fee fixation model whereby a government committee is empowered to verify and approve fee structures proposed by private schools. Karnataka is for a formula that caps fees for schools by way of framing rules under its school education legislation. Maharashtra has a weakly enforced legislation to regulate fees and has multiple government bodies to approve school fees. Recently, the Maharashtra government’s decision to cap proposed fee hikes at 15% was widely criticised by schools. A recent order of the Gujarat High Court upholding the validity of the Gujarat Self Financed Schools (Regulation of Fees) Act, 2017 is now being reconsidered by the Supreme Court. The court has directed the government to not take any coercive steps against schools in the interim period.
•As of now, these models are affected by the challenges of weak implementation, a lack of capacity and constant legal challenges posed by private school associations. There is a larger irritant which is entrenched in the way private schools operate. In 2010, the Comptroller and Auditor General slammed 25 well-known private schools in Delhi for arbitrary fee hikes. According to the report, money was being collected from parents under false heads, while at the same time, teachers were being underpaid, and accounts misrepresented. Existing legislative efforts have made an incomplete assessment of the deeper problems with financial management and accounting practices adopted by private schools.
Accounting standards
•The new wave of fee regulation laws being debated and enforced in States has the potential to address the problems Indian parents face. However, there is still a lack of jurisprudential clarity on what private schools can or cannot do, how much “surplus” they can make, or what “commercialisation” actually means. In order to make these laws more effective, the solution would be to address the disease of financial mismanagement and misreporting, and not the symptoms. In Modern School v. Union of India (2004), the Supreme Court recommended accounting standards for private schools. Further, measures such as regular government supervised audits, generating capacity in State-level Departments of Education, regular inspections, and stricter sanctions for fraudulent reporting could be considered. Legislative and executive efforts must weigh in on all of the above.
📰 Indo-French harmony: on President Macron's visit to India
PM Modi and President Macron deepen ties to work around global uncertainties
•Much like the pioneering India-France strategic partnership of 1998, the agreements signed during President Emmanuel Macron’s visit are set to strengthen bilateral cooperation at a time of global flux. The Joint Vision Statement on the Indian Ocean Region is clearly aimed at countering China’s growing presence in the region. And the International Solar Alliance, recommitment to starting the Jaitapur nuclear power plant, and joint ventures on climate change cooperation are reactions to the U.S. abdicating its role by announcing its pullout from the Paris accord. The “reciprocal logistics support” agreement, which Prime Minister Narendra Modi called a “golden step” in defence cooperation, is a signal to Russia and to the U.S.-led alliance that partnered in the “Quadrilateral”, that both New Delhi and Paris feel the need to diversify strategic postures beyond their current choices. Finally, by bringing 61 countries into the ISA, India and France are proposing an alternative leadership model for the less developed world, challenging the geopolitical power structure configured around fossil-fuel energy resources. Notably, Mr. Modi and Mr. Macron declared they would ensure cheaper solar energy and increase avenues for financing, something that has created heat at the WTO. The daunting task ahead is made clear by Mr. Macron’s assertion that $1 trillion is needed to reach the ISA goals by 2030: India and France have so far committed $1.4 billion and $1.3 billion, respectively.
•There are other contradictions that New Delhi and Paris must contend with. For example, India’s solar power tariffs stand at about ₹2.40 a unit and there is little scope to make the domestic industry profitable, as Mr. Modi wants, unless the cost of solar panels and other components are brought down drastically. At the same time, more thermal power, for which tariffs are higher but which is less fickle than solar or wind power, is being produced than the demand. France’s nuclear power story is a success, but negotiations between EDF and NPCIL for the Jaitapur plant, billed as the world’s biggest, have made very slow progress. While the two countries have committed to start construction by end-2018, they have missed deadlines multiple times. Bilateral cooperation in the Indian Ocean Region too is more symbolic than substantive today, and much will depend on how closely the Indian and French navies and intelligence work together in the future. The presumed joint message to Beijing may also be blurred by Mr. Macron’s parallel commitment to help “lead” the Belt and Road Initiative with China. As two pluralistic democracies with a firm belief in a multipolar world order and in the future of Eurasia, India and France have numerous strategic convergences. But common ambitions to cooperate on the world stage, as projected by Mr. Macron and Mr. Modi, must be grounded in some hard realities as well.
📰 Always a rule-maker
In the new world order, India should give primacy to rules that will chart a path for its own sustainable prosperity
•The inaugural International Solar Alliance (ISA) summit underlines India’s place in the new world order. Global equitable sustainable development, which is the basis of the ISA, suggests a ‘third’ way to the inequality and environmental damage characterising the current U.S. and China-led models. This vision follows from India’s call for ‘climate justice’, which reframes climate change as a social and not a physical problem. The shift fills the gap in the thrust of the ‘Chinese dream’ and ‘America first’, both of which ignore sustainable development. In January, the big takeaway from the ASEAN-India Summit was that countries in the region questioned the benefits of China’s model of a new order and the U.S.’s commitment to the existing order and considered India as a balancing factor. This is also why China and the U.S. are seeking to work with India.
•U.S. President Donald Trump said: “Any nation that trades away its prosperity for security will end up losing both.” This statement recognises the defining feature of the 21st century. The challenge for India is to take advantage of global trends and push infrastructure, e-commerce, human capital and technology development to position itself in the emerging global economic triumvirate, which must operate within global ecological limits, and as a cyber global power. India should now give primacy to rules that will chart a path for its own sustainable prosperity rather than seek congruent interests.
Jointly shaping new rules
•Questions around the existing political and economic order suggest that India should not reject collaboration in the Belt and Road Initiative (BRI), which is the framework for a new order. Rather, it should work with China to jointly set the new multilateral rules. Part of this dynamics is being played out in the Regional Comprehensive Economic Partnership (RCEP), where India must consider longer-term and not immediate interests.
•India and China have together been questioning the injustice of current global rules. They, along with other BRICS members, set up the BRICS Development Bank and established the BRICS Contingent Reserve Arrangement. In 2015, China launched the Asian Infrastructure Investment Bank of which India is the second largest shareholder. The RCEP, dominated by China and India, avoids rules on labour, environment and intellectual property rights espoused by the U.S., the European Union, and Japan. There is an emerging clash in the United Nations, World Trade Organisation, and the climate treaty with the U.S. weakening multilateral rules by redefining what is ‘fair’. It is also becoming clear that in a multipolar world China cannot shape rules for the ‘Asian Century’ by itself, just as India should not expect countries in Asia to choose between itself and China, as they see the BRI as the only source of much-needed investment.
•The two sides have just recognised “sensitivity to each other’s concerns, interests and aspirations” and China has suggested they “meet halfway”. New opportunities are emerging with Beijing’s willingness to discuss Delhi’s concerns about Pakistan and the BRI. The aim should be to demarcate the border, a colonial legacy, and for the Shanghai Cooperation Organisation to develop Asia-specific rules for non-aggression to institutionalise China’s stated support for non-hierarchical relations.
Maritime trade routes
•Indian Ocean trade routes, which have always connected the east and west, are an expanding conduits for half the world’s container traffic, one-third of bulk cargo transport, and nearly two-thirds of global maritime oil trade. The UN Convention on the Law of the Sea was designed to maintain public order at sea, but is inadequate for current needs. A U.S. withdrawing from economic multilateralism needs India to shore up its strategic influence in Asia. China is wary of India’s security understanding with ASEAN as it negotiates a Code of Conduct to meet challenges to its ‘Nine-Dash Line’. Statesmanship would require India to limit itself to its own naval conclaves of the littoral states of the Indian Ocean and organise platforms which include China and Japan and allow for the development of Indian Ocean-centric rules of engagement.
•The just-concluded reciprocal logistics support between the Indian armed forces and France limits itself to the Indian Ocean Region, India’s security perimeter. Partnership should be extended to the Francophone Indian Ocean Commission. New global vision also matters.
•In 2018, India will have to make hard choices. It will need to strike a balance between being a part of the Quad and partnering with Russia and China, as they are now considered the biggest threat by the U.S.
📰 U.K. fumes at French offer to Indian students
Post-Brexit stand on issue unclear
•French President Emmanuel Macron’s overtures to India during his four-day visit have hit a raw nerve in Britain, particularly as he sought to reach out to Indian students, encouraging them to study in France.
•British Foreign Secretary Boris Johnson took to Twitter to defend Britain’s record, pointing out that over 14,000 came to study in Britain in the first quarter of 2017 alone — a rise from the year before.
•“#educationisgreatinEnglish” he wrote, responding to the French President’s tweet that sought to stress the benefits that a connection to France would bring. “I want to double the number of Indian students coming to France. If you choose France you gain access to Francophonie, you gain access to Europe,” Mr. Macron tweeted during his visit to New Delhi.
British concerns
•His comments touch upon a couple of contested political issues in Britain — concerns around its stance on international students, and fears that European markets will seek to capitalise on Brexit-related uncertainty to lure businesses and others out of the U.K.
•The issue of international students remains particularly sensitive in the U.K., with the total numbers of Indian students making a modest recovery last year, but still below 2010 figures. Meanwhile, the numbers of Indian students in other European countries such as Germany have risen sharply.
📰 S-400 deal may be finalised by March 31
•India and Russia could be just weeks away from signing one of the biggest defence deals between the two sides in recent history, said two senior defence sources this week.
•The contract negotiations for the purchase of the S-400 Triumf long range air defence systems are in the final stages, and are expected to be closed by March 31.
•India is planning to buy five systems that is expected to cost about Rs. 39,000 crore and is considered one of the most potent Surface to Air missile systems in the world. It can track and shoot down a range of incoming airborne targets at ranges of upto 400km.
•“We expect to conclude the S-400 contract within this financial year,” a defence source said.
•In 2016, the two countries had concluded the Inter-Governmental Agreements for five S-400 systems and four stealth frigates after which the contract negotiations began to conclude a commercial contract.
•Officials termed the negotiations as “very complex” as there were thousands of pages of documentation to be discussed. Russia has already conveyed to India that the deal should not have any offset clause as it is a strategic system.
📰 Noted positive remarks by India, says China
Centre had spoken of developing bilateral relations
•China on Monday stepped up the ongoing messaging between Beijing and New Delhi, highlighting a steady improvement in their post-Doklam ties.
•To a question during his routine briefing, Foreign Ministry spokesperson Lu Kang said that China had noted “positive remarks by the Indian side”.
•Mr. Lu was apparently referring to observations by Raveesh Kumar, the spokesperson for the External Affairs Ministry.
•In response to positive remarks by China’s Foreign Minister Wang Yi regarding the prospects of Beijing-New Delhi ties, Mr. Kumar said on Friday that India was “willing to work with the Chinese side to develop our relations based on commonalities while dealing with differences on the basis of mutual respect and sensitivity to each other’s interests, concerns and aspirations”. He said that as “two major countries and large economies, relations between India and China are not just important bilaterally, but also have regional and global significance”.
Guided by consensus
•Mr. Lu said that the Chinese Foreign Minister, at his annual press conference on Thursday, “elaborated on China’s basic position on its relations with India”.
•“We wish to work with the Indian side to take the important consensus between the two leaderships as our guidance to improve our mutual trust, enhance mutual beneficial cooperation, manage our differences and ensure the correct track of our relations’ development,” Mr. Lu observed.
•During his media conference, Mr. Wang had said in response to a question on the flurry of visits by the Chinese and Indian officials after the 73-day Doklam standoff: “The Chinese dragon and the Indian elephant must not fight each other but dance with each other. If China and India are united, one plus one will not only include two, but also 11.”
•Mr. Wang and Chinese State Councillor Yang Jiechi visited India in December, in the backdrop of the post-Doklam meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping at Xiamen in September.
📰 Ineffective and arbitrary
The demand for death penalty for those who rape children is thick on rhetoric and thin on empirical evidence
•The amendments to the Indian Penal Code passed by Rajasthan and Madhya Pradesh introducing the death penalty as a possible punishment for the rape of a girl below the age of 12 years is a perfect example of lawmaking that is as thick on rhetoric as it is thin on empirical evidence. Though child sexual violence is one of the relatively better documented areas in criminal justice, little of that research is reflected in the imagination and passing of these amendments.
•What is the purpose of these amendments? Statements from politicians in the two States will reveal the three interests that drive this move: first, there is the belief that harsher punishments will deter people from committing child rape; second, justice for child survivors demands that the law provide for the death penalty; and third, our abhorrence for the crime makes the perpetrator ‘deserving’ of the death penalty.
The various justifications
•The deterrence argument is attractive because it appeals to our intuition that fear of the harshest punishment will prevent individuals from committing child rape. But social, economic, cultural, psychological and other factors in each of our lives interact in far more complex ways than just that simple equation. In 2012, the National Research Council of the National Academy of Sciences in the U.S. published a comprehensive analysis of deterrence studies and came to the conclusion that it is impossible to determine whether the death penalty is a deterrent or not. The response might well be: if we are uncertain about deterrence, what is the harm in trying it? The specific counter in the context of child rape is that there is an extensive body of work that documents many preventive measures and policies that have a definitive impact on preventing child rape. By diverting resources to the death penalty, we are taking away from developing strategies like risk assessment and management, cognitive behavioural treatment and community protection measures that have proven to have far greater preventive potential.
•Death penalty as justice to the child survivor is a disingenuous argument because it seeks to cover-up the real reasons that prevent justice to survivors. Child rights groups have often expressed grave concerns over the manner in which investigations and criminal prosecutions take place under the Protection of Children from Sexual Offences Act, 2012, and low conviction rates. The lack of specialised investigators, prosecutors, judges, mental health professionals, doctors, forensic experts and social workers working on cases of child rape specifically has been repeatedly cited as the need of the hour. Further, our efforts to ensure justice for child survivors have suffered from grossly inadequate child protection and rehabilitation services, lack of compliance with child-friendly legal procedures, and no real system of positive measures to reduce vulnerabilities of children in this context.
•Research on child sexual violence in India shows that a large proportion of perpetrators are family members or those close to or known to the family. This results in massive underreporting of such crimes. This concern will only intensify with the death penalty because we are effectively asking the child’s family to risk sending a family member or a known person to the gallows.
•The third reason perhaps lies at the core of these amendments and everything else appears to be dressing around it. The abhorrence associated with the crime and perpetrators of such crimes drives the sentiment that such individuals ‘deserve’ the death penalty. In the words of Madhya Pradesh Chief Minister Shivraj Singh Chouhan: “We believe that human rights are meant for humans and not devils who are involved in heinous crimes.” This line of thinking raises a conundrum. Under our Constitution, a legislation has to always give a sentencing judge the option of choosing between life imprisonment and the death penalty; death penalty cannot be declared as the only punishment for any crime. The sentencing judges will have to make this choice in the context of child rape too. If our abhorrence is a valid constitutional consideration, how is a judge to choose which child rapist deserves or which one doesn’t deserve to die? Are we then to signal that the rape of a certain child matters more than the rape of another?
This will inevitably become a judge-centric exercise where the individual predilections of a judge will take precedence over any rule of law. In essence, this would be a ‘lethal lottery’ that will express our abhorrence for some perpetrators but will do very little for the survivors or those at risk of such violence.
•Arbitrariness in imposing death sentences has been explicitly discussed in judgments of the Supreme Court and also led the Law Commission to recommend the gradual abolition of the death penalty in its 262nd report. This concern about arbitrariness is only bound to worsen when judges are asked to pick instances of child rape where the death sentence is to be imposed based on the ‘rarest of rare’ standard. It is mind-boggling to imagine the manner in which judges will attempt to apply the requirements of that standard to balance aggravating and mitigating circumstances. In essence, we will be asking judges to decide why certain instances of child rape are worse than others.
Targets the poor
•The arbitrariness of the death penalty in India also arises from the discriminatory impact of the choice of what constitutes ‘rarest of rare’. The Death Penalty India Report of 2016 found that a very large proportion of death row prisoners (over 75%) are extremely poor and belong to marginalised groups with barely any meaningful access to legal representation. Thus the weakest sections of society bear the burden of the death penalty. It is important to understand the implication of this for the discussion on child rape. While there is widespread agreement that child rape is a concern across all sections of society, by choosing the death penalty as a response we are focussing on a punishment that structurally targets the poor.
•The death penalty for child rape is a counterproductive diversion that helps the government present the illusion that it is serious about child rape. Governments are looking for the easy way out on an issue that requires sustained planning, engagement, and investment of resources. The measures required for protecting children from sexual violence and providing survivors with justice require governments to take steps that are very different from steps meant to convey our abhorrence. We are dangerously close to hate colouring our judgment on what is required to protect our children.
📰 SC admits plea on lawmaker-lawyers
Petition says dual role is a matter of concern to judiciary and the legislature
•The Supreme Court on Monday admitted a PIL petition to ban MPs and MLAs from doubling up as lawyers.
•A three-judge Bench, led by Chief Justice of India Dipak Misra, directed the Bar Council of India (BCI) to respond by April 23, the next date of hearing.
•The writ petition filed by Supreme Court advocate Ashwini Kumar Upadhyay said legislators donning the lawyers’ robes was a “matter of serious concern to both the judiciary and the legislature”. “They also utilise their position as MPs/MLAs to be visible in the public domain, including on television where they give interviews or participate in shows. This essentially amounts to advertising, as their ‘brand’ is promoted among the public, many of whom are potential litigants. This virtually seamless transition between the two spheres by these legislators is causing irreversible harm to both the profession and public interest,” the petition said.
Violation of law
•The petition said the practice was in violation of Rule 49 of the Bar Council of India Act, which forbade an advocate to be “full-time salaried employee of any person, government, firm, corporation or concern, so long as he continues to practice”.
•The lawmakers draw their salaries and pensions from the exchequer. The petition was filed by Mr. Upadhyay, represented by V. Shekhar, after his plea before the BCI was stalled.
•Mr. Upadhyay has contended that MPs and MLAs drew their salaries from the Consolidated Fund of India, and hence were “employees of the State”.
•Under Section 21 of the Indian Penal Code and Section 2(c) of the Prevention of Corruption Act, MLAs and MPs were public servants. Hence, allowing them to practice as an advocate and restricting other public servants was arbitrary, irrational and violation of Articles 14-15 of the Constitution, Mr. Upadhyay said. He said it amounted to “professional misconduct” that MLAs and MPs who got salary and other benefits from the public fund, appeared against the government.
📰 Not by fear alone
With the GST e-way billing set for April 1,firm timelines and simplification will be key
•The GST (goods and services tax) Council chaired by Finance Minister Arun Jaitley has decided to stick to the prescriptions of the group of ministers on the rollout of the e-way bills system. So, starting April 1, all inter-State movement of goods above the value of Rs. 50,000 will require the generation of an e-way bill to help track their movement. The original rollout plan for February 1 had to be aborted as the IT system couldn’t handle the lakhs of e-way bills being generated by consignors and transporters. As proposed by the ministerial group, the e-way bill system for tracking intra-State movement will be launched in a phased manner, with all States to be on board by June 1. From April 1 onwards, every week a few States will start the system for internal trade. While such an approach may give the government an opportunity to fix the chinks in the system, this is a compliance nightmare in the making for taxpayers with operations in multiple locations. The government is keen to use the system to foil tax evasion or non-filing of returns. The Central Board of Excise and Customs, together with the GST Network, has begun deploying data analytics on the vast repository of information collected from taxpayers since July. Action is likely to begin soon on taxpayers, based on variances and data gaps that have been found in returns.
•While industry remains edgy about the capacity of the IT system to cope with e-way bills from April 1, new rules and forms for the generation of these transit challans have been issued. Tax experts have voiced concern about some of these rules, including one that empowers commissioners to notify those officers who can intercept any mode of conveyance to carry out physical verification of e-way bills while goods are in transit, akin to the old physical checkpost system. What is most disappointing for business, however, is the failure of the GST Council to finalise a simplified tax form for assessees. Infosys co-founder Nandan Nilekani has also made a pitch to help formulate a simpler return that involves just one monthly filing. Mr. Jaitley has said that there is scope for further simplification in the options available with the Council without rendering such a form ‘evasion-prone’. For now, taxpayers will have to stick to the current compliance system till June 2018. Similarly, the plan to pay GST under the reverse charge mechanism has been deferred till the end of June, to avoid ‘inconvenience’ to trade and industry. The e-wallet scheme proposed for exporters whose cash flows have been affected by delays in refunds on GST paid on domestic inputs has been deferred till October 1. For GST to become truly simple for taxpayers, certainty of timelines is as critical as the fear of the taxman.
📰 Banks need better governance: IMF
Asset quality deteriorating, says Zhang
•The recent instance of fraud in the banking sector has brought to the fore the issue related to governance in banks, especially public sector entities that need to put in place tighter controls and improve their balance sheets, according to a top official of the International Monetary Fund (IMF).
•“While the asset size is increasing in India, there is a deteriorating trend in terms of asset quality,” said Tao Zhang, deputy managing director, IMF. “It is not good compared to other countries.” “The efficiency of the sector can be made better and risk management and culture strengthened,” he added while highlighting some of the recent reforms related to bankruptcy regulations, asset quality review and the resolution framework for stressed assets.
A challenge
•Speaking at a fintech event organised jointly by the IMF and the National Stock Exchange (NSE), he stressed on the fact that even while India had been a leader in terms of growth rates, financial inclusion was a challenge as access to finance had been low compared with other developing countries.
•“The Financial Sector Assessment Program (FSAP) has highlighted the need to boost the efficiency of India’s financial system as the return on assets has been low when compared to its peer group,” he said.
📰 IIP quickens to 7.5%, inflation softens
Manufacturing, electricity, capital goods drive industrial activity; 4.4% inflation at four-month low
•Industrial activity accelerated in January to 7.5% on the back of strong manufacturing growth and a rebound in the consumer durables sector, according to official data released on Monday.
•Retail inflation, as measured by the Consumer Price Index (CPI), eased to 4.4% in February, following two months of figures above 5%.
•Growth in the Index of Industrial Production quickened to 7.5% in January from 7.07% in December. The manufacturing sector saw growth quickening marginally to 8.7% in January from 8.4% in the previous month.
•Electricity also saw growth accelerating to 7.6% from 4.43% in December.
•“IIP growth appears to be firming up and it is confirmation of the ongoing recovery of the economy,” D.K. Srivastava, chief policy adviser at EY India said. “The government demand picked up post last year’s Budget and it is now having an effect on infrastructure and primary goods.” Primary goods saw growth accelerating to 5.8% in January from 3.73% in December. The capital goods sector continued to witness strong growth of 14.6% in January, although this was lower than the 16.44% seen in the previous month.
•Growth in infrastructure and construction quickened slightly to 6.8% in January from 6.68% in the previous month. The consumer durables sector saw growth accelerating sharply to 8% from 0.86% over the same period.
‘PMI data mismatch’
•“The only concern is that the Purchasing Managers’ Index data for February showed a weakening so one has to wait and watch,” Mr. Srivastava said.
•Inflation as measured by the CPI slowed to 4.44% in February from 5.07% in January, mostly due to easing food and fuel prices.
•Inflation in the food and beverages segment slowed to 3.38% in February from 4.58% in the previous month. Similarly, inflation in the fuel and light segment slowed to 6.8% from 7.73% over the same period.
‘One-off seasonal factor’
•“This easing appears to have come largely on the back of a slowdown in the food price inflation on account of one-off seasonal factors,” Richa Gupta, senior economist and senior director, Deloitte India said.
•“Whether this easing sustains or not depends on multiple factors, including the agricultural production as well as the threat of rising crude oil prices on the back of further output cuts.
•“Hence, it can be expected that RBI may not dilute its position on expected inflationary risks and is likely to maintain status quo during the April monetary policy.”
📰 India’s arms imports from U.S. up by 550%: report
“India was the world’s largest importer of major arms in 2013-17”
•The U.S. recorded a blazing growth in its arms exports to India, recording over 550% growth in 2013-17 compared with the previous five years. As a result, the U.S. has become India’s second largest supplier.
•In contrast, Pakistan’s imports from the U.S. dropped by 76% in 2013-17 compared with 2008-12, while it emerged as the largest recipient of Chinese arms exports, according to the latest report from the Stockholm International Peace Research Institute (SIPRI).
•Russia continued to be India’s largest arms supplier, accounting for 62% of India’s arms imports between 2013 and 2017.
•“India was the world’s largest importer of major arms in 2013-17 and accounted for 12% of the global total. Its imports increased by 24% between 2008-12 and 2013-17,” SIPRI, which monitors global arms transfers, said in the report released on Monday.
•“The tensions between India, on the one side, and Pakistan and China, on the other, are fuelling India’s growing demand for major weapons, which it remains unable to produce itself,” said Siemon Wezeman, Senior Researcher with the SIPRI arms and military expenditure programme.
Chinese arms
•While India continues to depend on imports for its arms requirements, China’s arms imports fell by 19 per cent between 2008-12 and 2013-17. While it was the world’s fifth largest arms importer in 2013-17, China has also emerged as the fifth largest arms exporter, with exports rising by 38% between 2008-12 and 2013-17. A majority of these weapons have been procured by countries in India’s neighbourhood.
