📰 Nutritional politics
After more than a decade of discussions, there is no agreement on what to feed children in anganwadis
•Many children have died of malnutrition in India and yet Women and Child Development Ministers over the years haven’t decided what food to give children in anganwadis. This is worrying. How many more children must suffer from stunted growth before the Minister in charge of their welfare decides on whether to serve them hot-cooked nutritious meals or packaged/processed fortified mixes? And why does there have to be a choice between the two? Why can’t India incorporate both? Is it really that difficult to keep a close watch on the quality of food served to children between the ages of three and six as well as take-home ration for pregnant and lactating women?
•Apparently, it is. If you put together the years of the Congress-led United Progressive Alliance government and the Bharatiya Janata Party government, no solution is in sight after more than a decade of discussions. The Minister of Women and Child Development, Maneka Gandhi, and her predecessor, Renuka Chowdhury, have always exercised the easy option: dense, fortified food for malnourished children, courtesy the manufacturers. But early this month, Ms. Gandhi locked horns with her own officials on arriving at a solution. While her officers are batting for take-home rations that are locally available and processed, Ms. Gandhi favours a quickly served, nutrients-fortified alternative. It is an old debate; one that involves big biscuit-makers and assorted corn puff manufacturers on the one hand and social activists on the other, with children caught in between.
•Data on malnutrition should serve as a wake-up call for the government: 38% of children are stunted and 35.7% are underweight in India. About 21% of children under the age of five are wasted (low weight for height), according to the National Family Health Survey-4 data.
•Eight years ago, when malnutrition deaths occurred in some districts in Maharashtra, a simple solution involving a protein-rich diet called Lapsi — a green millet mixture combined with water and milk — was given to malnourished babies. In Jharkhand, dry rations such as oil, dal, wheat or rice were given to mothers — until the contractor lobby forced the government to shift in favour of processed food.
•The point is to address malnourishment through locally produced, diverse food options that the country offers. Under the UPA government, the Minister in charge wondered aloud in 2007 about who would keep a watch on the quality of meals served. She asked what would happen if something fell into the food being cooked. “Can we keep a close watch? Why not serve packaged food?” This is a valid point of concern, but is it impossible to work out a solution? Or is there no solution because children cannot be quantified as vote banks?
📰 Anatomy of a reset
There is now a mutual recognition in both India and China that a posture of hostility has undermined their interests
•The India-China relationship has always been too complex to classify under a single theme. Competition-cooperation-discord is an often-evoked term typology that reflects the contradictory nature of this relationship. Last year witnessed all these facets play out: India’s trenchant critique of the Belt and Road Initiative (BRI), India’s entry into the Shanghai Cooperation Organisation, the dramatic crisis in Doklam on the northern frontiers, the acceleration of multilateral cooperation in the BRICS format, and attempts to foster economic engagement. Yet, nothing exemplified the state of ties more than the Himalayan standoff, which was the closest both countries came to drawing blood in over three decades.
Build-up of negativity
•What led to this tailspin in India-China relations? We will not find the clues in some valley or a narrow stretch of road in the upper Himalayas. Rather, the main reason has been a systematic buildup of negative images of how each side viewed the other’s foreign policies along with a collapse in geopolitical trust. For India, China’s attempt to raise its economic and political profile in the subcontinent was seen as an encroachment on, and an affront to, Indian authority in the neighbourhood. For China, India’s pursuit of deeper military engagement with the former’s main strategic rivals — the U.S. and Japan — was viewed as a serious challenge to its future security. Convinced that only an assertive policy would work, both Delhi and Beijing over the past two years began exploiting leverages and pressure points to keep the other side off balance. India tilted closer to the U.S., China towards Pakistan, and on a scale not witnessed even during the Cold War years.
•Yet, neither side has been able to extract any concessions or improve the terms of their bilateral interactions. On a range of issues – the Nuclear Suppliers Group membership, Pakistan-sponsored terror and hydrological cooperation being the most prominent — India failed to receive any give from China. With India’s boycott of the BRI, China too found itself confronting not only the only major holdout against its flagship international initiative but also its most suspicious and non-cooperative neighbour in Asia. Beijing also noticed that New Delhi was beginning to openly involve external powers to collaborate with it in an anti-China strategy in South Asia and the Indian Ocean. Worse still must have been the spectacle of India brandishing its Tibet card. Such unbridled competition and rising costs to Indian and Chinese interests — and Doklam was the tipping point — appears to have persuaded both Prime Minister Narendra Modi and Chinese President Xi Jinping that their policies were producing zero-sum outcomes and required some kind of a course correction.
•Sensibly, both leaderships have drawn the correct lessons and are reciprocating each other’s moves towards a reset. The traditional template, where India-China differences were handled in an overall framework of a politically stable and mature relationship, is being restored. The rhetoric from the recent meeting between Foreign Minister Sushma Swaraj and Chinese State Councillor and Foreign Minister Wang Yi was instructive. The emphasis has shifted from a glass half-empty narrative to a glass half-full: “our commonalities outweigh our differences” (Indian Foreign Minister) or “our common interests far outweigh our differences” (Chinese Foreign Minister). To be sure, we have heard similar rhetoric before. But the context is new as both leaderships hope to infuse stability back into this complex relationship.
Course correction
•The Modi government’s decision to resuscitate the China relationship has aroused scepticism from the doubters in the strategic community who think the pendulum will shift towards appeasement after a period of doggedly standing up to China. But New Delhi is really adjusting a policy that has simply not worked. First, it is becoming apparent to the realists inside the government that an adversarial relationship with China brings no advantages and amplifies security problems that India can neither solve on its own nor address with the assistance of external powers who have shown little inclination to deflect Chinese influence in the subcontinent and its littoral.
•Second, India-China friction enhances Pakistan’s ability to shape Beijing’s South Asia hand even though the latter itself would prefer a more balanced regional posture and a constructive equation with New Delhi.
•Third, a contentious India-China relationship also reduces India’s bargaining leverage vis-à-vis the U.S. and Japan. New Delhi must have also noticed that despite their differences with Beijing, both the U.S. and Japan truly value their interdependence with China. Sino-American cooperation on the Korean nuclear question and efforts to transform North East Asian geopolitics is just one example. Japan, with a $300 billion trading relationship with China, too wants to ensure it remains engaged with the world’s second largest economy. Recently, Tokyo has even endorsed the prospect of a “case-by-case” cooperation with the BRI.
•Finally, the Modi government is also recognising that the promise of economic cooperation with China can only translate into meaningful outcomes if there is overall geopolitical stability. Few economic actors will enter the fray if the forecast for bilateral ties is one of uncertainty and turbulence. Mr. Modi’s original instinct to craft a grand “developmental partnership” with China got lost in the geopolitical headwinds after 2014. There now seems to be an effort to reclaim that pragmatic vision.
More than common sense
•Since 2014, India’s discourse on China’s rise has swung back and forth from paranoia and deep suspicion to calmer assessments of its implications for Asia and the world economy. Fortunately, there is now a shared belief in both capitals that a posture of hostility has undermined Indian and Chinese interests. But an India-China détente will have to be built on more than just common sense. Mr. Modi and Mr. Xi have their task cut out for them.
📰 Saving Afghanistan
Global and regional powers must desist from playing the ‘Great Game’ and build peace
•Even before the Taliban announced its new “spring offensive”, violence in Afghanistan had escalated dangerously this year. According to the UN Assistance Mission in Afghanistan, the number of casualties in the first three months of 2018 was already 2,258 (763 killed, 1,495 injured). Last year, the U.S. announced a new ‘South Asia policy’ for Afghanistan, which was officially welcomed by both New Delhi and Kabul and hailed as a game-changer for the region. Just eight months later, the policy itself seems uncertain. And although the U.S. administration has taken some steps on Pakistani funding of terrorism across the Durand Line, it has clearly not yielded calm on the ground, as wave upon wave of terrorist violence has lashed Kabul and other cities. Sunday’s bomb attack in Kabul at a voter registration centre, where more than 57 were killed, carried a doubly diabolical message from the Islamic State. Not only did the group attack Afghanistan’s fragile democratic process, making it clear that elections next year could face more violence, but a majority of the victims were Shias, highlighting the sectarian turn in the conflict. In addition, the statement from the Taliban rejecting Afghan President Ashraf Ghani’s offer of talks “without preconditions” and calling for the targeting of American forces in Afghanistan as part of a “spring offensive” signals the security challenge. According to the U.S., Afghan forces control just a little over half the territory today, down from nearly three-fourths in 2015. There seems little to suggest then that the U.S. policies guiding Afghanistan, and Kabul’s efforts to protect its people, are making any headway. It is necessary for both to take a more hard-headed, realistic view of the road ahead.
•There is a need to stop the ‘Great Game’ for influence in Afghanistan. Growing U.S.-Russia tensions are creating space for proxies for both on Afghan soil, and the attacks by al-Qaeda and IS-related terror groups have their roots in the larger war between Iran and the Arab world. Tensions between India and Pakistan cast a shadow over Afghanistan, with India’s development assistance under attack. In turn, driven by the desire to secure itself from Islamist groups, China is trying to build a rival military base in Afghanistan. Ironically, in the wake of 9/11 and the Taliban’s defeat in 2001, for a while all these countries were actually on the same page on helping Afghanistan. It is not as if efforts have not been made for bilateral and multilateral peace talks in recent months, but each one has amounted to too piecemeal an effort. Defeating terrorism in Afghanistan needs every stakeholder to put aside differences, and acknowledge that the current situation is a danger to all.
📰 H-4 visa move draws criticism
Several Democratic lawmakers oppose plan to scrap work permits for spouses of H-1B visa holders
•The move by the Donald Trump administration to end work permits for spouses of H-1B visa holders is a regressive measure that would also adversely impact the American economy, several Democratic lawmakers said on Wednesday. These lawmakers were speaking at an event hosted by the U.S.-India Friendship Council, an organisation led by prominent Indian American businessman Swadesh Chatterjee.
Gender discrimination
•Lawmakers also underscored the gender discriminatory impact of the move as most of the beneficiaries of the current rule that was enacted in 2015 are women. “Women who are just as qualified, sometimes more qualified than their spouses but haven’t been able to work,” got their right to work in 2015, said Indian American Congresswoman Pramila Jayapal, recalling her campaign during the previous Obama administration for work permits for them. “I oppose the move to terminate work permits to H-4 visas,” Ms. Jayapal, the first Indian American woman elected to the House of Representatives, said.
•H-4 is the category of visas allotted for spouses of H-1B visa holders.
•Ro Khanna, Representative from California, said: “I oppose the move. I am on a bipartisan Bill that seeks to ensure work permits for spouses. It is also a question of countering domestic violence. Because most of these spouses are women, in the absence of economic independence, they become vulnerable.”
•“We worked with the Obama administration to institute a rule that said the spouses of H-1B holders should also be able to work. If we have talented men and women who are spouses, we want them to be able to contribute those skills. We passed that rule administratively. Now the Trump administration is threatening to pull that rule back. It would hurt many many spouses and children across the country,” Ms. Jayapal said.
•Ms. Jayapal said while there was a need for reforming the H-1B programme to ensure that it is not misused, there cannot be any question on the fact that immigration is essential for America’s identity and economy. “All of the research shows us that immigration does not take jobs away from people it actually contributes to greater economic growth but also the ability for American workers to move up themselves,” she said. “I myself was on an H-1B at various times.”
📰 ‘Merit trumps seniority in elevation to SC’
Senior SC source says govt. reasons for freezing Justice Joseph’s file invalid; several judges have been appointed over seniors
•The lack of seniority is a poor reason for freezing the appointment of Uttarakhand High Court Chief Justice K.M. Joseph, who wrote the judgment quashing President's rule in the State, according to a senior Supreme Court source in favour of his candidature.
•In a six-page letter addressed to Chief Justice of India Dipak Misra on Friday, the government had said Justice Joseph is much too junior among High Court judges to be elevated to the Supreme Court. It said he is placed 42nd in the All India High Court Judges’ Seniority List and that 11 Chief Justices of various High Courts are senior to him.
•But such elevations to the apex court are not new with sitting Supreme Court judges such as Justices Ranjan Gogoi, Mohan M. Shantanagoudar, S. Abdul Nazeer, Naveen Sinha and Deepak Gupta having been chosen over their seniors.
•The highly-placed source in the Supreme Court said merit, more than seniority, is a crucial factor while considering a judge for elevation to the Supreme Court.
Earlier instances
•Justice Gogoi, who is judge number three in the Supreme Court and the next CJI as per the seniority norm, was appointed before his Supreme Court colleagues Justices Madan B. Lokur, Kurian Joseph, A.K. Sikri, S.A. Bobde, R.K. Agrawal, N.V. Ramana, Arun Mishra, A.M. Khanwilkar, A.M. Sapre and D.Y. Chandrachud, who were all senior to him.
•Justices Deepak Gupta and Naveen Sinha have approximately over 30 high court judges senior to them as of now. At the time of their appointment on February 17, 2017, they had around 40 high court judges senior to them in various high courts.
•Similarly, Justices S. Abdul Nazeer and Mohan M. Shantanagoudar have 14 high court judges senior to them now. At the time of their appointment, also on February 17 last year, over 20 judges were senior to them.
•Another reason cited for re-consideration of Justice Joseph’s candidature is that his parent High Court of Kerala, with a sanctioned judge strength of 47, is a “comparatively small” one. If he is appointed, there would be two judges — Justice Kurian Joseph is a sitting Supreme Court judge — from Kerala High Court. The letter said the Kerala High Court has adequate representation in the Supreme Court and high courts’ judiciary, and any more would “forestall” the chances of judges from other high courts.
•The source said the argument was “hollow” as the Supreme Court had three apex court judges — Justices K.G. Balakrishnan, Cyriac Joseph and K.S. Radhakrishnan — at the same time, and all hailing from the Kerala High Court. Again, this was at a time when the High Court’s judge strength was less than 40.
•The source said Justices K.S. Paripoornan and K.T. Thomas were also Supreme Court judges at the same time when the strength in the Kerala HC was just 21.
•Besides, the Bombay High Court has a generous representation both in the Supreme Court and the high courts. Justices Bobde, Khanwilkar and Chandrachud, all hail from that high court. Allahabad Chief Justice D.B. Bhosale, Punjab Chief Justice S.J. Vazifdar and Acting Chief Justice of Bombay High Court V.K. Tahilramani all hail from the Bombay High Court. The Delhi High Court has three sitting judges in the Supreme Court, while Andhra Pradesh and Madhya Pradesh have two each.
•On the government’s letter highlighting that there has been no SC/ST representation in the Supreme Court judiciary “since long”, the source pointed out that Justice Joseph’s appointment has no connection with the argument. When appointed, Indu Malhotra will be the 25th Supreme Court judge. The Court would have seven more vacancies with the retirement of Justice Agrawal on May 4. There would be “ample room” for SC/ST representation.
📰 Unpacking the Dalit angst
Reverence for Ambedkar requires fighting caste discrimination and safeguarding the Constitution
•On April 4, Prime Minister Narendra Modi asserted: “No government has, perhaps, given respect to Babasaheb the way our government has.” Stung by the criticism over his government’s alleged inaction in defending the Scheduled Castes and Schedule Tribes (Prevention of Atrocities) Act, 1989, before the Supreme Court, Mr. Modi cited his reverence for Ambedkar as proof of his government’s commitment to the welfare of SCs and STs.
•Mr. Modi deserves the credit he claimed for fast-tracking the construction of the Ambedkar International Centre in New Delhi. The Congress was in power for two-thirds of those 25-odd years that the project took for completion, but it behaved as if it never wanted to finish it.
Widespread dissatisfaction
•However, Mr. Modi’s ‘credit’ amounts to nothing compared to the criticism that his government is facing as being anti-Dalit. Some Dalit leaders of the Bharatiya Janata Party (BJP) too have openly expressed dissatisfaction with the government, depriving it of the opportunity to dismiss the matter as anti-BJP propaganda.
•In essence, the controversy over the Atrocities Act forces one to take a position on the special provisions for the protection and welfare of SCs/STs. Can the interests of these groups be ensured without resorting to special provisions? Second, one must consider the issue within the larger context of the unprecedented attacks on the Constitution mounted by some BJP leaders. Mr. Modi’s position appears ambiguous on special provisions and he is silent on the Constitution.
Caste annihilated?
•The apex court’s verdict has its origins in a 2014 report of the Parliamentary Standing Committee on Social Justice headed by Ramesh Bais, a BJP MP. It recommended ‘an inbuilt provision’ to protect those falsely implicated under the Atrocities Act. Through its verdict, the court has just done that.
•It is not as if those Dalits protesting against the verdict are bent on falsely implicating non-Dalits in criminal cases, but they are concerned that the verdict will embolden obscurantist sections to unleash violence on the community. It matters little that the guidelines confine to atrocity cases involving government officials, but the Karni Sena has heard the message it wanted to hear.
•Where the committee and the court erred is in their failure to revisit why Parliament thought it necessary to make a draconian law that bypasses due process and whether the conditions have changed so much to warrant dilution of the Act. Their single-minded pursuit to provide justice to victims of false cases at the cost of the Act’s subject matter resembles more of a butcher’s nonchalance rather than the diligence and empathy of a surgeon.
•Ambedkar thundered thus in hisAnnihilation of Caste, “…turn in any direction you like, Caste is the monster that crosses your path. You cannot have political reform, you cannot have economic reform, unless you kill this monster.” Sadly, the received wisdom appears to be: to ignore the monster is to have killed it. For example, Mr. Modi’s genuine aversion to caste as a divisive force in society has been translated into myriad incongruities. One, the government still refuses to release caste data from the Socio-Economic and Caste Census (SECC), reducing the SECC to merely the Socio-Economic Census. Two, departing from tradition, the President’s annual address to Parliament this year had no references to the government’s commitment to special care that SC/STs and other weaker sections deserve.
•Three, traditionally the annual Economic Survey used to carry trends in social sector spending, especially on SC/STs, minorities, etc. The Budget would follow a similar pattern. In 2015, the government dropped this feature in these important policy documents. Justifying the erasure of caste, the Finance Minister said, “Our commitment to the ‘Daridra Narayan’ is steadfast, as is commitment to the Constitutional principles of Equality and Justice for All, without concern for caste, creed or religion.” The Budget reverted to the old pattern from the very next year (2016-17) but the change of heart was never explained. However, the Economic Survey still caters to a casteless India.
•The aversion to caste in governance needs to be contrasted with caste calculus in elections. The advocates of a caste-blind approach are entitled to hope that it would lead to a casteless society. But it can also throw us into Social Darwinism.
Respecting the Constitution
•Dalits and other weaker sections revere the Constitution as the ultimate guarantor of their rights in view of the way it recognises them. Most Indians also respect the Constitution for its obvious merits. Two notable exceptions to this are the far left and the religious right, which is represented by the Rashrtiya Swayamsevak Sangh. While the former remains in margins, the latter has come to dominate the mainstream.
•As historian Ramachandra Guha highlighted, the RSS rejected the Constitution as it’s not in tune with theManusmritiwhose laws, the RSS claimed in 1949, “excite the admiration of the world and elicit spontaneous obedience and conformity [among Hindus in India].” The rub is the “spontaneous obedience and conformity” to the caste system which Ambedkar found so obnoxious that he burnt the book to express his outrage.
•The only change in seven decades is that the RSS no longer invokes theManusmriti,and its chief, Mohan Bhagwat, takes a nuanced position by merely saying that the Constitution does not reflect “Bharatiya ethos”. Union Minister Anantkumar Hegde ended the ambiguity, saying: “We are here to change the Constitution.” A BJP MLA from Uttar Pradesh went a step ahead and declared that India would be a Hindu Rashtra by 2024. No senior leader of the government or the party contradicted any of these utterances. For Mr. Modi, silence doesn’t seem to be an option any longer.
📰 ‘States unable to implement farmer price support schemes’
Infrastructure and funding required
•The Centre’s proposals to decentralise price support schemes for farmers are not viable as State governments do not possess the infrastructure or the willingness required to implement them, said S.K. Singh, additional managing director of the National Agricultural Cooperative Marketing Federation of India (NAFED), on the sidelines of the Agriculture Ministry’s annual kharif conference on Thursday. “... without infrastructure, it is not possible,” Mr. Singh told The Hindu .
•NAFED is responsible for the procurement of oilseed, pulses and copra under the current Central price support scheme. The Centre declares minimum support prices (MSP) for 23 crops. While paddy and wheat farmers can depend on the Food Corporation of India (FCI) to procure their crops at the MSP rates, the system is less widespread for other crops, as State governments must request the Centre to step in and procure the harvest when prices fall below the MSP. “Although the full cost of the scheme is borne by the Government of India, and the NAFED MD writes to all States, only a few States approach us,” said Ashish Kumar Bhutani, joint secretary-Agriculture.
•States fail to maintain a revolving fund from which they can pay farmers over the 10-day window before they receive payment from the Centre; some also lack storage space, adequate number of procurement centres, and trained surveyors.
•The new proposals, made by Niti Aayog and communicated to States last month, shift the responsibility of procurement of oilseeds, pulses and coarse cereals from the Centre to the States. Under the Market Assurance Scheme, States are responsible for the procurement and disposal of crops, while the Price Deficiency Procurement Scheme will directly pay farmers the difference between the MSP and the sale price, instead of procuring his crop.
📰 ‘Aadhaar-SIM linking based on SC orders’
•The government on Thursday insisted that the directives of the Department of Telecommunications to seed SIM cards with Aadhaar is based on “at least two Supreme Court orders”.
•Attorney General K.K. Venugopal said one of the Supreme Court orders was from Justice D.Y. Chandrachud, who is a member of the five-judge Constitution Bench led by Chief Justice Dipak Misra hearing the challenge to the Aadhaar scheme.
•Mr. Venugopal made the submission just before the Bench was rising at the end of the day.
•He said he would expand the point in the next hearing.
•The Supreme Court had on April 25 questioned the mandatory linking of Aadhaar-SIM and said the government is using an order passed by it on February 6 last year as a “tool” to seed Aadhaar with SIM cards.
•Justice Chandrachud, after perusing the February 6 order in the Lok Niti Foundation case, had said the court had only asked the government to tighten the verification process of mobile phone users through Aadhaar linkage. “In fact there was no such direction from the Supreme Court, but you took it and used it as tool to make Aadhaar mandatory for mobile users,” the Bench observed orally.
📰 ‘India to lose if oil prices climb more’
May risk reversing the improving economic fundamental ‘sweet spot’: Nomura
•India, along with other emerging economies like Turkey and the Philippines, will be a loser if the recent oil price rise continues, according to a Nomura report.
•The supply side-driven increase in crude oil prices is likely to spur a major differentiation in emerging markets’ performance, hurting large net oil importers with weak economic fundamentals, possibly by more than it benefits large net oil exporters, the brokerage said.
•Turkey and Ukraine, with high inflation and large twin deficits, appear to be the most at risk of a vicious spiral from a continued rise in oil prices while India, Cambodia, Pakistan, the Philippines, Sri Lanka and Romania are also susceptible, albeit to a lesser extent.
•For India, the rising oil prices risk reversing the improving economic fundamental ‘sweet spot’ experienced during 2014-16, at a time when there are heightened market concerns over pre-election populist government policies, the costs of cleaning up the banking sector and the lack of progress in rejuvenating private investment, Nomura said.
Worsening CAD
•“We estimate every $10/barrel (bbl) rise in oil price would worsen the current account balance by 0.4% of GDP, increase inflation by 30-40 basis points (bps), hurt growth by 15 bps and worsen the fiscal balance by 0.1% of GDP. For instance, if Brent oil averages $75/bbl sustainably in 2018, we estimate the current account deficit would widen to 2.5% of GDP in 2018 from 1.5% in 2017,” said the brokerage.
•The clear cut winners from the rise in oil prices include exporters Saudi Arabia, Nigeria and Colombia.
•Additionally, rising inflationary risks would push the Reserve Bank of India to hike cumulatively by 50 bps in H2 2018against the current base case of no change. “In fact, the economic effect could exceed our estimates, as the government could decide against raising petroleum product prices in the year,” Nomura said.
📰 ‘India can do more to make it easy for doing business’
Protectionist tendencies, a concern: Finland’s Ambassador
•India has initiated a host of reforms including the Goods and Services Tax (GST) and simplification of registration process for firms, but there are still some concerns which the government needs to address, Finland’s Ambassador Nina Vaskunlahti said in an interview.
•“Decisions have been taken to ease the doing of business,” she said. “The registration process is simpler. GST is one example, though its implementation is a bit cumbersome. In the long term, it’s beneficial as it makes India a single market,” Ms. Vaskunlahti told The Hindu.
•“During the last few years, the current Indian government has also repealed over thousand pieces of legislation that were considered an impediment for making business. So, yes, steps have been taken, but at the same time we see some protectionist tendencies. For instance, increasing customs tariffs on certain components needed in producing digital equipment, and there’s also a bit [of lack of] clarity on when you have to pay the GST, before exporting or after importing. So, there are issues that need to be addressed, but all in all things are on track,” she added.
•Asked whether there was a marked rise in investment by Finnish companies in India since the government unveiled the Make in India campaign, she said, “We just conducted a survey among Finnish companies in India. Over 60% of Finnish companies are planning to increase their investment. At the same time, 33% of the companies say that they find challenges in the Indian market. Challenges such as bureaucracy, unclear taxation rules, corruption, rigidity in decision making.”
•The government is aware that it’s good to have a slogan like Make in India but you have to make conditions for people to come here and make investments, she said.
•She said these issues were mentioned to Prime Minister Narendra Modi when he met Finnish Prime Minister Juha Sipila at the recent Indo-Nordic summit in Stockholm.
‘Many challenges’
•“Yes Finnish companies are interested in the Indian market, yes there are opportunities, but still there are challenges that need to be addressed by the government. As we usually say the Prime Ministers, politicians and ambassadors don’t make businesses. We contribute to the conditions that would contribute to making doing business easier.”
•During the summit, Mr. Modi had met leaders from all five Nordic countries — Finland, Sweden, Denmark, Norway and Iceland.
•Ms. Vaskunlahti said the summit showed the growing importance of cooperation between India and the Nordic region.
•The leaders also had bilateral meetings in addition to the summit.
•“So, we had an opportunity to discuss trade, say no to protectionism and emphasise on a rules-based international order. It gave an opportunity to PM Modi to hear what the Nordic countries have to offer in areas of innovation, education, energy, technologies, and how the Nordic countries can contribute to the development and modernisation of India.”
•“India is an important global player. Therefore, it’s important for us to get together. We also talked about issues of mutual concern such as terrorism, cyberthreat and how we can address these issues together,” Ms. Vaskunlahti said.
•“In today’s world, everybody is needed. And, Finland and India share the same values about democracy and diversity.”
•On the India-EU free trade agreement talks, she said both sides had identified complicated issues such as agricultural products, intellectual property rights, automobile parts and alcohol and were determined to address the differences.
•“There has not been much progress on the issue, but certainly there’s a push from both sides to find a common ground and move forward to clinch a trade agreement,” the envoy said.
📰 ‘Simplifying Finance Bill must be the next big reform’
Tax rate must be cut, exemptions removed: CII president
•The next big reform to improve ease of doing business in India should be the simplification of the presently complex Finance Bill, the new president of the Confederation of Indian Industry Rakesh Bharti Mittal said. He added that the recovery in private sector investment would gather pace by the end of this year propelling the economy to 8% growth next year. Excerpts:
What is the real progress you are seeing in fixing the twin balance sheet problem, especially on the company balance sheet side?
•There is good progress, especially on the company side where many stressed assets have been referred to the NCLT (National Company Law Tribunal). However, in some cases, the resolution is taking some time due to the judicial process that has to be followed. These things cannot be concluded in a hurry as all [the] parties need to be satisfied. Quick resolutions will ensure that more stressed assets are able to take advantage of the IBC process.
How would you rate the Insolvency and Bankruptcy Code [IBC] in its current form? What are the changes you would like to see incorporated?
•It [IBC] is a major reform that has been brought in and something that the country was lacking. Companies that become bankrupt due to various reasons did not have a way to shut down their business. Any major reform, when first introduced, will need some modifications depending on [the] issues that come up. I believe changes have been suggested, for example, to allow promoters to buy back their own assets. Another issue is that of home buyers who need to be compensated for any loss even if the builder has filed for bankruptcy.
There are some green shoots in private investment but by when do you see it recovering enough to properly drive economic growth in the country?
•There are definitely signs of a pick-up in investment activity as the capital goods sector is doing well.
•I believe that the investment cycle should begin to move up by the end of this year. Economic growth will then move to the 8%-plus rate.
Has bank credit to the private sector started picking up?
•Bank credit has started to move up. I do not think it is an issue of demand, as the money raised from equity and bond markets has been rising. One could say that there is preference for accessing the market directly for funds. Non-banks are also becoming more active as providers of credit, especially to the small and medium sector. The bulk of bank lending is to the retail sector.
What would you consider the next big policy decision that would improve the ease of doing business?
•I believe the next big reform should be in the area of direct taxes where the complex Finance Bill needs to be replaced with a simpler one which reduces the tax rate and removes exemptions. This would be a bold move and therefore may take some time to implement. Meanwhile, [the] CII is looking at rationalisation of the GST (Goods and Services Tax) in terms of fewer rates and inclusion of more products.
What are the reforms you would like to see in the agricultural sector?
•Agriculture has great potential and the involvement of the private sector is required for the realisation of the Prime Minister’s vision of doubling farmers’ income. A host of reforms are required at the State level such as allowing long tenure land leases, giving freedom to farmers to sell their perishable produce and others.
•I would suggest that the NITI Aayog initiates a ranking of State governments on the ease of doing agricultural business. This should cover areas such as power, micro-irrigation, high value crops and agri-infrastructure. This will induce competition across States to improve their agri-environment.
📰 World Bank loan for Biopharma Mission
Focus on developing new vaccines, medical devices and medicines
•The government has secured a loan of about Rs. 1,600 crore from the World Bank to develop new vaccines, medical devices and medicines.
•The money will be disbursed over five years and is part of the Department of Biotechnology-led National Biopharma Mission.
•The goal is to have 6 to 10 new products in the next five years and in the process create a slew of jobs.
•It was approved by the Cabinet in May 2017 and launched on June 30, 2017.
