📰 Justice and redemption
When a child faces brutality, in or outside the family, society’s contract with its own spirit is violated
•Judicial hearing in the Kathua rape and murder case has been shifted out of Jammu and Kashmir, where the incident occurred, to Pathankot in Punjab. This has raised the hope that justice will be served. However, it is worth examining what justice means in cases where the victim of a heinous crime is a child. After each case of rape, including the rape of small girls, the demand for justice is raised. This demand is, of course, right. In the media, one often hears and reads that the victim’s parents want justice to be served without delay. In many cases, people are known to have come out on the streets to demand police action and justice. Now that an ordinance has been issued to enable the judiciary to award the death penalty to rapists of small girls, we can expect quicker protests for demanding justice.
The meaning of justice
•In general, the idea of justice does not sit well with childhood, which is a formative but also vulnerable period of life. These two characteristics make the delivery of justice to a child victim difficult. Sexual abuse during childhood presents a particularly hard case. It has been recognised all over the world that nothing is tougher to leave behind than sexual assault in early life. Justice in such a case usually means public identification of the perpetrator, followed by adequate punishment. When rape has been committed by a person who enjoys fame and power, justice may bring the victim a sense of vindication. This seems to have happened in a recent case where a girl went through a prolonged legal struggle against a famous ‘godman’. Her victory at the level of a local court is impressive, and one hopes that it will be sustained through the legal battle at higher levels of the judiciary.
•When rape is followed by murder, as in the Kathua case, the meaning of justice is quite different. No matter how long and strong the arms of law become, they cannot reach out to an eight-year-old who is no more. We can’t even refer to her with dignity as the National Commission for Protection of Child Rights has forbidden the mention of her name. Having failed in its job to protect this child, the Commission is trying to give her the dubious dignity of anonymity. Apparently, the rule it is applying is meant to protect the girl’s parents. In all such cases, justice seems to mean little more than giving the satisfaction to parents that law will not forget their loss and grief.
•For the rest of society, this meaning of justice carries two kinds of value. One is the value of deterrence. If the rapists and murderers of a child go untracked and unpunished, this might encourage the tendency to commit such crimes. The second value served by justice in such cases resides in the recognition of a child’s right to justice. This value governs all rights granted under the United Nations’ convention on this subject to which India is a signatory. This convention recognises children as beneficiaries of universally applicable human and civic rights. By punishing those who rape and kill small girls, the judiciary posthumously imparts the significance to their lives that they ought to have received as children.
The social fabric
•The experience of the child in Kathua, however, leaves a big question for us to address. No one will deny that with such violence, the social fabric has ripped apart. Children cannot grow up and become sane adults unless they feel secure and protected, and parents alone cannot protect a child. Safety and security during childhood is a responsibility that society as a whole shares with the biological parents. Therefore, when a child encounters violence, the protective fabric of society shreds. The responsibility to protect children is embedded in the very idea of society. When a child faces brutality, in or outside the family, society’s contract with its own spirit is violated. Punitive justice cannot redeem this contract, although it may constitute the first step towards redeeming the contract and the collective spirit it signifies.
•Redemption is a concept borrowed from ethics. It has several meanings, two of which are especially relevant to the application of justice in a society witnessing a steep rise in cases of previously unimaginable cruelty to children, especially girls. One meaning of redemption is the recovery of something damaged as a result of neglect or bad intention. The other meaning is to fulfil a pledge. The first meaning is specific to the kind of crime we are witnessing today. The rape of small girls on the scale at which it is currently taking place, especially in the north, signifies a breakdown of the ethical order of common living. Each incident of rape of a baby or small girl communicates that society is going through a change it does not understand. Fabric is an apt metaphor to refer to social relations, as they involve the tacit acceptance of a norm to govern the upbringing of children. Incidents of rape of small girls have been reported from cities as well as villages, suggesting a much wider crisis than traditional wisdom might be able to recognise. No simple analysis can help us grasp the factors that have enabled the crisis to deepen and erupt. There can be no doubt that these factors are rooted deep in culture, but they are also tangled now in the new technological environment. They are being nourished by an ethos marked by an acceptance of casual, collective frenzy.
•The fear of the death penalty cannot restrain this kind of frenzy. Hatred for the weak and rejection of their right to be treated as fully human are ingredients of this ethos. In such an environment, society seems to have lost its collective self-awareness. Forgetting about its responsibility towards children — everyone’s children — is a consequence of the loss of self-awareness. Can the state help society in such a dire moment? Of course it can, but first it must radically improve its own apparatus to serve children.
📰 Why due process matters
#MeToo without due process could subvert the goals and values of the rule of law, including equality and transformative justice
•The legal system has failed women in India. In two recent cases, we saw even lawmakers and enforcers becoming perpetrators of sexual violence or defending the accused. The chilling details of the Kathua and Unnao cases are telling but perhaps only the tip of the iceberg.
•It is in this context that those who support anonymous lists such as the list of “sexual harassers in academia” have debunked the call for “due process”. They argue that due process has done too little for women who have chosen to complain against sexual harassment. There is little hope from mechanisms such as the Internal Complaints Committee established under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act of 2013, which, in effect, rely on due process principles like the presumption of innocence and a standard of proof beyond reasonable doubt. The critique of due process is a sign of frustration with and disruption of the status quo. Yet, if the critique debunks due process normatively, as part of our conception of the Rule of Law, substantive equality and transformative justice, we need to reconsider the critique.
•Due process, as part of the ideal of Rule of Law, means more than just a day in court for the victim or maintaining that the accused be presumed innocent until proven guilty. In fact, as part of the Rule of Law, it means that all persons in a state are bound by and entitled to the equal benefit of laws publicly administered by courts. Thus, our expectation from the Rule of Law should not only be to be governed by, but also be equally benefitted by the law. This insistence on equal benefit of the law forms a part of the thick account of the Rule of Law, which embraces human rights, substantive equality and transformative justice. Substantive equality itself is concerned with not only a redressal of structures of disadvantage, but also a sense of transformative justice, which seeks to overturn these structures and reimagine systems and practices which are defined by equal concern and respect for all.
•Abandoning the principles of due process could lead to reform that is thin on these goals and values. This is because the language of rights, especially gender equality, does not exist in a vacuum. It comes from within the package of social justice norms, including a thick account of constitutional principles like the Rule of Law. We cannot selectively apply these values to realise the goal of gender equality.
•This matters to the feminist and social movements such as #MeToo, Black Lives Matter, or Occupy, because ultimately, their success depends on their transformative vision. If we are to break the cycle of disadvantage for women and other disadvantaged groups, we need to be able to posit a transformative agenda which is both critical of due process here and now, and appreciative of its normative significance in struggles for equality and justice.
📰 China wants Pakistan to relocate Hafiz Saeed to a West Asian country
President Xi pitches the suggestion to Prime Minister Abbasi in the face of mounting international pressure on Islamabad
•China has asked Pakistan to explore ways of relocating Jamaat-ud-Dawa (JuD) chief Hafiz Saeed to a West Asian country in response to mounting international pressure to act against him for his links with terror groups.
•Chinese President Xi Jinping suggested this course of action — allowing Saeed to live a quiet life in a West Asian country — to Pakistan Prime Minister Shahid Khaqan Abbasi on the sidelines of the Boao Forum in China last month. “At a 35-minute meeting, at least 10 minutes of the discussion dealt with Saeed. The Chinese President was keen on pressing the Prime Minister to find an early solution to keep Saeed away from the limelight,” a close aide of Mr. Abbasi told The Hindu, requesting anonymity.
•Mr. Abbasi has consulted the government’s legal team, which is yet to come up with a solution. The issue is expected to be referred to the next government as the Prime Minister will leave office on May 31 after completion of his tenure. The general election will be held at July-end.
Charge against govt.
•The JuD has been accusing the government of taking action against Saeed at the instance of the U.S. and India.
•Saeed, who met some journalists over Iftar on Tuesday in Karachi, refused to believe that China would want a ban on him or to see him out of the country. However, he admitted that China would act as a super power and dictate to Pakistan. He denied that any government functionary had met him in recent weeks to discuss the future of the JuD.
•Saeed, who has been declared a global terrorist by the United Nations, the U.S. and India, carries a reward of $5 million on his head for his alleged involvement in the 2008 Mumbai attacks. Pakistani authorities last year put him under house arrest for almost nine months but were forced to release him on the orders of the Lahore High Court.
•Earlier this year, the JuD was put on the list of banned organisations just before the Financial Action Task Force (FATF) meeting in Paris. Following the meeting, it was decided to put Pakistan on the grey list for its failure to prevent terror financing.
•The JuD was reported by Indonesia after the authorities detected some money channelled through the country by the outfit. Indonesia notified the FATF.
•A Presidential Ordinance was issued to freeze all assets of Hafiz Saeed, linked to the JuD and its charity arm, Falah-i-Insaaniyat Foundation.
•Interestingly, the JuD was not put in Schedule 1 of the Anti Terrorism Act under which the leaders of a banned organisation must be arrested. “The federal government is pleased to direct that requisite actions with regard to freezing and taking over of assets (movable, immovable and human resource) associated with the JuD and the FIF shall be taken in pursuance of ordinance No II of 2018,” read a notification of the Interior Ministry.
•An Interior Ministry source said a formal notification of its placement on Schedule I was held back. “Without the notification, the organisation will not be formally admitted as a defunct organisation,” he said. Another clue that the JuD and the FIF were not banned as claimed by the government is the list of banned organisations by the National Counter Terrorism Authority.
•On the ground, the Punjab government took the JuD’s madrassas and health facilities in Rawalpindi. The provincial government also issued a notification barring collection of donations by the JuD and the FIF. The JuD has a network of over 150 ambulances, six hospitals, 60 schools and scores of madrassas across Punjab and the Pakistan-administered Kashmir and northern areas.
•In January this year, the Securities and Exchange Commission of Pakistan issued a circular to all companies barring them from donating money to those entities put on the UNSC sanctioned list. The government also tabled a Bill to formalise the ban on the JuD but it has not been passed so far.
📰 Do we need the office of the Governor?
To understand why we don’t, it is important to understand its origins in the colonial regime
•Among all the players who strutted and fretted across the stage during the recently concluded Karnataka elections, it is the Governor of the State, Vajubhai Vala, who emerged with least credit to his name. His decision to first invite the Bharatiya Janata Party (BJP) to take a stab at forming the government was perhaps a legitimate exercise of his constitutional discretion (albeit without any recorded reasons for ignoring the post-poll Congress-Janata Dal (Secular) alliance’s claims to having an absolute majority). However, the invitation was extended at 9 p.m., and the swearing in fixed for 9.30 a.m. the next day, ostensibly to ward off any judicial challenges, and present a fait accompli.
•His decision to grant B.S. Yeddyurappa 15 days to prove his majority, when the latter himself asked for only a week, was troubling enough for the Supreme Court to intervene and order an immediate floor test. So was his appointment of BJP MLA K.G. Bopaiah as Pro Tem Speaker to conduct the floor test, when the latter had been castigated by the Supreme Court in 2011 for partisan conduct (although this time the Court chose not to intervene). Each of the Governor’s actions was taken in that uncertain grey area of “discretion” — partisan enough to skew the process in favour of the BJP, but not illegal enough to warrant judicial intervention.
Short-term options
•In the aftermath, some have called upon the Governor to resign; others have suggested that the post of the Governor be reserved for non-political appointees; and still others have urged the Supreme Court to lay down the law on how the Governor ought to act when an election yields a fractured verdict. All of these, however, are patchwork solutions that miss the point: the flaw lies not with the identity of the individual who occupies the post, but in the design of the Constitution itself. If we want to put an end to the continuous misuse of the Raj Bhavan for partisan political ends in a manner that threatens both federalism and democracy, we have to rethink the role of the Governor in the constitutional scheme.
•To do that, it is important to understand the origins of the office in the colonial British regime. Through the course of the early 20th century, the Indian nationalist movement managed to extract gradual and incremental reforms towards responsible government from the British rulers. These reforms culminated in the Government of India Act, 1935 which established provincial legislative assemblies elected from a limited franchise.
•However, in order to ensure that overriding power remained with the British, the Act retained the post of Governor (a holdover from the old, “diarchy” system), and vested him with “special responsibilities” that, in essence, allowed for intervention at will. In a searing critique, K.T. Shah (who was later one of the most articulate members of the Constituent Assembly, or CA), wrote that the Governor would inevitably be biased in his functioning, and his actions would remain at odds with those of popularly elected Ministers.
•Despite the nationalist movement’s bitter experience with Governors over almost three decades, the CA chose to retain the post, and continue to vest it with discretionary power. During CA debates, it was pointed out that the Articles dealing with the powers of the Governor were almost verbatim reproductions of the 1935 Act. Defenders of the office raised two broad arguments: first, that there was a dearth of competent legislators in the States; and second, that a certain amount of centralisation of power was necessary in a nascent state such as India. Concerned members of the CA were assured that the Governor would remain only a constitutional post, and would have no power to interfere in the day-to-day administration of the State. However, when Rohini Kumar Chaudhari raised a particularly prescient concern about the Governor’s powers to “form the first Ministry” and call upon “anyone, whether he has a big majority or a substantial minority”, this was brushed aside by saying that a no-confidence motion couldsoon resolve such issues.
A constitutional ‘choke point’
•The CA debates around the office of the Governor reveal an important point. The Constitution was the culmination of the democratic aspirations of the people, and its major pillars — universal adult suffrage, the parliamentary system, fundamental rights — are all expressions of those aspirations. But there were also moments where the framers lacked the courage of their convictions. If granting universal adult suffrage at one stroke was a leap of faith, then at other places, driven by concerns about maintaining national integrity and preventing disintegration in the teeth of the trauma of Partition, the framers pulled up short. They were committed to federalism — but not too much federalism, for fear of secession; they were committed to popular democracy,but also wanted to retain some manner of control, lest democracy unleash the kinds of passions that would trigger its own destruction. The office of the Governor represented one such “choke point” in the Constitution (ordinances and emergencies are others), where federalism and the popular will were to be kept in check from above, if the occasion ever arose.
•The occasion arose very soon. Soon after the first general elections, the State of Madras went to the polls in 1952. In a 375-member Assembly, the United Democratic Front (UDF), a coalition of parties, held 166 seats. The Congress finished with 152.
•The Governor, Sri Prakasa, ignored the UDF’s claim to form the government, and instead invited the Congress, which did form the government with Rajaji as Chief Minister, after engineering several splits and defections (including through offers of cabinet posts). The civil rights lawyer, K.G. Kannabiran, writes that “on this act of impropriety Rajaji became the chief minister of the first Congress government after Independence.” Rohini Kumar Chaudhari’s fears had come true, and the justification was eerily similar: the UDF’s communist orientation rendered it ineligible to govern (no matter how the people voted), and it was incumbent upon the government to ensure an orderly government. And so it has been ever thus.
•The purpose of this history is not to draw an equivalence between 1952 and 2018, or to suggest that the sins of the past justify sinning in the present. It is to demonstrate that the post of the Governor, by constitutional design, acts as a check upon both federalism and popular democracy. And even though the framers insisted that it was only a “constitutional post”, Karnataka has just been the most recent example demonstrating that the Governor has enough discretion to skew the political process in the direction that the Central government desires.
Specify the rules
•Perhaps we are not in a position to judge the wisdom of the framers’ choice in 1950, when they were driven by imperatives we can no longer assess. But we are certainly in a position to judge the wisdom of continuing with this in 2018: the idea of the Governor standing as a bulwark against secessionism, or providing legislative expertise to States otherwise starved of it, are no longer valid justifications. On the other hand, the Governor’s interference with the democratic process is both real and continuing. As history shows, the solution is not to tinker around the edges, or hope that the courts will come to our rescue. It is to ask whether the constitutional “choke point” of the Governor serves any valid purpose in 2018 — and if not, whether it should continue to exist. Would it not be better, for example, to clearly specify the rules governing government-formation in the Constitution itself, and reduce swearing-in to a purely ceremonial action, to be performed by the Chief Justice of the relevant High Court? This — or any other potential solution that does away with the “choke point” — is what must now be debated.
📰 A quick recap of the gutkha scam
The SC has confirmed that the CBI will investigate the case
What is the gutkha scam?
•The manufacturer of the MDM brand of gutkha had allegedly paid several crores of rupees as kickbacks to the Tamil Nadu Health Minister, senior IPS officers, and officials of various Central and State government departments between 2014 and 2016 to ensure the manufacture, storage and sale of gutkha, a banned substance in Tamil Nadu since 2013.
How did it get exposed?
•Officials of the Income Tax Department unearthed the scandal while searching the Chennai premises of the manufacturer of MDM in July 2016. They discovered accounts which suggested that ₹39.91 crore was paid over two years to the Health Minister, C. Vijaya Baskar, two former Chennai Police Commissioners, and other officials to facilitate illegal trade in tobacco products. The IT Department subsequently sent a confidential report to the Tamil Nadu Chief Secretary and the Director General of Police, with information on the beneficiaries, but the government took no action. Though former Chief Secretary P.S. Rama Mohana Rao confirmed that he had sent the report to the then Chief Minister Jayalalithaa, there is nothing on record about the movement of the file or action taken.
•In June 2017, The Hindu exposed the alleged pay-offs in an exclusive report. Based on this revelation, opposition parties demanded the removal of the Health Minister and police officers involved in the scam.
Why is there demand for a CBI probe?
•The Tamil Nadu government claimed that it had not received any report on the gutkha scam, but subsequently, the IT Department seized a copy of the report from Jayalalithaa’s residence during a search in November 2017. With the Directorate of Vigilance and Anti-Corruption, a State agency, registering a case against several lower level officials in the scam, political parties and rights activists were up in arms demanding a probe by the CBI since IPS officers (including two of DGP rank), a State Minister and Central Department employees were potentially involved in bribery.
What is the present status of the case?
•Passing orders on a petition filed by a DMK MLA, the Madras High Court transferred the case to the CBI for investigation. One of the accused in the case, a Health Department official, moved the Supreme Court against the order. However, last week, the apex court upheld the Madras High Court order.
📰 Thoothukudi firing: Entirely preventable
There must be a thorough inquiry into the lead-up to the deaths in Thoothukudi
•The protest against the copper smelter plant of Sterlite Copper in Thoothukudi has witnessed its deadliest turn so far, with the death of 12 people in police firing. It was clear the movement would put up a show of strength on May 22, the 100th day of this phase of protests — in fact, the Madurai Bench of the Madras High Court had predicted that it was “likely to trigger a law and order situation” and declared that the “protesters do not have any intention of conducting a peaceful protest”. Yet, the Tamil Nadu government failed to gauge the intensity of what was coming. It is a tragic irony that such an angry and violent demonstration could have been staged at a time when the plant is not operational and after the Tamil Nadu Pollution Control Board refused to renew its consent to operate. It raises questions about the government’s failure to drive this point home forcefully, and casts a doubt about the real intent of some of the protesters, possibly a small section comprising hardline groups. The immediate task is to compensate the public for its losses and end the alienation of the affected communities through talks. But the commission of inquiry headed by retired judge Aruna Jagadeesan must examine why 12 lives were brutally snuffed out, more specifically, the chilling accusation that snipers were deployed by the police force to pick out protesters in a premeditated manner. Any police response must be commensurate with the gravity of the situation; there is no place for heavy-handedness and a disproportionate use of force. The inquiry must establish who gave the orders to fire and on what basis. Also, why the police failed to intervene well before the protest developed an angry head of steam.
•Sterlite stakes claim to be India’s largest copper producer and is a major presence in Tamil Nadu’s industrial mix. But it has had mixed fortunes over the two decades of its production, including periods when it was under administrative orders of closure, a ₹100-crore fine imposed for pollution by the Supreme Court in 2013, and consistent opposition from fishermen. Now, there is a fresh injunction and the Madras High Court has restrained it from a proposed capacity expansion plan. This, together with the decision to not renew consent for operation, gives a moment for pause for all sides. An urgent process, such as an all-party meeting, is needed to heal the wounds, and infuse confidence in the community. A credible environmental audit should be undertaken, without compromising on the ‘polluter pays’ principle. The TNPCB, which usually scores poorly on transparency, should commission credible experts to assess the quality of air and water in Thoothukudi. Only such verifiable measures will build public confidence, and make orderly industrialisation viable.
📰 Natural capital in the 21st century
India must calculate ‘its green GDP’ to factor in the value of the environment in its growth
•A few years ago, India suffered a cost of $550 billion, about 8.5% of GDP, due to air pollution, according to a World Bank report; the cost of externalities such as water pollution and land degradation were possibly far higher. Through commodity exports, we effectively transfer natural capital to our trade partners, raising the risk of desertification and land being degraded significantly. Within a century, our food production could see a loss of 10-40% if these trends continue. So when we crow about GDP growth, we should also consider the decline in natural capital in our national accounts.
Estimation is a challenge
•The idea of having a national account for wealth accrued over a year is accepted in most major economies. Such national accounts (GDP, net national product, gross savings) provide a measure of an economy’s performance and form the basis for socio-economic policies, while highlighting the gap between potential and actual economic output.
•GDP computations indicate the economic activity in a country, with rising GDP growth rate often leading to international prestige. However, such estimates often exclude the variations in natural capital by assuming them to be constant and indestructible. Such natural capital is often self-generating (water, clean air) but needs to be handled in a sustainable way in order to avoid depletion.
•Natural capital can cover entire ecosystems such as fisheries and forests, besides other hidden and overlooked services — for example, the regeneration of soil, nitrogen fixation, nutrient recycling, pollination and the overall hydrological cycle. Valuing such ecosystems can be challenging, with their market value often termed as zero. When pollution happens, it is actually a depletion of our natural capital as, for example, acid rain damages forests and industrial seepage affects water quality. In a modern economy, the challenge is to estimate such depreciation to natural capital.
•Consider groundwater. Most groundwater basins in India are subjected to unrestricted extraction until the ‘marginal value of extracting water is less than the unit extraction cost’ — i.e. when the water table drops so low new borewells are needed. Effectively, any rents due to groundwater depletion are dissipated indefinitely.
•Now many economists have pushed for an “environmental Kuznets curve”, highlighting that the ‘relationship between GDP per capita and the concentration of sulphur dioxide in the local air’ is an inverted U curve. Such a relationship leads to the postulation that people from ‘developing countries can’t place a weight on natural environment’ and should consider pollution as an acceptable side-effect of GDP growth.
•However, this inverted U curve is found primarily for local pollutants that lead to short-term damages (sulphur, particulates) and not for pollutants that lead to long term and dispersed costs (carbon dioxide). In addition, the inverted U curve hides systemic consequences of emissions. We are long past treating natural capital as a luxury. In fact, it is a necessity.
•While India might have a GDP of $2.65 trillion in nominal terms, it fails to take into account the externalities of such economic growth. For example, India routinely suffers from high levels of air pollution that impose costs on local transport, health and liveability in urban and rural areas. When economic growth leads to the destruction of forests, wetlands and woodlands for agriculture, mining or even urban expansion, it is typically the poorest of the traditional dwellers who suffer. Ecological collapse can soon come, examples being the Darfur region in Sudan and countries in the Horn of Africa. All were subject to rapid socio-economic decline.
Some attempts
•India has sought to unveil “green GDP” figures in the past. In 2009, the Centre announced that it would publish a “green GDP” that would include the environmental costs of degrading and depleting our forests, grasslands and natural stock. An expert programme, sponsored by the Ministry of Statistics and Programme Implementation, released a Compendium of Environment Statistics 2013.
•The group recommended that India shift to a system of measuring comprehensive national wealth, which includes items such as human capital, capital equipment and natural capital. However, implementation of such well-founded recommendations has been constrained by the lack of micro-level data on capital formation, particularly in a natural context.
•While the 12th Five Year Plan undertook groundwater resource mapping at the national level, a similar focus is essential for data on land usage, forests and mineral wealth. ‘India’s current national accounts incorporate such environmental considerations in a limited fashion’. GDP includes the value of: minerals extracted; timber, fuelwood and non-timber forest products; natural growth of cultivated assets for some crops; and the output from dung manure. In addition, ‘gross fixed capital formation contains output estimates from the improvement of land along with irrigation works and flood control projects’. However, even in GDP estimates of timber value, there is significant under-estimation — non-monetised goods and services provided from timber forests are not considered.
•India should seek to publish “green GDP” figures that take into account depreciation of natural capital stock due to economic exploitation and environmental degradation. This can follow the template provided by the UN’s System of Environmental-Economic Accounting.
•A few studies have tried to document the ecological services offered by natural capital in India. But we need a ‘greater push for empirical studies of the potential value of such ecosystem services’. Adapting our national accounts in line with this framework will help in incorporating the value of the environment in our growth while helping us to focus on developing a feasible transition path to a green economy.
📰 Capital remaining for banks is ‘sufficient’: Govt.
About ₹65,000 cr. left from ₹2.11 lakh cr. announced last year, says Rajiv Kumar: PSBs to be ranked based on performance
•Despite huge losses made by large public sector banks in the fourth quarter of 2017-18, the government has indicated it may not increase the capital allocation beyond what had already been budgeted.
•“The capitalisation amount which we have worked out is sufficient,” said Rajiv Kumar, Secretary, Financial Services in the Finance Ministry, on the sidelines of an event.
•“We have with us which is nearly ₹65,000 crore which is the leftover of ₹2.11 lakh crore. That capital is intact, that’s budgeted and it is with us,” he said when asked what kind of support the government could provide to the banks in the wake of mounting losses. Mr. Kumar said there were other avenues for banks to raise funds like selling of non-core assets.
•Last year, the government had announced a ₹2.11 lakh crore capitalisation plan for the public sector banks for two years, including ₹1.35 lakh crore via recapitalisation bonds. The government had already allocated the capital of the previous financial year.
•Following stricter norms on bad loans, many banks, including the country’s largest lender State Bank of India and the second largest, Punjab National Bank, reported a loss of ₹7,718 crore and ₹13,400 crore respectively in the Jan.-March quarter.
Cleaning of books
•“One or two quarters no issues. It’s the cleaning of the books, transparently recognising everything, and in the process even if there is a provisioning requirement or even if there is a loss, it’s okay. We are ready to take this,” Mr. Kumar said. “The future and the roadmap is only that worst is over and it’s only the positive which can take place now. It is visible in the credit offtake.”
•The Finance Ministry is also planning to rate public sector banks based on their performance and make the rating available on public domain. “We are ranking all the banks on the reforms and at the end of every year, we will make that ranking public. So, its a report card to the citizen on the health of each bank,” Mr. Kumar said.
•The government may start announcing the ranking from the next financial year taking into account this year’s performance. Future capital infusion in banks may depend on how the bank fare in these rankings.
CEO appointments
•With the CEO post in three public sector banks remaining vacant and another divested of portfolios, the Finance Ministry said the Bank Board Bureau was in the process of selecting the candidates. “We are aware of it and the banks board bureau is in the process of selecting the candidates. We are in the process of bringing the best possible talent to the banking industry,” Mr. Kumar said. The CEO’s post in Dena Bank, Andhra Bank and Punjab and Sind Bank is vacant, while the board of Allahabad Bank has divested its MD & CEO Usha Ananthasubramanian of power after investigative agencies named her in the charge sheet filed in the Nirav Modi scam.
•Mr. Kumar said that the BBB was also in the process of selecting a new CEO for Allahabad Bank.
Banks under PCA
•Mr. Kumar said the Finance Ministry had asked all the banks that were facing restrictions under the prompt corrective action framework of RBI to come out with a specific plan for the future. “It includes their business strategy, niche areas, sale of non-core assets, capital requirement. The government is committed to give them the regulatory capital and maintained their capital adequacy levels,” he said.
📰 India moves WTO over U.S. steel tariffs
Trump imposed tariffs, levying 25 % on steel imports, 10 % on aluminium
•India has launched a complaint against the United States to challenge U.S. President Donald Trump’s tariffs on steel and aluminium, a filing published by the World Trade Organization showed on Wednesday.
•Indian officials told Reuters last month that their government would open a WTO dispute if the country’s firms were not granted an exemption. Mr. Trump imposed the tariffs in March, levying 25 % on steel imports and 10 % on aluminium. He said they were justified by national security concerns and therefore outside the WTO’s remit.
Dismisses U.S. claim
•India, China, Russia, Japan, Turkey and the European Union have all dismissed that claim, regarding the U.S. tariffs as ”safeguards” under the WTO rules, entitling them to a combined $3.5 billion in annual compensation.
•India’s retaliation claim seeks to recoup a cost of $31 million levied on its aluminium exports and $134 million on steel, and it has said it could target U.S. exports of soya oil, palmolein and cashew nuts in its retaliation.
•Its latest legal challenge seeks to force the U.S. to scrap the tariffs entirely. It follows a similar move last month by China, which Washington called “completely baseless”.
•Under WTO rules, the U.S. has 60 days to settle the complaint, after which India could ask the WTO to set up an expert panel to adjudicate.
•However, uncertainty is hanging over the WTO’s dispute settlement system because Mr.Trump is vetoing the appointment of new appeals judges.
•In its complaint, India listed a string of ways the U.S. tariffs violated the WTO rules and unfairly damaged India’s interests.
•It said they broke the WTO’s safeguards agreement and the U.S.was trying to use its tariffs to get other countries to agree to “voluntary export restraints”.
•The U.S. had also exceeded the maximum import tariff allowed by the WTO and the tariffs were not applied uniformly to steel and aluminium imports from all suppliers, breaking a core principle of the WTO rulebook.
📰 World faces ‘staggering’ obesity challenge: study
Says a quarter of global population will be obese in 27 years
•In 27 years from now, almost a quarter of the global population will be obese, researchers said on Wednesday, warning of the mounting medical bill.
•If current trends continue, 22% of people in the world will be obese by 2045, up from 14% last year, according to researchpresented at the European Congress on Obesity in Vienna.
•One in eight people, up from one in 11, will have type 2 diabetes — a form of the disease that generally hits in adulthood as a result of being overweight.
•“These numbers underline the staggering challenge the world will face in the future in terms of numbers of people who are obese, or have type 2 diabetes, or both,” said researcher Alan Moses of Danish healthcare company Novo Nordisk’s research and development department.
•“As well as the medical challenges these people will face, the costs to countries’ health systems will be enormous,” he added.
Not a healthy scenario
•In the U.S., the researchers found obesity will increase from 39% of the population in 2017 to 55% in 2045, and diabetes from 14% to 18%.
•In Britain, the proportion will swell from 32% to 48%, with the incidence of diabetes rising from 10.2% to 12.6%.
•Already, health systems are spending “huge sums just to treat diabetes,” the researchers said in a statement.
•Mr. Moses and a team analysed population data for all countries in the world, obtained from a World Health Organization database.
•They divided the population of each country into age groups, and further into body mass index (BMI) categories, and looked at trends to make projections. BMI is a ratio of height to weight used to divide people into low- to high-risk categories for developing heart disease, high blood pressure, type 2 diabetes and certain cancers.
•A person with a BMI of 25 or more is considered overweight, and 30 or higher obese. A healthy BMI ranges from 18.5 to 24.9.
•“Each country is different based on unique genetic, social and environmental conditions,” Mr. Moses said. “Individual countries must work on the best strategy for them.”
📰 Why birds don't have teeth
Research paper says the avians gave up teeth to speed up egg hatching.
•Why did birds lose their teeth? Was it so they would be lighter in the air? Or are pointy beaks better for worm-eating than the jagged jaws of dinosaur ancestors?
•Actually, birds gave up teeth to speed up egg hatching, a research paper published Biology Letters on Wednesday suggests, challenging long-held scientific views on the evolution of the toothless beak.
•Compared to an incubation period of several months for dinosaur eggs, modern birds hatch after just a few days or weeks. This is because there is no need to wait for the embryo to develop teeth — a process that can consume 60% of egg incubation time, said researchers Tzu-Ruei Yang and Martin Sander from the University of Bonn.
•While in the egg, the embryo is vulnerable to predators and natural disasters, and faster hatching boosts survival odds. This would be a concern for dinosaurs and birds — all egg layers. In mammals, embryos are protected inside the mother. “We suggest that (evolutionary) selection for tooth loss (in birds) was a side effect of selection for fast embryo growth and thus shorter incubation,” they wrote.
Had teeth, lost them later
•Previous studies had concluded that birds — living descendants of avian dinosaurs — lost their teeth to improve flight. Other studies had concluded that beaks were better for eating bird food.
