📰 PM renews call for debate on simultaneous polls
AT NITI Aayog meet, Modi favours a uniform voter list
•Prime Minister Narendra Modi on Sunday again called for widespread consultation on simultaneous elections in the country during the fourth governing council meeting of the NITI Aayog. The meeting was attended by the Chief Ministers of 23 States, the Lieutenant-Governor of the Andaman & Nicobar Islands and senior Union Ministers.
•“The Prime Minister called for widespread debate and consultations on simultaneous elections to the Lok Sabha and the Vidhan Sabhas, keeping in view aspects such as the resulting financial savings and better utilisation of resources,” an official statement said.
•Reacting to Mr. Modi's speech, the Congress accused the government of “telling half-truths and building tall tales.”
Finance panel row
•Briefing the media after the meeting, NITI Aayog Vice-Chairman Rajiv Kumar said as a result of being in a “perpetual election” mode, the focus on development was diluted.
•On amending the terms of reference of the 15th Finance Commission as raised by some States, Mr. Kumar said, “Those who are already born, they should be given what is rightfully theirs… For all such devolutions, the current population [as per 2011 census] should be the basis.”
•He, however, added that Mr. Modi had asked States to give “fresh ideas” to the Commission for incentivising outcome-based allocations and expenditure correction.
•“He (the PM) emphasised that the Finance Commission devolution formula has to take cognizance of the relative backwardness and low per capita incomes of some States,” an official statement said.
•States like Andhra Pradesh, have demanded that 1971 census be used as reference for 15th Finance Commission as to not penalise States which have worked towards controlling population.
•During the meeting, which did not see representation from Delhi, Goa, Jammu and Kashmir, Odisha, Manipur, Mizoram, Sikkim and Tripura, Mr. Modi called upon States to fix “ambitious growth targets” for their economies as India looks to become a $5 trillion economy soon.
•Mr. Kumar said chief ministers of northeastern States could not participate due to the flood situation in their respective States.
•However, he added that no response was received from Delhi Chief Minister Arvind Kejriwal on the invitation sent to him.
•The Prime Minister assured all central assistance to flood-affected States.
•Additionally, the PM has suggested that a committee of seven Chief Ministers— from Madhya Pradesh, Bihar, Sikkim, Gujarat, West Bengal, Andhra Pradesh and Uttar Pradesh, be set up to make recommendations on leveraging MNREGA in the agriculture sector.
•Mr Modi also asked States to explore opportunities to increase corporate investment in agriculture, such as in food processing, warehousing and logistics.
•Pointing that the Indian economy has grown at a healthy rate of 7.7% in the fourth quarter of 2017-18, Mr Modi added that the challenge before India is to take the economic growth rate to double-digits for which many more steps needed to be taken.
•“He said in the current financial year, States are receiving over ₹11 lakh crore from the Centre, which represents an increase of about ₹6 lakh crore, from the last year of the previous government,” as per the statement.
•Former Finance Minister P Chidambaram too attacked the government for the high fuel prices and said it was "robbing Rs 13,000 crore from the people every time it increased fuel prices by one rupee."
•In a series of tweets, Congress communication chief said PM Modi presented GDP figures.of only one quarter.
•"Instead of ‘Jumlas’, Modiji should tell why did the GDP fall steeply to 6.7% in 2017-18 despite changing the GDP calculation methodology? Was it because of his Disastrous DeMo & Flawed GST?"asked Mr Surjewala.
📰 With liquor out, Bihar splurges on saris
Consumption of honey, cheese rises: study
•Prohibition is making people of Bihar spend on good clothes and food with sale of expensive sarees rising by 1,751%, while consumption of honey by 380% and that of cheese by 200% in the first six months of the ban, according to latest studies on the measure.
•The studies, conducted by think tank Asian Development Research Institute (ADRI) and government-funded Development Management Institute (DMI), also pointed out that 19% of households acquired new assets from the money they earlier splurged on alcohol.
Rural women
•Both studies were commissioned by the State to evaluate consequences of prohibition, which came into force in April, 2016 “mainly as a response to demands of rural women who suffered because of the widespread practice of drinking alcohol.” The findings were appended to the economic survey report and tabled before the Assembly this year.
•The ADRI study took stock of purchasing behaviour as recorded at retail outlets of COMFED (Bihar State Milk Co-operative Federation), better known by the brand name “Sudha.”
•It noted that the consumption of honey registered a monumental increase by 380% and cheese by 200%.
•An impressive rise in sale was also recorded for items like butter milk 40%, flavoured milk 28.4% and lassi 19.7%, the report said.
•The ADRI study collected data on purchase of a few other consumer items as well, based on sales tax revenues.
•The increase was substantial — the sale of expensive sarees rose by 1,751%, expensive dress materials by 910%, processed food by 46%, furniture by 20% and sports goods by 18%.
•The other study done by DMI also underscored the “substantial economic impact” of the ban on alcohol.
•The DMI study, based on primary data collected from 2,368 households in five districts of Nawada, Purnea, Samastipur, West Champaran and Kaimur, noted that families reported a weekly expenditure of ₹ 1,331 on food after prohibition, compared to ₹ 1,005 before the ban, implying an increase of 32%.
New assests
•“After prohibition, 19% of households acquired new assets and another 5% spent money on renovating their houses,” the study said.
•It also observed that 58% women feel they were given more respect and played a better role in making household decisions. Going further, 22% of women said their opinion was now counted not just for household matters, but for village issues as well, the study added.
•On the crime front, the ADRI report noted there was a 66.6% dip in cases of kidnapping for ransom, followed by 28.3% dip in murder cases and 2.3% in dacoity.
📰 Ennore port expansion gets green nod
Proposal approved based on the latest draft CZMP; activists slam Centre’s decision
•In a contentious move, an expert appraisal committee (EAC) of the Union Ministry of Environment and Forests has recommended granting of Environmental Clearance and CRZ clearance for the Phase-III expansion of the Kamarajar Port Ltd (KPL) in Ennore.
•In a meeting last month, the EAC had recommended the clearance based on the draft Coastal Zone Management Plan (CZMP) 2018. However, environmental activists termed it illegal as a writ petition against the draft CZMP was pending in the Madras High Court.
‘Map not notified’
•Also, they said that a project cannot be recommended for clearance based on a ‘wrong map’, especially one that has not been notified by the Ministry. Although the EAC’s recommendation for granting the clearance is subject to the final outcome of cases filed against the expansion at the National Green Tribunal, activists and lawyers say the decision itself is flawed.
•“As per the CRZ notification, 2011, all proposals have to be evaluated as per the approved Coastal Zone Management Plan (CZMP) which, in this case, dates back to 1996. The new CZMP is only a draft and a recommendation based on a map that is not notified by the MoEF cannot be accepted as it is not factual,” Pooja Kumar of Coastal Resource Centre, told The Hindu.
•“Until the new map is notified and approved, this recommendation is illegal. This is only a draft plan. You can’t give clearance based on this map,” said an environmental lawyer, who did not want to be named. “Also, whatever they have mentioned as river front activity, cannot be built there as per the CRZ notification, 2011,” the lawyer added.
•After the port management filed for EC and CRZ clearance for the Phase-III expansion of the port, the MoEF committee received a number of representations, following which a two-member sub-committee visited the site on January 5 and 6 this year. The sub-committee submitted its report in the meeting held in April.
•The expansion proposals of KPL include an automobile export/import terminal, container terminal, bulk terminal, multi cargo berth and marine liquid terminal.
•The minutes of the meeting of the EAC held in May, interestingly, referred to the draft CZMP multiple times. The sub-committee considered the “latest draft CZMP of Tamil Nadu Coastal Zone Management Authority for preparation of the report since there is substantial change in the coastal ecosystem”.
•The EAC, while recommending the project for clearance, too noted, “As per the latest map, no development zone shall be maintained 100 m on either side of the Kosasthalaiyar river”.
‘Report is not public’
•Ms. Pooja said only parts of the sub-committee report were mentioned in the EAC report. “This report has not been made public. The fisherfolk in the region are demanding that the report be made public immediately and the report of the sub-committee be revisited,” she said.
•She questioned the hurry in recommending the project for clearance. “As per the original map, this is an inter-tidal zone and as per the 2011 notification, no development activities can happen in this zone,” she said.
📰 Battle ready: Dhanush artillery gun clears final trials
Army to acquire 114 in four years
•The indigenously upgraded artillery gun Dhanush has successfully completed final user trials and is ready for induction into the Army. Dhanush is an upgraded version of the Swedish Bofors gun procured by India in the mid-1980s.
•“This was the third and final phase of user exploitation firings in which six Dhanush guns were fired in battery formation from May 31 to June 7, 2018 at the Pokhran field firing range. A total of 301 rounds were fired from the six guns, including burst fire,” said Dr. Uddipan Mukherjee, public relations officer of the Ordnance Factory Board (OFB), in response to a questionnaire from this newspaper.
•The first phase of trials were conducted between July and September 2016 at the Pokhran and Babina ranges and the second phase was conducted between October and December 2016 at the Siachen base camp with three guns. A total of 1,520 rounds have been fired in all the three phases.
Tested in all terrains
•During the trials, the guns travelled extensively in towed/ self-propelled mode in desert and high-altitude terrains with each gun clocking over 1,000 km demonstrating their mobility.
•Dr. Mukherjee said the next step was completion of general staff (GS) evaluation after which Bulk Production Clearance (BPC) will be accorded. The OFB already has an indent from the Army for 114 guns and will start supplying the guns on receipt of the BPC. “The OFB has already supplied six guns for battery firing during the user trials. Another 12 guns will be issued within a year on receipt of the BPC,” he stated.
•The entire order of 114 guns is to be delivered within four years. To meet the requirement, the Board has undertaken capacity augmentation to manufacture over 400 barrels and 250 ordnances for large-calibre weapon systems, Dr. Mukherjee said, adding that the OFB was confident of producing eight to 10 guns per month within two to three years. As of now, the gun has over 80% indigenous content. The imported systems include the power pack, parts of the electronic suite, and some seals and bearings.
📰 Parched or polluted: on India's water crisis
Urgent reforms are needed to deal with the acute water stress in most of India
•India’s water crisis is clear and present, with implications for the health of the entire population. According to the Composite Water Management Index developed by Niti Aayog, 70% of the water resources are identified as polluted. This is based primarily on data supplied by States for calculating the index. If the water accessible to millions is contaminated, the problem is infinitely worse than that of availability. The system of ratings for States is based on their performance in augmenting water resources and watersheds, investing in infrastructure, providing rural and urban drinking water, and encouraging efficient agricultural use. It presumes that this ‘hall of fame’ approach will foster “competitive and cooperative federalism”. What emerges from the early assessment is that States such as Gujarat, Madhya Pradesh, Andhra Pradesh, Karnataka, Maharashtra, Punjab and Telangana have initiated reforms for judicious water use, while populous ones such as Uttar Pradesh and Bihar have failed to respond to the challenge. Tamil Nadu, which has a middling score, does well on augmentation of water sources, but is abysmally poor in ensuring sustainable use for farming. The trends that the data reflect of high to extreme stress faced by 600 million people call for speedy reforms.
•Two areas that need urgent measures are augmentation of watersheds that can store more good water, for use in agriculture and to serve habitations, and strict pollution control enforcement. In this context, the Committee on Restructuring the Central Water Commission and the Central Ground Water Board, chaired by Mihir Shah, has called for a user-centric approach to water management, especially in agriculture. It advocates decentralisation of irrigation commands, offering higher financial flows to well-performing States through a National Irrigation Management Fund. Clearly, awarding an index rank should help advance such schemes, making States feel the need to be competitive. Yet, such approaches may not resolve seemingly intractable inter-State river disputes. As the Cauvery issue has demonstrated, State governments would rather seek judicial intervention than be accused of bartering away the rights to a precious resource under a shared, cooperative framework. Groundwater extraction patterns need to be better understood through robust data collection; less than 5% of about 12 million wells are now under study. Steady urbanisation calls for a new management paradigm, augmenting sources of clean drinking water supply and treatment technologies that will encourage reuse. Pollution can be curbed by levying suitable costs. These forward-looking changes would need revamped national and State institutions, and updated laws. A legal mandate will work better than just competition and cooperation; it would make governments accountable.
📰 Shujaat Bukhari, a warrior for peace
He was a man of great discipline and clear sight when it came to the interests of Kashmiris
•The tragic and shocking assassination of Shujaat Bukhari came as yet another reminder of how conflict brutalises. Shujaat joins a line of martyrs who were assaulted because they sought a negotiated end to violence — Abdul Ghani Lone who called for an end to cross border militancy and Fazal Haq Qureshi who engaged with the Indian government to find an honourable solution to the Kashmir conflict. Fazal Haq escaped with his life. Shujaat alas did not. His last days were spent in underlining the grave situation in the Valley, where youth alienation was at a peak. The government’s unfortunate decision to end the Ramzan ceasefire will only add to this nihilistic despair, as Shujaat would warn were he alive.
Building bridges
•Shujaat fought for a policy that would return Kashmiri youth to the peacemaking fold. He was a passionate Kashmiri nationalist who brought the Kashmiri language back to the Valley’s literary and educational establishments. He sought to build bridges with Jammu and Ladakh as well as across the Line of Control, with New Delhi as well as Islamabad. He never indulged in abuse or even expressions of rage — an extraordinary feat given the terrible suffering of his people at the hands of both the Indian and Pakistani governments, not to mention Pakistan-based terror groups like the Lashkar-e-Taiba and Jaish-e-Mohammed. He was a man of great discipline and clear sight when it came to the interests of Kashmiris.
•I first met Shujaat when he was a reporter at The Hindu, but my closest association with him came when I was appointed one of the Indian government’s Group of Interlocutors for Jammu and Kashmir in 2010. Shujaat was sceptical, as were most Kashmiris — so many interlocutors had come and gone, he said, but the government never took the next step, of moving towards a political solution. We might help assuage rage at the deaths of 120 youth during the summer uprising of 2010, he added, but what after that? Could we get the government to engage in a results-oriented political dialogue with the ‘azaadi’ groups and Pakistan? Was there any hope of resurrecting the peace process of 2004-07?
•Despite his scepticism, Shujaat helped us. Like the rest of the Kashmiri media, his paper was hostile to our mission when we started. Yet, as they saw that we were sincere — though our superiors in government may not be — they rallied to our cause. When we visited the Srinagar jail and met with the militants held there, he called to commiserate with me on the trolling we received by the Bharatiya Janata Party (BJP) and the national media. It was after this that he assigned one of his most seasoned journalists to cover our work, and it was partly due to the reporting in Rising Kashmir, and Greater Kashmir too, that the tide of public opinion in the Valley slowly turned in our favour.
•In the one year that we worked as interlocutors, we must have met Shujaat a few dozen times. Our meetings were never as friends — though we were indeed friends — but always professional. He refused to lunch or dine with us, but he did offer us advice. It was because of his prodding, along with Fayaz Ahmad Kaloo’s, that the Home Ministry lifted its ban on government advertisements in his and other papers, albeit briefly. It was also because of his prodding that we were able to get hundreds of stone throwers released. Most rare of all, his was one of the few Valley papers that gave as much coverage to our work in Jammu and Ladakh as in the Valley. And when my colleagues wanted to focus on Jammu and Kashmir alone, excluding the Pakistan-held parts of the former princely state, it was Shujaat who gave me the courage to stand firm and include those regions in our final report.
•Ironically, it was our attempt to push the boundaries of interlocution to include human rights, demilitarisation and talks with ‘azaadi’ groups, including their armed wings, that won us Shujaat’s support. I say ironically because it was these very efforts that led to our loss of support in both Delhi and the government and made us less effective than we might have been. But Shujaat, like so many other Kashmiris, welcomed us as individuals. He did not believe the government would act politically, but he believed that the more inclusive we were the better it would be for everyone. He was a man who saw both the short and the long run.
Unfinished business
•Our mission ended, as he had predicted, without the government engaging in next steps. But he remained a friend. We did not work together again but were constantly in touch on Kashmir. Our last conversation was about my forthcoming book. He was writing his own book, he told me. Do it fast, I said, because then I can quote from it. The paper came first, he replied, there was time for his book. Alas there was not, but the chapters he did write should be published soon.
•As I conclude this memorial, I have only one hope. Let the Indian and Pakistani governments, and the ‘azaadi’ groups — all of whom have condemned Shujaat’s assassination — restore the ceasefire and restart political talks for an end to the conflict. This was what Shujaat worked for. As his senseless killing shows, time is fast running out for the Valley.
📰 New health scheme flawed: IMA
•The Indian Medical Association (IMA) has demanded a review of the Centre’s ambitious National Health Protection Scheme, saying it has “conceptual deficits and operational flaws”. The doctors body said the rates quoted by the government for various procedures are abysmal and impractical and most of them do not cover even 30% of the cost of the procedure.
•“No hospital can work on these rates without seriously compromising patient safety. In the garb of cost cutting the government is exposing the people to danger in the hospitals. “Caesarean sections underwritten for ₹9,000 cannot ensure safety of the mother and the child,” IMA national president Dr. Ravi Wankhedkar said.
•The IMA demanded that the costing undertaken be transparent and be in public domain.
•The doctors body said the money allotted for the Ayushman Bharat — National Health Protection Scheme (AB-NHPS) would have better served the country if every district hospital is strengthened with an infrastructure of ₹2 crores each.
•“The highly optic NHPS fails to create any new national asset. The same money invested in our public hospitals would have brought secondary and tertiary care closer to poor in our government hospitals.
•“In addition to non-creation of new public sector hospitals, the government will lose around ₹400 crore to private health insurance companies which will manage the scheme. The insurance driven healthcare is a failed experiment,” Dr. Wankhedkar said.
•IMA members said apart from such conceptual deficits the operational flaws of the scheme will ensure it as a non-starter.
•While lauding that the scheme has brought health as an important issue in an election year, the doctors body expressed concern that only a fraction of ₹1.5 lakh crore required has been allotted.
•The IMA said the way forward for the country is to invest in our government hospitals for better health infrastructure and manpower. The current policy change in India will only end up strengthening the insurance business.
•“IMA has suggested to the Union government that NHPS should be modelled as healthcare purchase directly from the provider hospitals removing the insurance companies and third party administrators.
•“These intermediaries siphon off 40% of the budgeted money and are breeders of corruption and unethical practices,” IMA Secretary General Dr. R.N. Tandon said.
•Twenty States, so far, have signed MoUs with the Union Health Ministry to implement the government’s ambitious national health protection mission, aiming to provide a cover of ₹5 lakh per family annually to ten crore vulnerable families.
📰 MCLR, base rate merger proves elusive
RBI yet to mandate banks to allow customers to migrate to lower rate regime, despite promise
•Millions of customers are paying a higher interest rates on home and auto loans, among others, in effect ensuring that public sector banks avoid further losses.
•This is because the Reserve Bank of India (RBI) is yet to mandate banks to allow customers who signed up for loans in the erstwhile ‘Base Rate’ regime and who are paying higher rates, to shift to the current ‘MCLR’ structure, which is lower than the base rate.
Interest income impact
•An internal study by the banking regulator has found that if banks offer their customers a lower interest rate, public sector banks will incur a whopping Rs. 40,000 crore loss. “Public sector banks have reported huge losses in the previous financial year. Asking them to shift their customers to MCLR could impact their interest income further,” said a reliable source who wished not to be named.
•State-run banks are already reeling under huge losses due to a rise in non-performing loans. Nineteen of India’s 21 state-run lenders reported losses in 2017-18, wiping out almost all of the government’s capital injections during the year.
•Base rate is the erstwhile loan pricing mechanism which was replaced by MCLR — the Marginal Cost of funding based Lending Rate — from April 1, 2016. The one-year MCLR of banks, to which a bulk of the loan rates are linked, is lower than the base rate. For example, SBI’s base rate is 8.7% while its one-year MCLR is 8.25% — a difference of 45 basis points.
RBI’s own assessment
•According to the RBI’s own assessment, ‘a large proportion’ of loans is still linked to the base rate. A base rate customer can shift to the MCLR only by paying a fee. On February 7, in the sixth bimonthly policy review of 2017-18, RBI had said the base rate would be linked to MCLR from April 1.
•“With the introduction of MCLR, it was expected that the existing base rate-linked credit exposures shall also migrate to MCLR system. It is observed, however, that a large proportion of bank loans continue to be linked to the base rate despite the Reserve Bank highlighting this concern in earlier monetary policy statements,” the RBI had said on February 7.
•“Since MCLR is more sensitive to policy rate signals, it has been decided to harmonise the methodology of determining benchmark rates by linking the base rate to the MCLR with effect from April 1, 2018. Necessary instructions will be issued by the end of next week,” it added. Instructions to the effect have not yet been issued.
📰 New auto policy likely to be finalised in 3 months
May seek emission-linked tax on automobiles : sources
•The new National Auto Policy, which may seek emission-linked taxation on automobiles and a technology- agnostic green mobility roadmap, is likely to be finalised in the next three months, according to official sources.
•Discussions with various stakeholders have been on for the past six months to frame the new policy, which envisages having a single nodal regulatory body for the automobile industry, officials in the Heavy Industry Ministry said.
•A draft cabinet note on the policy is being prepared and will be circulated shortly among departments concerned, they disclosed.
•“There has also been a discussion on strengthening the FAME India (Faster Adoption and Manufacturing of Electric & Hybrid Vehicles) scheme further for the faster adoption of eco-friendly automobile technologies,” a source said.
Long-term plan
•In terms of emission, it has been suggested to have a comprehensive long-term plan with definite time-lines under the new auto policy, the source added. The draft of the policy released earlier had recommended rationalisation of the GST structure for automobiles that is currently based on length, engine displacement, engine type and ground clearance. It had called for replacing the current classification criteria with a composite criterion based on vehicle length and CO2 emissions.
•The draft policy had recommended that vehicle length-based classification will target reduction in vehicular congestion and CO2 emissions based classification will align with the overall vision of green mobility and reduction in green house gas(GHG) emissions.
•The policy is expected to define thresholds for length and CO2 emissions with the objective of neutralising the impact on GST revenue.
📰 Unravelling the fine print of the ‘new’ IBC
Relief to micro, small and medium enterprises (MSME)
•The promoter of a MSME is not disqualified to bid for his firm which is undergoing corporate insolvency resolution process, provided the firm/person is not a wilful defaulter (though NPA) and does not attract any other disqualification.
•A person who has provided a guarantee on the loan taken by the MSME firm is also not disqualified from bidding. Prior to the ordinance, under Section 29 A, promoters and guarantors of the firm were disqualified from bidding. Now, exemption has been provided to MSMEs. Further, the amendment also empowers the Centre to allow further exemptions or modifications with respect to the MSME sector, if required, in public interest
Limitation Act 1963
•The ordinance has said that the Limitation Act 1963 will apply to the proceedings before the National Company Law Tribunal (NCLT)) and National Company Law Appellate Tribunal (NCLAT). The law deals with whether the debt in question is time-barred and whether an application can be filed.
Transfer of pending winding-up petition to the NCLT
•The ordinance has made an amendment to Section 434 of the Companies Act, 2013. This enables parties to seek the transfer of winding-up cases against companies pending in any court, before the commencement of the IBC, to the NCLT and the court may order the transfer of such cases which would be dealt with as insolvency proceedings application before the NCLT.
Putting the onus on person submitting the resolution plan to revive sick company
•The person, while submitting a resolution plan for the sick firm, will now have to additionally submit an affidavit to the resolution professional, confirming that he/she has complied with the provisions of Section 29 A. Wherein the terms of the plan, shareholders’ approval is required under any law for a particular action under the resolution plan, the approval shall deemed to have been given for the purpose of implementation of the plan. The person filing the resolution plan is also required to obtain the necessary approvals required under any law for the time being in force within a period of one year from the date of approval of the plan or within such period as provided for in such law, whichever is later.
Corporate guarantor
•The amendment had defined corporate guarantor as a corporate person who has provided guarantee to the loans availed by the firm facing insolvency proceedings. Now, insolvency proceedings can be initiated against the corporate guarantors.
