📰 Govt stand on Lokpal appointment is ‘wholly unsatisfactory,’ says Supreme Court
The court asked the government to file the affidavit in four weeks.
•The Supreme Court on Tuesday said the government’s stand on completing the appointment of a Lokpal, an ombudsman to protect the common man from corruption in public service and power centres, was “wholly unsatisfactory.”
•The court was reacting to an affidavit filed by the government, the stated aim of it being to specify the exact time frame by which it would appoint a Lokpal. Instead, the government, represented by Attorney General K.K. Venugopal, said it was a “complicated” process.
•Advocate Prashant Bhushan, who filed a contempt petition against the government for not appointing a Lokpal despite an April 2017 judgment by the court, said the apex court should now take over and appoint a Lokpal.
'Govt dragging feet'
•“They [the government] are just dragging their feet. The court should start the procedure of appointing a search committee [to shortlist the candidates for Lokpal],” Mr. Bhushan, for NGO Common Cause, submitted.
•The judges should “consult among themselves,” he said.
•“Let the Supreme Court give names and let the court appoint a Lokpal,” he urged the court.
•After a short discussion with Justices R. Banumathi and Navin Sinha on the Bench, Justice Gogoi began to pass a short order, recording that the government affidavit was “wholly unsatisfactory” and the competent authority should file a second affidavit with all the details of what it had done in the appointment process.
•At this point, Mr. Venugopal said the court may make it clear what “details” it wanted from the government in the second affidavit
•Justice Gogoi then tersely went on to record Mr. Venugopal’s request and the court’s reply in the very same order. It said Mr. Venugopal “suggested” the court should “lay down” the details the government has to include in its second affidavit. Refusing the Attorney General, the court responded that “we do not feel the necessity” to guide the government on what it should or should not include in its affidavit.
•The court asked the government to file an affidavit in four weeks.
•The selection panel, led by Prime Minister Narendra Modi, met on July 19 for finalising a search committee for finding a Lokpal.
Finalising a search panel will take time: AG
•Outside the courtroom, Mr. Venugopal said finalising a search committee would take time. Besides, the appointment process should be inclusive. A thorough vetting of the candidates for Lokpal is a must, he added.
•The court has for the past several months been constantly urging the government to complete the Lokpal appointment.
•Though passed in 2014, the Lokpal and Lokayukta Act of 2013 had not been implemented all these years because there was no Leader of Opposition (LoP) in the 16th Lok Sabha. The 2013 statute includes the LoP as a member of the selection committee. The Act intends the LoP to be the part of the selection committee of the Prime Minister, the Chief Justice of India and the Speaker, which has to first appoint an eminent jurist among their ranks.
•However, on April 27 last year, the Supreme Court, in a judgment, clarified that the Lokpal appointment process need not be stalled merely due to the absence of the LoP.
•The judgment dismissed the government’s reasoning that the Lokpal appointment process should wait till the 2013 Act was amended to replace the LoP with the single largest Opposition party leader.
📰 Proving the hardliners in Tehran right
The cornerstone of Donald Trump’s West Asia policy is Israel’s security. The containment of Iran is the subplot
•America’s Iran policy has come full circle with U.S. President Donald Trump’s recent and open threats against Tehran — from historical hostility towards post-revolutionary Iran, to engagement during the Barack Obama era, it has now flipped back under the new administration.
The Trump road map
•The cornerstone of Mr. Trump’s West Asia policy, as it appears, is Israel’s security, and the containment of Iran is a subplot of this approach. America’s traditional allies, Israel and the Sunni Arab world (read Saudi Arabia), were upset with Mr. Obama’s outreach to Iran. His approach was focussed on restoring some balance in the region, which was shaken up by revolts in the Arab world and civil wars. The Obama administration could persuade Iran to give up its nuclear ambitions in return for the lifting of international sanctions. The 2015 nuclear deal with Iran had at least opened new avenues for both Washington and Tehran to reimagine their relations. Those avenues have been closed, at least for now.
•Interestingly, it’s not Iran which is responsible for the current escalation. Iran, as the UN atomic watchdog has certified, has been fully compliant with the terms of the nuclear accord. Other signatories of the deal, including the European Union, still stick with it. But Mr. Trump, who has called it the “worst deal ever” in American history, withdrew from it unilaterally this May, thereby manufacturing a new crisis. If the Obama administration had a nuanced view of Iran’s leadership — it engaged with Iranian moderates such as President Hassan Rouhani — in the Trump team’s perspective, there’s no statesman-like figure within the Iranian government. A few hours before Mr. Trump warned Mr. Rouhani late on Sunday of unprecedented consequences if Iran threatened America, U.S. Secretary of State Mike Pompeo addressed a group of Iranian diaspora in California, and called the regime a kleptocracy akin to the mafia.
Anti-Iran bloc
•Why this U-turn? Besides his urge to undo every achievement of his immediate predecessor, Mr. Trump sees Iran through the establishment’s foreign policy prism. He wants U.S. policy to swing back to America’s traditional allies, Israel and the Sunni Arab world. They saw the nuclear deal and the subsequent opening up of the global economy for Iran as further helping Tehran consolidate its position in West Asia at a time when it’s already spreading its influence through a Shia corridor. Mr. Trump doesn’t have a broader regional stabilisation strategy. Rather, in his worldview, Iran has to be rolled back for the U.S.’s traditional allies to assert themselves even more strongly in the region. He dumped the nuclear deal not to force Iran to renegotiate it, but to provoke and isolate it instead.
•The plan is to deny Iran the economic benefits of the nuclear deal, incite Iranians against the regime and scuttle Tehran’s influence within Syria using Russian help. The Trump-Vladimir Putin agreement in Helsinki (which was pre-endorsed by Israel) to keep Iranian-trained militias away from the de facto border between Syria and the Israeli-occupied Golan Heights and sustain the relative freedom Israel enjoys within Syria to target Iranian assets at will suggest that Moscow is ready to cooperate to a certain extent.
A comparison
•Conventionally, Iran is not a great military force. It spends far less on defence than what Saudi Arabia, its regional rival, does. In 2016, Iran spent $12.7 billion on defence, compared to Saudi Arabia’s $63.7 billion. Even in terms of percentage of GDP, Iran, at 3%, is behind even Jordan, which spent 4% in 2016, not to mention Saudi Arabia’s 10% and Israel’s 6%. It’s to overcome this asymmetry in its conventional might that Iran has adopted a ‘forward defence’ doctrine, empowering militias and proxies in other countries, such as the Hezbollah in Lebanon, mobilisation units in Iraq and Syria, and the Houthis in Yemen. This upsets both Israel and the U.S. In the event of a war, Iran could activate these groups, unleashing havoc in its neighbourhood and targeting both American and Israeli soldiers. This doctrine draws from Iran’s insecurity, not from some revolutionary zeal. Iran is basically a pragmatic power with revolutionary rhetoric. It’s also a country that has a complex system with multiple power centres that requires a nuanced approach — a message completely lost on the Trump administration.
•In the past, there have been different attempts, from both Iran and the U.S., for a rapprochement. In the last leg of the Bill Clinton presidency, the administration had ended a few of America’s sanctions on Iran and made a commitment to take steps towards ending two decades of hostility. After the 9/11 attack, Iran offered cooperation to the U.S. in its war against the al-Qaeda and Afghanistan. But the George W. Bush administration reversed the Clinton-era policy and even ignored the goodwill Iran showed after the 9/11 attack; it clubbed Iran alongside North Korea and Iraq as part of an “axis of evil”. Within a few months Iraq was invaded and there was talk of an imminent Iran invasion. The election, in 2005, of Mahmoud Ahmedinejad, a hardliner, as Iran’s President only made matters worse.
Dashed hopes
•What’s happening now is a repeat of history. After Mr. Rouhani became President in 2013, there was a climate for engagement, which Mr. Obama seized. Mr. Rouhani ignored or overcame the warnings and pressure tactics from hardliners within the regime and went ahead with negotiating the nuclear deal. In 2015, they made history. Mr Rouhani’s bet was on the economic benefits the deal would bring, which helped him secure a re-election last year. It had both global and domestic ramifications. Globally, checks were introduced on Iran’s nuclear ambitions without coercion. It was a triumph of diplomacy.Domestically, it strengthened the hands of the moderates in Iran’s power dynamics. A U.S. administration with a rational policymaking machine would have appreciated the deal and consolidated it, by retaining the checks on Iran while sharpening the contradictions within Iran’s power games. Continued normalisation should have been the key, which would have allowed both sides to address lingering concerns such as Iran’s support for militias. It would also have set a global example for non-proliferation and new rules to check countries with nuclear ambitions.
•Instead, the Trump administration has demolished all these possibilities with its irrational, if not ideological, hostility towards Iran. Look at these two examples: Iran is a country which had an active nuclear programme and came forward to negotiate a deal with world powers. But the deal has been jettisoned by the U.S., which is now threatening Iran with force. North Korea, on the other hand, went ahead and built nuclear bombs and missiles, threatened the U.S. and its allies and is living in a permanent state of war in East Asia. The U.S. President travelled to Singapore to meet the North Korean leader and is seeking an agreement with him, with assurances of economic benefits in return. In other words, the Trump administration is punishing the country which agreed to scuttle its nuclear programme and engaging with the country that built nuclear weapons. The U.S. President is proving Iran’s hardliners right. How will they trust America again?
📰 Lok Sabha passes anti-graft amendment Bill
It provides for jail terms to those convicted of taking or giving bribes to public officials
•The Lok Sabha on Tuesday passed the Prevention of Corruption (Amendment) Bill, 2018 that seeks to punish bribe-givers and bribe-takers.
•The Bill provides for jail terms of three to seven years, besides fine, to those convicted of taking or giving bribes to public officials.
•The Bill also extends the ambit of public servants who will be protected by the provision of a prior government sanction for prosecution. There is also a provision now to get prior permission for starting an investigation and that has prompted many to say that the law has been “diluted” from its original draft.
Safeguards incorporated
•The Bill, cleared by the Rajya Sabha last week, was passed unanimously by the Lower House after debating for nearly four hours.
•Minister of State for Personnel and Public Grievances Jitendra Singh replied to the debate.
•He said safeguards had been provided to ensure that honest officers were not intimidated by false complaints. “For any corruption case, we will bring guidelines for decision to be ordinarily given in two years.” He described the Bill as “historic.”
•In a departure from the earlier anti-corruption law, the current law makes a distinction between “collusive bribe givers” and those who are “coerced.” In such cases, the Bill seeks to protect those who report the matter within seven days.
•However, taking note of the concerns raised by many members that the seven-day window was too short, Dr. Singh said the government would look at ways to “extend this period while framing the rules.”
•Many members who took part in the debate stressed on the need to curb election expenditure and bring about electoral reforms to stop corruption in politics.
•Congress MP Adhir Ranjan Chowdhury, while supporting the Bill, said despite the government’s claim of corruption-free governance, there had been many such allegations, including the multi-core Rafale deal, bank frauds by Nirav Modi, Mehul Choksi and Vijay Mallya. “They talk about zero tolerance against corruption... but the reality is diametrically opposite. There is maximum corruption, minimum prevention,” said Mr. Chowdhury. He questioned the delay in appointing a Lokpal.
Sena’s charge
•But the sharpest attack came from Shiv Sena member Arvind Sawant who tore into the Modi government over demonetisation and grand election rallies.
•He alleged that the “BJP used investigating agencies like Enforcement Directorate (ED) to pressure political rivals and make them join their party.”
•He also asked whether the elections rallies of the Prime Minister or a Chief Minister were borne by the exchequer or the political party. “Let the people find out,” said Mr Sawant.
📰 India needs smart urbanisation
Cities require a renewal that factors in rural-urban migration
•Residents of Bhavanpur, a village about 15 km outside Ahmedabad, have been protesting against their inclusion in the city’s urban area by the local urban development authority. Similar protests have been observed in villages elsewhere in Gujarat. It’s a strange trend, the fruits of urban development seemingly rejected. Meanwhile, pollution in India’s urban areas seems to have sparked off a reverse migration. Farmers from Haryana who had migrated to Delhi and Gurugram for work to escape an agricultural crisis are increasingly going back to their farms during winter, unable to take the toxic pollution. And it’s not just big cities. India’s urbanisation template is clearly ripe for change.
A rising number
•Over 34% of India’s current population lives in urban areas, rising by 3% since 2011. More importantly, while existing large urban agglomerations (those with a population above 50 lakh) have remained mostly constant in number since 2005, smaller clusters have risen significantly (from 34 to 50 clusters with 10-50 lakh population). By some estimates, India’s urban population could increase to 814 million by 2050. And yet, cities look and feel downtrodden, riven with poverty and poor infrastructure, with little semblance of urban planning. With an increase in urban population will come rising demands for basic services such as clean water, public transportation, sewage treatment and housing.
•Meanwhile, on the ‘Smart City’ front, while over 90 ‘Smart Cities’ have identified 2,864 projects, India lags on implementation, with about 148 projects completed and over 70% still at various stages of preparation. Finally, there is still an outstanding shortage of over 10 million affordable houses (despite the government taking encouraging steps to incentivise their construction). The annually recurring instances of floods in Mumbai, dengue in Delhi and lakes on fire in Bengaluru paint a grim picture. While work continues, admittedly slowly, on the Delhi-Mumbai Industrial Corridor project and the bullet train, urban India’s challenges remain manifold.
•One primary problem is that of the definition of what’s urban. Urban development comes under State governments, with the Governor notifying an area as urban based on parameters such as population, density, revenue generated for the local administration and percentage employed in non-agricultural activities. This notification leads to the creation of an urban local government or municipality, classifying the area as a “statutory town”. With such a vague definition, discretionary decisions yield a wide variance in what is considered a town. The Central government considers a settlement as urban if it has a urban local government, a minimum population of 5,000; over 75% of its (male) population working in non-agricultural activities; and a population density of at least 400 per sq. km. However, many States consider such “census towns” as rural, and establish governance through a rural local government or panchayat. Consider the case of Dabgram, in West Bengal’s Jalpaiguri district, which is classified only as a
“census town”, while having a population more than 120,000 and located just 3 km from Siliguri.
•Another issue is the low level of urban infrastructure investment and capacity building. India spends about $17 per capita annually on urban infrastructure projects, against a global benchmark of $100 and China’s $116. Governments have come and gone, announcing a variety of schemes, the Jawaharlal Nehru National Urban Renewal Mission included, but implementation has been mostly inadequate, with exploration of financing options limited as well. For example, Jaipur and Bengaluru collect only 5-20% of their potential property tax — how can urban local bodies be sustainable without enforcing this? Meanwhile, urban institutions also suffer from a shortage of skilled people.
•Finally, there needs to be a systemic policy to deal with urban migration. Internal migration in India is very closely linked to urban transitions, with such migration helping reduce poverty or prevent households from slipping into it. Urban migration is not viewed positively in India, with policies often bluntly seeking to reduce rural to urban migration. Preventing such migration can be counterproductive — it would be better to have policies and programmes in place to facilitate the integration of migrants into the local urban fabric, and building city plans with a regular migration forecast assumed. Lowering the cost of migration, along with eliminating discrimination against migrants, while protecting their rights will help raise development across the board. Consider Delhi. While historically, urban policy sought to limit urban migration, this is now changing with a focus on revitalising cities nearby such as Meerut, building transport links and connectivity.
•Our urban policymakers also need to be cognisant of the historical context of our urban development. Our cities have been witness to multiple transitions over the last century, with barely any time to recover and adapt — the British creation of three metropolitan port cities, combined with the rollout of the railway network, transformed India’s urban landscape, relegating erstwhile prominent Mughal-era towns such as Surat and Patna into provincial backwaters. The creation of hill stations in northern India and the advent of the plantation economy, along with industrial townships (such as Jamshedpur) transformed trading networks. Finally, the creation of cantonments and civil lines areas, along with railway stations, in our major cities led to the haphazard growth of urban areas away from bazaars and towards railway terminals. Transforming them into neatly organised urban spaces will not be easy.
Towards a new model
•Perhaps we need a different model of urbanisation. The announcement of a new urbanisation policy that seeks to rebuild Indian cities around clusters of human capital, instead of considering them simply as an agglomeration of land use, is a welcome transition. We need to empower our cities, with a focus on land policy reforms, granting urban local bodies the freedom to raise financing and enforce local land usage norms. For an India to shine, the transformation of its cities is necessary.
📰 Cosmetic repair: on inter-creditor agreement
It will now be easier for banks to sell stressed assets, but other tricky issues remain
•Indian banks trying to sell their troubled assets now have one less hurdle to cross. A group of banks, including public sector, private sector and foreign banks, signed an inter-creditor agreement on Monday to push for the speedy resolution of non-performing loans on their balance sheets. According to the agreement, a majority representing two-thirds of the loans within a consortium of lenders should now be sufficient to override any objection to the resolution process coming from dissenting lenders. Minority lenders who suspect they are being short-changed by other lenders can now either sell their assets at a discount to a willing buyer or buy out loans from other lenders at a premium. The inter-creditor agreement is aimed at the resolution of loan accounts with a size of ₹50 crore and above that are under the control of a group of lenders. It is part of the “Sashakt” plan approved by the government to address the problem of resolving bad loans. Over the last few years, Indian banks have been forced by the Reserve Bank of India to recognise troubled assets on their books, but their resolution has remained a challenge. According to banker Sunil Mehta, who headed a panel that recommended the plan, disagreement between joint lenders is the biggest problem in resolving stressed assets. The government hopes that the holdout problem, where the objections of a few lenders prevent a settlement between the majority lenders, will be solved through the inter-creditor agreement.
•Such an agreement may persuade banks to embark more quickly on a resolution plan for stressed assets. This is an improvement on the earlier model, which relied solely on the joint lenders’ forum to arrive at a consensus among creditors. It is, in fact, logical for joint lenders who want to avoid a deadlock to agree on the ground rules of debt resolution prior to lending to any borrower. But the obligation on the lead lender to come up with a time-bound resolution plan can have unintended consequences. Banks may be compelled to engage in a quick-fire sale of stressed assets due to arbitrary deadlines on the resolution process. This will work against the interests of lenders looking to get the best price for their stressed assets. Also, it is often in the interest of the majority of creditors to take the time to extract the most out of their assets. Meanwhile, the biggest obstacle to bad loan resolution is the absence of buyers who can purchase stressed assets from banks, and the unwillingness of banks to sell their loans at a deep discount to their face value. Unless the government can solve this problem, the bad loan problem is likely to remain unresolved for some time to come.
