📰 SC tags Tripura NRC plea with Assam case
•The Supreme Court on Monday issued notice to the government on a public interest litigation to update the National Register of Citizens (NRC) in Tripura, as is being done in Assam, in order to detect and deport the “illegal immigrants” from Bangladesh.
•A three-judge Bench led by Chief Justice of India Ranjan Gogoi directed the court registry to tag the petition, filed by the Tripura People’s Front and some others, along with petitions in the Assam NRC case.
•The petition asked the Supreme Court to direct the authorities to update the NRC with respect to Tripura in terms of Rules 3 and 4 of The Citizenship (Registration of Citizens and Issue of National Identity Cards) Rules, 2003 by taking July 19, 1948 as the cut-off date as provided for in Article 6 of the Constitution.
‘External aggression’
•The petition contended the “influx” of illegal immigrants into Tripura amounted to ‘external aggression’ under Article 355 of the Constitution. The Union is bound to protect the State from this, it said.
•“The presence of illegal immigrants violates the political rights of the citizens of Tripura,” the petition said.
‘Demographic changes’
•“Uncontrolled influx of illegal migrants from Bangladesh to Tripura has caused huge demographic changes in Tripura… Tripura was a predominantly tribal State, but now it has become a non-tribal State… Indigenous people who were once the majority have now become a minority in their own land,” it claimed.
•The petition submitted to the court that it was “very necessary to update the NRC in Tripura, detect and identify the illegal immigrants/non-citizens of India and deport them.”
•The petitioner claimed that it had submitted memoranda to the President and Prime Minister of India in February 2018 but had not got any “favourable response in this regard till date.” The petition arraigns the Union of India, Ministry of External Affairs, Registrar General and Census Commissioner of India, the Election Commission of India and the State of Tripura as respondents.
•It would now be heard by a Special Bench monitoring the Assam NRC case. Chief Justice Gogoi heads it.
📰 SC pulls up RBI as banks go slow on lowering interest rates
Petitioners said loan rates were not being reduced in tandem
•The Supreme Court on Monday directed the RBI to come up with a decision on a representation that banks are delaying passing on the benefit of lower interest rates to those who have taken loans at floating interest rates.
•A Bench of Chief Justice of India Ranjan Gogoi and Justices S.K. Kaul and K.M. Joseph asked the RBI to communicate within six weeks its decision to the public trust ‘Moneylife Foundation’, which has filed the representation alleging that banks and financial institutions take a tardy approach in lowering interest rates despite the central bank’s decision on the repo and reverse repo rates.
•“According to the petitioner(s), it has not been informed of the result of such consideration leaving the petitioners with no option but to approach this Court... We are of the view that, at this stage, the Reserve Bank of India should be directed to communicate its decision in the matter covered by the representation/ letter of the petitioner(s) dated 12.10.2017 to the petitioner(s) within a period of six weeks from today,” the Bench said.
•It granted liberty to the Trust and others to approach the court again if they were not satisfied with the response of the RBI.
📰 India faces threat of deadly heat waves: UN report
IPCC panel study prescribes ‘large-scale changes’ to keep the rise in global temperature below 1.5°C
•If the average global temperature rises by more than one degree Celsius from the present, India could “annually” expect conditions like the 2015 heat wave that killed at least 2,000, according to the ‘Special Report on Global Warming of 1.5°C,’ commissioned by the Intergovernmental Panel on Climate Change (IPCC).
•The report was put together by about 91 authors and review-editors from 40 countries, who had convened in Incheon, South Korea, last week, to assess the feasibility of keeping the average global temperature from rising beyond 1.5 degree Celsius from pre-industrial times.
•Achieving this would require “rapid, far-reaching and unprecedented changes in all aspects of society,” the IPCC said in the assessment. The 2015 agreement in Paris, considered a landmark achievement, had the world agree to keep temperatures below 2 degrees Celsius and “pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.”
•With the U.S. withdrawing from the accord, the chances of such an ambitious target were significantly weakened.
Rapid transitions
•The report stated that capping the rise in temperature to 1.5 degrees Celsius would require “rapid and far-reaching” transitions in land, energy, industry, buildings, transport and cities. The global net human-caused emissions of carbon dioxide (CO2) would need to fall by about 45% from 2010 levels by 2030, reaching ‘net zero’ around 2050. This means any remaining emissions would need to be balanced by removing CO2 from the air.
•However, allowing the global temperature to temporarily exceed the 1.5°C target would mean a greater reliance on techniques that remove CO2 from the air, if the aim is to return the rise in global temperature to below 1.5°C by 2100. Many of these techniques, such as carbon capture and storage, were unproven on a global scale and some carried significant risks for sustainable development, the report said.
•“Limiting global warming to 1.5°C, compared with 2°C, would reduce challenging impacts on ecosystems, human health and well-being, making it easier to achieve the United Nations Sustainable Development Goals,” Priyardarshi Shukla, Co-Chair of IPCC Working Group III, said in a statement.
•A representative of the Indian delegation told The Hindu that much of the discussion centred on government officials questioning the authors on the scientific basis of their assessment. “An earlier draft said there was ‘high confidence’ of the extent of changes to the Indian monsoon. This subsequently became ‘medium confidence’,” said the official, who didn’t want to be identified. The U.S. has “rejected” the findings of this report, the official added.
•Officials of the Environment Ministry, the Ministry of Earth Sciences, the Indian Institute of Human Settlements, and the Tata Institute of Social Sciences were part of the Indian delegation.
📰 The diaspora and disasters
As the Kerala floods have shown, the diaspora can shape political and economic responses
•Between August 8 and 20, the devastating floods in Kerala claimed nearly 500 lives, displaced over a million people, and directly affected over a sixth of the State’s total population. The State government’s latest report estimates the losses to be more than the State’s annual plan. In the fiscal 2017-18, Kerala’s annual plan outlay was pegged at ₹26,500 crore. Moreover, according to the just concluded Kerala Migration Survey (KMS) 2018— conducted by the Centre for Development Studies in Kerala — while remittances received in Kerala accounted for approximately ₹85,000 crore, much was used for housing and improving human development.
•This was the worst flood in Kerala since 1924. In the deluge then, the State received 650 mm of rain compared to 2,344 mm this time. However, the impact was similar.
•The difficult task of rebuilding the State has begun and contributions to the Chief Minister’s Distress Relief Fund (CMDRF) have crossed more than ₹1,680 crore. The Chief Minister is confident that the State would be able to overcome the shortage of funds by mobilising its own resources and through support from different quarters. For Kerala, the most important support system is the Malayali diaspora across the world.
Migrant data
•According to the KMS 2018, there are over 2.1 million Malayali emigrants globally and 1.3 million return migrants. The Department of Non-Resident Keralite Affairs, headed by the Chief Minister of Kerala, looks after the welfare of the 3.4 million migrants globally, in addition to the nearly 2 million internal migrants within India. These are Keralites who have direct connections to their households — fathers, mothers, spouses, and, in some cases, elderly children. Of course, there are also Malayalis who have moved from Kerala permanently with their family and live within the country or abroad (non-residents from Kerala). They number around 2-3 million (over the last 60 years since the formation of the State in 1956).
•The advantage Kerala has at this point is to engage with its migrants and diaspora who have been instrumental in rebuilding the destination economies after natural calamities and economic crises. The standing of the Malayali diaspora is evident from the extraordinary support Kerala has received from other sovereign states with large diaspora populations such as in West Asia, multinational corporations employing Malayalis, and by the diaspora itself. With the depreciation of the Indian rupee, the State can relaunch foreign currency deposit schemes such as the hugely successful India Millennium Deposit Scheme which was introduced in 2000 by the Centre to leverage higher values of foreign currencies so as to overcome financial and economic crises.
Pivotal role
•Unfortunately, ‘not much attention has been paid to the role of diaspora groups in post-disaster situations. Yet, in a globalised world, the international dimensions of disaster response and recovery, and the significant policy role played by the diaspora can be critical’. For example, after the earthquake in 2010 in Haiti, ‘the Haitian diaspora in the U.S. served as a conduit for doctors, nurses, engineers, educators, advisers and reconstruction planners. Haitian-Americans continue to be vital in long-term recovery — as supplies, remittances, sharing human and financial resources, lobbying governments, international organisations and corporations for disaster relief and redevelopment funding, and in facilitating eased travel restrictions’.
•In Nepal, after the 2015 earthquake, the Non-Resident Nepali Association collected $2.69 million, mobilised over 300 volunteers including doctors and nurses, and pledged to rebuild 1,000 disaster resilient houses. In the tsunami in South Asia (2004) and the Pakistan earthquake (2005), diaspora and migrant remittances flowed generously, demonstrating the counter cyclical nature of remittances.
•In Kerala, the migrant community and diaspora moved swiftly to organise an Internet-driven response. By sharing and re-sharing vital information on affected regions and people, supplies, and precautionary measures (on social media platforms), they were instrumental in expanding the flow of information that would later be used by politicians, private and military rescue operations, and relief workers.
•Successful diaspora groups are among the largest contributors to the CMDRF. They will be invaluable in mobilising resources, talent, and knowledge which will be integral in rebuilding the State. For example, a Kerala Health Department report has made it clear that there will be a 100% increase in the demand for pharmaceutical drugs. These can be sourced quickest through transnational diaspora networks. As the diaspora is one of the greatest assets of Kerala, communities should improve relations with diaspora groups. Return migrants should also act as liaison agents.
•Diaspora communities will also inevitably shape political and economic responses to a disaster. The linking of social capital between diaspora, civil society organisations, advocacy groups and government institutions, although necessary during rehabilitation, is bound to lead to unanticipated and undesirable outcomes. At least temporarily, the State may witness higher rates of emigration among the common people as they try to mitigate losses caused by the floods. For example, the KMS shows that migrants use over 40% of their remittances in purchasing land, construction and repayment of mortgage debt. Finally, we need to investigate the relationship between rehabilitation and migration further.
More questions
•Kerala has close to 3 million migrants from other States to replace Keralites who left to West Asia (also known as replacement migration). Have they been affected by the floods? Are they likely to participate in the reconstruction of the economy of Kerala or leave for their home States for better opportunities? The preliminary results of the KMS indicate a decline in emigration. Finally, we should ask ourselves what the future of emigration, return emigration, internal migration and remittances from Kerala will be in the coming years.
📰 Power politics at play
Proposed changes in the Electricity Act could leave the poor behind
•A few months before the next general election, the Central government has proposed a set of changes to the Electricity Act 2003. The amendments seek to enable a market transformation in electricity. The link between political power and electrical power is widely known; promises around electricity access, price and quality are important political currency.
•However, the expenditure of scarce political capital on this issue is puzzling. The amendments will be hard to get through Parliament (an earlier 2014 effort failed) and voters will not see an immediate impact. What is the political rationality of this effort? Who are the winners or losers from these amendments?
Competition and choice
•Bringing in competition and choice in supply for the final consumer has long been an aim of electricity reform and remains central to these amendments. The idea is that while a single public utility will run the wires through which electricity flows, multiple supply licensees (both public and private) will be allowed to compete for consumers. The intent is that the discipline of competing for customers will lead to improved supply and lower bills. However, the global track record on this approach is far from definitive.
•While an earlier 2014 reform effort proposed mandatory and time-bound implementation of these reforms, and therefore was resisted by States, the current amendment allows them discretion on the timing of implementation. The combination of time discretion and the improved presence of the ruling coalition in State governments may facilitate passage this time around.
•If it does, India could have an electricity distribution sector with pockets of competition for wealthy consumers in a sea of monopoly inhabited by the poorest. Private suppliers could cherry-pick profitable locations and consumers; the state-owned incumbent supplier will be left with the obligation to serve low-paying consumers.
•This need not be bad, if there were a mechanism to support the second group. This currently happens through ‘cross-subsidy’ from wealthier customers, but this is also being changed under the amendments. This leaves only the possibility of direct support from States. If these transfers are not forthcoming, or late, the cash-starved incumbent supplier will be locked into a cycle of poor quality of service for its customers who have no ‘exit’ option, leading to more bill evasion, and further financial deterioration.
•The amendment (along with changes in the National Tariff Policy) aims to get the price right — a long-standing aspiration — by capping cross-subsidies at 20% immediately, and eliminating them within three years. The cross-subsidy surcharge on open access customers — the fee that holds back customers from leaving the grid — would be eliminated within two years.
•There is a compelling rationale for these changes — India has among the highest electricity tariffs for industry, which bears the burden of low-performance and losses among other consumers, impacting their global competitiveness. However, this shift could be highly disruptive if the profit-making side is allowed to flee, without devising a transition pathway for the loss-making side of electricity.
•Perhaps because of these political sensitivities, the proposed approach to eliminating cross-subsidies is complicated. Subsidies will not be allowed across consumer categories like industry and agriculture, but will be allowed across consumption categories — big consumers can subsidise small ones. Big industrial consumers will see no effective change, although small business consumers will escape payment of subsidy.
•The more significant change is abolition of the cross-subsidy surcharge, which will open the flood gates for large consumers to migrate through ‘open access’ to cheaper sources and avoid paying any subsidy. In short, cross-subsidy will become load-based subsidy, but the load available to pay that subsidy will be allowed to escape.
•Where is support for poorer customers to come from? The amendment recognises the need to subsidise the poor, but mandates this be done through direct benefit transfers. However, identifying and targeting beneficiaries remains a challenge. Moreover, with these changes, the mechanism of support for poorer customers will shift from the electricity customer to the taxpayer. Cross-subsidies are certainly distorting. But the solution requires the electricity sector to assert its claims for support in competition with several other possible uses of state funds, introducing political uncertainty.
•The proposed legislation makes subsidy to the poor the collective responsibility of the States and the Centre, which has so far been only the responsibility of each State. Notably, the Centre may have access to enhanced tax revenues from electricity because it stands to gain from additional tax revenue from profitable new wires companies and private suppliers. Thus, the Centre could become a new fulcrum of redistribution from wealthy areas in wealthy States, to needy customers that are concentrated in a few States.
•While this may be a pragmatic fiscal strategy allowing redistribution across States, it also has undeniable political implications. It provides greater control to the Centre and limits the States’ and regional political parties’ capability to make electoral use of electricity pricing. The politics of power prices will shift from sub-national to national electoral politics. In an electoral context where the battle lines may be drawn between the ruling coalition and strong regional parties, this is worth noting.
•Moreover, the amendments have other centralising dimensions. The amendment proposes a re-formulation of the selection committee for State regulators, from a majority of State representatives to a majority of Central representatives.
•The Centre will also gain more oversight on capacity addition, through the requirement of detailed project report submission to the Central Electricity Authority. There is no doubt that State performance has been poor on both fronts. But the amendments reflect a clear choice of solution: re-direct responsibility to the Centre instead of fixing the process in the States.
Pump priming generation
•Many generating companies have been in the news recently due to decreasing demand for their power and consequently their stranded assets. The amendments potentially provide comfort to them at the expense of distribution companies. Specifically, they mandate that suppliers sign power purchase agreements (PPAs) to meet the annual average demand, ostensibly to ensure 24x7 power for all, which will be subject to review and compliance measures.
•The challenge of low demand for existing power is undoubtedly an issue. However, the logic of this move is curious; disincentives to serve poor customers rather than availability of power is the real obstacle to 24x7 power. The gain to generators could come at the cost of customers, who, through the PPAs signed by supply companies, have to ultimately bear the risk of uncertain load growth, prices and migration.
•The amendments include many other provisions, notably around making the Act more up to date with regard to renewable energy, which is a worthy objective. In terms of the big questions, it places its bets on more competition, subsidy reform, a steering role for the Centre and throwing a lifeline to generators.
•There is no doubt the status quo is unsatisfactory; India’s electricity sector remains beset with problems. Yet, the amendments leave quite unclear what happens to those left behind by distribution reforms and by efforts to help out generators. Disruptive change in Indian electricity may be needed, even inevitable. But the amendments risk placing the cost of disruption on the backs of the poorest, and shifts the potential for ameliorative measures to the hands of the Centre, rather than the States.
📰 Estimating India’s population
Researchers find that education levels are an important factor in projecting a country’s population
•Sometime in 2017, the UN released projections on India’s population. It said that the population would peak at around 1.675 billion people in the 2056-2066 period, and then decline slowly. However, these projections may have been at the lower end as they considered India to be a heterogeneous entity rather than a union of disparate States.
•In a different study, researchers from the International Institute for Applied Systems Analysis and the Asian Demographic Research Institute used five key dimensions of population growth. It was published recently in the Proceedings of National Academy of Sciences .
•The UN’s Population Division had arrived at its figure by factoring in age, sex and fertility rates. This, however, hid the State-wise differences — States such as Bihar and Uttar Pradesh, which have higher fertility rates, will grow much faster than, say, a lower fertility rate State like Kerala.
Five factors
•While an age-sex model gives a lower projection, a State-level extrapolation (and then adding the sum of these populations) gives rise to a much higher figure, as States with high fertility rates will have an increasingly dominant effect on total fertility rates. In contrast, models which factor in educational levels give rise to lower population projections due to the link between educational levels and lower fertility rates.
•In the second study, apart from age and sex, researchers also factored in the population by State, the place of residence (rural/urban), and the level of education to “comprehensively” address these issues. The factors, when combined to arrive at a figure, show the population to be touching 1.72 billion people, and peaking between 2066 and 2076.
•Education, the researchers found, is an important factor, coming only behind age and sex, in projecting the population. If India’s enrolment rates “stall” and continue at levels observed today, its population could be as much as 1.79 billion by 2071. However, if the country continues increasing enrolment with the momentum seen since 1990, the population could peak at 1.72 billion.
•In a statement, Samir K.C., lead author of the paper, noted that continuously improving on these population projects can underscore the need for increased investment in education and human resources.
📰 Alarming portents from global warming report
1.5 degree C rise in temperatures will be catastrophic for coastal nations and agricultural economies like India
•Coastal nations and agricultural economies like India would be the worst affected. Decline in crop yields, unprecedented climate extremes and increased susceptibility could push poverty by several million by 2050, said the ‘Special Report on Global Warming of 1.5°C,’ commissioned by the Intergovernmental Panel on Climate Change (IPCC) that saw as many as 91 authors and review-editors from 40 countries, convene in Incheon, South Korea and, over the last week, assess the scientific evidence, feasibility and benefits from countries striving to keep the average global temperature from rising above 1.5 C from pre-industrial times.
•“Even at a little over 1.0°C warming, India is being battered by the worst climate extremes – it is clear that the situation at 1.5°C is going to worsen. The new report from the Intergovernmental Panel on Climate Change (IPCC) has served us a final warning that we must get our act together — now and quickly,” said Sunita Narain, director general, CSE, in response to the release of the Panel’s latest study.
•Officials from the Union Environment Ministry, the Union Ministry of Earth Sciences and the Indian Institute of Human Settlements and the Tata Institute of Social Sciences were part of the Indian delegation at Incheon.
•One of them, who didn’t want to be identified, told The Hindu that the report gave a more comprehensive assessment of the differences in a 1.5C world and 2C world and quantified the carbon dioxide that would need to be removed from the atmosphere to achieve this.
•India hadn’t made any scientific contribution — in terms of modelling possible climate change-impact to its agriculture, monsoon, urban dwellings — to this report but gave critical inputs to the scientific basis underlying these assessments. “We discussed, for instance, how much land would need to be diverted from agriculture to forestry (for creating carbon stocks) for capturing carbon, or growing biofuel,” the person told The Hindu. “These are impossible targets but will contribute to future discussions.”
•The next major climate discussions are scheduled in December in Katowice, Poland where countries are expected to discuss rules to implement the Paris agreement.
📰 India to be the 11th wealthiest, says BCG
Personal wealth may rise to $5 tn by 2022
•India’s personal financial wealth, currently estimated to be about $3 trillion, is expected to grow to $5 trillion by 2022 making India the 11th wealthiest nation, according to a report from the Boston Consultancy Group (BCG).
•According to the report, India is currently the fifth largest Asian market in terms of number of affluent, high net worth and ultra high net worth individuals. The total number of such individuals was pegged at 4.13 lakh in 2017.
Ultra high net worth
•While wealth in excess of $100 million was categorised as ultra high net worth, that in the range of $1 million and $100 million was put in the category of high net worth. Affluent referred to an individual with wealth between $2,50,000 and $1 million. Interestingly, almost 70% of India’s personal financial wealth was in liquid assets such as equities, currencies and bonds.
•Meanwhile, global personal financial wealth rose 12% in 2017 to $201.9 trillion in dollar terms, which was roughly 2.5 times the word’s gross domestic product for the year at $81 trillion.
•According to BCG, it was the highest annual growth rate in the past five years and was largely driven by bull market environment in all major economies and significant strengthening of most major currencies against the dollar. Incidentally, the bull market led to the wealth in equities and investment funds showing the strongest growth.
Investible assets
•Further, in terms of asset classes, almost 60% or $121.6 trillion of the global wealth was in the form of investible assets such as equities, investment funds, currency, deposits and bonds with the remaining 40% or $80.3 trillion in low-liquidity assets such as life insurance, pension funds and equity in unlisted companies. “The overall growth of global personal wealth continued its momentum in 2017. “Residents of North America held over 40% of global personal wealth, followed by residents of western Europe with 22%. The strongest region of growth was Asia, which posted a 19% increase,” said the report
