📰 Sabarimala case: SC refuses to stay ruling
Review pleas to be heard on Jan. 22; women of all age groups can visit the shrine this pilgrim season
•The Supreme Court on Tuesday agreed to hear in open court review petitions against its majority judgment which lifted a ban on women aged between 10 and 50 years from undertaking the pilgrimage to the Sabarimala temple in Kerala.
•The review petitions will be heard by an “appropriate Bench” in open court on January 22, next year.
Majority ruling holds
•The Review Bench of five judges, led by Chief Justice of India Ranjan Gogoi, however, refused to stay the majority judgment by a Constitution Bench on September 28. The majority judgment had declared the exclusion, solely based on the menstrual status of women, to be a smear on individual dignity. It said the bar amounted to “treating women as the children of a lesser God”.
•The refusal to stay the judgment would mean that worshippers, both men and women of all ages, can still undertake the pilgrimage when the temple re-opens on November 16 evening for Mandala Pooja.
•The pilgrimage season would end on January 20 after the Makaravilakku festival.
Impact on season
•“The order of the court to examine its judgment is a positive step. But there are apprehensions that the review petitions would become infructuous once women aged between 10 and 50 enter the temple this pilgrimage season,” Supreme Court advocate Usha Nandini, one of the 49 review petitioners, reacted.
•Advocate G. Prakash, who represents the Kerala government in the issue, said the Bench has only taken a prima facie decision to hear the review petitions in open court. “It has not issued notice. On January 22, the same Review Bench will hear the petitioners and decide whether their pleas should be admitted or not,” he said.
•“Besides, the refusal to stay the September 28 judgment is a message that if there is any violence against women pilgrims during the coming season, it would go against the petitioners on January 22,” Mr. Prakash said.
•The September judgment had triggered widespread protests in Kerala. The State Police has arrested thousands of protestors even as Kerala Chief Minister Pinarayi Vijayan staunchly stood by the judgment.
Several appeals
•The apex court has seen a flood of review petitions. Oral pleas were made for an early hearing. The court has consistently refused to stay the September 28 judgment. On Tuesday morning, a three-judge Bench led by Chief Justice Gogoi deferred three fresh writ petitions against the September 28 judgment, in order to wait for the decision of the Review Bench, which was scheduled to examine the 49 review petitions at 3 p.m.
•Now, these three writ petitions would be tagged along with the review pleas and heard along with them on January 22.
•The decision to re-examine the majority view comes despite the fact that three of the judges on the Review Bench — Justices Rohinton Nariman, D.Y. Chandrachud and A.M. Khanwilkar — were part of the original majority judgment. Justice Chandrachud, in his separate opinion, had compared the prohibition against women to the abolished practice of untouchability.
•Only Justice Indu Malhotra, the fifth judge on the Review Bench, had dissented on September 28, declaring the ban to be an “essential practice”. She held that imposing the court’s morality on a religion would negating the freedom to practise religion according to one’s faith and beliefs. Justice Malhotra's judgment has become a rallying point for petitioners.
📰 Sri Lanka court stays dissolution, snap elections
Speaker to convene Parliament today
•Sri Lanka’s Supreme Court on Tuesday stayed President Maithripala Sirisena’s dissolution of Parliament and restrained the Election Commission from preparing for snap elections.
•After hearing 11 petitioners and respondents for two days, the top court suspended until December 7, the proclamation issued by Mr. Sirisena last week sacking the legislature and calling for elections on January 5.
•The ruling comes amid a fortnight-long political upheaval.
•Following the ruling, Speaker Karu Jayasuriya convened Parliament on Wednesday. Mr. Jayasuriya will first meet representatives of all parties at 8.30 a.m. and reconvene the House at 10 a.m. “All MPs are requested to attend,” he said in a statement.
Wickremesinghe upbeat
•As those opposed to Mr. Sirisena’s actions welcomed the apex court’s ruling, a spokesman at ousted Prime Minister Ranil Wickremesinghe’s office told The Hindu: “We have the numbers. We are ready to prove it in Parliament on Wednesday.”
•It remains unclear if the House will take up a floor test on Wednesday but its reconvening, nearly three weeks after it was prorogued, and subsequently dissolved — comes as good news to parties that deemed the President’s sudden actions unconstitutional.
•Mr. Wickremesinghe tweeted: “The people have won their first victory. Let’s go forward and re-establish the sovereignty of the people in our beloved country.”
•Speaking for the Sirisena camp, Nimal Siripala de Silva said the respondents would ask for revision of the decision by a fuller Bench.
•President Sirisena’s November 9 decision to dissolve Parliament came shortly after his party publicly admitted to lacking a majority in the House, heightening a political crisis that began on October 26. In a snap move, Mr. Sirisena fired his PM Wickremesinghe, installed former President Mahinda Rajapaksa in his place, and swiftly swore in a “new cabinet”, in the face of strong local and international criticism.
•In exactly two weeks, Mr. Sirisena dissolved Parliament, preventing a vote on the House to test the rival camps’ claims to majority. Almost all political parties, except those aligned to the Sirisena-Rajapaksa front, petitioned the Supreme Court on Monday, challenging the “illegal” action. One independent election commissioner joined them.
•A formidable line-up of senior lawyers represented the 11 petitioners who made submissions to the three-member Bench led by the country’s Chief Justice Nalin Perera. The Attorney General responded on Tuesday, invoking the President’s plenary powers in the Constitution to argue that his actions were constitutional. The CJ read out the order around 6 p.m.
•“This is the most important order the Supreme Court has delivered in its history,” said Tamil legislator M.A. Sumanthiran.
📰 Four corners: on the Quad's agenda
Quad members still face the challenge of defining its common agenda
•As officials from the ‘Quadrilateral’ grouping of India, Australia, Japan and the U.S. meet in Singapore on Wednesday, their challenge will be to accurately describe their common agenda. The Quad is billed as four democracies with a shared objective to ensure and support a “free, open and prosperous” Indo-Pacific region. During this round, the four countries are expected to discuss infrastructure projects they are working on, and building humanitarian disaster response mechanisms. Over the past few months, India and Japan have announced they will combine efforts on a number of projects in South Asia, including bridges and roads in Bangladesh, an LNG facility in Sri Lanka and reconstruction projects in Myanmar’s Rakhine province. Australia has unveiled an ambitious $2 billion project to fund infrastructure and build maritime and military infrastructure in the Pacific region, on which it is willing to cooperate with other Quad members. The four countries are expected to talk about regional developments, including elections in the Maldives, the collapse of the government in Sri Lanka and the latest developments in North Korea. With Quad talks being held on the sidelines of the East Asia summit, the Regional Comprehensive Economic Partnership summit and the ASEAN-India informal summit, discussions will include some of the overlapping issues among these groupings.
•However, despite the potential for cooperation, the Quad remains a mechanism without a defined strategic mission. In 2007, when the grouping was first formed following cooperation after the 2004 tsunami, the idea was to better coordinate maritime capabilities for disaster situations. When revived in 2017, the grouping seemed to have become a counter to China’s growing inroads into the region, despite denials that any particular country had been targeted. Even a common definition of the geographical area encompassed has yet to be found. While Washington sees the U.S. and India as “bookends” of the Indo-Pacific, India and Japan have included the oceans up to Africa in their definition. The entire focus on the Indo-Pacific makes the Quad a maritime, rather than land-based, grouping, raising questions whether the cooperation extends to the Asia-Pacific and Eurasian regions. Even on maritime exercises, there is a lack of concurrence. India has not admitted Australia in the Malabar exercises with the U.S. and Japan, despite requests from Canberra, and has also resisted raising the level of talks from an official to the political level. The fact that India is the only member not in a treaty alliance with the other Quad countries will slow progress somewhat, although each member is committed to building a stronger Quadrilateral engagement. The outcome of the third round in Singapore will be judged by the ability of the group to issue a joint declaration, which eluded it in the first and second rounds.
📰 A reality check on cooperative federalism
It is yet to be tested on issues related to the Goods and Services Tax
•Since at least 1974, when the Supreme Court commented on the Constitution envisaging a cooperative federal structure, federalism has come a long way in India. In relation to the imposition of President’s rule under Article 356 of the Constitution, federalism is far more mature. Between 1947 and 1977, there were 44 instances when the power to impose President’s rule was exercised.
•Between 1977 and 1996, the power was exercised almost 59 times. Prime Minister Indira Gandhi’s cabinet resorted to the power an estimated 50 times in her 14 years. The fact that it includes 15 instances between 1980 and 1984 after the Supreme Court held federalism a basic feature of the Constitution is quite telling. From 1991 till 2016, there have been 32 instances of the exercise of this power — compared to 92 instances in the preceding period. In S.R. Bommai v. Union of India (1994), the limitation laid down by the Supreme Court might have placed gentle breaks on exercise of this power, but the Centre continues to wield superior legislative powers, including residuary powers and legislative precedence.
•These are powers the Central government enjoys under the Constitution and States’ legislative powers have routinely yielded to the Centre. Given this constitutional framework, what is the cooperative federalism that one can hope for?
•Recently, in Govt. of NCT of Delhi v. Union of India, the Supreme Court gently tilted the balance of executive power in favour of the Government of the National Capital Territory vis-à-vis the Lieutenant Governor (and by extension, the Centre). However, the court’s observations on cooperative federalism were stating the obvious considering members of both cabinets take an oath to uphold the Constitution. The facts behind the case and the acrimonious litigation, which the Supreme Court did not examine in its July 2018 ruling, clearly bring out the yawning gap between the Constitution’s intent and political reality.
Contentious terrain
•Taxation powers are another contentious issue and the Central government has won most of the disputes purely due to express provisions in the Constitution. In the Goods and Services Tax (GST) scenario, States have foregone some taxation powers (octroi, entry tax, luxury and entertainment taxes, etc.) but have powers to levy taxes through panchayats and municipalities.
•Such powers can result in an anomalous situation of a transaction being taxed under GST laws and a local law, and this is yet to be tested in court. After the GST amendments to the Constitution, States have power to levy tax on sale of petrol, diesel, etc. and these would be revenues of the respective States. However, the GST Council is yet to recommend inclusion of these items under GST.
•This brings us to another key dynamic that defines the Centre-State relationship — sharing of taxes. The southern States have been vocal about the false positives and negatives from tax sharing and this mechanism is largely subject to the recommendations of the Finance Commission (FC) and action by Parliament. State levies and State GST form part of a State’s revenue. Under Article 269A(1) the GST Council — and not the FC — has the powers to make recommendations in relation to sharing of taxes from inter-State trade.
•This is important since States have a vote in the GST Council. However, Articles 270(1A) and 270(2) provide that taxes levied under the GST laws will be shared in the manner ‘prescribed’ in Article 270(2) — which takes us to the FC, and not the GST Council. The possible anomaly between roles and powers of the FC and the GST Council has not been tested but it may make sharing of these revenues subject matter of the FC and Parliament rather than the GST Council, where States have more power.
•States don’t merely seek parity with each other, historically States have also sought parity with the Centre (Sarkaria and Punchhi Commissions). Recommendations of the FC are placed before Parliament and States have no role in the debate. There is no provision for an aggrieved State to challenge the FC report or seek its enforcement. If the Centre refuses to make allocations as per the GST Council, or if a State is aggrieved by the recommendations itself, an aggrieved State would have to litigate in the Supreme Court as it appears that the GST Council is yet to establish a mechanism for resolving differences in terms of Article 279A(11). In 68 years of the Constitution, there is limited precedent for such extreme actions. In an era of coalition politics, this would be a true test of cooperative federalism.
📰 Is crop insurance scheme losing steam?
Of the 84 lakh farmers who withdrew, 68.31 lakh are from the four BJP-ruled States: reply to RTI
•More than 84 lakh farmers, which is around 15% of the total farmers insured in the first year of the Union government’s ambitious Pradhan Mantri Fasal Bima Yojana in 2016-17, withdrew themselves from the scheme in 2017-18, a reply to an RTI application has revealed.
•It includes 68.31 lakh farmers from the four Bharatiya Janata Party-ruled States of Madhya Pradesh, Maharasthra, Rajasthan and Uttar Pradesh.
Profit margins
•The crop insurance companies, including Reliance, ICICI, HDFC and IFFCO, among others, have registered a total profit of around ₹15,795 crore since the launch of the scheme, though the final profit margins could change since the insurance claims for 2017-18 Rabi crops are yet to be estimated. The profits for 2016-17 are approximately ₹6,459 crore, said the RTI reply.
‘Scheme a fiasco’
•Panipat-based RTI activist P.P. Kapoor, who sought the information from the Ministry of Agriculture and Farmers’ Welfare, alleged that the crop insurance scheme was a “fiasco” as shown by the figures and aimed at benefiting the private insurance companies in the name of farmers. He said the government would have done better to directly help the farmers than route it through the insurance companies.
•As per the RTI figures, 5,72,17,159 farmers enrolled themselves for the crop insurance scheme in 2016-17, including 4,35,52,715 loanee farmers and 1,36,64,444 non-loanee farmers. But the number of these farmers dwindled to 4,87,70,515 for 2017-18 with the number of insured loanee farmers going down to 3,51,36,128, but the number of non-loanee farmers remaining almost stagnant at 1,36,34,387.
•As per the scheme, the crop loans through Kisan Credit Cards -- or in other words for loanee farmers — are covered under compulsory coverage.
•Among the four States, the maximum number of 31,25,025 farmers have withdrawn themselves from the scheme in Rajasthan, followed by Maharashtra (19,46,992), Uttar Pradesh (14,69,052) and Madhya Pradesh (2,90,312). In South India, the number of insured farmers in Karnataka has decreased from 27,37,667 to 16,08,569, while their number has marginally gone up for Andhra Pradesh from 17,74,444 to 18,18,449.
Losses in T.N., Andhra
•Though the insurance companies made several thousand crore rupees profit in the first year of the launch of the scheme, they suffered losses in Tamil Nadu and Andhra Pradesh the same year. In Tamil Nadu, the total claim paid by the insurance companies was around ₹3,35,562 lakh against the gross premium of approximately ₹1,22,737 lakh. Similarly, the companies made a loss of around ₹3,012 lakh in Andhra Pradesh.
📰 New index to check ease of doing agri-business
Centre to reward high-performing States
•States may soon start receiving extra funding for the Agriculture Ministry’s flagship schemes on the basis of their performance in encouraging agri-business, especially with regard to marketing, land and governance reforms.
•The Centre expects to roll out a new Ease of Doing Agri-Business Index early next year, which will rank the States on the basis of such reforms, as well as their investment in agriculture, increased productivity, reduction of input costs, and risk mitigation measures. “In future, the Ministry may consider rewarding the higher performing States [both in absolute and incremental terms] by linking the performance with allocation from flexi funds made available in various flagship schemes of this Ministry,” says a recent concept note for the Index.
•NITI Aayog already brings out a Agricultural Marketing and Farm Friendly Reforms Index, rating States on their implementation of such reforms. In the initial edition of that Index in 2016, Maharashtra stood first in the rankings, followed by Gujarat.
•The proposed index has a wider ambit, but the focus is still on reforms, with marketing reforms (25%) and governance and land reforms (20%) carrying almost half of the weight of the parameters in its scoring system.
Soil health cards
•Another major parameter which States will be rated on is their success in reducing the cost of farm inputs (20%) by distributing soil health cards and encouraging organic farming and micro-irrigation. Risk mitigation measures such as crop and livestock insurance carry a 15% weightage, while increased productivity and investment in agriculture carry a 10% weight each.
Process-oriented
•The parameters are process-oriented, and are meant to evolve as and when new reforms or initiatives are proposed, says the concept note.
•As agriculture is a State subject, the success of policies and reform initiatives proposed at the Centre is dependent on implementation by the States. “To ensure that reform agenda of the government is implemented at a desired pace by all State governments, there is a need to develop a competitive spirit between the States,” says the note, adding that the committee set up to recommend strategies to double farmers income by 2022 had also suggested that States should be ranked based on their reform and governance record.
•The concept note is open for public and stakeholder feedback until November 15, following which operation guidelines will be drafted by the end of the month. An online dashboard to track State performances will be developed by the year-end, and a national level workshop to roll out the Index will be held in January 2019, according to the concept note’s timelines.
📰 Changing trends?: on the global petroleum market
A meeting of OPEC and its allies in December will decide the future course of oil prices
•The fickle nature of the global petroleum market has been on display over the last few days as prices reacted to statements and counter-statements by producers and consumers. Over the weekend, Saudi Arabia signalled its discomfort with the falling prices and hinted at a fresh cut of one million barrels a day. The benchmark Brent crude, which slipped below the $70 a barrel mark last Friday, reacted sharply on Monday, rising to above $72. That prompted a tweet from U.S. President Donald Trump asking for lower prices, and so, on Tuesday prices again fell to below $69! The price of Brent crude, which had risen over the $85 mark in early October, is down by about 20% from its October peak. Interestingly, Saudi Arabia’s latest call to cut output comes just months after the OPEC cartel decided to increase its output. In their June meeting, OPEC members decided to ramp up supply after apprehensions over Iranian supplies in the wake of economic sanctions imposed by the U.S. Since then, the U.S. has granted a temporary waiver to eight countries, including major buyers India and China, to continue importing oil from Iran for at least the next six months. The way prices have responded to OPEC’s output decision, however, suggests that it may still be too early to dream about higher prices in the near future. A crucial meeting between the cartel and its allies in the first week of December will decide the 2019 output level. That might well set the trend for oil prices in the new year.
•Even after OPEC’s sudden change in its supply outlook, oil surprisingly continued its longest losing streak on record, perhaps owing to expectations that the production cut would not raise prices significantly. In fact, technically speaking the oil market is yet to break its short-term downtrend that began after the fall from its peak in October. Oil prices were down on Tuesday as well. This price action suggests that markets could probably still be worried about the risks of any kind of sustained rise in oil prices. For one, strong U.S. opposition to higher oil prices could be making investors feel jittery. Mr. Trump’s tweet on Monday, for instance, negated the bullish influence of OPEC’s announcement almost immediately. The increasing output of shale is another significant threat to oil prices.The U.S. Energy Information Administration last week predicted that American crude output would increase at a higher pace than expected and lead to lower prices next year. This is not at all surprising because U.S. shale producers have traditionally increased their output in response to higher oil prices. Also, producers like Russia have been non-committal on any significant production cut. Any slowdown in global economic growth is another risk factor that may weigh down oil.
📰 After IL&FS, SEBI tightens norms for raters
Factors such as cash flow and asset-liability mismatch must be considered
•The Securities and Exchange Board of India (SEBI) has tightened the disclosure norms for credit rating agencies (CRAs) that will now have to take into account various factors, including asset-liability mismatch, liquid investments, cash flows and capital infusion from parent or group entities while performing any rating action.
•In a circular issued on Tuesday, the capital markets regulator enhanced the quantum of disclosures by introducing additional norms that are largely based on the learnings from the IL&FS episode, which has affected the overall liquidity scenario, especially in the non-banking financial company (NBFC) segment.
•“When a rating factors in support from a parent/group/ government, with an expectation of infusion of funds towards timely debt servicing, the name of such entities, along with rationale for such expectation, may be provided,” the circular said.
•“When subsidiaries or group companies are consolidated to arrive at a rating, list of all such companies, along with the extent (e.g. full, proportionate or moderate) and rationale of consolidation, may be provided,” it added.
List of subsidiaries
•Based on the learnings from the IL&FS episode, the regulator has also made it mandatory for rating agencies to disclose full list of subsidiaries or group companies if such entities form part of the consolidated ratings.
•While welcoming the new disclosure norms, Somasekhar Vemuri, senior director, Crisil Ratings said that Crisil always analysed aspects on parent support, consolidation, liquidity and factored them in the rating analysis.
•“Enhanced disclosures on parent support, approach towards consolidation and liquidity will give investors more clarity on the rating drivers and assist in their own analytics,” he said.
•SEBI also mandated CRAs to include a specific section on “liquidity” to highlight parameters like cash balances for servicing maturing debt obligation.
