📰 U.S., China decide to hold off fresh tariffs for 90 days
Washington keeps tariffs at 10%; Beijing agrees to by American agricultural goods.
•China and the United States agreed to halt additional tariffs in a deal that keeps their trade war from escalating as the two sides try again to bridge their differences with fresh talks aimed at reaching an agreement within 90 days.
•The White House said on Saturday that President Donald Trump told Chinese President Xi Jinping during high-stakes talks in Argentina that he would not boost tariffs on $200 billion of Chinese goods to 25% on Jan. 1 as previously announced.
•Beijing for its part agreed to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products from the U.S., the White House said in a statement.
New trade talks
•The two sides will also launch new trade talks to address issues including technology transfer, intellectual property, non-tariff barriers, and agriculture, it said.
•If no deal is reached within 90 days, both parties agreed that the 10% tariffs will be raised to 25%, the White House said.
•On Sunday, China’s state-run media lauded the “important consensus” reached by the two leaders but did not mention the 90-day deadline.
•Mr. Trump had imposed 10% on $200 billion worth of Chinese goods in September. China responded with its own tariffs.
•The U.S. President has also threatened to slap tariffs on another $267 billion worth of Chinese imports, as the relationship appeared set to worsen in the weeks ahead of the Argentina meeting.
•“I think this is not a breakthrough — it’s more of avoiding a breakdown. This is not a worst case outcome but the hard work is ahead of them,” said Paul Haenle, Director at the CarnegieTsinghua Center in Beijing.
•“The Chinese have to come into (the talks) with a sense of urgency,” he added.
•As part of the deal, China agreed to start purchasing agricultural products from U.S. farmers immediately, the White House said.
•Speaking to reporters on board Air Force One, Mr. Trump hailed his agreement with Mr. Xi.
Incredible deal: trump
•“It's an incredible deal,” Trump said. “What I’d be doing is holding back on tariffs. China will be opening up. China will be getting rid of tariffs.”
•He said China would buy a “tremendous amount of agricultural and other product” from the United States. “It’ll have an incredibly positive impact on farming.”
•State Councillor Wang Yi, the Chinese government’s top diplomat, told reporters in Buenos Aires that the two sides believed the agreement “effectively prevented the expansion of economic frictions between the two countries”. “Facts show that joint interests between China and the United States are greater than the disputes, and the need for cooperation is greater than frictions,” he said.
•U.S. companies and consumers are bearing part of the cost of the U.S. tariffs on China by paying higher prices for goods, and many companies have increased prices of imported goods.
•At the same time, U.S. farmers have been hurt by reduced Chinese imports of soybeans and other products.
Qualcomm-NXP deal
•China “is open to approving the previously unapproved” deal for U.S. company Qualcomm Inc to acquire Netherlands-based NXP Semiconductors “should it again be presented,” the White House statement said.
•In July, Qualcomm —the world's biggest smartphone-chip maker — walked away from a $44 billion deal to buy NXP after failing to secure Chinese regulatory approval, becoming a high-profile victim of the China-U.S. trade dispute.
•Qualcomm and NXP did not immediately respond to requests for comment late on Saturday.
•Beyond trade, Mr. Xi also agreed to designate the drug fentanyl as a controlled substance, the White House said.
•For more than a year, Mr. Trump has raised concerns about the synthetic opioid being sent from China to the United States, which is facing an epidemic of opioid-related deaths.
•Scott Kennedy, a China expert at the Center for Strategic and International Studies in Washington, said the United States appeared to come out slightly ahead in the overall agreement.
•“Beijing at best gets a temporary reprieve from additional tariffs, but was unable to get the U.S. to agree to return to ‘business as usual’,” he said.
📰 Right to know: Now just drop into a govt. office to access information
•Mumbai: Citizens seeking data from the government under the Right to Information (RTI) Act, can now simply land up at the concerned office on Monday afternoons and study the relevant files, as per a fresh decree from the Devendra Fadnavis administration.
•Apart from smoothening access to information, the move is also expected to help curb the rising number of pending appeals with the Maharashtra State Information Commission from applicants against departments denying or withholding information. By the end of September 2018, 39,709 appeals and complaints were pending since 2014.
•“To reduce the number of first and second appeals, all government offices ranging from district level to lower level, and municipal corporations, municipal councils, and zilla parishads will make files available for applicants to inspect between 3 p.m. and 5 p.m. every Monday,” said a directive issued by the State government.
•In case there is a public holiday on Monday, information can be accessed on the next working day.
•Former Central Information Commissioner Shailesh Gandhi termed this is an useful order for citizens and suggested that people carry a copy of the official order the first time they visit government offices, because there is going to be denial from officials initially.
•“Once more people keep insisting, the officers will have to buckle under the pressure,” he said, adding that the order should help reduce the number of pending appeals and complaints.
•“RTI applications have been on the decline for the last two years. Because, a citizen finds that the system is obscuring and blocking the information. Then they get tired and don’t have time and energy to follow up,” explained Mr Gandhi.
📰 Slowdown signals: on Q2 growth estimates
Growth estimates for the second quarter show the challenge of shoring up rural demand
•The growth estimates for the July-September quarter from the Central Statistics Office show that the economy’s expansion predictably slowed. GDP growth weakened to 7.1%, from the robust 8.2% in April-June, as rising oil prices combined with a weakening rupee to dampen demand. Gross value added (GVA) data show five of the eight sectors reflecting the slowdown from the first quarter, with only utility services, public administration, defence and other services, and trade, hotel, transport, communication and broadcasting services bucking the trend. Worryingly, GVA growth in agriculture, forestry and fishing eased to 3.8%, from 5.3% three months earlier, as foodgrain output in the kharif season inched up a mere 0.6% (production had expanded by 1.7% in the previous year). Given the distress in the farm sector, below-normal monsoon rains and a shortfall of over 8% in rabi sowing till November 30, the outlook for rural demand remains challenging at least for the next couple of quarters. This demand weakness in the hinterland is also evident in the consumption spending data, with growth in private final consumption expenditure slowing to 7%, compared to 8.6% in the first quarter. Manufacturing, though posting a 7.4% expansion, also poses cause for concern as the momentum almost halved from the June quarter’s 13.5% and slipped back nearer to the year-earlier level of 7.1%. Index of Industrial Production data reveal that growth in manufacturing output remained becalmed at 4.6% through August-September, and when seen alongside the weakness in car and two-wheeler sales, suggest an acceleration may be some time away.
•To be sure, not all data paint a less-than-encouraging picture. Gross fixed capital formation (GFCF), a key metric for investment demand, expanded by a robust 12.5%, building on the first quarter’s 10% increase, and constituted 32.3% of GDP. With non-food bank credit also showing signs of a recovery, there is the discernible prospect of an investment revival. An RBI research paper posits that improvement in investment activity is being driven by cyclical factors and may last up to 2022-23, when the investment rate as measured by the GFCF is estimated to increase to 33% of GDP. The same RBI paper, however, points to risks to the investment outlook and flags the gross fiscal deficit as a key pressure point, given that borrowing by the government invariably crowds out investment demand. Here, the latest expenditure and receipts figures released by the Controller-General of Accounts are not reassuring: the fiscal deficit crossed the budget estimate for the full year in just the first seven months, raising the chances that the Centre would miss its target of limiting the deficit to 3.3% of GDP. With multiple uncertainties looming on the global trade and growth horizon and elections approaching, India’s economic managers will need to be at their best to keep the momentum from sliding.
📰 Job creation at the farmer’s doorstep
The conversation on raising farmer income needs to embrace non-farm diversification
•The Telangana government’s recent announcement of the Rythu Bandhu scheme has spotlighted the policy of utilising cash transfer to assist land-owning farmers with a non-agricultural income — instead of the traditional policy measures of price interventions, trade restrictions and farm loan waivers. While the scheme is nominally intended as investment support for inputs such as seeds and pesticides, it implies a transfer of ₹8,000 per acre for every landowning farmer over two crop seasons.
•As Credit Suisse notes, the scheme has an inbuilt bias for large farmers, allowing 9% of farmers with more than five acres to earn 34% of the total payout. My travels across Telangana and Andhra Pradesh, among other States, over the last few years, have shown how difficult it is for marginal farmers to eke out a living from just agricultural income.
•Rural India’s economic situation continues to worsen. A recent survey by the National Bank for Agriculture and Rural Development (All India Rural Financial Inclusion Survey) shows that the average monthly income of rural households is ₹8,059, with agricultural households deriving only 43% of their income from agriculture; most of it is from providing daily wage labour and government jobs. While agricultural households typically had a higher income than non-agricultural households, they had higher debt on average (₹1,04,602 and ₹76,731, respectively). This is also reflected in the decoupling of urban Indian incomes from rural India with per capita income in rural India lagging a fair bit. The government has sought to double farmer income by raising minimum support prices, but such initiatives would apply directly only to 48% of rural India, with non-agricultural households being left behind. Perhaps we need to look at alternative sources of income.
Diversification is the key
•The conversation on raising farmer income needs to embrace non-farm diversification, an important pathway for empowering landless labourers and marginal farmers, as development economist Daniel Coppard recommended in a 2001 report.
•Diversification, away from marginal farming, is typically the answer — as a few papers on the subject show (Adams and He, Lanjouw, Janvry, and Reardon) — helping to overcome land constraint to income growth, while allowing farmers to cope with exogenous shocks through additional income. In some cases, it ‘even allows them to reinvest in productivity enhancing agricultural technologies’. Within this, there are two key sectors, where appropriate reforms can lead to significant income support for marginal farmers.
Opportunity in livestock
•The livestock sector can offer significant opportunities for bolstering non-farm income. The current breeding policy (based on exotic blood and artificial insemination) needs to be revamped. A national breeding policy is also needed to upgrade the best performing indigenous breeds. Buffalo breeding ought to be given more attention, while poultry breeding should be focussed on conservation. State governments should be encouraged to participate in national breeding policy implementation, creating an environment for competition among alternative suppliers of artificial insemination. Consensus must be built among breeders to develop indigenous breeds. The feed supply (currently inadequate) needs to be mitigated through greater imports, with feed technology packages developed for extension dissemination. Geographical information system-based analysis must be utilised to map production systems. Private investment must also be encouraged. Animal health care should become a priority, with greater investment in preventive health care. The government needs to create better incentive structures for investment in livestock in the States that are lagging while harmonising rules, regulations and regulatory authorities across States. State governments should sponsor research and assessment of the market, along with highlighting investment potential.
Focus on migrant workers
•We should also embrace the fact that agricultural labourers routinely seek construction-related daily wage labour to bolster their income. Improving the conditions of migrant workers in the construction sector requires a multi-pronged approach. First, we have to enable migrant workers to get deserved access to various government (Central and State) schemes, despite the lack of identity proof. Access to Anganwadi facilities should be provided regardless of their identity documents. While multiple laws exist for the welfare of construction workers, compliance is abysmal. The penalties for non-compliance have to be increased to a significant fraction of the construction cost, payable by the builder. Registration of workers with the Welfare Board should be made mandatory and be the responsibility of the contractor and the builder. If the contractor is found to engage or employ any worker without a registration card/ID, penalties (monetary and non-monetary) should be imposed, which would then be used for improving awareness and penetration of registration cards and their benefits. The registration cards should be linked to their Jan-Dhan accounts, and transfer of payments on a periodic basis be made directly to their accounts. In order to improve the condition of women, strict anti-harassment laws should be implemented. Creche facilities at construction sites should be provided to also ensure that children are not neglected; they often play with gravel and dust, which can threaten their health. Utilisation of a construction cess has to be improved if we are to make any difference to the lives of our construction workers. Workers should also be provided with training and skilling in their areas of interest, as it could lead to higher earnings and credit-worthiness.
•Our policies should help create sustainable, long-term, rural, non-farm employment options which can aid the rural poor in overcoming barriers to economic prosperity. India’s rural development policies should increasingly focus on developing markets, infrastructure and institutions that can help sectors such as livestock and construction growth. While India’s post-Independence rural policy has primarily been about driving people away from agriculture and towards cities, we must now incentivise job creation at their doorstep.
📰 Sharing outbreak data
Publishing epidemic data on open access platforms can help countries tackle outbreaks better
•The recent Zika outbreaks in Rajasthan and Madhya Pradesh are a reminder of how poor Indian authorities are at sharing health data. Neither Rajasthan, which saw 154 cases, nor M.P., which saw 127, published the day-wise numbers of confirmed infections. Meanwhile, even though the Indian Council of Medical Research (ICMR) has genetically sequenced Zika viruses from five patients in Rajasthan, it hasn’t published these sequences in any open access databases such as GenBank.
•Both daily case counts and genetic sequences of the viruses circulating in India can be extremely useful to epidemiologists studying Zika. Daily case counts can show how quickly the virus is spreading. Genetic sequences can help us understand from where the virus came to India and for how long it had been circulating in Rajasthan and M.P. before it was detected. Using data from previous epidemics, scientists have been able to estimate the rate at which the Zika virus mutates. So, by comparing genome sequences from multiple patients, they can estimate when these viruses diverged from their most recent common ancestor, giving an idea of when the virus entered India. If this date is much earlier than the date of the first detected case (September in Rajasthan), that would mean a larger number of patients were infected, which in turn could help customise our outbreak response.
•However, ICMR has only announced that the Rajasthan Zika strain is genetically close to the Brazilian strain (suggesting that the virus came from Latin America), and that it does not have certain mutations. “Genetically close” is a broad term, and without the sequence information, other researchers cannot independently interpret and validate ICMR’s claims. ICMR says it has submitted the data to a peer-reviewed journal for publication, but publication in journals takes longer than publication in an open access database.
•Given how important such data are during epidemics, the World Health Organisation (WHO) released a policy statement in 2016 saying “pathogen genome sequences be made publicly available as rapidly as possible through relevant databases.” West Africa’s 2013 Ebola virus outbreak and Latin America’s 2015 Zika outbreak showed how useful such proactive sharing can be — during the Ebola epidemic, around 80% of the epidemiological modelling studies used only open data, according to a 2016 PLOS Medicine paper.
•There are reasons why researchers are often reluctant to share genome sequences. During the Ebola outbreak, some scientists were worried that they may not be credited for their work if someone else published an analysis based on their sequences, and waited for months before publishing. Such concerns are valid, and the WHO says it is important to address this. But given the benefits to public health from data-sharing, Indian authorities should do their part too.
📰 No local currency trade with India: China
Proposal was aimed at bridging deficit
•China has not accepted India’s proposal to carry out bilateral trade in local currencies, which was aimed at bridging the ballooning trade deficit with the neighbour, an official said.
•India’s exports to China stood at only $13.4 billion and imports aggregated to $76.4 billion in 2017-18, leaving a trade deficit of $63 billion. It was $51.11 billion in 2016-17.
•India had mooted renminbi-rupee trade with China to boost exports and tackle the widening trade deficit concern. “They have not accepted the proposal,” the official said.
•The issue was discussed in an inter-Ministerial meeting in October. In the meeting, it was suggested the Reserve Bank of India and the Department of Economic Affairs should look at the possibility of exploring renminbi-rupee trade with China.
•India has also proposed trade in national currencies with other countries, including Russia, Iran and Venezuela with which New Delhi has a trade deficit.
•“Trade imbalance should not be there with the country with which we want to do trade in rupee. It will not help bridge the deficit. The partner country should have an opportunity to invest in India to use the rupee,” said Biswajit Dhar, professor at Jawaharlal Nehru University.
📰 WhatsApp chief writes to RBI, seeks nod to expand payment services to all users
The development comes at a time when competitors such as Google have forged ahead with their payments offerings.
•WhatsApp Chief has written to the Reserve Bank of India (RBI), seeking a formal nod to expand payments services to all its 200 million users in India.
•The messaging app, which has drawn fire from the government over spread of fake messages on its platform, continues to wait for a regulatory clearance to launch full-fledged payments operations in India, months after its ‘testing’ amassed nearly one million users, and almost two years since it first began discussions with the government on its payments services plans.
•The development comes at a time when competitors such as Google have forged ahead with their payments offerings.
•WhatsApp is currently piloting WhatsApp payments, and its Chief Chris Daniels has now written to the RBI urging that a formal approval be granted to take the payments product to all its users in the country.
•“I write to request your formal approval to immediately expand WhatsApp’s BHIM UPI (Unified Payments Interface) compliant payments product to all users in India, giving us the opportunity to offer a useful and secure service that can improve the lives of Indian people through digital empowerment and financial inclusion,” Daniels said in the letter addressed to the RBI Governor.
•The letter, dated November 5, mentions that WhatsApp’s partner banks have also submitted a request for formal approval.
•When contacted, a WhatsApp spokesperson said the platform is working closely with the Indian government, National Payments Corporation of India (NPCI), and multiple banks, including payment service providers to expand the feature to more people and support the country’s digital economy.
•“Today, almost 1 million people are testing WhatsApp payments in India. The feedback has been very positive, and people enjoy the convenience of sending money as simply and securely as sending messages,” the company’s spokesperson said, responding to a specific email query on the recent plea to the RBI.
•In the letter, WhatsApp noted that the platform had rushed to ensure that the payments data is stored in India, immediately after the RBI came out with a directive outlining the new payments data storage requirements in April this year.
•“Today, (the) RBI has unfettered supervisory access to payments data as prescribed by the RBI circular , said the letter. PTI has seen a copy of the letter.
•The Facebook-owned company has also demanded a “level playing field” for all companies that offer payment services, including “a certain and transparent regulatory and operating environment“.
•WhatsApp has also made a case for scaling up its operations by citing the productivity gains that have accrued to Indian small business as a result of the digital tool, and expressed its deep commitment to the market.
•“Based on feedback from NPCI and our bank partners, we are confident that we are fully compliant with the UPI checklist, have made all necessary submissions and have passed the security audits required to launch WhatsApp Payments,” Daniels said.
•It could not be immediately ascertained if the firm has received any response from the RBI to its letter.
•WhatsApp’s ambitious payment services’ blueprint has been caught in a bind, over concerns around authentication and its data storage practices. In the past, its home grown rivals have alleged that WhatsApp’s payment platform has security risks for consumers and is not in compliance with the guidelines.
•WhatsApp has been under tremendous pressure to put in place a mechanism to curb fake news on its messaging platform that incited mob fury in India. Over a dozen people have been killed across the country this year in mob lynchings, fuelled by rumours circulating on WhatsApp.
•The rumours ranged from suspicion of stealing children to victims being believed to be killing cows. Riots have been instigated by people forwarding and misinterpreting videos on WhatsApp.
•The government has, on several occasions, warned the company that it can’t evade responsibility if its messaging service is used to spread false information. The Centre has directed WhatsApp to develop tools to combat fake or false messages, and, more importantly, to identify message originators.
•Apart from the traceability request, the government had asked WhatsApp to set up a local corporate presence and appoint a grievance officer to address complaints.
•WhatsApp recently named a grievance officer for India, and announced the appointment of an India head — the first for the country that accounts for most users across the world. It also launched a label that identifies forwarded messages, and barred forwarding of messages to more than five people at one go.
📰 Stamp duty on merger, an illegal circular
Pending President’s nod to TN Stamp Act, an HC order okaying merger will not be liable to stamp duty
•A merger or amalgamation between two companies had to be earlier sanctioned by a high court under the Companies Act, 1956, and is now to be approved by the National Company Law Tribunal (NCLT) under the Companies Act, 2013. In 1993, the State of Maharashtra amended the Bombay Stamp Act, 1958 to include an order of high court under section 394 of the Companies Act, 1956 in the definition of “conveyance” and for the first time, these orders became liable to stamp duty. This was challenged before the Supreme Court unsuccessfully in Hindustan Lever Ltd. v State of Maharashtra (2004) 9 SCC 438.
•After Maharashtra, the States of Andhra Pradesh, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Rajasthan and West Bengal followed suit and made amendments to their respective stamp duty laws and orders of amalgamation or merger became liable to stamp duty in these States.
•The State of Tamil Nadu was an exception and did not amend its stamp laws till 2013 when a new Tamil Nadu Stamp Act, 2013 was enacted, which is now awaiting the assent of the President of India. Stamp duties come under Concurrent List of the Constitution, and once there is a Parliamentary enactment, a State enactment has to get assent of the President under Article 254(2) of the Constitution of India. Thus, till the Tamil Nadu Stamp Act, 2013 receives the assent of the President, an order of the high court sanctioning amalgamation or merger will not be subjected to stamp duty.
Circular surprising
•In this background, it was surprising, if not shocking, for the Inspector General of Registration to issue a circular on November 20, 2018 declaring that amalgamation schemes sanctioned by the high court/NCLT will be liable to stamp duty as a “conveyance” under Article 23 of the Indian Stamp Act, 1899 applicable in Tamil Nadu.
•This circular refers to a judgment of the Delhi High Court which had observed that even if the Stamp Act had not been amended, the order of merger would still be liable to stamp duty. The circular also refers to another decision of a single judge of the Calcutta High Court in Gemini Silk Mills Ltd. v Gemini Overseas Ltd, rendered in 2003. The Inspector General of Registration does not mention that this very judgment was overruled in 2004 by a Division Bench of the Calcutta High Court in Madhu Intra Ltd. v Registrar of Companies 130 Comp Cas 510 (Cal). It is also unfortunate that the Inspector General of Registration has omitted reference to two judgments of the Madras High Court which have categorically held that an order of amalgamations will not be liable to stamp duty. In T.T.Krishnamachari & Co v The Joint Sub-Registrar, [2009] 2 MLJ 245, the Madras High Court followed the later Calcutta High Court decision and held that mergers and amalgamations, whether ordered by the high court or by the BIFR, would not be liable to stamp duty. This order was passed in 2008. Six years later, the issue came up again before the Madras High Court in Srinidhi Industries Ltd. v Sub-Registrar, (decision dated 18.11.2014 in WP 4128 of 2010). Following the T.T. Krishnamachari decision, the high court once again held that the orders of amalgamation will not be liable to stamp duty. These two judgments are binding on the Inspector-General of Registration and he has no power to issue any circular contrary to the decision of the Madras High Court.
•In East India Commercial Company v The Collector of Customs, AIR 1962 SC 1893, the Supreme Court pointed out that a decision of a high court is binding on all authorities within that State and they cannot act contrary to such decision. Thus, the circular that has been recently issued in November, 2018 is illegal and cannot be sustained.
•There can be no stamp duty on mergers and amalgamations until the stamp law obtains Presidential assent. After such assent, Tamil Nadu, can always levy stamp duty on amalgamations and mergers like other States that have made similar amendments. It is inexplicable how a circular can be issued to demand stamp duty on judicial orders approving an amalgamations or merger when the very law passed by the Tamil Nadu Legislature on the same subject is pending Presidential assent.
•Finally, Article 265 of the Constitution mandates that “no tax shall be levied or collected except by the authority of law”. The word “law” means a legislation passed either by the Parliament or the respective State Legislatures. It has been repeatedly held that notifications and circulars cannot impose a levy of tax. Illegality apart, the circular does not set out the value to be adopted, the rate of stamp duty or the ceiling limit, if any.
•In an amalgamation, all the assets and liabilities of one company are merged with another company. There is no sale or conveyance of any individual asset. On what value will the stamp duty be levied? Other States have expressly provided rules for computation of stamp duty.
•In view of the binding judgments of the Madras High Court, the circular that directs orders of amalgamation will not be registered without payment of stamp duty has to be withdrawn immediately. It will be a sad day if the statutory authorities within the State start issuing circulars and guidelines completely contrary to the judgments of the high court, the Supreme Court and the Constitution of India.
•A merger or amalgamation between two companies had to be earlier sanctioned by a high court under the Companies Act, 1956, and is now to be approved by the National Company Law Tribunal (NCLT) under the Companies Act, 2013. In 1993, the State of Maharashtra amended the Bombay Stamp Act, 1958 to include an order of high court under section 394 of the Companies Act, 1956 in the definition of “conveyance” and for the first time, these orders became liable to stamp duty. This was challenged before the Supreme Court unsuccessfully in Hindustan Lever Ltd. v State of Maharashtra (2004) 9 SCC 438.
•After Maharashtra, the States of Andhra Pradesh, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Rajasthan and West Bengal followed suit and made amendments to their respective stamp duty laws and orders of amalgamation or merger became liable to stamp duty in these States.
•The State of Tamil Nadu was an exception and did not amend its stamp laws till 2013 when a new Tamil Nadu Stamp Act, 2013 was enacted, which is now awaiting the assent of the President of India. Stamp duties come under Concurrent List of the Constitution, and once there is a Parliamentary enactment, a State enactment has to get assent of the President under Article 254(2) of the Constitution of India. Thus, till the Tamil Nadu Stamp Act, 2013 receives the assent of the President, an order of the high court sanctioning amalgamation or merger will not be subjected to stamp duty.
Circular surprising
•In this background, it was surprising, if not shocking, for the Inspector General of Registration to issue a circular on November 20, 2018 declaring that amalgamation schemes sanctioned by the high court/NCLT will be liable to stamp duty as a “conveyance” under Article 23 of the Indian Stamp Act, 1899 applicable in Tamil Nadu.
•This circular refers to a judgment of the Delhi High Court which had observed that even if the Stamp Act had not been amended, the order of merger would still be liable to stamp duty. The circular also refers to another decision of a single judge of the Calcutta High Court in Gemini Silk Mills Ltd. v Gemini Overseas Ltd, rendered in 2003. The Inspector General of Registration does not mention that this very judgment was overruled in 2004 by a Division Bench of the Calcutta High Court in Madhu Intra Ltd. v Registrar of Companies 130 Comp Cas 510 (Cal). It is also unfortunate that the Inspector General of Registration has omitted reference to two judgments of the Madras High Court which have categorically held that an order of amalgamations will not be liable to stamp duty. In T.T.Krishnamachari & Co v The Joint Sub-Registrar, [2009] 2 MLJ 245, the Madras High Court followed the later Calcutta High Court decision and held that mergers and amalgamations, whether ordered by the high court or by the BIFR, would not be liable to stamp duty. This order was passed in 2008. Six years later, the issue came up again before the Madras High Court in Srinidhi Industries Ltd. v Sub-Registrar, (decision dated 18.11.2014 in WP 4128 of 2010). Following the T.T. Krishnamachari decision, the high court once again held that the orders of amalgamation will not be liable to stamp duty. These two judgments are binding on the Inspector-General of Registration and he has no power to issue any circular contrary to the decision of the Madras High Court.
•In East India Commercial Company v The Collector of Customs, AIR 1962 SC 1893, the Supreme Court pointed out that a decision of a high court is binding on all authorities within that State and they cannot act contrary to such decision. Thus, the circular that has been recently issued in November, 2018 is illegal and cannot be sustained.
•There can be no stamp duty on mergers and amalgamations until the stamp law obtains Presidential assent. After such assent, Tamil Nadu, can always levy stamp duty on amalgamations and mergers like other States that have made similar amendments. It is inexplicable how a circular can be issued to demand stamp duty on judicial orders approving an amalgamations or merger when the very law passed by the Tamil Nadu Legislature on the same subject is pending Presidential assent.
•Finally, Article 265 of the Constitution mandates that “no tax shall be levied or collected except by the authority of law”. The word “law” means a legislation passed either by the Parliament or the respective State Legislatures. It has been repeatedly held that notifications and circulars cannot impose a levy of tax. Illegality apart, the circular does not set out the value to be adopted, the rate of stamp duty or the ceiling limit, if any.
•In an amalgamation, all the assets and liabilities of one company are merged with another company. There is no sale or conveyance of any individual asset. On what value will the stamp duty be levied? Other States have expressly provided rules for computation of stamp duty.
•In view of the binding judgments of the Madras High Court, the circular that directs orders of amalgamation will not be registered without payment of stamp duty has to be withdrawn immediately. It will be a sad day if the statutory authorities within the State start issuing circulars and guidelines completely contrary to the judgments of the high court, the Supreme Court and the Constitution of India.
📰 New Chief Election Commissioner Sunil Arora seeks support for ‘fair’ polls
•Sunil Arora, 62, a retired 1980-batch IAS officer of the Rajasthan cadre, took over as Chief Election Commissioner (CEC) on Sunday.
•Mr. Arora sought the cooperation of political parties and people to make elections “totally free, fair and ethical.”
•He succeeded O.P. Rawat who demitted office on Saturday.
•The Lok Sabha election, which is due next year, will be conducted the Election Commission under Mr. Arora.
•He will also hold elections to the Assemblies of Sikkim, Andhra Pradesh, Arunachal Pradesh, Odisha, Maharashtra, Haryana, Jharkhand, Delhi, Bihar and Jammu & Kashmir. He will be in office till April 12, 2021.
•Mr. Arora retired in April 2016 as Secretary, Ministry of Information & Broadcasting.
•During his 36 years of service, he held various crucial positions in Rajasthan and at the Centre.
•He served in several key positions, including as Secretary in the Ministry of Skill Development and Entrepreneurship; Chairman & Managing Director of the then Indian Airlines between 2002 and 2005; member of the Board of Directors of Air India (AI), the Airports Authority of India Limited (AAI), and the National Skill Development Corporation (NSDC).
•Mr. Arora also served as Chairman of the Rajasthan State Industrial Development & Investment Corporation in 2005-2013, and as Additional Chief Secretary (Home) of the State government in 2013-2014.
•After assuming charge, Mr. Arora said: “All of us in the Commission shall continue to put our best foot forward to meet the expectations of all the stakeholders, strictly in consonance and in conformity with the vision and ideals of the Constitution of India, especially the Preamble thereof.”
•He said internal preparations for the Lok Sabha elections had begun sometime back.
•“We will try to meticulously prepare on all fronts, whether it is the Electoral Roll, EVM (Electronic Voting Machine), VVPATs (Voter Verifiable Paper Audit Trail) disseminations through our very credible programme of SVEEP (Systematic Voters’ Education and Electoral Participation), ensuring voting rights through electronically transmitted postal ballot system for our soldiers, for persons with disabilities, and give the country a fair, credible, free, impartial and ethical election,” said Mr. Arora.
•He said the committee appointed to review various facets of Section126 [which bars publication of election-related matter in the last 48 hours leading to polls] of the Representation of the People Act would submit the final report for the perusal and consideration of the Commission by December 30.
📰 Rajasthan Assembly Elections 2018: Polls come and go, but Sahariyas’ plight still poor
Rajasthan’s tribal community in Shahbad region facing poverty, unemployment and malnutrition
•The Sahariya tribal community of Shahbad region in Baran district, which recorded 47 starvation deaths during the 2001 drought, waits for concerted welfare measures that could take them out of poverty, unemployment and malnutrition. Though politicians have made a promise against starvation, the tribe’s economic condition is yet to reach a reasonable level.
•Though the 70,000-strong community has been classified as a particularly vulnerable tribal group because of its low development indices, the benefits of additional days of work under the Mahatma Gandhi National Rural Employment Guarantee Scheme and the supply of essential items under the Antyodaya Yojana are not fully available to them.
•Lakhan Sahariya, a tribal activist from Unee village in Shahbad tehsil, says daily wage labour and agriculture are the main sources of livelihood in the region, but the payments under the MGNREGS are not made on time, while wheat and ghee are supplied on festive occasions. “The Sahariyas have benefited from special reservation made for them, but a lot more still needs to be done,” he said.
•Mr. Sahariya, 33, who earlier worked with the Bharat Gyan Vigyan Samiti, says several youth from the community have obtained government jobs following special efforts, but “concerted measures” are required for the welfare of the landless tribal people in the remote villages. In July 2012, 135 Sahariya families reclaimed land from the landlords with government help and started growing crops.
•The Congress candidate from Baran-Atru, Panachand Meghwal, told The Hinduduring his election campaign in the city’s Cherighat locality that the Special Reservation Bill for Sahariyas, implemented by the Ashok Gehlot government in 1999, had immensely benefited the tribal people and opened new opportunities for them.
Party position
•Though Sahariyas have been traditionally voting for the Congress, the reserved seat of Kishanganj was won by the BJP in 2013. BJP MLA Lalit Meena is pitted against Nirmala Sahariya of the Congress from Kishanganj this time. The three other seats in the district — Baran-Atru, Anta and Chhabra — are also occupied by the BJP.
•Mr. Meghwal said the BJP regime had distorted the Congress government’s scheme for supply of 25 kg of wheat in the region on each ration card by restricting the supply on the basis of number of members in a household. “As a result, the deserving families are not getting the benefit. This is one of the several instances of the BJP’s anti-poor approach. They remember Ram temple during elections instead of working for the betterment of the poor.”
•The Baran chapter of the Indian National Trust for Art and Cultural Heritage (INTACH) has taken up the task of preserving the tribal art of mandana, which is drawn on floor and walls as a mark of celebration and to protect home and hearth. INTACH district convenor Jitendra Sharma said each mandana painting was accompanied by a different song, which had been catalogued and recorded.
•Artist Kaushalya Devi recently drew mandanas at the Mini-Secretariat here on behalf of INTACH during a heritage week. Mr. Sharma said the preservation of tribal art would help protect Sahariyas’ identity.
