The HINDU Notes – 11th June 2019

📰 Modi to meet Xi, Putin at SCO

Ministry yet to confirm meeting with Imran Khan on the sidelines

•Prime Minister Narendra Modi will meet Russian President Vladimir Putin and Chinese President Xi Jinping on the sidelines of the Shanghai Cooperation Organisation (SCO) summit, the External Affairs Ministry said here on Monday.

•“We are happy to confirm bilateral meetings with Russia and China. There are also similar requests from others,” said A. Gitesh Sarma, Secretary in charge of Western affairs in the Ministry.

•Uzbekistan President Sooronbay Jeenbekov is also scheduled to hold a bilateral discussion with Mr. Modi.

Summit with Xi

•Sources indicated that Prime Minister Modi was expected to reiterate his invite to President Xi to visit India for an informal summit later this year. The first informal summit was held in Wuhan last year.

•The official spokesperson of the Ministry refused to confirm if Mr. Modi would hold a separate meeting with his counterpart from Pakistan, Imran Khan. Earlier, India had stated that there was no confirmation of such an official meeting.

•A source, however, confirmed that India had asked for Pakistan’s permission to use an air corridor for the Bishkek-bound flight of Mr. Modi. The source, however, said that the details of the request were not yet known due to security reasons.

•The SCO summit in Bishkek, Kyrgyz Republic, on June 14 will be the first multilateral meeting of Prime Minister Narendra Modi after his re-election in the Lok Sabha election.

•Mr. Sarma said issues related to terrorism, Afghanistan, regional security, multilateral dialogue and global scenario would be part of the discussion at the summit.

RATS participation

•Mr. Sarma said that India was satisfied with the participation in the Regional Anti-Terror Structure (RATS). India has been participating in tactical drills and counter-terror cooperation with other SCO member countries under the RATS, which has its headquarters in Tashkent.

•In August 2018, India joined Pakistan in a tactical military exercise under the SCO’s RATS. Mr. Sarma said that India was expected to participate in a military exercise in Russia under the RATS.

📰 PM seeks five-year road map for each Ministry

Meets with the respective Secretaries

•In their first meeting with Prime Minister Narendra Modi on Monday after his re-election, Secretaries to the Government of India have been tasked with creating a five-year road map for each Ministry with well-defined targets.

•The meeting, which took place at the Prime Minister’s residence, was also attended by Defence Minister Rajnath Singh, Home Minister Amit Shah, Finance Minister Nirmala Sitharaman and Dr. Jitendra Singh.

•During the meeting, Cabinet Secretary P.K. Sinha tasked the sectoral groups of secretaries with preparing a five-year plan document for each Ministry, with well-defined targets and milestones. In addition, there is also a need to propose “a significant impactful decision” in each Ministry, for which approvals will be taken within 100 days, an official release said.

•Mr. Modi pointed out that each department had a role to play in making India a five-trillion dollar economy. While asking each Ministry to focus on ‘ease of living’, the Prime Minister added that India’s progress in ‘Ease of Doing Business’ should reflect in greater facilitation for small businesses and entrepreneurs, an official release said.

📰 China upbeat on Xi-Modi meet at SCO

Countering trade protectionism will be an important topic of discussion: official

•China on Monday invited India to join a budding international effort to counter headwinds of “trade protectionism and unilateralism” and brainstorm ways to address “bullying practices of the United States”.

•In response to question ahead of a meeting of Chinese President Xi Jinping and Prime Minister Narendra Modi on the sidelines of a summit of the Shanghai Cooperation Organisation (SCO) that begins in Bishkek on Thursday, Chinese Vice-Foreign Minister Zhang Hanhui said at a press conference that “trade frictions between China and the United States and the spectre of trade frictions between the United States and India” could become an “important topic” for talks. He added: “Trade protectionism and unilateralism are very much on the rise. How to respond to the bullying practices of the United States... its practices of trade protectionism is an important question.”

Hope for consensus

•Mr. Zhang hoped that talks between the two leaders would yield “extensive consensus” to counter trade protectionism and uphold “justice”. He was upbeat that the upcoming dialogue between Mr. Xi and Mr. Modi would “not only enhance bilateral trade (but) also play an important role in promoting global economy”. The talks between the two leaders are likely to be part of broader dialogue between China and other countries at the summit.

•The Chinese official also stressed that at a personal level, the two leaders are “good friends”. He singled out last year’s “very successful informal summit in Wuhan,” which has imparted “strategic guidance for the development of China-India relations, paving the way for stable growth of China-India relations in the long run”.

•An official source had earlier told The Hindu that China was keen to step up preparations for the next informal summit between Mr. Xi and Mr. Modi as a follow-up to the Wuhan conclave. During official discussions, Varanasi has been proposed as a possible venue for the summit.

•The rising trade and technology tensions with the U.S. appear have spurred China to seek new allies and attempt forging new rules of international trade and commerce.

📰 SEBI mulls norms to reward whistle-blowers

It seeks protection of informant from victimisation

•The Securities and Exchange Board of India (SEBI) has proposed establishing a framework to reward individuals who bring forward instances of violations of insider trading norms while at the same time protecting such persons from victimisation in the form of demotion or termination of job.

•“... it is desirable and prudent that SEBI considers instituting a process that enables timely reporting of instances of insider trading violations and also provide for grant of reward with adequate checks and balances that could incentivise timely reporting of information relating to insider trading to SEBI at the first available opportunity,” stated the discussion paper released by SEBI on Monday.

•The capital markets regulator has proposed that entities that come forward with such information will have to disclose the source of information and give an undertaking that such information has not been sourced from any regulator.

•Further, the regulator has proposed that if such information leads to a final order by SEBI with a minimum disgorgement of Rs. 5 crore, then a monetary award of 10% of the money collected by SEBI, subject to a cap of Rs. 1 crore, can be given to the informant.

•Further, the reward will be paid from the Investor Protection and Education Fund (IPEF). SEBI also plans to establish an Office of Informant Protection, which will be independent of the investigation and inspection wings of the regulatory body.

Anonymous complaint

•While the informant would be required to disclose his or her identity at the time of submission of the complaint in the official format – Voluntary Information Disclosure Form, in SEBI’s parlance – an anonymous complaint can also be submitted through an authorised representative who is a practising advocate.

•To protect such complainants against victimisation, the regulator has proposed that all listed companies and intermediaries would include in their code of conduct, provisions to ensure that such individuals are not “discharged, terminated, demoted, suspended, threatened, harassed, or discriminated against, directly or indirectly.”

•While SEBI has also proposed an amnesty for such individuals, it has also stated that if a complaint is found to be frivolous, the regulator can initiate actions against the informant.

📰 We have the right to disallow extradition of Zakir Naik: Malaysia

He feels that he is not going to get a fair trial, says Prime Minister

•Malaysian Prime Minister Mahathir Mohamad on Monday said the country reserved the right to disallow extradition of Zakir Naik to India if he was not going to be accorded justice, according to the local media.

•As reported by The Star, a Malaysian daily, Dr. Mohamad said the situation was the same with Australia not sending Sirul Azhar Umar back to Malaysia. Umar, a former bodyguard, was sentenced to death in 2015 for the murder of Mongolian model Altantuya Shaariibuu.

•“We requested Australia to extradite Sirul and they are afraid we are going to send him to the gallows,” Dr. Mohamad was quoted as saying. He said Naik “in general feels that he is not going to get a fair trial [in India]”.

•The statement comes when the Enforcement Directorate is preparing to secure a non-bailable warrant against Naik on money laundering charges involving more than ₹193 crore. It has already attached assets worth ₹50 crore in the case.

•Based on the warrant, the Directorate can request the Interpol to issue a Red Notice against him and also approach the Malaysian authorities seeking his extradition.

•The ED probe is based on an FIR registered by the National Investigation Agency of allegedly spreading communal hatred by making provocative speeches.

•A response to Dr. Mohamad’s reported statement is awaited from the Ministry of External Affairs.

📰 Foreign policy challenges five years later

In an unpredictable global environment and with resource constraints, India needs to shape a domestic consensus

•As Prime Minister Narendra Modi begins his second term, the world looks more disorderly in 2019 than was the case five years ago. U.S. President Donald Trump’s election and the new dose of unpredictability in U.S. policy pronouncements; the trade war between the U.S. and China which is becoming a technology war; Brexit and the European Union’s internal preoccupations; erosion of U.S.-Russia arms control agreements and the likelihood of a new arms race covering nuclear, space and cyber domains; the U.S.’s withdrawal from the Iran nuclear deal and growing tensions between Saudi Arabia and Iran are some of the developments that add to the complexity of India’s principal foreign policy challenge of dealing with the rise of China.

Redefining neighbourhood

•As in 2014, in 2019 too Mr. Modi began his term with a neighbourhood focus but redefined it. In 2014, all South Asian Association for Regional Cooperation (SAARC) leaders had been invited for the swearing-in. However, the SAARC spirit soon evaporated, and after the Uri attack in 2016, India’s stance affected the convening of the SAARC summit in Islamabad. Since an invitation to Pakistan was out of the question, leaders from the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) countries (Bangladesh, Bhutan, Nepal, Sri Lanka, Myanmar and Thailand) with Kyrgyzstan, added as current Shanghai Cooperation Organisation chair, highlighted a new neighbourhood emphasis.

•Yet Mr. Modi will find it difficult to ignore Pakistan. A terrorist attacks cannot be ruled out and it would attract kinetic retaliation. Despite good planning there is always the risk of unintended escalation as Balakot (this year) and the downing of an Indian Air Force (IAF) MiG-21 showed. In the absence of communication channels between India and Pakistan, it appears that the U.S., Saudi Arabia and the United Arab Emirates played a role in ensuring the quick release of the IAF pilot, Wg. Cdr. Abhinandan Varthaman, thereby defusing the situation. Unless the Modi government wants to outsource crisis management to external players, it may be better to have some kind of ongoing dialogue between the two countries. This could be low-key and discreet, at whatever level considered appropriate, as long as no undue expectations are generated. A policy in-between diplo-hugs and no-communication provides both nuance and leverage.

•Relations with countries on our periphery, irrespective of how we define our neighbourhood, will always be complex and need deft political management. Translating India’s natural weight in the region into influence was easier in a pre-globalised world and before China emerged in its assertive avatar. Today, it is more complex and playing favourites in the domestic politics of neighbours is a blunt instrument that may only be employed, in the last resort; and if employed it cannot be seen to fail. Since that may be difficult to ensure, it is preferable to work on the basis of generating broad-based consent rather than dominance.

•This necessitates using multi-pronged diplomatic efforts and being generous as the larger economy. It also needs a more confident and coordinated approach in handling neighbourhood organisations — SAARC, BIMSTEC, the Bangladesh, the Bhutan, India, Nepal Initiative, the Bangladesh-China-India-Myanmar Forum for Regional Cooperation, the Indian Ocean Rim Association. This should be preferably in tandem with bilateralism because our bilateral relations provide us with significant advantages. With all our neighbours, ties of kinship, culture and language among the people straddle boundaries, making the role of governments in States bordering neighbours vital in fostering closer linkages. This means investing attention in State governments, both at the political and bureaucratic levels.

Managing China and the U.S.

•China will remain the most important issue, as in 2014. Then, Mr. Modi went along with the old policy since the Rajiv Gandhi period that focussed on growing economic, commercial and cultural relations while managing the differences on the boundary dispute through dialogue and confidence-building measures, in the expectation that this would create a more conducive environment for eventual negotiations. Underlying this was a tacit assumption that with time, India would be better placed to secure a satisfactory outcome. It has been apparent for over a decade that the trajectories were moving in the opposite direction and the gap between the two was widening. For Mr. Modi, the Doklam stand-off was a rude reminder of the reality that the tacit assumption behind the policy followed for three decades could no longer be sustained.

•The informal summit in Wuhan restored a semblance of calm but does not address the long-term implications of the growing gap between the two countries. Meanwhile, there is the growing strategic rivalry between the U.S. and China unfolding on our doorstep. We no longer have the luxury of distance to be non-aligned. At the same time, the U.S. is a fickle partner and never has it been more unpredictable than at present.

•In 2014, Mr. Modi displayed unusual pragmatism in building upon a relationship that had steadily grown under the previous regimes, after the nuclear tests in 1998. The newly appointed External Affairs Minister, S. Jaishankar, had played a key role as the then Ambassador in Washington. Later, as Foreign Secretary, he successfully navigated the transition from the Obama administration to the Trump administration while keeping the relationship on an upward trajectory.

•Despite this, a number of issues have emerged that need urgent attention. As part of its policy on tightening sanctions pressure on Iran, the U.S. has terminated the sanctions waiver that had enabled India to import limited quantities of Iranian crude till last month. The Generalised System of Preferences scheme has been withdrawn, adversely impacting about 12% of India’s exports to the U.S., as a sign of growing impatience with India’s inability to address the U.S.’s concerns regarding market access, tariff lines and recent changes in the e-commerce policy.

•A third looming issue, perhaps the most critical, is the threat of sanctions under the Countering American Adversaries Through Sanctions Act (CAATSA), were India to proceed with the purchase of the S-400 air and missile defence system from Russia. Till the end of last year, then U.S. Defence Secretary James Mattis had been confident of India securing a waiver — but times have changed.

•Other potential tricky issues could relate to whether Huawei, which is currently the prime target in the U.S.-China technology war, is allowed to participate in the 5G trials (telecom) in India. The reconciliation talks between the U.S. and the Taliban as the U.S. negotiates its exit from Afghanistan raise New Delhi’s apprehensions about the Taliban’s return, constituting another potential irritant.

External balancing

•How New Delhi manages its relations with Washington will be closely watched in Beijing and Moscow, which have been moving closer. It is reminiscent of 1971 when China began moving closer to the U.S. to balance the then USSR, with which its relationship was strained. Today, both see merit in a common front against the U.S., though for China the rivalry with the U.S. is all-encompassing because of its geography and Taiwan. Russia has interests beyond, in Afghanistan, West and Central Asia and Europe, and it is here that Mr. Modi will need to exploit new opportunities to reshape the relationship.

•In a post-ideology age of promiscuity with rivalries unfolding around us, the harsh reality is that India lacks the ability to shape events around it on account of resource limitations. These require domestic decisions in terms of expanding the foreign policy establishment though having a seasoned professional at the top does help. We need to ensure far more coordination among the different ministries and agencies than has been the case so far. Our record in implementation projects is patchy at best and needs urgent attention. The focus on the neighbourhood is certainly desirable, for only if we can shape events here can we look beyond. However, the fact that China too is part of the neighbourhood compounds Mr. Modi’s foreign policy challenges in his second term. Employing external balancing to create a conducive regional environment is a new game that will also require building a new consensus at home.

📰 Striking a balance

The RBI’s nuanced approach in the revised circular on stressed assets is noteworthy

•The efforts of the Reserve Bank of India to clean up the non-performing loans mess in the banking system suffered a setback in April when the Supreme Court shot down its circular of February 12, 2018, terming it ultra vires . Version 2.0 of the circular, titled “Prudential Framework for Resolution of Stressed Assets”, issued by the central bank on June 7, manages to retain the spirit of the original version even while accommodating the concerns of banks and borrowers. The RBI has achieved a good balance between its objective of forcing a resolution of stricken assets and giving banks the elbow room to draw up a resolution within a set timeframe without resorting to the bankruptcy process. Banks will now have a review period of 30 days after a borrower defaults to decide on the resolution strategy, as compared to the one-day norm earlier. They will also have the freedom to decide whether or not to drag a defaulter to the insolvency court if resolution does not take place within 180 days of default. Banks had no such option earlier. By making an Inter Creditor Agreement between lenders mandatory, the RBI has ensured that they will speak in one voice, while the condition that dissenting lenders should not get less than the liquidation value puts a floor on recovery from the resolution process.

•The RBI’s nuanced approach now is noteworthy. There will be disincentives in the form of additional provision of 20% to be made by banks if a resolution is not achieved within 180 days and a further additional provision of 15% if this extends to a year. If that is the stick, the carrot is that they can write back half of the additional provision once a reference is made to the insolvency court and the remaining half can also be clawed back by banks if the reference is admitted for insolvency resolution. This approach will give banks the freedom to explore all options before referring a defaulter to the insolvency process. Instead of treating banks like truant schoolchildren who need to be disciplined with the stick, the RBI has graduated to treating them like responsible adults who know what is good for them when it comes to handling defaulters. Of course, the RBI was forced to wield the stick originally only because banks resorted to evergreening loans and pushing NPAs under the carpet. It is to be hoped that they will now uphold the trust placed in them by the RBI. The central bank, anyway, retains the right to direct banks to initiate insolvency proceedings in specific cases by drawing on its powers under Section 35AA of the Banking Regulation Act. Meanwhile, the government has to assess what ails the insolvency resolution process, which has got bogged down in the case of several high-profile defaulters, beginning with Essar Steel. The delays in resolution are not good optics, and the gaps that defaulters typically use to subvert the process must be plugged. Ultimately, the RBI’s efforts will be negated if banks, put off by the long delays in the resolution process, choose not to refer cases to the insolvency court.

📰 Ryots sow seeds of defiance

Blame Centre for not approving next generation of GM cotton.

•Hundreds of farmers on Monday joined in, what they called, a ‘civil disobedience’ movement to protest the Centre’s indecisiveness in approving the next generation of genetically modified (GM) cotton. As a mark of protest, farmer leader Lalit Patil-Bahale sowed the seeds of the ‘illegal’ herbicide tolerant (HT) Bt cotton and Bt Brinjal in his own field at Akot in Akola district of Maharashtrta.

•The open defiance of law was organised by Shetkari Sanghatana (SS), a farmers’ organisation and an advocate of open market in the field of agriculture. “We should be getting the newest of technologies available in the market for agriculture,” said Mr. Patil-Bahale.

•The issue has gained momentum in the wake of Haryana government accusing two farmers of illegally growing genetically modified brinjal and destroying their crops.

•The outbreak of pink bollworm in Maharashtra three years ago despite farmers using BG-2, Monsanto’s second generational insecticidal technology for cotton, is being blamed by the SS on Indian government’s ban on testing further enhanced version of the seed.

•Akola district collector Jitendra Papalkar told The Hindu that the farmers’ body has committed an illegal act. “We have sent a team of agriculture officers and will be seeking the report from them, following which necessary action would be taken,” he said.

📰 Artificial Intelligence, the law and the future

AI-driven tech will become counterproductive if a legal framework is not devised to regulate it

•In February, the Kerala police inducted a robot for police work. The same month, Chennai got its second robot-themed restaurant, where robots not only serve as waiters but also interact with customers in English and Tamil. In Ahmedabad, in December 2018, a cardiologist performed the world’s first in-human telerobotic coronary intervention on a patient nearly 32 km away. All these examples symbolise the arrival of Artificial Intelligence (AI) in our everyday lives. AI has several positive applications, as seen in these examples. But the capability of AI systems to learn from experience and to perform autonomously for humans makes AI the most disruptive and self-transformative technology of the 21st century.

•If AI is not regulated properly, it is bound to have unmanageable implications. Imagine, for instance, that electricity supply suddenly stops while a robot is performing a surgery, and access to a doctor is lost? And what if a drone hits a human being? These questions have already confronted courts in the U.S. and Germany. All countries, including India, need to be legally prepared to face such kind of disruptive technology.

Challenges of AI

•Predicting and analysing legal issues and their solutions, however, is not that simple. For instance, criminal law is going to face drastic challenges. What if an AI-based driverless car gets into an accident that causes harm to humans or damages property? Who should the courts hold liable for the same? Can AI be thought to have knowingly or carelessly caused bodily injury to another? Can robots act as a witness or as a tool for committing various crimes?

•Except for Isaac Asimov’s ‘three laws of robotics’ discussed in his short story, ‘Runaround’, published in 1942, only recently has there been interest across the world to develop a law on smart technologies. In the U.S., there is a lot of discussion about regulation of AI. Germany has come up with ethical rules for autonomous vehicles stipulating that human life should always have priority over property or animal life. China, Japan and Korea are following Germany in developing a law on self-driven cars.

•In India, NITI Aayog released a policy paper, ‘National Strategy for Artificial Intelligence’, in June 2018, which considered the importance of AI in different sectors. The Budget 2019 also proposed to launch a national programme on AI. While all these developments are taking place on the technological front, no comprehensive legislation to regulate this growing industry has been formulated in the country till date.

Legal personality of AI

•First we need a legal definition of AI. Also, given the importance of intention in India’s criminal law jurisprudence, it is essential to establish the legal personality of AI (which means AI will have a bundle of rights and obligations), and whether any sort of intention can be attributed to it. To answer the question on liability, since AI is considered to be inanimate, a strict liability scheme that holds the producer or manufacturer of the product liable for harm, regardless of the fault, might be an approach to consider. Since privacy is a fundamental right, certain rules to regulate the usage of data possessed by an AI entity should be framed as part of the Personal Data Protection Bill, 2018.

•Traffic accidents lead to about 400 deaths a day in India, 90% of which are caused by preventable human errors. Autonomous vehicles that rely on AI can reduce this significantly, through smart warnings and preventive and defensive techniques. Patients sometimes die due to non-availability of specialised doctors. AI can reduce the distance between patients and doctors. But as futurist Gray Scott says, “The real question is, when will we draft an artificial intelligence bill of rights? What will that consist of? And who will get to decide that?”