📰 India to be most populous by 2027: UN
Report says country expected to have 1.64 billion inhabitants by 2050; China will have only 1.4 billion
•India is set to overtake China as the most populous country by 2027 and will have almost 1.64 billion inhabitants by 2050, says a United Nations report, adding that South Asia’s opportunity to reap the “demographic dividend” will peak by 2047.
•Globally, people aged above 65 are the fastest growing age group, putting pressure on social protection systems as the proportion of the working-age population shrinks.
273 million more
•According to the World Population Prospects 2019 report released on Tuesday, India is expected to add 273 million people by 2050, which will be the largest national increase in the world. China, on the other hand, is expected to become smaller, dropping from its current 1.43 billion people to approximately 1.4 billion by 2050.
•However, while India may have the highest absolute increase in numbers, its rate of growth is slowing. The Central and the Southern Asia region, of which India is a part, is expected to see a 25% increase in population between now and 2050.
•The rate of population growth is the highest in sub-Saharan Africa, where the fertility rate stand at 4.6 births per woman over a lifetime. The region is expected to double its population by mid-century. Nigeria is expected to add 200 million people over the next three decades and overtake the U.S. to become the third most populous nation.
•Moving from geographical areas to age cohorts, India is still among the countries where the working-age population (25-64 years) is growing faster than other groups, creating an opportunity for accelerated economic growth. However, the “demographic dividend” will peak by 2047 in the region, meaning that countries such as India must rush to invest in education and health, especially for young people, the report says.
•Globally, it’s the post-working-age group that is growing the fastest. By 2050, one in six people will be above 65, compared with one in 11 people in 2019. In 2018, for the first time in history, people above 65 outnumbered children under five years of age. By 2050, the number of people over 80 is expected to triple to 426 million.
•This trend has also led to falling proportions of working-age people to support an ageing population. By 2050, almost 50 countries are expected to have less than two working-age people to support every person above 65.
Ageing impact
•“These low values underscore the potential impact of population ageing on the labour market and economic performance as well as the fiscal pressures that many countries will face in the coming decades as they seek to build and maintain public systems of health care, pensions and social protection for older persons,” says the report.
Major drop seen in open defecation
•India has made great gains in providing basic sanitation facilities since the start of the millennium, accounting for almost two thirds of the 650 million people globally who stopped practising open defecation between 2000 and 2017.
•However, a monitoring report by UN organisations released on Tuesday also shows that there has been absolutely no growth in the population with access to piped water facilities over that period, while large inequalities remain between rural and urban areas.
•As for drinking water, the Joint Monitoring Programme report by UNICEF and WHO shows that India has increased the percentage of its population with access to a protected drinking water source less than 30 minutes away, from 79% in 2000 to 93% in 2017.
•However, the percentage of households getting piped water has remained stagnant at 44% over the 17-year period.
•“Drinking water is now the highest priority of the development agenda for this government,” said Drinking Water and Sanitation secretary Parameswaran Iyer. The contours of a new scheme, tentatively called Nal Se Jal, are being drafted this month.
•With regard to sanitation, India’s record has been better. The country is responsible for almost single-handedly dragging the world towards achieving Sustainable Development Goal of ending open defecation. The South Asian region, including India, accounted for almost three-fourths of the population who stopped defecating in the open between 2000 and 2017, according to the report. Of the 2.1 billion people who gained access to basic sanitation services over this time period globally, 486 million live in India.
•“India’s Swachh Bharat mission has been an example and inspiration to other countries, especially in Africa, but also East and South Asia,” said Mr. Iyer. “Nigeria sent a delegation to study the programme…We believe our programme had four reasons for its success that we can share with the rest of the world: political leadership, public financing, partnerships and people’s participation.”
•The millions of new toilets which mark the progress of the Swachh Bharat mission are, however, producing large amounts of solid and liquid waste that India simply does not have the ability to treat and dispose of safely. According to the report, only 30% of the country’s wastewater is treated at plants providing at least secondary treatment, in comparison to an 80% global average.
•“Solid and liquid waste management will be the focus of Swachh Bharat phase 2. We will launch the roadmap and strategy for that programme next month,” said Mr. Iyer.
•“The human right to sanitation implies that people not only have a right to a hygienic toilet but also have a right not to be negatively affected by unmanaged faecal waste. This is most relevant to poor and marginalized groups who tend to be disproportionately affected by other people’s unmanaged faecal sludge and sewage,” says the report, highlighting inequalities beyond toilet access.
📰 U.S. deploys more troops to West Asia
Pentagon reiterates its claim that Iran was behind tanker attacks; Russia and China call for restraint
•China and Russia warned on Tuesday about escalating West Asian tensions after Washington said it would deploy 1,000 more troops to the region and renewed accusations that Iran was behind a tanker attack.
•The U.S. moves came as Iran set a 10-day countdown for world powers to fulfil their commitments under a nuclear deal abandoned by Washington, saying it would otherwise surpass the uranium stockpile limit mandated by the accord.
•“I have authorised approximately 1,000 additional troops for defensive purposes to address air, naval, and ground-based threats in the Middle East,” acting Pentagon chief Patrick Shanahan said in a statement. “The recent Iranian attacks validate the reliable, credible intelligence we have received on hostile behaviour by Iranian forces and their proxy groups that threaten U.S. personnel and interests across the region.”
•Meanwhile, in an interview to Time magazine on Monday, Mr. Trump said he would order a U.S. military response if Iran had to be stopped getting nuclear arms, but he was not eager for war otherwise, downplaying the attacks on the oil tankers. He, though, accepted the U.S. intelligence assessment that Iran was behind the explosions.
•“I would certainly go over nuclear weapons,” he said, “and I would keep the other a question mark.”
•The U.S. has blamed Iran for last week’s attacks on two tankers in the Gulf of Oman, a charge Tehran denies as “baseless”. The Pentagon released new images on Monday that it said showed Iran was behind the attack on one of the ships. The U.S. argument centres on an unexploded limpet mine on the tanker shipKokuka Courageous that it says was removed by Iranians on a patrol boat.
•“Iran is responsible for the attack based on video evidence and the resources and proficiency needed to quickly remove the unexploded limpet mine,” the Pentagon said in a statement.
•The U.S. released a grainy video last week it said showed the Iranians removing the mine. The images released on Monday show the site where the unexploded mine was allegedly attached, the Iranians on a patrol boat who are said to have removed it, and damage from another device that did explode.
‘Won’t wage war’
•However, Iran President Hassan Rouhani insisted on Tuesday that Tehran would “not wage war against any nation.” “Despite all of the Americans’ efforts in the region and their desire to cut off our ties with all of the world and their desire to keep Iran secluded, they have been unsuccessful,” Mr. Rouhani said.
•In Moscow, President Vladimir Putin’s spokesman Dmitry Peskov urged all sides “to show restraint.” “We would prefer not to see any steps that could introduce additional tensions in the already unstable region.”
•China’s Foreign Minister Wang Yi warned all sides “not to take any actions to provoke the escalation of tension in the region, and not to open a Pandora's box.” He urged Washington to “change its practice of extreme pressure” but also called on Tehran not to abandon the nuclear deal.
📰 15 more Finance Ministry officials forcibly retired over graft charges
Complaints against the officials included corruption, extortion and bribery
•In another action aimed at cleaning up government service, President Ram Nath Kovind on Tuesday ordered the retirement of 15 senior officials of the Ministry of Finance.
•This comes a week after the President ordered the retirement of 12 senior officials of the Finance Ministry for alleged corruption, extortion and sexual harassment.
•While last week’s action was against officers of the Income Tax Department, Tuesday’s orders were against senior officers of the Central Board of Indirect Taxes and Customs (CBIC).
•In exercise of the powers conferred by clause (j) of rule 56 of the Fundamental Rules, the President of India has retired 15 officers of Indian Revenue Service (C&CE) in public interest with immediate effect on completing 50 years of age,” the Finance Ministry said on Tuesday.
•The 15 officers — all in the rank of Assistant Commissioners, Principal Commissioners or Commissioners — are to be paid a sum equivalent to the amount of pay and allowances for a period of three months at the same rate at which they would have received immediately before their retirement.
•Sources in the Finance Ministry said complaints against the officials included corruption, extortion, acquisition of movable and immovable assets that were not disclosed to the proper authorities, smuggling and bribery.
•The President chose to remove the officials immediately rather than opting for the other choice of giving them three months’ notice.
•Clause (j) of rule 56 of the Fundamental Rules state that: “The Appropriate Authority shall, if it is of the opinion that it is in the public interest to do so, have the absolute right to retire any Government servant by giving him notice of not less than three months in writing or three months’ pay and allowances in lieu of such notice.”
📰 An idea whose time may not have come
But the debate on simultaneous elections is useful — it could throw up other reforms to cleanse the electoral process
•Not even a month after the world’s largest elections in history were over, the debate around “one nation, one election” has been resurrected. Prime Minister Narendra Modi, who had continued to flag the issue for the last five years, has now called for a meeting on the subject with leaders of other political parties.
•The 2014 manifesto of the ruling Bharatiya Janata Party (BJP) read: “The BJP will seek, through consultation with other parties, to evolve a method of holding Assembly and Lok Sabha elections simultaneously. Apart from reducing election expenses for both political parties and Government, this will ensure certain stability for State Governments.”
Constant campaigners
•In an interview with a news channel in January 2018, the Prime Minister had rightly highlighted the demerits of the country being in constant election mode. “One election finishes, the second starts,” he said. He argued that having simultaneous Parliament, Assembly, civic and Panchayat polls once every five years and completed within a month or so would save money, resources and manpower. This, he pointed out, happened on account of a large section of the security forces, bureaucracy and political machinery having to be mobilised for up to 200 days a year on account of electioneering.
•The BJP’s 2019 manifesto also mentions that simultaneous elections for Parliament, State Assemblies and local bodies to “ensure efficient utilisation of government resources and security forces and… effective policy planning”. It goes on to say that the party “will try to build consensus on this issue with all parties”. It is in this spirit of reform and consensus building that the Prime Minister has revived this debate, calling an all-party meeting for discussions on June 19.
•The re-elected Chief Minister of Odisha, Naveen Patnaik, has already welcomed the idea, saying, on June 15, that frequent elections affect the development climate, and hence it is better to have simultaneous elections in the country.
•The Law Commission had recommended simultaneous elections to Lok Sabha, Vidhan Sabha and the local bodies as far back as in 1999. The BJP’s L.K. Advani also supported the idea back in 2010 in an eloquent blog post. The matter was examined by a Parliamentary Standing Committee in December 2015, and was also referred to the Election Commission of India (EC). Both supported it in principle.
Genuine concerns
•The concerns raised are indeed genuine, and the idea is worth debating. First, it is becoming more and more difficult to contest elections. The 2019 general election was the most expensive on record; a whopping Rs. 60,000 crore was reportedly spent on the whole exercise. Given that there is no cap on the expenditure incurred by political parties, they spend obscene amounts of money in every election. It is argued that simultaneous elections would help reduce this cost.
•Second, frequent elections hamper the normal functioning of the government and disrupt civic life. This happens because the Model Code of Conduct (MCC) comes into operation as soon as the EC announces the election dates. This means that the government cannot announce any new schemes during this period. This results in what is often referred to as a policy paralysis. The government cannot make any new appointments or transfer/ appoint officials. The entire government manpower is involved in the conduct of elections.
•I would also like to add that elections are the time when communalism, casteism and corruption are at their peak. Frequent elections mean that there is no respite from these evils at all. This has directly resulted in the souring of the political discourse, something that was on full display during the 2019 general election.
•From the point of view of EC, simultaneous elections make perfect sense because the voters for all three tiers are the same, polling booths are the same and staff/security is the same — the suggestion of “one nation, one election” seems logical.
The hurdles
•The idea, however, has some hurdles. First, how will “one nation, one election” work in case of premature dissolution of the Lok Sabha, for instance, as happened in late 1990s when the House was dissolved long before its term of five years was over? In such an eventuality, would we also dissolve all State Assemblies? Similarly, what happens when one of the State Assemblies is dissolved? Will the entire country go to polls again? This sounds unworkable both in theory and in the practice of democracy.
•Second, as for the implementation of schemes of the government during the MCC period, only the new schemes are stopped as these could be tantamount to enticing/bribing voters on the eve of elections. All ongoing programmes are unhindered. Even new announcements that are in urgent public interest can be made with the prior approval of the EC.
•Additionally, frequent elections are not so bad for accountability after all. They ensure that the politicians have to show their faces to voters regularly. Creation of work opportunities at the grass-root level is another big upside. The most important consideration is undoubtedly the federal spirit, which, inter alia, requires that local and national issues are not mixed up.
•Now, as the debate has been rekindled, wider deliberation on the need for a range of reforms must be considered. Till the idea achieves political consensus, there are two alternative suggestions to deal with the problems that arise due to frequent elections.
•First, the problem of uncontrolled campaign expenditure can be remedied by introducing a cap on expenditure by political parties. State funding of political parties based on their poll performance also is a suggestion worth considering. Private and corporate fund collection may be banned.
•Second, as I have suggested elsewhere, the poll duration can be reduced from two-three months to about 33 to 35 days if more Central armed police forces can be provided. The problems associated with a multi-phased election have been getting compounded, with more issues being added to the list with every election. Violence, social media-related transgressions and issues related to the enforcement of the MCC which are unavoidable in a staggered election will vanish if the election is conducted in a single day. All that needs to be done is to raise more battalions. This will also help in job creation.
A healthy debate
•To conclude, it is undeniable that simultaneous elections would be a far-reaching electoral reform. If it is to be implemented, there needs to be a solid political consensus, and an agenda of comprehensive electoral reforms should supplement it. The pros and cons need to be appropriately assessed and practical alternatives sincerely considered. It is good that the government continues to encourage a debate on the subject rather than forcibly pushing it through.
📰 E-com firms take up data localisation issues with Goyal
Also flag data provisions in draft e-commerce policy
•E-commerce companies on Monday voiced their concerns about the Reserve Bank of India’s data localisation norms with Commerce Minister Piyush Goyal.
•They also highlighted the data-related provisions of the draft e-commerce policy during the meeting. Mr. Goyal asked them to submit their concerns in writing within 10 days and assured them that his Ministry would take them on board.
‘Towards a framework’
•“The meeting was held by [Mr.] Piyush Goyal in order to understand their concerns and take their suggestions towards building a robust data protection framework that will achieve the dual purpose of privacy and innovation and strengthen India’s position as a global tech leader with focus on trust and innovation,” the Commerce Ministry said in a statement.
•Some of the companies also raised concerns about the draft e-commerce policy released by the government, especially provisions related to treatment of data.
•“For example, we tried to explain to them that the provision that the government should have the sovereign right over all data at all times was unviable,” the CEO of one of the companies present at the meeting told The Hindu. “For many businesses that is the only intellectual property that they have. I think, on the aggregate data point, they are coming around.”
•The other issue was the government’s demand for data from companies, where the companies argued that the data should be shared only for law and order and investigation situations.
•“Citizens, however, should have full right over the individual private data they share with the company and the company must be held accountable for protecting the same,” Sachin Taparia, founder and chairman of LocalCircles said. “Also, the government should be able to request aggregate data in law, order and enforcement situations and the companies must comply.”
•The third data-related issue raised was that companies cannot share their data with their group companies.
•“The argument made was that if a start-up is acquired by a multinational company, then it becomes a part of that company,” the CEO said. “If you say that the start-up cannot share its data with the parent company, then nobody will want to acquire Indian start-ups at all.”
📰 Building confidence, BIT by BIT
Indian bilateral investment treaties need to strike a balance between foreign investor interests and those of the state
•As Minister of Finance and Corporate Affairs Nirmala Sitharaman gets ready to present the first budget of the 17th Lok Sabha, she faces enormous challenges. The GDP growth rate is at a five-year low, domestic consumption is sinking, the business confidence index has plunged, and India has recorded its highest unemployment rate in the last 45 years. To add to this list of woes is a claim made by Arvind Subramanian, India’s former Chief Economic Adviser, that India’s GDP has been overestimated. Foreign direct investment (FDI) equity inflows to India in 2018-19 contracted by 1%, according to the government’s own data. After an increase of 22% and 35% in 2014-15 and 2015-16, respectively, FDI equity inflows began tapering off since 2016-17 with the growth rate falling to 9% and then to 3% in 2017-18.
Lost opportunity
•This contraction in FDI inflows comes at a time when global supply chains are shifting base as a result of the ongoing trade war between the U.S. and China. India has failed to attract firms exiting China. Many of these supply chains have relocated to Vietnam, Taiwan, Malaysia and Indonesia. India is clearly not the natural/first option for these firms for a host of reasons, such as poor infrastructure, rigid land and labour laws, a deepening crisis in the banking sector and a lack of structural economic reforms.
•The decline in the FDI growth rate, despite the well-advertised improvement in India’s ease of doing business rankings, interestingly, has coincided with India’s decision, in 2016, to unilaterally terminate bilateral investment treaties (BITs) with more than 60 countries; this is around 50% of the total unilateral termination of BITs globally from 2010 to 2018. Unilateral termination of BITs on such a mass scale projects India as a country that does not respect international law. India also adopted a new inward-looking Model BIT in 2016 that prioritises state interests over protection to foreign investment.
•In the absence of empirical evidence, one cannot conclude that termination of BITs and adoption of a state-friendly Model BIT adversely impacted FDI inflows. Nonetheless, since studies have shown that BITs positively impacted foreign investment inflows to India, an examination of the link between the two should be a high priority for the Ministry of Finance and Corporate Affairs — the nodal body dealing with BITs.
•The decision to terminate BITs and adopt a state-friendly Model BIT was a reaction to India being sued by several foreign investors before international arbitration tribunals. The government concluded that these claims were an outcome of India’s badly designed BITs, signed in the 1990s and 2000s that were based on a laissez faire template.
Bad regulation
•True, India’s BITs gave extensive protection to foreign investment with scant regard for state’s interests — a characteristically neoliberal model. This design flaw could have been corrected by India negotiating new balanced treaties and then replacing the existing ones with the new ones instead of terminating them unilaterally, which has created a vacuum. Importantly, the design flaw was not the real reason for the increasing number of BIT claims. A large number arose either because the judiciary could not get its act together (an example being inordinate delays in deciding on the enforceability of arbitration awards) or because it ruled in certain cases without examining India’s BIT obligations such as en masse cancellation of the second generation telecom licences in 2012. Likewise, the executive — the Manmohan Singh government — got the income tax laws retrospectively amended in 2012 to overrule the Supreme Court’s judgment in favour of Vodafone and cancelled Devas Multimedia’s spectrum licences in 2011
without following due process, thus adversely impacting Mauritian and German investors.
•These cases are examples of bad state regulation. They also reveal an absence of full knowledge of India’s obligations under BITs by different state entities. Thus, the Ministry of Finance and Corporate Affairs should invest extensively in developing state capacity so that the Indian state starts internalising BITs and is not caught on the wrong foot before an international tribunal.
•In correcting the pro-investor imbalance in India’s BITs, India went to the other extreme and created a pro-state imbalance as evident in the Model BIT.
For a four point plan
•Correcting this imbalance should be high on the reform agenda of the government. ‘Progressive capitalism’ (channeling the power of the market to serve society, as explained by Nobel laureate Joseph Stiglitz) provides the right template. Indian BITs should strike a balance between interests of foreign investors and those of the state. A certain degree of arrogance and misplaced self-belief that foreign investors would flock to India despite shocks and surprises in the regulatory environment should be put to rest. Clarity, continuity and transparency in domestic regulations and a commitment to a balanced BIT framework would help India project itself as a nation committed to the rule of law, both domestically and internationally, and thus shore up investor confidence. As the 2019 World Investment Report confirms, since India is fast becoming a leading outward investor, balanced BITs would also help in protecting Indian investment abroad.
