📰 Buddhist relic unearthed
Local limestone pillar is carved with half lotus medallions at the centre and top portions on all the four sides
•A Buddhist relic has been unearthed by a group of indologists on the right bank of the Gundlakamma river at Anamanaluru village, near Korisapadu, in Prakasam district.
•A group of historians led by Dr. E. Sivanagireddy, Buddhist Archaeologist and Chief Executive Officer, the Cultural Centre of Vijayawada and Amaravati (CCVA), examined the 3rd century A.D. relic during their visit to the sleepy village as part of ‘Preserve Heritage for Posterity’, an awareness campaign launched by the CCVA to bring to limelight artefact which remained in neglect in different parts of the State. The local limestone pillar measuring 1’-3”x 0’-9’’x8’.0” and 2’.0” feet below the ground level, is carved with half lotus medallions at the centre and top portions on all the four sides in the Amaravati school of Art of the Ikshwaku times.
•It was an accidental find while uprooting eucalyptus trees in the agricultural field and erected it inside the Veerabhadra temple towards the north of the village. Dr. Reddy said that there might be a Buddhist monastery of which this pillar might be part of a Shilamandapa where Buddhist teachers offer regular discourses on the Dhamma of the Buddha.
•The antique Buddhist pillar was found worn out due to weathering and active agricultural operations.
‘Ikshwaku style’
•Dr. Sivanagi Reddy said that similar pillars carved in the Ikshwaku style are earlier noticed inside the Siva temple at Manikeswaram another village located on the Gundlakamma river bank, 3 km away from the present spot. Dr. Reddy said that he would like to take up a village–wise survey of Buddhist sites and monuments in Prakasam district and publish a book for the benefit of the research scholars.
•In view of the archaeological and historical significance of the Buddhist pillar, he appealed to the officials of the State Archaeology and Museums Department, to take necessary action to protect it for posterity in the present site or shift to a nearby museum.
📰 UNSC non-permanent seat: India’s candidature receives unanimous endorsement by Asia-Pacific group
Pakistan and China also come out in support
•India has won the unanimous support of all countries in the 55-member Asia-Pacific Group at the United Nations in support of its bid for a non-permanent seat at the UN Security Council (UNSC) for a two-year term in 2021-22.
•The development is particularly significant given that Pakistan and China, both countries with which India has had diplomatic challenges at the UN, supported the move.
•“Humbled by the show of solidarity by the Asia-Pacific Group in endorsing India’s candidature,” India’s Ambassador & Permanent Representative to the UN Syed Akbaruddin told The Hindu. “We accept the responsibility with humility and will now seek support from the broader UN membership at the elections in General Assembly next year.”
•The 55-member Asia-Pacific Group gets to nominate one of its members for the June 2020 elections to a non-permanent seat on the UNSC. Estonia, Niger, Tunisia, Vietnam and St. Vincent and the Grenadines were elected earlier this month.
•No challenges to India’s candidacy are expected with regard to acquiring the support of other UN members. India will need the vote of two-thirds of the 193 UN General Assembly members to win a non-permanent seat on the UNSC.
•India has already held a non-permanent seat on the UNSC for seven terms: 1950-1951, 1967-1968, 1972-1973, 1977-1978, 1984-1985, 1991-1992 and 2011-2012. It announced its candidacy for the 2021-22 seat at the end of 2013, with Afghanistan, a potential contender, withdrawing its nomination to accommodate India’s candidacy based on the “long-standing, close and friendly relations” between the two countries, as per what Afghanistan’s UN mission had said at the time.
•India has been keen to hold the seat in 2021-22 to coincide with the 75th anniversary of Independence in 2022.
•It will be hosting the G-20 meeting in New Delhi in that year.
•“Quiet diplomacy always works even in places where megaphones are easily available,” Mr. Akbaruddin said of the support India had received from all countries in the Asia Pacific group, including Pakistan and China.
📰 India and U.S. resolve to work through their trade differences
Secretary of State Pompeo meets Jaishankar, says hurdles can be negotiated
•India and the U.S. resolved to “work through” their differences which have led to an impasse on trade issues as External Affairs Minister S. Jaishankar hosted U.S. Secretary of State Mike Pompeo in Delhi ahead of a meeting between Prime Minister Narendra Modi and U.S. President Donald Trump in Osaka this week.
•“If you trade with somebody, and particularly if they are your biggest trading partners, it’s impossible that you don’t have trade issues. But I think the sign of a mature relationship is that ability to negotiate your way through that and find common ground,” Mr. Jaishankar said at the end of their meeting on Wednesday, although neither side announced any positive outcomes from the discussions. Mr. Pompeo and Mr. Jaishankar are understood to have thrashed out issues, including tariffs and counter-tariffs imposed by New Delhi and Washington on each other in the past year, as well as the U.S.’s specific concerns with India’s proposed laws on e-commerce and data localisation, on price caps and market access.
•“The U.S. is clear that it seeks greater market access and the removal of trade barriers in our economic relationship, and today I addressed these differences in the spirit of friendship and I think we will be able to resolve these issues in the interests of our two countries,” said Mr. Pompeo.
•He clarified that the U.S. decision to withdraw India’s GSP preferential trade status this month had not come up for discussion.
•Mr. Jaishankar said both sides had come away with a “better understanding” of each other’s concerns on a wide variety of issues besides trade, including energy, defence, investment concerns and people-to-people contacts, as well as the growing conflict in the Gulf with Iran and the peace process in Afghanistan.
•Rejecting calls by the United States and the threat of sanctions under its CAATSA law, Mr. Jaishankar said that India will take its decision on the purchase of the Russian S-400 Triumf anti-missile system in its own “national interest”, and conveyed this to his American counterpart during talks here on Wednesday.
•“On the CAATSA ( Countering America’s Adversaries through Sanctions Act)issue) I explained to Secretary Pompeo in some detail that we have many relationships with many countries, and many of them have some standing and they have a history,” said Mr. Jaishankar, referring to India’s traditional relationship with Russia.
•Mr. Jaishankar also raised India’s concerns over growing U.S.-Iran tensions and their impact on India’s energy security.
•While India has zeroed out all oil imports from Iran since the U.S. sanctions deadline ran out on May 2, it has maintained a cordial and close relationship with the Iranian government. In response, Mr. Pompeo lashed out at the Iranian government, which he called a “terrorist regime”, adding that India and the U.S. had a “shared understanding” of the terrorist threat emanating from Iran.
•“We know that Iran is the world’s largest state sponsor of terror, and the Indian people have suffered from terror around the world. So I think there is a shared understanding of the threat and a common purpose to ensuring that we keep energy at the right prices and deter this threat,” Mr. Pompeo said.
•The MEA declined to comment on whether it supported Mr. Pompeo’s remarks, which were made in Mr. Jaishankar’s presence. Mr. Pompeo, who leaves for Osaka on Thursday morning, also met with PM Modi and National Security Adviser Ajit Doval on Wednesday.
📰 Police station in Satara tops SMART survey
One police station each in Akola, Beed ranked 59 and 60 in nation-wide survey
•Rahimatpur police station in Satara district in western Maharashtra has emerged as the State topper in a survey based on the ‘SMART’ policing concept announced by Prime Minister Narendra Modi.
•Mr. Modi had first called for making the police force ‘SMART’ — strict and sensitive, modern and mobile, alert and accountable, reliable and responsive, techno-savvy and trained — while addressing the 49th annual conference of Directors-General and Inspectors-General of Police in Guwahati in 2014.
•The Quality Council of India (QCI), which executed the survey, assessed 87 shortlisted police stations across the country on a number of parameters like performance in controlling crime, infrastructure of the police building, mess and optimal use of technology, and citizen feedback.
•The other vital parameters included approachability and discipline of the police personnel, storage of manual records in the police station as well as the station head officer’s (SHO’s) declaration of the budgetary process.
•However, the State’s performance was disappointing as none of its three shortlisted stations failed to make the top 10.
•Two other police stations besides Rahimatpur, including Akot Rural police station in Akola district and Talwada in Beed district, were included in the rankings, being placed at 59 and 60 respectively.
•The Kalu police station in Rajasthan’s Bikaner came first rank in the country for having recreational facilities for police personnel, and a helpdesk for women besides being equipped with wi-fi servers.
•“Credit must be given for completion of the ISO process of the shortlisted stations in Maharashtra. In fact, the quality standardisation process started in full swing in Satara and other districts like Kolhapur and Aurangabad in 2017,” Tejaswi Satpute, Satara Superintendent of Police, told The Hindu.
•Ms. Satpute said that as against the rest of the State, police stations in Satara district had commenced their ISO processes relatively earlier.
•“While the survey in no way implies that bigger police stations in Mumbai, for instance, are not superior in other parameters, the chief criterion chosen for the rankings this time was the data on the Wipro-developed Crime and Criminal Tracking Network system (CCTNS) portal,” she said.
•It was on the basis of cent per cent upgradation of the CCTNS system that Rahimatpur, already an ISO station, made it as State topper, Ms. Satpute said, adding that the reason for choosing this particular criteria was to encourage other stations to update data faster.
•In February this year, Chief Minister Devendra Fadnavis had declared Satara as a ‘SMART’ police district adding 37 police stations in the district qualified as ‘SMART’ stations.
•Fourteen police stations were placed in the A++ category, 12 in the A+, and the remaining 11 in A category as per the SMART policing concept norms.
📰 Govt. to start Jal Shakti Abhiyan for 255 water-stressed districts from July 1
•The Centre is set to initiate the Jal Shakti Abhiyan to ramp up rainwater harvesting and conservation efforts in 255 water-stressed districts from July 1, in line with the government’s promise to focus on water.
•Though water is a State issue, the campaign would be coordinated by 255 central IAS officers of Joint or Additional Secretary-rank, drawn from ministries as varied as Space, Petroleum and Defence, according to a notification issued by the Department of Personnel and Training on Wednesday. The campaign seems to follow the model of last year’s Gram Swaraj Abhiyan, where central officials monitored the implementation of seven flagship development schemes in 117 aspirational districts across the country.
•The campaign would run from July 1 to September 15 in States receiving rainfall during the south-west monsoon, while States receiving rainfall in the retreating or north-east monsoon would be covered from October 1 to November 30. Overall, 313 blocks with critical groundwater levels would be covered, along with 1,186 blocks with over-exploited groundwater and 94 blocks with low groundwater availability.
Progress monitored
•The Jal Shakti Abhiyan would aim to accelerate water harvesting, conservation and borewell recharge activities already being carried out under the Mahatma Gandhi National Rural Employment Guarantee scheme and the Integrated Watershed Management Programme of the Rural Development Ministry, along with existing water body restoration and afforestation schemes being undertaken by the Jal Shakti and Environment Ministries. Progress would be monitored in real time through mobile applications and an online dashboard at indiawater.gov.in.
•Block and district-level water conservation plans would be drafted, and Kisan Vigyan Kendras would hold melas to promote better crop choices and more efficient water use for irrigation. A major communications campaign on TV, radio, print, local and social media would be carried out, with celebrities mobilised to generate awareness for the campaign.
•Teams led by 255 Joint Secretary and Additional Secretary-rank officers and 550 Deputy Secretary-level officers from various central ministries would fan out across the country, making at least three trips of three days each to cover their allocated districts and blocks. All officers would also participate in a preparatory workshop led by the Cabinet Secretary at Vigyan Bhavan in the capital on June 27 and 28. Scientists and IITs would provide technical support, while national NGOs would aid in community mobilisation. State- and district-level officials would also join these teams on the ground.
📰 U.S.-China trade war mayreduce global growth rate
Will cut economic output by 0.4 percentage points: Fitch
•The ongoing U.S.-China trade war escalation could knock off 0.4 percentage points from world GDP growth by 2020, and possibly lead to the lowest growth since 2009, according to Fitch Ratings.
•“The imposition by the U.S. of 25% tariffs on the remaining $300 billion of imports from China would reduce world economic output by 0.4 percentage points in 2020,” Fitch Ratings said in a report. “Global GDP growth would slow to 2.7% this year and 2.4% next year, compared with our latest ‘Global Economic Outlook’ baseline forecasts of 2.8% and 2.7% respectively.
•China’s growth rate is expected to be reduced by 0.6 percentage points, and U.S. growth by 0.4 percentage points in 2020.
Import tariffs
•Fitch has assumed a scenario in which the U.S. imposes import tariffs at 25% on $300 billion of goods from China and China retaliates by imposing a 25% tariff on $20 billion of U.S. imports untouched by the trade war so far, and by raising the tariff rate on $100 billion of U.S. imports already subject to new tariffs to 50%.
•“For China and the U.S., the tariffs would initially feed through to lower export volumes and higher import prices, with the latter raising firms’ costs and reducing real wages,” the report said. “Business confidence and equity prices would also be dampened, further weighing on business investment and reducing consumption through a wealth effect.”
•The negative growth effects from lower export demand would be magnified on upstream supplier industries and from lower incomes in the export sector, Fitch added.
•These effects are expected to spill over to other trading partners not directly targeted by the tariffs. “Global growth would fall even allowing for the monetary policy easing response,” Fitch said. “While falling short of a global recession, this would be the weakest global growth rate since 2009 and slightly worse than 2012, when the Eurozone sovereign debt crisis was at its peak.”
📰 RCEP next steps: on India's free trade agreement
India cannot afford to fall out of the free trade agreement negotiations
•Leaders of the 10-member Association of South East Asian Nations have resoundingly committed to conclude negotiations for the Regional Comprehensive Economic Partnership free trade agreement by the end of 2019. Some like the Malaysian Prime Minister went a step further, suggesting that countries not ready to join the RCEP, notably India but also Australia and New Zealand, could join at a later date, allowing a truncated 13-member RCEP to go ahead. Others insist that all 16 members must agree on the final RCEP document. It is clear that ASEAN, which first promoted the RCEP idea in 2012, is putting pressure on all stakeholders to complete the last-mile negotiations. The ASEAN summit, which ended in Bangkok on Sunday, agreed to send a three-member delegation to New Delhi to take forward the talks. RCEP includes ASEAN’s FTA partners — India, China, Japan, South Korea, Australia and New Zealand — and the FTA would encompass 40% of all global trade among economies that make up a third of global GDP. India has been keen to join. But six years into negotiations, its concerns remain: opening its markets for cheaper goods from countries like China and South Korea; and ensuring that RCEP countries open their markets for Indian manpower (services).
•India has a trade deficit with as many as 11 of the RCEP countries, and it is the only one among them that isn’t negotiating a bilateral or multilateral free trade agreement with China at present. As a result, although negotiators have agreed to New Delhi’s demand for differential tariffs for its trade with China vis-à-vis the others, India has also made tagging the “Country of Origin” on all products a sticking point in RCEP negotiations. Despite its misgivings, however, the government has reiterated that it is committed to making RCEP work, and any attempt to cut India out of the agreement was “extremely premature”. In the next few months, India will be expected to keep up intense negotiations, and most important, give a clear indication both internally and to the world that it is joining RCEP. To that end, the Commerce Ministry has begun consultations with stakeholders from industries that are most worried about RCEP, including steel and aluminium, copper, textile and pharmaceuticals, and has engaged think tanks and management institutes to develop a consensus in favour of signing the regional agreement. Giving up the chance to join RCEP would mean India would not just miss out on regional trade, but also lose the ability to frame the rules as well as investment standards for the grouping. Above all, at a time of global uncertainties and challenges to multilateralism and the international economic order, a negative message on RCEP would undermine India’s plans for economic growth.
📰 Scoring on health: on Health Index 2019
States, now with greater resources at their command, must upgrade primary health care
•The Health Index 2019 released by NITI Aayog makes the important point that some States and Union Territories are doing better on health and well-being even with a lower economic output, while others are not improving upon high standards. Some are actually slipping in their performance. In the assessment during 2017-18, a few large States present a dismal picture, reflecting the low priority their governments have accorded to health and human development since the Aayog produced its first ranking for 2015-16. The disparities are stark. Populous and politically important Uttar Pradesh brings up the rear on the overall Health Index with a low score of 28.61, while the national leader, Kerala, has scored 74.01. Andhra Pradesh and Maharashtra join Kerala as the other top performers, with the additional distinction of making incremental progress from the base year. The NITI Aayog Index is a composite based on 23 indicators, covering such aspects as neonatal and infant mortality rates, fertility rate, low birth weight, immunisation coverage and progress in treating tuberculosis and HIV. States are also assessed on improvements to administrative capability and public health infrastructure. For a leading State like Tamil Nadu, the order of merit in the report should serve as a sobering reminder to stop resting on its oars: it has slipped from third to ninth rank on parameters such as low birth weight, functioning public health centres and community health centre grading.
•For the Health Index concept to spur States into action, public health must become part of mainstream politics. While the Centre has devoted greater attention to tertiary care and reduction of out-of-pocket expenses through financial risk protection initiatives such as Ayushman Bharat, several States remain laggards when it comes to creating a primary health care system with well-equipped PHCs as the unit. This was first recommended in 1946 by the Bhore Committee. The neglect of such a reliable primary care approach even after so many decades affects States such as Bihar, where much work needs to be done to reduce infant and neonatal mortality and low birth weight, and create specialist departments at district hospitals. Special attention is needed to shore up standards of primary care in Odisha, Madhya Pradesh, Uttarakhand, Rajasthan, Assam and Jharkhand, which are at the bottom of the scale, as per the NITI Aayog assessment. The Health Index does not capture other related dimensions, such as non-communicable diseases, infectious diseases and mental health. It also does not get uniformly reliable data, especially from the growing private sector. What is clear is that State governments now have greater resources at their command under the new scheme of financial devolution, and, in partnership with the Centre, they must use the funds to transform primary health care.
📰 Negotiating the forks in the road of diplomacy
India needs a substantive and defined account of its own objectives to steer its strategic course in these stormy times
•Seldom in the recent past has the impact of one month meant more in Indian foreign policy than the present one. And rarely have meetings on the sidelines around one summit carried as much import on India’s future policies as the G-20 summit in Osaka (June 28-29), where Prime Minister Narendra Modi will hold bilateral meetings with at least eight world leaders (most notably U.S. President Donald Trump and Russian President Vladimir Putin), and participate in two parallel trilaterals, the Russia-India-China (RIC) and Japan-U.S.-India (JAI). Two weeks ago, in June, he also held a bilateral meeting with Chinese President Xi Jinping on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Bishkek.
•In a few months, he will meet the three world leaders again for more substantive meetings: with a visit to Vladivostok (the Eastern Economic Forum in September), a possible dash to Washington during the UN General Assembly, again in September, and the Wuhan return-visit by Mr. Xi to India in October. Between these two sets of meetings, Mr. Modi has his work cut out on a number of issues, each of which represents a fork in the road, depending on India’s decision on them: a fork where the U.S. holds one prong and the Russia-China axis holds the other.
Trade concerns
•On trade, the tussle is evident. Many in India had rejoiced when the U.S. first declared a trade war on China, given India’s long-standing concerns about China’s unfair trade practices. However, as Mr. Trump trained his guns on India next, the joy evaporated, and choices for the Modi government changed. At Osaka, Mr. Modi will meet Mr. Trump in an effort to give trade issues another try, but he also plans to attend the RIC trilateral as well as a meeting with leaders of BRICS (Brazil-Russia-India-China-South Africa), both of which will focus on countering the U.S.’s “unilateralism” on trade. In the months ahead, New Delhi must make another choice, on whether to sign up for the Regional Comprehensive Economic Partnership (RCEP), a trade grouping that has taken centrestage after the U.S. walked out of the Trans-Pacific Partnership. If trade issues with the U.S., India’s largest trading partner, remain intractable, it is not hard to see that the RCEP bloc, with China in it, will become more prominent in India’s trade book.
Energy and communications
•The choice on energy, and in particular on Iran, comes next. When the Trump administration pulled out of the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement in May 2018, but granted India and a few other countries a waiver to continue oil imports (as well as one for Chabahar trade), the government had assumed it could muddle through the Iran-U.S. confrontation. Instead, it has lost on both principle and profit. After accepting U.S. sanctions on oil imports, India’s intake of cheaper, better Iranian crude will dip from about 23.5 million tonnes in 2018-19 to zero in 2019-20. The waiver for Chabahar turned out to be a red herring as banks, shipping and insurance companies have declined to support India-Afghan trade through the Iranian port for fear of sanctions affecting their other businesses. What follows now will be more difficult for New Delhi, as the U.S. has sanctioned the top rungs of Iran’s government and the Islamic Revolutionary Guard Corps. Having meekly submitted to U.S. sanctions, will India now also abjure contact with the Iranian leadership or reject the U.S.’s demand? And where will India’s investments and its dreams of larger connectivity via Chabahar and the Russian-led International North-South Transport Corridor go, in the event of a full-scale confrontation between the U.S. and Iran? Willy-nilly, the forks in the road are presenting themselves and choices must be made.
•Another choice New Delhi will be forced to make in the next few months is on telecommunications and building its 5G network, for which trials are due to begin in September. The U.S. has made it clear that it expects the Modi government to exclude the Chinese telecom company, Huawei, over security concerns, and threatens to withhold intelligence and security cooperation if India allows this company to control its 5G networks. China has made it equally clear that India must make an “unbiased” choice and will oppose any move to cut Huawei out of the trials. On the Russian S-400 missile system deal too, its a black-or-white decision for the government to make as the U.S. makes it clear that going ahead with the deal won’t just invoke sanctions but will close the door to American high-tech and advanced aircraft deals.
•The next contestations will come from the maritime sphere. The U.S. and China are pitted against each other in the South China Sea, which is now spilling over into South Asia through the Indo-Pacific. While India has focussed on China’s encroachment in subcontinental waters, it is clear that the U.S. too is seeking a role here. The signing of an updated Status of Forces Agreement (SOFA) which was put off, along with a cancellation of U.S. Secretary of State Mike Pompeo’s visit to Colombo at the last minute this week, will be one of many such military and security upgradation plans for the U.S. in the region. Having strenuously objected to one, will India continue to be complacent about the other’s military build-up in South Asia?
Transformed alignments
•The tussle between the U.S. and Russia-China is not new and India has negotiated these in the past few decades with considerable success. However, there are several reasons why this does not hold in the present, and why New Delhi will need more than nimble footwork to navigate the choices that their contestations present. To begin with, the Russia-China bond today is firmer than it has been at any point since the 1950s, cemented by the Xi-Putin friendship. The Trump administration has crystallised that bond by marking out “revisionist” Russia and China as the U.S.’s “central challenge” in its National Defense Strategy published in 2018. As a result, both sides are imposing an “either/or” choice on countries that are not already strategically or economically riveted to one side or the other. In a world where the rhetoric is increasingly about interoperability and there is a ‘buffet’ of options, a la carte choices that New Delhi had hoped it could make may no longer be on the menu. India’s pivot within this period, away from “non-alignment” to “multi-alignment” or “issue-based alignment”, therefore, is unsustainable.
•India needs a substantive, more clearly defined account of its own objectives to steer its strategic course in these stormy times.
•It is necessary to stay rooted in India’s own geographical moorings within Asia and within South Asia in particular. An India that carries its neighbourhood is a formidable force at any international forum, compared to one mired in sub-regional conflicts. Second, India needs its own list of “asks” from its relationships with big powers. The recent success with listing Masood Azhar as a globally designated terrorist is an example of how focussed persistence and quiet diplomacy pays off. However, India needs to move beyond asking for punitive measures against Pakistan or its constant demand for more visas for Indians to live and work abroad and think in terms of long-term strategic needs instead. Third, India needs to re-embrace non-alignment as it was envisioned, not as the Non-Aligned Movement grouping, which is now in disarray. Former Prime Minister P.V. Narasimha Rao wrote in 1989 that “Standing on our own feet and not being a plaything of others was the essence of the policy of non-alignment… a means of safeguarding India’s own national self-interests, that also constituted an earnest attempt to democratise international relations.”
•In order to do this, it is necessary to reject the “tactical transactionalism” that has currency today for a more idealistic view of the world that India wishes to shape in the future. It would be a mistake, as Australian Prime Minister Scott Morrison said recently, if we become “nothing more than the sum of our deals”. It would be a greater misfortune, however, to be trapped in the ‘zero sum’ of our deals.
📰 Payments data must be saved locally: RBI
This follows a clarification sought by payment system operators
•The Reserve Bank of India (RBI) has clarified on Wednesday that payment system providers need to store entire payments data in a system only in India.
•Following clarifications sought by Payment System Operators (PSOs), RBI has released frequently asked questions (FAQ), in which it said data processed abroad would have to be brought back to the country within 24 hours.
•“The entire payment data shall be stored in systems located only in India,” RBI clarified in the FAQ.
•“The data should include end-to-end transaction details and information pertaining to payment or settlement transaction that is gathered/transmitted/processed as part of a payment message/instruction,” the RBI said.
•The data could be pertaining to customer data like name, mobile number, Aadhaar number, PAN; Payment-sensitive data like customer and beneficiary account details; payment credentials like OTP, PIN and, transaction data such as originating and destination system information amount, among others.
•The RBI further clarified that in case the processing is done abroad, the data should be deleted from the systems abroad and brought back to India within one business day or 24 hours from the payment processing, whichever is earlier.
•The central bank had issued a directive in April 2018 on ‘storage of payment system data’ where it advised that all system providers to ensure that within a period of six months, the entire data relating to payment systems operated by them is stored in a system only in India.
•The FAQs further said there is no bar on processing of payment transactions outside India if so desired by the PSOs. “...the data shall be stored only in India after the processing. The complete end-to-end transaction details should be part of the data,” the RBI said.
•The data can be shared with the overseas regulator, if required, depending upon the nature/origin of transaction with prior approval of the RBI.
📰 Centre expands terms of reference of direct tax law body
Provides for ‘faceless and anonymised’ verification system
•The Central Board of Direct Taxes (CBDT) has expanded the terms of reference (ToR) of the task force set up to come up with a new direct tax law, according to a notification issued on Wednesday.
•The existing terms of reference include drafting an “appropriate direct tax legislation” keeping in view; the direct tax litigation in other countries; international best practices; the economic needs of the country; and other related issues.
•The new additions include the creation of a “faceless and anonymised” verification and scrutiny system, and the sharing of information between GST, Customs, CBDT and the Financial Intelligence Unit.
Cross verification
•Other terms of reference added include setting up a mechanism for cross-verification of financial transactions and reduction in tax-related litigation.
•In light of the resignation of Arvind Subramanian from the post of Chief Economic Adviser (CEA), his special invitation to the task force had been transferred to the current CEA Krishnamurthy Subramanian, the notification added.
•Further, in light of the expanded terms of reference, the Central Board of Direct Taxes has decided to invite Ritvik Pandey, Joint Secretary (Revenue) as a member of the task force.
•The Finance Ministry has clarified that the expanded terms of reference will not affect the July 31, 2019 deadline for the submission of the task force’s recommendations.
📰 RBI begins monitoring HFCs
Liquidity, asset-liability gap, repayment schedules being reviewed on dailybasis
•The Reserve Bank of India (RBI) has started monitoring the liquidity position, asset-liability gap and repayment schedules of housing finance companies (HFCs) on a daily basis after the liquidity crisis hit these firms, resulting in defaults.
•Mortgage lenders are regulated by the National Housing Bank. But the central bank is of the view that the since the liquidity crisis of the HFCs could have a spillover effect on the other segments in the financial sector, including banks, and hence, could affect financial stability, it was necessary to monitor these entities on a regular basis
•For this purpose, a general manager in National Housing Bank has been asked to be in regular communication with a chief general manager in the department of non-banking supervision (DNBS) of the RBI, sources familiar with the development told The Hindu, adding the process had started about a week ago.
•The non-banking financial sector, particularly the mortgage lenders, are fighting a crisis of confidence with banks having stopped lending to these entities since the debt default by IL&FS in September last year.
•NBFCs saw their cost of funds going up sharply in the last few months. This has impacted their business growth as the lenders have to cut down on their loan disbursements.
Feeling pressure
•The move to monitor HFCs on a daily basis comes after some mortgage lenders started feeling the pressure to meet their financial obligations. Dewan Housing Finance Corporation, for example, partially defaulted on repayment to its commercial paper holders. Earlier, the company had to delay repayment to its non-convertible debenture holders.
•RBI Governor Shaktikanta Das had emphasised on the importance of maintaining financial stability in the wake of the HFC crisis.
•“... the RBI does not regulate the housing finance companies, nonetheless, the banks have significant exposure to the housing finance companies. And, the RBI in any case is mandated to look after the financial stability of the entire economy…the RBI will not hesitate to take whatever steps are required to ensure that financial stability is not adversely impacted in any manner by any development,” Mr. Das had said during a media interaction earlier this month.
