📰 Finance panel flags recovery uncertainty
Members of the Committee have wide variations of opinion in nominal GDP growth projections
•India’s nominal GDP growth rate in 2020-21 could range between -6% and 1%, according to members of the 15th Finance Commission’s committee on the fiscal consolidation road map, which had a videoconference on Thursday.
•“There are high levels of uncertainty, both with regard to the course of the pandemic and the fiscal pressures on the economy and the trend of economic recovery,” the Commission’s Chairman, N.K. Singh, told presspersons after the meeting. He said participants in the meeting had wide variations of opinion in terms of nominal GDP growth projections, ranging between -6% and 1%, as well as on whether the economy would experience a V-shaped or U-shaped recovery.
•Nominal GDP growth does not take inflation into account, and is thus higher than real GDP growth.
•“In the medium term, we would like to be in the range of 8% growth, or the debt trajectory becomes very problematic,” said Dr. Singh, who felt that the Centre’s reforms as part of the Aatmanirbhar stimulus package were meant to spur such growth in the medium term, even if they did not help immediately. “The question is what is the lag with which these reforms are going to reflect in the growth rate in the medium term,” he said.
•He also endorsed the Centre’s reform conditions to allow the States to exceed their current borrowing limits, though several States have objected to this.
•The Commission’s high-level group on health, headed by AIIMS Director Randeep Guleria, also met on Thursday, to review its earlier recommendations in view of the COVID-19 pandemic. It has now recommended an immediate beefing up of health infrastructure in areas with a cluster of positive patients, and discussed the growing needs of rural health infrastructure, especially with migrants returning from the cities, often carrying the virus.
•“There is a wide disparity between the per capita health personnel available in various States. The situation in rural Bihar and Jharkhand is dramatically different from the cities,” Dr. Singh said. The anaesthetists needed to operate ventilators are crucially missing in many rural areas, he noted, even while manufacture of the machines has increased. There were also discussions about allowing final year MBBS students to begin practising in some areas and the need for a national health service.
•In the medium term, the government’s financial outlay on the health sector must increase significantly from the current 0.9% of GDP, said Dr. Singh.
•Mr. Srivastava’s remarks followed claims by the China’s Ministry of Foreign Affairs (MFA) on Tuesday that Indian troops were attempting to “unilaterally change” the status quo at the boundary between them and “blocking” patrolling by Chinese border guards.
•On Thursday, the MFA issued another statement repeating the claims. It said Chinese troops “firmly” dealt with what it called the Indian troops’ “crossover and infringement activities.”
•“We urge the Indian side to work together with us, abide by our leadership’s important consensus, comply with the agreements signed, refrain from unilateral actions complicating the situation,” said MFA spokesperson Zhao Lijian.
•Thus far, Indian Army officials had maintained that scuffles at two points, at “Finger areas” of Pangong Tso (lake) in eastern Ladakh and Naku La in north Sikkim, had been part of normal ground actions that emanate from a “difference in perception of the Line of Actual Control”.
•The sources said more troops were being moved into the next stage of a three-step acclimatisation process for high altitudes. “The Army units at Binnaguri, Hashimara and a few other places have been upstaged and are undergoing acclimatisation in Sikkim,” the sources added.
•The MEA statement is the first time the government has said Chinese troops are blocking Indian patrols during the current stand-off, though it didn’t accuse the PLA of crossing into Indian territory. While New Delhi and Beijing indicated that talks between military commanders are on to resolve the situation, neither said they had made progress yet.
•China reacted angrily to comments by senior American official Alice Wells, who had referred to the border dispute as proof of Chinese “provocative behaviour” and “threat to its neighbours”. “The Diplomat’s remarks are just nonsense,” said Mr. Zhao. “There are consultations and diplomatic channels between the two sides that has nothing to do with the USA,” he said.
📰 Keeping the peace: On India-China border tension
India and China must end tensions on the border by clarifying the LAC
•With four incidents along the Line of Actual Control (LAC) in recent weeks, the India-China border is witnessing the highest tensions since the Doklam stand-off in 2017. In the three years since, both sides have done remarkably well to keep the peace. Prime Minister Modi and President Xi both agreed differences should not be allowed to escalate into disputes. Also, a clear message was sent to the two militaries to abide by the detailed protocols already in place, such as those agreed to in 2005 and 2013. These regulate the activities of troops in the contested zones that lie in between both sides’ overlapping claim lines of the undefined LAC. If Army Chief General Manoj Naravane wisely sought to cool the temperatures with his May 14 statement, China has unhelpfully raised them. On May 19, its Foreign Ministry accused the Indian Army of “attempting to unilaterally change the status” of the LAC. The stand-off in Ladakh appears to have been triggered by China moving in troops to obstruct road construction activity by India. Last year, India completed the Darbuk-Shyok-Daulet Beg Oldi (DBO) road which connects Leh to the Karakoram Pass. India also maintains a key landing strip at DBO at 16,000 feet. The broader context for the tensions is the changing dynamic along the LAC. India has been upgrading its roads as it plays catch-up, with China already enjoying an advantage in both terrain and infrastructure. China now seems to be telling India it has no right to carry out the kind of activity that Beijing has already done. India is well within its right to carry out construction work. Delhi needs to remind Beijing that a fundamental principle that underpins all previous agreements is recognising the right to mutual and equal security of the two sides.
•The immediate priority is for both sides to use existing channels and step back. Flag meetings between brigade commanders have so far been unable to break the stalemate. The incidents have underlined how the new LAC situation is placing existing mechanisms under renewed stress. India and China should grasp the current situation as an opportunity to revive the stalled process of clarifying the LAC. China has resisted this as a distraction to the boundary negotiations. But rather than agree on a line, both can instead simply seek to better understand the claims of the other and reach a common understanding to regulate activity in these areas. Clarifying the LAC may even provide a fresh impetus to the stalled boundary talks between the Special Representatives. Beyond the posturing, both sides know a final settlement will ultimately have to use the LAC as a basis, with only minor adjustments. Only a settlement will end the shadow boxing on the LAC. With both countries in the midst of an unprecedented global pandemic, the time to push for a settlement to a distracting, protracted dispute is now.
📰 The lockdown has highlighted stark inequalities
Instead of embracing the welfare state path, the BJP government is encouraging greater privatisation
•The novel coronavirus is a global threat, but the pandemic has had an uneven impact across countries and within countries. Historically, social inequality has always been extreme in India. However, the lockdown has sharpened the edges of inequality even further, especially because of the way it has been implemented. Many countries have imposed lockdowns but not as stringent and severe as the Indian one. What is more, the largest lockdown in the world with hardly any safety net was imposed at a four-hour notice. The sudden decision deprived countless people of jobs and livelihoods. This has strained the fragile social and economic fabric far more than it needed to.
A disastrous decision
•Nobody is safe from the virus, but some classes are more protected than others. Class and wealth inequality means COVID-19 may pose greater risks to some as it poses a double threat to them. In India, the lockdown favours the “balcony classes”, with no regard of its consequences for others. The pandemic has exposed the precarious existence of millions of migrants who operate the levers of the informal economy. It required no rocket science to anticipate that India’s huge army of informal labour would be the most badly hit by the lockdown. Repeated extension of the lockdown has caused economic devastation to workers in the informal economy as it has left them with no income, no food and no shelter. The Centre for Monitoring Indian Economy estimates that about 140 million people have lost jobs since the lockdown. In brief, pervasive unemployment or underemployment, a feature of the Indian economy before the lockdown, worsened after it, and will remain so for the foreseeable future.
•Worldwide, the defining images of India’s lockdown are the caravans of migrant workers walking hundreds of kilometres to reach their homes. Bereft of substantive support from the government or their employers, they want to escape the city and get back to their villages and families. Several hundreds of them lost their lives in their desperate attempt to reach home during the lockdown. The SaveLife Foundation, a non-profit organisation working to prevent road accidents, has recorded nearly 2,000 road crashes and 368 deaths from March 25, when the lockdown began, to May 16.
•The Union Home Ministry had asked shops, industry and commercial establishments to pay wages to workers during the lockdown but it offered no financial support should this not happen. Social activist Harsh Mander asked the Supreme Court to order the government to pay wages. As expected, the apex court refused to intervene. However, the Court intervened and asked the government not to resort to any coercive action against private companies that have not paid their workers full wages during the lockdown in accordance with a government order in March. Since then, the government has dropped the crucial order. Clearly, the Court has readily accepted the government’s assurance that it was looking after migrant labourers. But all that the government had done was take small steps such as providing dry rations and a paltry sum of Rs. 500, the first of the three instalments of a sum of Rs. 1,500 relief, to Jan Dhan accounts of women.
Putting the onus on citizens
•The Sangh Parivar believes that society has to take care of itself through self-regulation. Given this world view, it is no surprise that the BJP government is offering little by way of a safety net. Rather, Prime Minister Narendra Modi, in one of his national addresses, asked each citizen to help nine poor families during the lockdown. This puts the responsibility for containing the consequences of the pandemic/lockdown squarely on the citizens, instead of instituting a government-backed social support system. While the call to compassion is unremarkable, it has two implications — it minimises the urgency of state intervention required to deal with the economic crisis and it passes on the responsibility to citizens with an emphasis on citizens’ duties as against citizens’ rights.
•Quite the reverse is happening in many other countries which have introduced huge relief packages involving large amounts of government expenditure to provide money for workers’ wages for up to three months, giving money or rebates to companies, unemployment allowance or direct benefit transfers. The Spanish government unveiled sweeping reforms that led to nationalisation of all private hospitals. The U.K. extended a worker furlough programme that pays people idled by the pandemic till the end of October. This is similar to the Paycheck Protection Programme in the U.S. Both seek to preserve jobs rather than resorting to mass lay-offs.
•In India, transfer of cash in the past two months of lockdown could have mitigated the most heart-breaking migrant crisis since the Partition in 1947. This was the basic requirement of justice. But the government failed to transfer money to the distressed people or to small businesses and commercial establishments. Failure to do so has exposed the heartlessness of the BJP government. It refuses to embrace the welfare state path adopted by most governments which believe radical change is essential for restoring a social balance underlying the welfare state of earlier years. Even governments ideologically committed to conservatism are loosening their purse strings. But the BJP government has done nothing of the sort. In the event, acute distress and disempowerment of the most vulnerable has further deepened existing social inequalities of Indian society. The government’s lack of sympathy and concern for the stranded migrant workers clearly shows that the system doesn’t work for everyone. No wonder, migrant labourers across India have told reporters they won’t return to see such humiliation again.
Greater privatisation
•Seen against the scale of distress, the government’s economic stimulus package is niggardly based on minimal fiscal cost and minimum social spending. Just about everything is included in the fiscal stimulus ranging from repaying tax refunds to loans. At this rate, even a good monsoon can be considered fiscal stimuli. The immediate relief to the people is not more than 1% of the GDP. The stimulus package has been rightly dismissed by almost everyone outside the government as too little, too late.
•Most shocking is the slew of controversial reforms announced by the Finance Minister in the last episode of her five-part serial on the government’s stimulus package. Instead of addressing the migrant worker crisis, the government has embarked on greater privatisation and further opening the economy to foreign capital. It has thrown open coal, defence production, space travel, among other areas, to the private sector. These contentious pieces of economic reforms wouldn’t be counted as rescue package anywhere; moreover, it is wrong and unethical to push them under lockdown without parliamentary oversight.
•The much-derided Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and National Food Security Act (NFSA) have come to the rescue of the people. Ironically, both schemes are legacies of the Congress-led United Progressive Alliance government and both were hugely criticised by the BJP. MGNREGA was described as a “living monument” of Congress failure in addressing poverty. Now the government has decided to allocate an additional Rs. 40,000 crore to MGNREGA. This is welcome as it will provide a semblance of relief during distress in rural India. But in cities migrant workers do not have even this modicum of social security. The one important lesson that this pandemic has underlined is the urgent need for an urban employment guarantee scheme. In the meantime, generous cash transfers can provide economic security. However, for this to happen, we need a more humane government responsive to the basic needs of its people.
📰 A violation of right found, but no remedy given
Despite finding a violation of rights in prohibiting 4G Internet in J&K, the Supreme Court did not issue a writ to the state
•The maxim Ubi Jus Ibi Remedium (where there is a right, there is a remedy) has anchored the common law for centuries. In India, the Constituent Assembly regarded the principle as so foundational that, through Article 32, it granted the Supreme Court the authority to issue a set of prerogative writs to enforce the fundamental rights guaranteed by the Constitution. Over the last four decades, though, the idea of remedies moving in parallel with rights has come to wither. In this period, the Supreme Court has enunciated a number of rights which it found ought to be manifest on a proper reading of the Constitution. These have included the rights to clean air, health, shelter, human dignity, and privacy. But this articulation, stentorian as it might have been, hasn’t always led to just results. The court’s history is littered with cases where a violation of a right is found, but a remedy hasn’t been forthcoming. The ruling delivered on May 11, in Foundation for Media Professionals v. Union Territory of Jammu and
Kashmir [FMP] , is, in many ways, symptomatic of this trend. It ought to enjoin us to think more deeply about what the Court’s institutional role really should be.
•The judgment begins thus: “Again, this Court is called upon to address a very important but a sensitive issue… we have to ensure that national security and human rights can be reasonably and defensibly balanced, a responsibility, that this Court takes with utmost seriousness.” But while the Court found that a prohibition of 4G Internet in J&K was potentially disproportionate, it could not extend itself to remedying the wrong by issuing a writ to the state. What it did instead was to relegate the decision-making to a newly formed committee comprising officials from the executive. In doing so, it effectively reversed the age-old principle that no person shall act as a judge in his own cause.
Vagueness of purpose
•What was the reason for the Court’s dithering? The answers are hard to find in the judgment. The Constitution, and the debates that went into its making, are clear on what the judiciary’s role ought to be. It is meant to act as an independent check on parliamentary and executive actions. But the Court remains mired in a vagueness of purpose. When must it strike down legislation? When must it show deference to Parliament? Do social welfare measures demand greater deference than ordinary criminal laws? Should the level of scrutiny of executive actions be higher than that employed in testing statutes? Under what circumstances do executive acts call for special respect? These questions should have been settled by now. But the Court still wavers in its answers every time a new case comes before it. In January, when, in Anuradha Bhasin , the Court recognised something akin to a fundamental right to access the Internet, the judgment was widely acclaimed. But of what use is the fashioning of a new right to the people of J&K if a decision on whether that right has been violated is consigned to the very authority that made the original call?
•Indeed, the petitioner in FMP relied on the Court’s judgment in Anuradha Bhasin to argue that a blanket restriction on 4G Internet across the region had had a deleterious impact on a slew of rights, including the rights to free speech and expression, education, freedom of trade, and health. The Court’s own past decisions, including that of the very bench which heard FMP, prescribes a standard of proportionality to judge cases where a fundamental right is limited by state action. The test would have required the Court to engage in a rigorous analysis of the facts, to examine whether the state’s rationale for limiting access to the Internet was, one, predicated on legitimate grounds; two, was the least intrusive measure available to the government; and three, whether on a balance of the competing interests the restriction was justified. Given this doctrine and given that the Supreme Court often functions as a court of first resort, it cannot absolve itself from the job of fact-finding. In a system of justice that is adversarial, it is incumbent on the Court to appreciate the rival versions of the facts submitted before it and arrive at what it deems to be the truth. And once it does so, should it find the state’s actions illegitimate, it must issue a writ to remedy the wrong, unless it finds compelling reasons not to do so. And if such reasons do exist, they require voicing.
•There is no doubt that there might be instances in which appreciating evidence can prove to be a confounding exercise. But judicial review is not meant to be easy. What we need today is a reversion to first principles — where the Court seeks to treat the art of delivering a judgment as an exercise in persuasion, where there is a clear link drawn between rights and remedies. In far too many cases the Court has inverted the basic logic of judicial review: it has either enunciated a violation of rights only to deny a remedy or it has granted remedies without articulating what right has been violated.
•In her 2002 Reith Lectures, the philosopher Onora O’Neill began by quoting Confucius, who held weapons, food and trust as necessary for the government. O’Neill retold this theorem not to stress on any need for arms, but to emphasise on what she believed was a crisis of trust. It was telling, she thought, that ancient philosophies held trust to be the dearest of qualities. If a ruler, said Confucius to his disciple Tsze-kung, could not hold on to all three necessities for government, he should give up the weapons first and the food next. Trust, he said, had to be guarded to the end. Unlike governments, trust is all the judiciary has. When that belief begins to dissipate, courts lose their moral sway. They are rendered meaningless.
Building trust
•Courts build trust not through ambiguous snippets of wisdom, but through an adherence to basic norms. Principle over policy and consistency over randomness are the lodestar tenets of moral courage. The separation of powers cannot, as American writer Gore Vidal wrote, be allowed to work simply as a useful device under which “any sin of omission and commission can be shifted from one branch of government to another.” We need it to do more. We need it to uphold the rule of law.
