📰 What mechanism do you have against fake news, Supreme Court asks Centre
“Create one if an authority does not exist, or we will hand over the job to an outside agency”
•The Supreme Court on Tuesday asked the Centre to explain its “mechanism” against fake news and bigotry on air, and to create one if it did not already exist.
•Inability on the government’s part may well see the job go to an “outside agency,” the court said.
•“Why should we ask private entities like NBSA, etc, when you [the Centre] have the authority? If such an authority does not exist, create one... If you cannot, then we will hand it over to an outside agency,” Chief Justice of India Sharad A. Bobde told Solicitor General Tushar Mehta, appearing for the Centre.
Rejects affidavit
•Chief Justice Bobde, heading a three-judge Bench, said the court was “disappointed” with the contents of the latest government affidavit, filed by the Information and Broadcasting Secretary Amit Khare, in the Tablighi Jamaat case. The case is based on petitions, including one by Jamiat Ulama-i-Hind, against the communal colour given by certain sections of the electronic media to the holding of a Tablighi Jamaat event in the National Capital during the lockdown.
•The affidavit maintained that media coverage “predominantly struck a balanced and neutral perspective” in the past few months. It explained that as a “matter of journalistic policy, any section of the media may highlight different events, issues and happenings across the world as per their choice.” It was for the viewer to choose from the varied opinions offered by the different media outlets. Mr. Khare said the petitions in the court contained vague assertions against the media based on “fact-checking news reports.” Besides, he added, the government had already blocked 743 social media accounts and URLs spreading fake news on COVID-19.
•The court rejected the affidavit as inadequate. “We are disappointed with your affidavit. It does not contain a whisper about what you have done under the Cable TV Act... We are not satisfied... We want to know how you are employing the Cable TV Act. We want to know the quantum of applicability of the Act... What is the legal remedy when there are complaints?” Chief Justice Bobde asked Mr. Mehta.
Court’s poser
•For the past two months, the court has been asking the government to give a clear answer to whether the regulatory provisions of the Cable TV Network (Regulation) Act of 1995, meant for cable networks, would apply to TV broadcasts. “We want to know if the government has any power to question or ban TV broadcasting signals,” Chief Justice Bobde had asked the government in the previous hearing in October.
•Mr. Mehta referred to the power to prohibit transmission of certain programmes under Section 19 of the 1995 Act. However, he agreed to file an “elaborate” affidavit, which would be the third in a row from the government side. The CJI had termed the first one, filed by an under-secretary, “evasive” and even “nonsensical.”
•The Jamiat petitions has sought a direction from the court to the Ministry to identify and take strict action against sections of the media that communalised the Tablighi incident.
Unless prejudice is proved, case can’t be set aside, it says.
•Once a court takes cognisance of a corruption case investigated by the CBI, it cannot be set aside for lack of the State government’s prior consent for the probe against some of the accused, unless it is shown that it has resulted in prejudice, the Supreme Court has held.
•A Bench of Justices A.M. Khanwilkar and B.R. Gavai said the cognisance and trial in a CBI case against public servants “cannot be set aside unless the illegality in the investigation can be shown to have brought about miscarriage of justice”.
•Thus, if the State had given a general consent to CBI investigation in a corruption case and cognisance has been taken by the court, the case cannot be set aside unless the public servants plead that prejudice has been caused to them on account of non-obtaining of prior consent under Section 6 of the Delhi Special Police Establishment Act.
•However, in its observations, the court underscored that the CBI cannot extend its powers to any State unless the State government grants its consent.
•“Section 5 enables the Central government to extend the powers and jurisdiction of Members of the DSPE beyond the Union Territories to a State, the same is not permissible unless a State grants its consent for such an extension within the area of State...” the court said. This arrangement, it said, is in tune with the federal character of the Constitution.
•The judgment came in appeals challenging a judgment passed by the Allahabad High Court in August 2019 against the Fertico Marketing and Investment Private Limited and others.
•A surprise raid by the CBI in the factory premises of the company found that the coal purchased by it under the Fuel Supply Agreement (FSA) with the Coal India Limited was allegedly sold in the black market. The CBI had registered a crime.
•It was later found that two officials of the District Industries Centre were also involved. They contended that the general consent given by the State government was not enough, and separate consent ought to have been obtained prior to their being investigated.
•The High Court had noted that the Uttar Pradesh government had granted post facto consent against the two public servants who were later named in the chargesheet and that was sufficient for proceeding with the case.
•Upholding the order, the apex court said, “In the result, we find no reason to interfere with the finding of the High Court with regard to not obtaining prior consent of the State government under Section 6 of the DSPE Act,” the apex court held.
📰 Study highlights online education woes
Inadequate number of smartphones and difficulty in using apps have been cited as important reasons.
•A field study by the Azim Premji University on the efficacy and accessibility of e-learning has found that more than 60% of the respondents who are enrolled in government schools could not access online education. The study, titled “Myths of Online Education”, was undertaken in five States across 26 districts and covered 1,522 schools. More than 80,000 students study in these government schools.
•The study examined the experience of children and teachers with online education. The researchers noted that non-availability or inadequate number of smartphones for dedicated use or sharing, as well as difficulty in using apps for online learning, were the most important reasons why students were not able to access classes.
•Children with disabilities in fact found it more difficult to participate in online sessions.
•The researchers pointed out that 90% of the teachers who work with children with disabilities found their students unable to participate online.
•The study also found out that almost 90% of parents of government school students surveyed were willing to send their children back to school. However, they said it would be a feasible option if the health of their children was taken care of when schools reopen.
•Almost 70% of the parents surveyed were of the opinion that online classes were not effective and did not help in their child’s learnings.
Hurdles faced by students
•Teachers, too, expressed frustration with online classes. More than 80% surveyed said they were unable to maintain emotional connect with students during online classes, while 90% of teachers felt that no meaningful assessment of children’s learning was possible.
•Another significant finding was that nearly 50% of the teachers reported that children were unable to complete assignments shared during the online classes, which had led to serious gaps in learning. Only around half the teachers reported that they engaged with students daily through online classes. The survey also revealed that around 75% of the teachers spent, on an average, less than an hour a day on online classes for any grade.
•Teachers also reported that they were ill-prepared for online learning platforms. According to the survey, more than half the teachers shared that their knowledge and user-experience on online platforms and modes of teaching were inadequate. Another hurdle that teachers found during the online classes was the one-way communication, which made it difficult for them to gauge whether students were understanding what was being taught.
📰 Shot in the arm: on potential vaccine candidates
Every vaccine candidate that passes a significant hoop is a win for the world at large
•Close on the heels of the multinational, Pfizer, announcing promising results from its ongoing phase-3 trial of a potential COVID-19 vaccine, Moderna, the U.S.-based biotechnology firm, has indicated similar news from human trials (again phase 3) of its m-RNA vaccine. An analysis of 95 of the nearly 30,000 volunteers — they are exclusively from the United States — who tested positive, revealed that 90 had only got a placebo and five the double-vaccine shots. This led to the vaccine being declared as ‘94.5% effective’ and well past the U.S. FDA’s requirement that a potential vaccine must be at least 50% effective. Encouragingly, the company also said that 11 volunteers manifested moderate to severe disease and all of them were those who did not get the real vaccine. This is a sign that the vaccine is successful in its primary job of protection though its efficacy at curbing disease transmission is still to be evaluated. The results were announced as a company news release and not in a scientific journal, implying that a review by independent experts is pending.
•Moderna’s results, like Pfizer’s, are a boost for a new approach to vaccine design. The m-RNA class of vaccines are a synthetic construction of a piece of genetic machinery that viruses need to replicate. There are twin advantages. No physical part of a virus is introduced, reducing the odds of adverse reactions, and the number of doses can be quickly scaled up as they do not need mammalian cells. The cons are that such vaccines have never been commercially produced and require sub-zero refrigeration facilities, which is a rarity in most of the world. In the case of Moderna, there is more optimism as the company claimed that the vaccine was able to survive for 30 days — and not the supposed seven — in a refrigerator and could last 12 hours at room temperature. Its vaccine is primarily for the U.S. However, this vaccine, unlike Pfizer’s, was developed with support from the Coalition for Epidemic Preparedness Innovations and other global alliances. Under this arrangement, member-countries, and this includes India, are in line to get a minimum number of doses, however few, to cover a fraction of their population on priority basis. Moderna says it can ready 20 million doses by the year end. By late next year, this can be ramped up to the billions but by then it is expected that several more vaccines that are in large trials, including those in India, will be available. India does not stand to directly and immediately gain significantly from Moderna. However, every vaccine candidate that passes a significant hoop is a win for the world as it opens the way to new practices and ways of applying science that would have been otherwise implausible in the pre-pandemic world.
📰 Changing the discourse on victim jurisprudence
The system needs to account for victims at the pre- and post-crime levels; remedies have been more a judicial initiative
•With the state firmly planted in the driver’s seat, the engine of our criminal justice system runs full throttle in the name of justice; but on-boards only the accused and the functionaries. The primary victims — mere witnesses in the eyes of the law — are side-lined and left to their own resources. The victims, for no fault of their own, are frequently left without remedy where the institutions geared towards securing justice to them fail to deliver. Any reform in criminal laws would be incomplete without accounting for these concerns.
•While several steps have been taken to come up with remedies, progress has been piecemeal and marked by judicial initiative rather than legislative enterprise. While the Supreme Court has led the movement for recognition of victim rights to access to justice, compensation and assistance, little has changed in terms of both the black letter of the law and the ground realities. There is an overwhelming need to re-conceptualise the institutions of our criminal justice system to account for victims both at the pre- and post-crime levels. As opposed to post-crime mitigation and rehabilitation, a pre-crime conceptualisation of victimisation is geared towards prevention.
•Crime prevention is an oft-cited but least studied aspect of our criminal justice system. Examination of crime-prevention from the victim’s perspective is even rarer. Among other methods, situational crime prevention through risk-mapping and vulnerability-mapping stands out in terms of viability and efficacy. A truly effective criminal justice system can identify potential victims and to put measures to protect them in place — before the incidence of crime itself. Capacity building and effective implementation are key to such endeavours.
Victim’s rights and needs
•In a post-crime scenario, however, there is a need to shed the image of the victim as a mere witness and to institutionally recognise their rights and requirements. The same thing can be achieved through a legislative recognition of the following points. First, the conceptualisation of access to justice for victims requires viewing such access less in terms of Directive Principles of State Policy under Article 39A, and more as a fundamental right under Articles 14 and 21. There is an urgent need to strengthen the complaint mechanism for non-registration of FIR u/s. 154(3) Code of Criminal Procedure, and extension of Section 166A(c) in the Indian Penal Code to all cognisable offences. Further, access to justice also requires the creation of victim-friendly procedures that are aimed at reducing their inconvenience.
•Second, it is imperative to recognise the need for effective victim participation. Currently, the victims and their counsels are entitled to extremely limited participation. In line with the global trend, there is a need to recognise the right of victims to be heard at all appropriate stages of a trial. Victim Impact Statements can help accord this right. Moreover, substantive access to justice also requires access to legal aid. Such legal aid has the potential to culminate in effective victim participation if provided to the victim from the stage of reporting to the stage of sentencing and appeal.
Right to information
•Third, such legal aid to victims is also imperative for fruition of their right to information. The right to information, in turn, enables their access to all other rights. Ergo, victims must be entitled to information regarding their role in the criminal justice process, what they can expect from the criminal justice system, status of the trial,and also their other rights and entitlements as a victim of crime.
•Fourth, the right to information can also go a long way in securing the right to protection. The victim must be kept abreast of all developments in the trial process which may potentially compromise their security. This would require intimation of the victim in connection with any hearing changing the nature of the accused’s custody including his release on bail or parole. The framework for such intimation is already available to specific victims in Section15A of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act. Other measures for witness protection such as relocation and change in identity, as provided for in the Witness Protection Scheme, too need to be reviewed and enforced effectively.
•Fifth, the concept of assistance as envisaged in the 1985 UN Declaration of Basic Principles of Justice for Victims of Crime and Abuse of Power needs to be recognised as a right, not merely for victims of rape and acid attack, but for all victims of crime in general. The state must play the role of a facilitator in providing to the victims all such assistance as is necessary — medical, psychological, financial and material. The same would require institutional capacity building, through ramping up of infrastructure such as one-stop centres, training of existing functionaries, and by engaging with and promoting the non-governmental organisations involved in providing such assistance to victims.
Compensation and restitution
•Sixth, the right to compensation, recognised to a limited extent under our current laws, is lacking in many respects. Primarily, the political will for its enforcement at a state level has been found to be wanting. Additionally, the Victim Compensation Scheme provided for under Section 357A of the Code of Criminal Procedure must be revitalised by revising it in terms of accessibility and adequacy.
•Finally, the right to restitution must be separated from the right to compensation. Both terms have been used inter-changeably in our criminal justice system, leading to a large degree of confusion. But if the scheme of the 1985 Declaration is adopted, restitution can be differentiated from compensation in that the first right is enforceable against the accused while the second right is enforceable against the state.
•In this sense, the right to restitution is already present to some extent in Section 357A of the Code of Criminal Procedure, but has been mis-termed as ‘compensation’. Section 357 provides that where the court imposes a sentence of fine, the court may use the same, in whole or in part, for paying compensation for any loss or injury. The Supreme Court has repeated that the provision should be used liberally. The same must be made mandatory wherever appropriate.
•The global discourse on victim jurisprudence has now matured enough to be incorporated directly into our laws. In his seminal piece, Herbert L. Packer stressed that a criminal justice system focuses on two values — of crime control and due process. But in line with Douglas E. Beloof’s addendum to Packer’s models, there is a need to introduce a third value — victim participation. Without such a value, the aim of justice will remain unfulfilled; always just a little out of reach.
📰 Constitutional fault lines
T.N. Governor’s inaction on advice to free Rajiv case convicts warrants judicial intervention
•The Governor of Tamil Nadu (T.N.), Banwarilal Purohit, has continued to withhold his decision on an application seeking pardon filed by A.G. Perarivalan, one of the seven prisoners convicted in the Rajiv Gandhi assassination case. In September 2018, the Supreme Court (SC) had observed, while hearing a connected writ petition, that the Governor should take a decision. A subsequent resolution passed by the Council of Ministers in favour of releasing all seven prisoners had rendered the matter fait accompli. The inaction by the Governor now has given rise to constitutional fault lines within the Executive arm of the government.
•A five-judge Bench of the Supreme Court in Maru Ram v. Union of India (1981) held that the pardoning power “under Articles 72 and 161 of the Constitution can be exercised by the Central and the State Governments, not by the President or Governor on their own.” In that case, Justice V.R. Krishna Iyer, speaking for the majority judgment, reiterated that the “advice of the appropriate Government binds the Head of the State”. Therefore, a Governor is neither expected, nor is empowered, to test the constitutionality of the order or resolution presented to her. That is a power reserved exclusively for constitutional courts of the country.
Past judgments
•Only recently, the Supreme Court, had examined the inordinate delay by constitutional authorities — the President and the Governor — in taking decisions on mercy petitions. The Supreme Court, in the case of Shatrugan Chouhan v. Union of India, laid down the principle of “presumption of dehumanising effect of such delay”. Taking cognisance of undue delay in the cases of the petitioners who were incarcerated prisoners, the Supreme Court confirmed that the due process guaranteed under Article 21 was available to each and every prisoner “till his last breath”. The Supreme Court had exercised its powers under Article 32 of the Constitution to commute the death sentences of 15 convicts and essentially interfered when an inordinate delay to perform a constitutional function was brought to its notice.
•For long, Governors, like Speakers, considered themselves to be unanswerable for their actions. However, the apex court has clarified that constitutional functionaries are not exempt from judicial scrutiny. In the recent case of Keisham Meghachandra Singh v. Hon’ble Speaker (2020), the Supreme Court was asked to examine the Speaker’s inaction with regard to disqualification proceedings. It was hitherto believed that the powers of the Speaker, holding a constitutional office and exercising powers granted under the Constitution, were beyond the scope of a ‘writ of mandamus’. However, the apex court, recalling an earlier judgment in Rajendra Singh Rana v. Swami Prasad Maurya (2007), had confirmed its view that the “failure on the part of the Speaker to decide the application seeking a disqualification cannot be said to be merely in the realm of procedure” and that it “goes against the very constitutional scheme of adjudication contemplated by the Tenth Schedule”.
•Consequently, breaking years of convention, the SC, in the Keisham Meghachandra Singh case issued a judicial direction to the Speaker to decide the disqualification petitions within a period of four weeks. By doing so, the Supreme Court has indicated that it would only exercise caution when it comes to providing injunctions in quia timet actions, but would not be precluded from issuing directions in aid of a constitutional authority “arriving at a prompt decision”.
•In the present case, there has been a substantial delay at the hands of the Governor. The fifteenth Legislative Assembly of Tamil Nadu and consequently, the Council of Ministers, will end in May, 2021. This calls for the immediate interference of the Supreme Court, for it otherwise would render the resolution passed by the Council of Ministers and words contained in Article 161 of the Constitution meaningless.
📰 Under Biden, security empathy, liberal antipathy
Earlier, India had the empathy of the liberals while there was some antipathy in the American security establishment
•After telephonic conversations with a few European leaders last week, U.S. President-elect Joe Biden told the media, “I’m letting them know that America is back. We’re going to be back in the game.” Mr. Biden has signalled that he will revert to the traditional norms and patterns of American foreign policy and, more so, its diplomacy. The abrasive turbulence of the Donald Trump era will give way to calmer and predictable American policies and postures as Mr. Biden will seek to re-establish, in large measure, American involvement in the critical issues of our times. Like Mr. Trump, he will manage China’s aggressive rise but in a sober diplomatic style.
What New Delhi can expect
•How will Mr. Biden impact Indian interests? In particular, how will India handle what can be anticipated to become a strand in Mr. Biden’s, the Democratic Party’s and the American liberal community’s agenda, namely, an emphasis on civil and human rights and freedoms? Specifically, will the Narendra Modi 2.0 government continue to ignore, as it did last year, the concerns expressed in American liberal circles about some of its decisions? Or, will it in the wake of Mr. Biden’s victory, purposefully engage this opinion?
•There is no doubt that there is bipartisan support for the Indian-American partnership; it is based on a congruence of interests especially in the security and economic spheres. Mr. Biden is part of the American consensus supporting a deepening of bilateral ties in these areas. India’s political and security elites have shed their inhibitions of a closer relationship with America. China’s actions since April this year along the Line of Actual Control have strengthened the case of India-America defence and security cooperation. India’s signing of all the foundational agreements and its full participation in the Quad did not attract domestic criticism; this would not have been so in the past. It can also be expected that bilateral trade and immigration issues will positively move ahead from an Indian viewpoint under a Biden administration.
•It is ironic that at a time when Indian and American interests are becoming increasingly congruent in the security sphere, there is a growing perception among American liberals that India is moving away from its foundational moorings. In the earlier eras, while the security interests of the two countries diverged, the American system acknowledged a commonality in national values. India’s democratic order was held as a good example for emulation by the developing world. India then had the empathy of the liberals while there was antipathy in sections of the American establishment dealing with security. Now, the opposite may happen.
The Obama phase
•The Narendra Modi 1.0 government dealt with the Obama administration for the first half of its term and the very different Trump administration in the latter half. Reflecting the American interest in India adhering to its commitment to the values of freedom, including religious, and equality, Mr. Obama laid emphasis on these aspects in his Siri Fort address on January 27, 2015 (https://bit.ly/2KaYRGx). He said, “Our nations are strongest when we see that we are all God’s children — all equal in His eyes and worthy of His love.” He went on to recall, “Our freedom of religion is written into our founding documents.” The context of these remarks was obviously some incidents of lynching that had occurred in the name of cow protection. The Narendra Modi government did not really react to Mr. Obama’s words.
Security, economy for Trump
•The Trump administration was not concerned about human rights not only during the Narendara Modi 1.0 government but also after Modi 2.0 began. It focused on the security and economic spheres though its officials made a few ineffectual noises on the administrative steps taken after the constitutional changes in Jammu and Kashmir (J&K) on August 5, 2019. It largely and correctly implied that the constitutional changes were within India’s domestic jurisdiction. However, some members of the Democratic Party and the liberal sections of the American media were deeply concerned with the detentions and other steps taken by the government to ensure peace in J&K. These concerns grew with the Citizenship (Amendment) Act.
•Secure in the support of the Trump administration, External Affairs Minister S. Jaishankar decided to ignore the more trenchant critics of the government’s decisions on J&K. This included Congresswoman Pramila Jayapal who is of Indian origin and is a left of centre Democratic party member from Washington state. She had introduced a resolution in the House of Representatives criticising the administrative steps taken in J&K after August 5 last year. Mr. Jaishankar said that he was not interested in meeting her and went to the extent of cancelling a meeting with the leaders of the House Foreign Relations committee because Ms. Jayapal would have been present at the meeting. Significantly, the U.S. Vice-President-elect, Kamala Harris, defended Ms. Jayapal and tweeted that she stood with her.
Rights issues on the horizon
•The refusal to not engage American critics of the government’s decisions on J&K and the Citizenship (Amendment) Act because they had ‘closed minds’ was also reflected in Mr. Jaishankar’s comment to a well-known Indian commentator on foreign policy on the lack of diligence in the reporting of “really top line publications” on these issues (https://bit.ly/3kFnAPO). Mr. Jaishankar also asserted, “My reputation is not decided by a newspaper in New York.”
•It may not be as easy under the Biden dispensation to ignore American liberal opinion as it was during the Trump years. They will bring a degree of pressure to bear on the administration to more vigorously pursue the issues of rights including minority rights with the Modi government. The Biden administration will no doubt be partially responsive to these pressures and some lecturing can be expected. Will the Modi government, on its part, continue to ignore the likes of Ms. Jayapal especially because of the certainty that on account of the Chinese challenge to world order, India-U.S. cooperation in security and defence will not slow down?
•The question though is should an Indian government abandon the path of engagement with foreign critics even if they are prejudiced? The disengagement policy being pursued with Pakistan is valid because dialogue with a country which uses terrorism as a part of its security doctrine should be unacceptable. But American liberals do not promote violence. Should not correct perspectives be provided to even biased critics among them? Of course, it is only for the Indian people and government to take sovereign decisions, and while doing so, reject any and all intrusiveness. But such rejection is also best done through engaging critics.
Reaching out
•It is sad that Mr. Jaishankar’s interlocutor did not probe him on his ideas regarding what he would like India’s reputation to be. Also, on the values and systems that have gone into the making of India’s reputation. The Sangh Parivar puts a premium on India being recognised as Jagadguru. The Modi government has sought to spread India’s soft power with some success. The path to recognition as a guru for India lies through becoming a strong but humane state and achieving the constitutional aspiration of an inclusive and just society. Indeed, these objectives animate Prime Minister Narendra Modi’s vision of sabkasaath, sabkavikas, sabkavishwas not only for the country but the world.
•Indian diplomacy must realise that it cannot promote these ideas without engaging the country’s foreign critics even those with seemingly closed minds. And is not opening closed minds the ultimate test of diplomacy?
📰 Shifting sands for Asian economies
India faces an uphill task in maintaining its viability against highly competitive countries
•Discussions on the post-pandemic global economy have often predicted that China’s appeal as a business destination would fade, losing favour as the global manufacturing hub. Arguments have been made that production would be dispersed to other appealing locations mostly in Asia, and even to those outside. It was expected that this relocation of production would benefit emerging labour-abundant economies. The reality, however, is more nuanced.
•Some labour-intensive industries, such as textiles and apparels, have been moving to Bangladesh and Sri Lanka as labour costs in China are increasing. But trends in other industries show that businesses have mostly remained in China.
China’s importance
•Yossi Sheffi, professor at the the Massachusetts Institute of Technology and an expert in systems optimisation and supply chain management, points out in a recent article that the combination of the trade war and the COVID-19 crisis has resulted in firms establishing relatively small-scale operations elsewhere. This is perceived as a buffer against being completely dependent on China, referred to as the ‘China +1’ strategy.
•There are three reasons for firms to remain in China and pursue this strategy: First, starting an enterprise and maintaining operations in China are much easier than elsewhere. Second, Chinese firms are nimble and fast, which is evident from the quick recovery of Chinese manufacturing after the lockdown. Third, many global companies have spent decades building supply chains in China. Hence, getting out would mean moving the entire ecosystem, which involves time and expenditure. This strategy of global firms has led to an intensification of competition among Asian economies to be that ‘plus one’ in the emerging manufacturing landscape.
•In 1968, Swedish Nobel laureate Gunnar Myrdal published the monumental ‘Asian Drama – An Inquiry into the Poverty of Nations’, which, focusing on South and Southeast Asia, was pessimistic about their development prospects. Half a century later, there has been remarkable growth in the very region in which ‘Asian Drama’ was set. Openness and trade exploded, and these newly industrialised economies rode the wave of exporting goods to the rest of the world, while raising their own levels of living.
•A new ‘Asian Drama’ is likely to unfold with the formal launch of the Regional Comprehensive Economic Partnership (RCEP). Asia’s growth would hinge on the role of trade and investment flows into these economies, and this would again be the centrepiece of global growth, as the 15 member countries account for nearly 30% of the global GDP. This largest free trade agreement in the world includes provision to cover the entire gamut of trade and commerce. Unlike the portrayal in ‘Asian Drama’, these economies have spruced up their institutional and infrastructural settings, which would be the deciding factor in the new edition of ‘Asian Drama’.
A host of challenges
•The RCEP and the ‘China +1 strategy’ is likely to impact investment flows into Vietnam, India, Bangladesh and Indonesia, which have emerged as key investment destinations.
•India faces three challenges in this race. First is the task of increasing domestic public investments, which have a central role in economic activity, for both demand and supply sides. According to the International Monetary Fund, “increasing public investment by 1% of GDP could boost GDP by 2.7%, private investment by 10%, and employment by 1.2%, if investments are of high quality and if existing public and private debt burdens do not weaken the response of the private sector.” In India, even before the pandemic, the growth in domestic investments had been weak, and this seems to be the opportune time to bolster public investments as interest rates are low globally and savings are available. Private investments would continue to be depressed, due to the uncertainty on the future economic outlook, which underscores the need to undertake high-quality public investments.
•Second, India needs a major overhaul in her trade policy, as in the pre-COVID-19 era, world trade had been rattled by tendencies of rising economic nationalism and unilateralism leading to the return of protectionist policies. A revamped trade policy needs to take into cognisance the possibility of two effects of the RCEP: the ‘Walmart effect’ and a ‘switching effect’. The first would sustain demand for basic products and help in keeping employee productivity at an optimum level, but may also reduce wages and competition due to sourcing from multiple vendors at competitive rates. Switching effects would be an outcome of developed economies scouting for new sources to fulfil import demands, which requires firms to be nimble and competitive. Trade policy has to recognise the pitfalls of the present two-track mode, one for firms operating in the ‘free trade enclaves’ and another for the rest. A major fallout of this ‘policy dualism’ is the dampening of export diversification. The challenge is to make exporting activity more attractive for all firms in the economy.
•Third is to increase women’s participation in the labour force. While India’s GDP has grown by around 6% to 7% per year on an average in the recent years, educational levels of women have risen, and fertility rates have fallen, women’s labour force participation rate has fallen from 42.7% in 2004–05 to 23.3% in 2017–18. This means that three out of four Indian women are neither working nor seeking paid work. Globally, India ranks among the bottom ten countries in terms of women’s workforce participation. When Bangladesh’s GDP grew at an average rate of 5.5% during 1991 and 2017, women’s participation in the labour force increased from 24% to 36%. India could gain hugely if barriers to women’s participation in the workforce are removed, for which the manufacturing sector should create labour-intensive jobs that rural and semi-urban women are qualified for.
A new approach
•India’s approach to the changed scenario needs to be well-calibrated. The intensity of competition is evident from the fact that after India passed three labour code Bills on September 23, Indonesian Parliament on October 5 passed a legislation that slashes regulations contained in more than 70 separate existing laws, to open up the country to more foreign investment. Bangladesh on its part plans to start negotiations with a dozen countries, including the U.S. and Canada, for signing preferential trade agreements.
