📰 Stealth frigate Himgiri for Navy launched into water
Offshore Patrol Vessel Saksham also launched into water and expected to be delivered to Coast Guard by Oct. 2021
•The first of three stealth frigates, Himgiri, being built by the Garden Reach Shipbuilders and Engineers Limited (GRSE) under Project 17A for the Navy was launched into water on Monday. In Goa, the 5th and the last of the Offshore Patrol Vessels (OPV) in the series, Saksham, being built at Goa Shipyard Limited, was launched into water and is expected to be delivered to the Coast Guard by October 2021.
•P17A ships with a displacement of around 6,670 tonnes will be the most advanced state-of-the-art guided missile frigates once inducted, the GRSE said in a statement. The contract for construction of three stealth frigates under Project 17A is valued at over ₹19,293 crore.
•This project is unique that it is being built simultaneously at two locations, at GRSE in Kolkata and Mazgaon Docks Limited in Mumbai. Fincantieri of Italy is the knowhow provider for technology upgrade and capability enhancement in this project.
Advanced stage
•The indigenous OPV project was launched on November 13, 2016. Since then two vessels have been commissioned and all five have been launched, the ICG said in a statement.
•“In spite of the ongoing COVID-19 situation and disruptions in supply chains, it is creditable for the shipyard to complete the 100% hull construction and launch the vessel within 18 months from keel laying which was in June 2019,” the ICG said. The vessel is in advanced stage of outfitting and will be ready for delivery by October 2021, as per the contractual schedule, it added.
Older patients, mostly males, opt for such facilities, says survey
•Patients seeking care at private hospitals tend to be older and a larger share consist of men compared with those seeking medical care at public hospitals, show data released by the National Health Agency (NHA).
•In its briefing on “The role of private hospitals” published recently, the agency says they account for over half of the empanelled hospitals, nearly two-thirds of claim volumes, and three-quarters of claim outlays in the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY). This, when private hospitals are making a smaller contribution in extending the geographic reach of PM-JAY to underserved areas. The top PM-JAY packages by value — including knee replacement, cataracts, haemodialysis and cardiovascular surgeries — are overwhelmingly provided by private hospitals .
•The period for the analysis was from September 23, 2018 to February 29, 2020.
Rising fraud
•Medical audits have also revealed that private hospitals are more likely to indulge in fraud and abuse than public hospitals and more likely to discharge patients early post-surgery to cut costs.
•“Ensuring the accountability of private hospitals to provide efficient and high-quality care is a pre-eminent challenge for scheme implementation. Offering a robust public sector alternative in the form of high-performing government hospitals serving as a market anchor will be one element of such an approach,” the report says.
•The agency’s survey also found that over 72% of private empanelled hospitals are located in just seven States: Uttar Pradesh, Rajasthan, Tamil Nadu, Gujarat, Maharashtra, Punjab and Karnataka.
Better infrastructure
•“There is huge State-wise variation in the share of empanelled private hospitals from less than 25% in most of the northeastern and hill States to 80% in Maharashtra,” says the report. It also notes that private hospitals have fewer beds than public hospitals and are more likely to be empanelled for surgical packages and super-specialties. They also report better infrastructure for clinical and support services than their government counterparts, though data is incomplete.
•As per the data, private hospitals account for 63% of all PM-JAY claims and 75% of the total claim value.
•The data further states that claims processing appears to be more efficient in the case of private hospitals than for public hospitals.
•Previous survey evidence shows that prior to the launch of PM-JAY, patients often paid out-of-pocket for private hospital care, citing quality, trust, and availability of services as the major reasons for doing so.
📰 Raab, Jaishankar to discuss ties upgrade
UK’s Foreign Secretary’s visit will include talks on strategic partnership, set stage for post-Brexit ties.
•British Foreign Secretary Dominic Raab will meet with External Affairs Minister S. Jaishankar and other ministers on Tuesday as part of a three-day visit to India, expected to prepare for an expected visit by British Prime Minister Boris Johnson next month.
•India has invited Mr. Johnson as a guest for the Republic Day celebrations on January 26. While the British Prime Minister’s visit has not been confirmed yet, Mr. Raab, who is the United Kingdom’s Secretary of State for Foreign, Commonwealth and Development Affairs, would discuss a range of agreements including the upgradation of the relationship to a “Comprehensive Strategic Partnership”, to be signed during Mr. Johnson’s visit, officials told The Hindu.
•“India and the United Kingdom enjoy a strategic partnership since 2004 which has been marked by regular high-level exchanges and growing cooperation in diverse areas,” said a statement by the Ministry of External Affairs (MEA) announcing the visit from December 14-17.
Changed context
•“Mr Raab’s visit will pave the way for further strengthening of the partnership across trade, defence, climate, migration and mobility, education and health sectors in the post-Covid, post-Brexit context,” it added.
•The U.K. Foreign Secretary (who is the equivalent of the British Foreign Minister) will be accompanied by the Permanent Undersecretary of the Foreign Office Philip Barton, who was, until recently, the High Commissioner of the U.K. to India.
•Mr. Raab’s visit comes days after Mr. Johnson’s controversial remarks in the U.K. parliament that seemed to confuse India-Pakistan tensions with the ongoing farmers’ protests at the Delhi borders. The U.K. Prime Minister’s office later clarified that he had “clearly misheard the question”, adding that the British Foreign Office is “following the issue of protests in India closely”.
•Neither the MEA nor the British High Commission responded to a question on whether the issue or the U.K.’s comments would be discussed during Mr. Raab’s visit.
•According to the officials, India and the U.K. will discuss the framework of the Comprehensive Strategic Partnership, which will include the defence and strategic relationship, Indo-Pacific policy, trade, and cooperation on renewable energy ahead of the PM’s visit.
•Mr. Johnson’s visit to India will be one of his first forays abroad in 2021, after U.K. formally leaves the European Union (EU), and officials are hopeful of an announcement that India and the U.K. would begin talks for an “early harvest” Free trade Agreement (FTA) during the visit.
Defence agreements
•A mutual defence logistics support agreement is in an advanced stage of negotiation, while a Government-to-Government (G2G) mechanism for defence deals and a defence training Memorandum of Understanding (MoU) are also in the works. In addition, the two sides may conclude a Defence Technology and Industrial Capability Cooperation (DTICC) agreement, the MoU for which was signed in April 2019.
•Government sources said the two countries are close to signing a G2G agreement on jet engine technology development. The U.K. has also made a pitch to India for joint technology development of sixth generation fighter technologies which can go into India’s fifth generation Advanced Medium Combat Aircraft as well as offered the design of its Queen Elizabeth class aircraft carrier for Indian Navy’s proposed second indigenous carrier. The aircraft carrier HMS Queen Elizabeth would be in the Indian Ocean next year on its maiden deployment.
•Meanwhile, the U.K. has already announced its plans to deploy a Liaison Officer at the Indian Navy’s Information Fusion Centre for Indian Ocean Region (IFC-IOR) meant to improve Maritime Domain Awareness.
•Mr. Raab will also meet with Environment Minister Prakash Javadekar and Education Minister Ramesh Pokhriyal on Tuesday, and will leave for Bengaluru on Wednesday. Prime Minister Narendra Modi is expected to travel to Glasgow for the next UN Climate Change Conference (COP26) in November 2021, and both sides are keen to expand their partnership on fighting global warming and building renewable energy technologies, officials said.
📰 CII urges Centre to disinvest aggressively, monetise assets
‘Fiscal management needs 3-year perspective, as recovery expected only in FY22’
•The Confederation of Indian Industry (CII) has urged the government to look at fiscal management from a three-year perspective, as complete recovery was expected only in FY22.
•In its recommendations for the Union Budget, it has also suggested aggressive disinvestment, including bringing down stake in majority public sector banks (PSBs) to below 50%, as well as monetisation of assets.
•The industry association submitted its recommendations to Finance Minister Nirmala Sitharaman on Monday. “CII has suggested that the Budget proposals should focus on growth, and alongside, look at fiscal management from a three-year perspective. “Aggressive disinvestment and monetisation of assets can augment government revenues at a time when tax revenues have fallen sharply,” Uday Kotak, president, CII, said.
•He added that the Centre should prioritise expenditure in three areas — infrastructure, healthcare and sustainability — and that the Budget proposals should address critical areas of boosting private investments and providing support for employment generation. The representative body has suggested that healthcare expenditure be increased to 3% of the GDP over three years.
•“Achieving the vision of India being a $5-trillion economy is contingent on having a strong financial sector. Government should bring down its stake in PSBs to below 50% through the market route, over the next 12 months, except for 3-4 large PSBs such as State Bank of India, Bank of Baroda and Union Bank,” he said, adding that there was a need to create government-owned, professionally managed Development Finance Institutions to finance key sectors of the economy.
•The CII said that to raise revenues, the government should consider aggressive disinvestment of both loss-making and a few profit-making PSUs, given the capital markets were performing well. In addition, sale or lease of government surplus land should be considered.
•To boost private investments, he has sought a stable tax regime, stability of long-term interest rates at current levels and ensuring sanctity of contracts for government entities.
📰 Green over brown
India’s climate goals are on track, butfuture investments must be sustainable
•India asserted at the virtual Climate Ambition Summit, co-convened by the UN to mark five years of the Paris Agreement, that it is well on its way to not just fulfilling its national pledge on emissions reduction, but exceeding the commitment. The performance, outlined by Prime Minister Narendra Modi, rests primarily on the estimated present reduction of emissions intensity by 21% over 2005 levels (the goal is between 33% and 35% of GDP by 2030), and the twin pillars of renewable energy and higher forest cover. Indeed, the Emissions Gap Report 2020 of the UNEP includes India among nine G20 members who are on track to achieve their unconditional commitments under the Paris pact, based on pre-COVID-19 projections. Significantly, the G20 bloc as a whole, responsible for 78% of greenhouse gas emissions (GHG), was not expected to meet its pledges, but some countries and the EU as a group announced higher ambition at the summit. The brief reduction in global GHG emissions brought about by the pandemic has given all countries an opportunity to review their development trajectories. The unprecedented event has enabled them to deploy an extraordinary fiscal stimulus for rehabilitation of economies — estimated at $12 trillion globally — making green growth a possibility. India faces a particular challenge, in moving its pandemic rehabilitation spending away from traditional brown sector policies aligned with fossil fuel use to green territory.
•At the recent summit, Mr. Modi took credit for expansion of forests, which, according to the national pledge under the Paris Agreement, will serve as a carbon sink of 2.5 bn to 3 bn tonnes of carbon dioxide equivalent by 2030. This is a key goal, given that it has multiple benefits, protecting biodiversity, influencing the climate system and providing resources for communities. But it is fraught with uncertainty. The Centre has questioned the veracity of State afforestation data and said only a fourth of the claims they made were deemed credible. Clearly, without a cohesive policy on verifiable afforestation, the carbon sink approach may yield poor dividends, with questions hanging over the spending. Achieving 100 gigawatts of solar power capacity within the overall renewables goal, from 36 GW now, needs a steep scale-up that must actively promote rooftop solar installations. There is little evidence that this is a high priority for most States. Transport-related emissions, which are a major component of the whole, have risen sharply in the unlock phase of the pandemic as people prefer personal vehicles, but the issue received little support from States which failed to reorder cities for cycling and pedestrianisation. Large-scale agriculture insurance against climate disasters also needs attention. In the year that remains before countries meet at the UN Climate Change conference in Glasgow in 2021, India needs to focus on future emissions and plan green investments that qualify for global climate funding.
📰 Convergence of agrarian discontent in South Asia
With protests becoming catalysts for anti-authoritarian struggle, the air is ripe for new visions of rural emancipation
•Those familiar with the systematic attack on agriculture in South Asia over the last decades will not be surprised at the ongoing farmers’ protests in India. It could have been Pakistan, where farmers protesting for support prices were beaten up and arrested in Lahore only a month ago, or Sri Lanka, where shortages of imported fertilizers and declining subsidies has led to farmers’ outcry. In the middle of a long simmering rural economic crisis pushed over the cliff by the COVID-19 pandemic, efforts by South Asian governments to project corporatisation and deregulation as the way forward for agriculture have angered long-suffering farmers.
•Contempt for small-holding producers has been a part and parcel of policy-making across the region for decades. Successive governments have imposed a corporate agenda, seeking profits from food production and distribution by relaxing norms for cheap food imports, and encouraging export-oriented production, price speculation, agribusiness and retail supermarkets. South Asia’s rural landscape has been profoundly reshaped by such ‘reforms’, dispossessing farmers of their land, and pushing them into wage labour and migration as coping mechanisms. This hollowing out of rural livelihoods does not come with any assurance of stable jobs or a decent quality of life in urban areas.
Pandemic opportunism
•The COVID-19 crisis has given a new lease of life to such efforts. India is not the only country to have attempted to seize this moment to deregulate agricultural markets. In Pakistan, at the height of the first lockdown in May this year, the government inked an agreement with the World Bank to further deregulate the country’s wheat market. In Sri Lanka, with the national budget just passed for 2021, there are only meagre allocations towards revitalising agricultural livelihoods and policies focused on supporting technologies suitable for agribusinesses. Instead of the current crisis sending governments back to the drawing board, South Asia’s authoritarian regimes, complicit with corporate interests, are railroading in anti-farmer agricultural policies.
•Corporate agriculture further exacerbates the existential danger faced by South Asian farmers. Such corporate solutions do not address the role of middlemen and traders in denying farmers a fair price for their labour. Instead, opening up markets to large corporations is likely to spark the same sort of race to the bottom that has been seen in the industrial and service sectors. Deregulation makes farmers’ livelihoods even more precarious and threatens food sovereignty through increased dependence on global agricultural trade. It has become far too easy to forget that it was the collapse of global agricultural commodity prices in the 1970s that had a large role to play in the debt crisis that haunts countries such as Pakistan and Sri Lanka.
Reviving resistance
•There is a powerful legacy of rural movements in South Asia that have fought for the rights of farmers, peasants and agricultural workers. Rural movements played a crucial role in the anti-colonial struggle and fought for progressive land and agrarian reform after Independence. Seventy years on, they continue to fight against the recent waves of anti-farmer policies, while advancing new progressive visions such as peasant agroecology and food sovereignty, which put small food producers and the environment at the centre.
•While the issues highlighted by the Indian protests are not entirely new, the current convergence of authoritarianism and corporate capital brings this existential crisis for rural agricultural producers even more sharply in focus. Farmers’ movements have been aware of state connivance with exploitative actors, but they must now also contend with a breakdown of democratic process and increased repression. Those in power seem to have been caught off guard by the songs and displays of solidarity in Delhi and many other parts of India over the past two weeks. Just when it seemed like the anti-Citizenship (Amendment) Act protests against the Bharatiya Janata Party’s Hindutva agenda had been suppressed by severe state violence, the farmers’ movement has become the new face of opposition to the Narendra Modi government. These should be ominous signs for regimes across South Asia which continue to act with impunity in the face of demands for economic and social justice.
Voices of movements
•The COVID-19 pandemic has pushed food sovereignty back into the public imagination. We have been reminded of how precarious our food supplies are. The solution, of course, only begins with making farming a viable livelihood. Dominant assumptions about inevitable rural-urban migration and techno-utopian transformation in agriculture must be challenged. Questions of land redistribution and other rural inequalities must remain a crucial part of the political agenda. The situation of mostly female agricultural workers, the rural landless and Dalits in South Asia remains precarious. Even as rural movements across South Asia fight the ongoing attack on their livelihoods, they must also tackle rural inequality head on.
•The air is ripe for new visions of rural emancipation in South Asia. Rural movements are working to transform not just their world but are becoming catalysts for a broader anti-authoritarian struggle in South Asia. The rural movements that swept across South Asia in the 1960s may seem like a distant memory. The current phase of struggles has revived old questions, while raising others about the future of our long ignored rural world.
•We must listen to the voices and demands of the rural movements converging across South Asia.
📰 Firing a warning shot across big tech’s bows
Lawsuits and regulatory moves in the West suggest that their easy, unchecked expansion may be coming to an end
•It was a long time coming, but the day of reckoning for the big digital companies may finally have arrived. Despite the growing monopoly power of big tech and their use of anti-competitive practices, earlier attempts to regulate them (such as an attempt by the U.S. Department of Justice in 1998 to rein in Microsoft) had only limited success. The novel coronavirus pandemic further enhanced the monopoly power of the big tech giants.
Timeline and actions
•But now, a rash of lawsuits and regulatory moves in the United States and Europe against the big non-Chinese digital companies (particularly Facebook, Amazon, Apple and Google) suggest that the days of their easy expansion in an unregulated environment may be coming to an end. In October 2020, the U.S. Department of Justice brought a lawsuit against Google (https://bit.ly/37fngUw) for misusing its dominant position as search engine by undermining competitors; favouring its own content in search results; doing deals with other companies to become the default search engine in many browsers and devices; and then using data on its users and competitors to reinforce its dominance and get even more revenue from advertising.
•Then, in early December, the U.S. Federal Trade Commission (FTC) and 48 states, the District of Columbia, and Guam, sued Facebook (https://bit.ly/3mebxtD), accusing it of abusing its market power in social networking to crush smaller competitors. The specific instances of Facebook’s acquisitions of WhatsApp and Instagram were cited, which apparently resulted from concerns that the growing popularity of these platforms could break the company’s hold on social media. The FTC complaint (https://bit.ly/3moqDwY) cites a Mark Zuckerberg email of June 2008: “It is better to buy than compete”; in another internal communication, he noted that Facebook “can likely always just buy any competitive startups” (https://bit.ly/37ZBpV7).
•By 2012, just before buying Instagram, he said the photo and video sharing app “could be very disruptive to us”, if allowed to grow independently. The purchase of WhatsApp two years later similarly reflected concerns that the instant messaging service could become the favoured social media over Facebook.
The ‘wrath of Mark’
•Why did these companies agree to be bought up? It was not the price at which they were sold ($19 billion for WhatsApp and $1 billion for Instagram) so much as Facebook’s ability to make an offer they could not refuse, Mafioso-style, by destroying their ability to expand and attract new users. “Will he go into destroy mode if I say no?” Instagram founder Kevin Systrom is cited as having asked an investor when considering Facebook’s offer. “Bottom line I don’t think we’ll ever escape the wrath of Mark ... it just depends how long we avoid it.”
•This wrath was expressed by using Facebook’s huge user base in a bait-and-switch, offering newer app or website developers various incentives (such as allowing them to use “like” buttons) that promoted their sites or apps to Facebook users, which also meant that Facebook could then gather more data on the online activities of those users. When the new app grew and emerged as a possible threat, Facebook would stop this access and thereby destroy its ability to attract a new user base.
•Google and Facebook are hardly the only transgressors. A U.S. House Committee Report (https://bit.ly/2WaomKW) that led up to the lawsuits has major indictments of Amazon and Apple as well. Amazon “functions as a gatekeeper for e-commerce”, reducing competition and thereby also harming consumers. It has exploitative relationships with other sellers on the platform, which “live in fear of the company” and which Amazon refers to as “internal competitors”. Sellers are not allowed to contact shoppers directly, often limited in their ability to sell on other platforms, face “strong-arm tactics in negotiations” and have to choose between getting “atrocious levels of customer service” or better service for a fee. Like the other companies, Amazon profits from ideas and products developed by others, and simply buys up start-ups or even open-source cloud-software developers when it wants.
•Apple also favours its own apps and seeks to put rivals at a disadvantage on its products and leaves developers with little choice for reaching consumers. Like Google, it levies high commission fees (of 30%) that end up being charged on consumers. The two companies are voracious purchasers of companies: over the past few years, Google has bought at least one firm a month; Apple buys one every two or so (https://cnb.cx/2JTK1Vq).
•The European Union has separately filed cases again Amazon and Google. In November, it filed charges against Amazon (https://bit.ly/37htcwd), accusing the company of using its access to data from companies selling on its platform to gain unfair advantage over them.
•Earlier this summer it opened two antitrust cases against Google. It is planning to change the regulatory regime (https://reut.rs/37YZNq0) to prevent the anti-competitive practices exhibited, for example, in its Android mobile operating system and its search engine.
Impact on users
•The dangers of these aggressive monopolies are not confined to the competitors — users also suffer because of fewer options and weaker privacy controls. Both WhatsApp and Facebook have eroded the privacy protections that they earlier promised, by changing the terms of service communicated through long and complicated messages that most users simply do not read. All these companies hoard the data they collect, which increasingly covers all aspects of their users’ lives. For many of them, data are now the biggest source of revenues and profits. All sorts of use can be made of data: marketing and targeted advertising, influencing and manipulating political outcomes, targeting individuals based on particular criteria, enabling surveillance by both governments and private agencies.
•The idea in both the U.S. and the EU is to break up these companies — for example, by forcing Facebook to divest both WhatsApp and Instagram, much as the telecom giant AT&T was forced to break up in the early 1980s. Anti-trust lawsuits are notoriously difficult to win, but many legal experts agree that these cases are very solid.
•But this is only one step in the required regulatory control of these digital behemoths, which are now exercising unprecedented market power as well as other kinds of power.
•More regulation is clearly required, in addition to the lawsuits.
The Indian angle is relevant
•All this has direct relevance for India, and not only because these companies are so important in India. More than 400 million of WhatsApp’s estimated 2 billion users are in India; Amazon has around one-third of the share of online retail in India, neck and neck with Flipkart that was recently acquired by Walmart; India is Facebook’s largest single market, with around 270 million accounts; Google completely dominates the search engine space in India, and most smartphones in India are Android-based. And now Facebook and Google are collaborating with India’s largest telecom company — Reliance Jio owned by Mukesh Ambani — to create a single gateway for Indians (https://bit.ly/3abrSNw) providing everything from information, news media and entertainment to daily purchases of groceries and sundry other services. Apart from their market dominance, another concern is the cosy relationship these companies have established with the ruling party in the country, and the willingness to adopt different standards of fact-checking and privacy in India, so as to benefit the powerful. Reports suggest that Facebook has been unwilling to remove incendiary and violent content for fear of backlash (https://on.wsj.com/388qyZc) from Hindu nationalist politicians and stormtroopers. This is not helped by the fact that India still does not have a privacy law, even though the Supreme Court declared privacy to be a fundamental right some time ago. Even the proposed Bill is extremely weak without adequate safeguards. It is time for Indians to wake up and realise that anti-trust regulation and public control over digital companies—including home-grown ones — have become critical for them.
📰 Tax policy in trying times
The events of the pandemic show how it is the need of the hour to modernise India’s archaic tax laws
•The word ‘lockdown’, which is Collins Dictionary’s word of the year, sums up the pain that the world underwent in 2020. As a result of the pandemic-induced lockdown, India’s GDP contracted consecutively for two quarters from April to September 2020.
•Some have gained from the pandemic. India’s super rich only became richer in the first half of the year — in some instances by over three times. Between January and June, 85 new Indians were added to the list of High Networth Individuals (with a net worth of more than $50 million). While this happened, the economy was on the verge of plunging into recession. Those dealing in stock exchanges also gained. It is amazing that when the GDP is contracting, some stocks are surging to phenomenal heights. The third set of gainers comprises corporate houses, Internet service providers, laptop makers and scientists engaged in medical research. The fourth set comprises manufacturers of masks and Personal Protective Equipment. Indian dealers have taken to this new business like fish to water.
•But for most of the country, the pandemic led to unemployment and an increase in poverty levels. The migrant crisis revealed how thousands struggled to make ends meet. The government intervened. Pure economics dictates a big fiscal stimulus at the time of falling GDP and unemployment. But the government chose to rely more on monetary policy like credit easing and liquidity flow. Even here, there were no cuts in rates despite the fact that the real interest rate was falling. The fiscal stimulus was provided in stages and stood at merely 2% of the GDP compared to Japan’s fiscal stimulus (21% of the GDP), Brazil’s (10%) and China’s (7%).
Taxing MNCs
•Corporate profits have risen sharply at the expense of wages and small and medium enterprise profits. Corporate tax rates have been lowered to moderate levels but multilateral corporates have found an easy way to make big money in the time of COVID-19. Digitalisation and e-commerce have made their job simpler. The tax administration is struggling with the implementation of the equalisation levy. Non-resident e-commerce operators were brought within the scope of this levy by the Finance Act of 2000. Online sales of goods and services will be taxed at 2%. Clarity is required in implementation. The taxation of multinational corporations has become a perennial problem.
•The nexus rule versus residence rule haunts tax administrations in all countries where multinational corporations operate. Digital taxation has to be amended in accordance with the UN Model Convention. There is need for India to act in sync with the OECD. Canada plans to levy new taxes on foreign technology companies to increase government revenues. Tax avoidance by global web companies has become acute because of digitalisation. In the field of indirect taxes, the government has been vigorously following whether multinational companies are passing on the benefits of tax reduction to consumers. As per the Goods and Services Tax (GST) law, any reduction in the rate of tax on the supply of goods or services has to be passed on to the consumer by way of commensurate reduction in prices. Companies are prone to benefit from GST rate reduction without passing on the benefits to the end consumers. The Anti-Profiteering Rules have to be implemented vigorously wherever there is reduction in the tax rate on any commodity or service.
Rewriting the tax law
•India’s direct tax law needs to keep pace with fast-changing events. The Finance Minister announced a new scheme of faceless assessments and faceless appeals. But at the same time, the dispute resolution mechanism needs change. The International Court of Arbitration ruled that the Indian government’s move to seek taxes from Vodafone using retrospective legislation was against the fairness principle. It is necessary that a mechanism is found to negotiate a settlement through mediation and conciliation or, if necessary, arbitration in connection with tax disputes between the tax-paying companies and the Central Board of Direct Taxes.
•The Income Tax Act was framed in 1961. It has been amended several times. The government constituted the Akhilesh Ranjan Task Force to rewrite the Income Tax Act. The report is with the government but has not yet been made public. Our archaic laws should be modernised and made compatible with international tax laws. If the report had been made public, we would have had the time to discuss it. There is little time now to implement the recommendations of the Committee during the Budget session. The sooner the report is made public, the better.
📰 India needs to rethink its nutrition agenda
Poor nutritional outcomes in NFHS-5 show that a piecemeal approach does not work
•The Ministry of Health and Family Welfare has released data fact sheets for 22 States and Union Territories (UTs) based on the findings of Phase I of the National Family Health Survey-5 (NFHS-5). The 22 States/ UTs don’t include some major States such as Tamil Nadu, Rajasthan, Punjab, Uttar Pradesh, Jharkhand, Odisha and Madhya Pradesh. While the national picture will only be clear when the survey is completed and data are released for all the States and UTs, what we have so far paints a troubling picture in relation to nutrition outcomes.
Worrying findings
•Of the 22 States and UTs, there is an increase in the prevalence of severe acute malnutrition in 16 States/UTs (compared to NFHS-4 conducted in 2015-16). Kerala and Karnataka are the only two big States among the six States and UTs where there is some decline. The percentage of children under five who are underweight has also increased in 16 out of the 22 States/UTs. Anaemia levels among children as well as adult women have increased in most of the States with a decline in anaemia among children being seen only in four States/UTs (all of them smaller ones — Lakshadweep, Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, and Meghalaya).
•There is also an increase in the prevalence of other indicators such as adult malnutrition measured by those having a Body Mass Index of less than 18.5kg/m2 in many States/ UTs. What is also a matter of concern is that most States/UTs also see an increase in overweight/obesity prevalence among children and adults, once again drawing attention to the inadequacy of diets in India both in terms of quality and quantity.
•The data report an increase in childhood stunting (an indicator of chronic undernutrition and considered a sensitive indicator of overall well-being) in 13 of the 22 States/UTs compared to the data of NFHS-4. Among the remaining nine States, five see an improvement of less than 1 percentage point (pp) in this five-year period. Sikkim (7.3 pp), Manipur (5.5 pp), Bihar (5.4 pp) and Assam (1.1 pp) are the four States which see some improvement although even these are below the goals set by the government. There was a 10 pp decline in stunting among children under five (low height for age) between 2005-06 (NFHS-3) and 2015-16 (NFHS-4), from 48% to 38%, averaging 1 pp a year. Although in the right direction, this was considered to be a very slow pace of improvement. Poshan Abhiyaan, one of the flagship programmes of the Prime Minister, launched in 2017, aimed at achieving a 2 pp reduction in childhood stunting per year.
•All indications from these initial results of NFHS-5 are that we are likely to see an increase in prevalence of childhood stunting in the country during the period 2015-16 to 2019-20. This is extremely alarming and calls for serious introspection on not just the direct programmes in place to address the problem of child malnutrition but also the overall model of economic growth that the country has embarked upon. The World Health Organization calls stunting “a marker of inequalities in human development”.
•Over the last three decades, there have been phases where India has experienced high rates of economic growth. But this period has also seen increasing inequality, greater informalisation of the labour force, and reducing employment elasticities of growth. Some expansion in social protection schemes and public programmes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme, the Public Distribution System, the Integrated Child Development Scheme (ICDS), and school meals have contributed to reduction in absolute poverty as well as previous improvements in nutrition indicators. However, there are continuous attempts to weaken these mechanisms through underfunding and general neglect. For instance, in a response to a parliamentary question in December 2019, the Minister for Women and Child Development presented data which showed that only about 32.5% of the funds released for Poshan Abhiyaan from 2017-18 onwards had been utilised.
•The last few years particularly have been bad with slowdown in economic growth, stagnant rural wages and highest levels of unemployment. This is also reflected, for instance, in the rising number of reported starvation deaths from different parts of the country. Volunteers of the Right to Food campaign have listed over 100 starvation deaths based on media and/or verified fact-finding reports since 2015. While these data present a bleak picture as far as nutrition is concerned, what is worrying is that the situation would be even worse now as a result of the pandemic and lockdown-induced economic distress. Field surveys such as the recent ‘Hunger Watch’ are already showing massive levels of food insecurity and decline in food consumption, especially among the poor and vulnerable households. In the Hunger Watch survey carried out in 11 States, two-thirds of the respondents reported that the nutritional quality and quantity of their diets worsened in September-October compared to before the lockdown. All of this calls for urgent action with commitment towards addressing the issue of malnutrition.
•The NFHS-5 fact sheets, which also present data related to health, nutrition and other socioeconomic indicators, show some positive trends as well. There are some improvements seen in determinants of malnutrition such as access to sanitation, clean cooking fuels and women’s status – a reduction in spousal violence and greater access of women to bank accounts, for example. In these too, gaps remain and some States perform better than others.
A piecemeal approach
•What these overall poor nutritional outcomes therefore also show is that a piecemeal approach addressing some aspects (that too inadequately) does not work. Direct interventions such as supplementary nutrition (of good quality including eggs, fruits, etc.), growth monitoring, and behaviour change communication through the ICDS and school meals must be strengthened and given more resources. Universal maternity entitlements and child care services to enable exclusive breastfeeding, appropriate infant and young child feeding as well as towards recognising women’s unpaid work burdens have been on the agenda for long, but not much progress has been made on these.
•At the same time, the linkages between agriculture and nutrition both through what foods are produced and available as well as what kinds of livelihoods are generated in farming are also important. Overall, one of the main messages is that the basic determinants of malnutrition – household food security, access to basic health services and equitable gender relations – cannot be ignored any longer. An employment-centred growth strategy which includes universal provision of basic services for education, health, food and social security is imperative. There have been many indications in our country that business as usual is not sustainable anymore. It is hoped that the experience of the pandemic as well as the results of NFHS-5 serve as a wake-up call for serious rethinking of issues related to nutrition and accord these issues priority.
