📰 6 lakh Indians renounced citizenship
10,645 foreigners applied for Indian citizenship from 2016 to 2020, says Centre
•More than six lakh Indians renounced citizenship in the past five years, the Ministry of Home Affairs (MHA) informed the Lok Sabha on Tuesday. This year, till September 30, 1,11,287 Indians gave up their citizenship.
•The reason for a large number of Indians surrendering their citizenship was not stated in the reply. Though, in 2018, the MHA revised Form XXII under Citizenship Rules for declaration of renunciation of citizenship, which, for the first time, included a column on “circumstances/reasons due to which applicant intends to acquire foreign citizenship and renounce Indian citizenship”. Recently, the MHA had simplified the process and provisions were made for the applicants to upload documents online and an upper limit of 60 days was fixed for the renunciation process to be completed.
•Minister of State for Home Nityanand Rai, in a written reply, said that in 2017, 2018, 2019 and 2020, the number of Indians who gave up citizenship stood at 1,33,049, 1,34,561, 1,44,017 and 85,248, respectively.
•According to a Global Wealth Migration Review report, in 2019, India came second only to China when it came to high net worth individuals (HNIs) leaving the country. As many as 7,000 HNIs left India in 2019.
•In October, Amit Mitra, former Finance Minister of West Bengal, quoting a Morgan Stanley report, tweeted that “35,000 Indian Entrepreneurs of High Net Worth LEFT India between 2014-2020, as NRI/Immigrants. India RANKED No 1 IN EXODUS IN THE WORLD”.
•Mr. Rai added that in the period 2016-20, 10,645 foreigners applied for Indian citizenship, of which more than 7,782 were from Pakistan and 452 were stateless. During the same period, 4,177 persons were granted Indian citizenship but the country-wise breakup was not provided. A total number of 1,33,83,718 Indian nationals were living in foreign countries, the reply stated.
•The Minister said the persons covered under the Citizenship Amendment Act (CAA) might apply after the rules were notified.
•“Till now, the Government has not taken any decision to prepare the National Register of Indian Citizens (NRIC) at the national level,” the reply said.
Suppression of free speech by yielding to threats has become an unfortunate norm
•The ‘heckler’s veto’ seems to be winning repeatedly against stand-up comedian Munawar Faruqui. Bengaluru has joined the list of cities in which Mr. Faruqui cannot perform because right-wing Hindutva groups routinely threaten to disrupt his shows, wherever they are scheduled to be held. The Bengaluru city police asked the organisers to put off a show on November 28, alleging that allowing it to go on would create law and order problems and disrupt peace and harmony. Mr. Faruqui was unjustly arrested in Indore in January after a BJP functionary’s son complained that he was about to denigrate Hindu gods in a planned show. He had to spend 37 days in prison before obtaining bail from the Supreme Court for remarks that had not been made in a show that did not take place. It is this case, in which the police arrested even local organisers and those selling tickets for the show and had nothing to do with the content of his performance, that has been cited by the Bengaluru police while voicing fears about the consequences of allowing the show to be held. Earlier, programmes in which he was due to perform in Raipur, Mumbai, Surat, Ahmedabad and Vadodara were called off for the same reason. It is a telling commentary on the state of free speech in the country that anyone can be silenced anywhere by the threats posed by violent and vociferous groups that no regime in the country seems to be able to rein in.
•In a despairing reaction, Mr. Faruqui has said, “Goodbye! I’m done”, indicating that he has no further hope that he would be allowed to exercise his constitutional right to express himself. This is reminiscent of Tamil writer Perumal Murugan declaring his own “death” in a literary sense after being silenced by conservative and religious groups. In Mr. Murugan’s case, he was fortunate that the Madras High Court resurrected the author in him with a stirring verdict underscoring the duty of the state to protect free speech and to preserve law and order, instead of placating those who threaten to take the law into their own hands. It is a pity that the police authorities perfunctorily advise authors, speakers and artists to remain silent rather than take proactive steps to protect their fundamental rights. It is true that whenever such issues go before a court of law, the resulting judgments are speech-protective, but the proclivity of the authorities to pander to chauvinist groups is posing a serious threat to free expression in society. The Supreme Court’s observation in S. Rangarajan etc. vs P. Jagjivan Ram (1989) that suppressing free speech in response to a threat of demonstration or protest “would be tantamount to negation of the rule of law and a surrender to blackmail and intimidation” seems to have few takers among those in positions of power.
📰 Controlling the crypto genie
Cryptocurrencies cannot be controlled unless all nations work together, which is unfortunately a remote possibility
•Elon Musk may be the real crypto piper, for cryptocurrencies dance to his tunes. Crypto prices shot up when Tesla announced that it has invested $1.5 billion in Bitcoin and when Mr. Musk said that Tesla would accept Bitcoin as payment for its electric cars. They slumped when he reversed that decision and tweeted that Bitcoin prices “seem high”.
Nature of cryptocurrencies
•What is the true nature of such highly volatile cryptocurrencies? New York University Professor Nouriel Roubini considers Bitcoin a “pseudo-asset” that is pumped by “massive manipulation”. Whether the crypto hype is a ‘bubble’ is still a matter of speculation. While crypto-assets or cryptocurrencies are being embraced by many, they are under fire mostly by the officialdom in many parts of the world, primarily because the transaction process using cryptocurrencies is so secure that only a money transfer can be seen and nothing can be known about the sender and the recipient. These decentralised assets, with no central bank controlling them, may therefore be used for ‘hawala’, which is a trust-based system of transferring money quickly in a parallel arrangement avoiding the traditional banking system and escaping the due tax. Anonymity and privacy are the underlying characteristics as well as the potential danger of cryptocurrencies. There have been money laundering charges using cryptocurrencies. Shadows of cryptocurrencies loom in the supply of money for terrorist activities. Cryptos have become the preferred payment system for hackers in ransomware attacks. And so, the bid to put the genie back in the bottle was inevitable. But how is that possible and to what extent?
•At one extreme we have China which has almost banned cryptocurrencies and introduced its own centrally regulated digital currency called Digital Renminbi. At the other extreme we have El Salvador which is the first country to use Bitcoin as legal tender. While many parts of the world are planning to clip the wings of cryptocurrencies, El Salvador is planning to build the world’s first ‘Bitcoin City’, funded initially by Bitcoin-backed bonds. The idea may be to harness the cryptocurrency to fuel investment in the country. The International Monetary Fund, however, recently said that Bitcoin should not be used as legal tender in El Salvador and urged the country to strengthen the regulation and supervision of its newly established payment ecosystem. The standpoints of the U.K., the U.S., and most countries of the European Union seem to be in between. Many countries try to regulate it to some extent and also tax Bitcoin gains in their own ways.
Under the scanner
•In India, cryptocurrencies were under the scanner for some time. In 2018, the then Union Finance Minister said, “The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system.” A high-level government committee recommended a ban on all cryptocurrencies, except those issued by the state. Then, in 2020, the Supreme Court revoked the curb on cryptocurrency trade imposed by the Reserve Bank of India (RBI).
•The Cryptocurrency and Regulation of Official Digital Currency Bill of 2021 is listed for introduction this Parliament session. It seeks to “prohibit all private cryptocurrencies in India” but allow for “certain exceptions to promote the underlying technology and its uses”. It also aims to “create a facilitative framework” for the creation of the official digital currency to be issued by the RBI. Of course, the digital currency of a central bank may not look like a real substitute for a decentralised cryptocurrency to many users. A few weeks ago, there was speculation whether strong regulations would be imposed and income from crypto taxed in India. There was also speculation about a blanket ban, which led to a slump in the prices of major cryptocurrencies. It is not clear what kind of regulation is going to be imposed finally.
•A regulated market will certainly keep illegal activities under control to some extent. Most of the common investors will comply with the rules and substantial money will be gained from taxes. But is it at all possible to completely stop hawala, drug or terror funding by crypto with such regulations? Recently, Prime Minister Narendra Modi said cryptocurrencies must not fall into the “wrong hands and spoil our youth” and urged all democratic nations to come together and ensure that things like these do not happen. Of course, unless all nations work together, the genie cannot be completely controlled. And, unfortunately, that’s a remote possibility. For the time being, countries are imposing their own regulations. And Mr. Musk’s tweets might continue to regulate the crypto dance.
📰 Small grant but a big opportunity for local bodies
The earmarked health allocation recommended by the 15th Finance Commission can fulfil a mandate on primary care
•In early November 2021, a potentially game-changing and transformative development went by, almost unnoticed — the release of ₹8,453.92 crore to 19 States, as a health grant to rural and urban local bodies (ULBs), by the Department of Expenditure, the Ministry of Finance. This allocation has been made as part of the health grant of ₹70,051 crore which is to be released over five years, from FY2021-22 to FY2025-26, as recommended by the Fifteenth Finance Commission. The grant is earmarked to plug identified gaps in the primary health-care infrastructure in rural and urban settings. Of the total ₹13,192 crore to be allocated in FY 2021-22, rural local bodies (RLBs) and ULBs will receive ₹8,273 crore and ₹4,919 crore, respectively.
It is significant
•The allocation in FY2021-22 is relatively small by some comparisons. It would be 2.3% of the total health expenditure (both public and private spending together) of ₹5,66,644 crore in India and 5.7% of the annual government health expenditure (Union and State combined) of nearly ₹2,31,104 crore (both figures for 2017-18), the most recent financial year for which national health accounts data are available (https://bit.ly/3I39G77).
•This grant is equal to 18.5% of the budget allocation of the Union Department of Health and Family Welfare for FY 2021-22 and around 55% of the second COVID-19 emergency response package announced in July 2021. Yet, it is arguably the single most significant health allocation in this financial year with the potential to have a far greater impact on health services in India in the years ahead.
Good intentions gone wrong
•In 1992, as part of the 73rd and 74th Constitutional Amendments, the local bodies (LBs) in the rural (Panchayati raj institutions) and urban (corporations and councils) areas were transferred the responsibility to deliver primary care and public health services. The hope was this would result in greater attention to and the allocation of funds for health services in the geographical jurisdiction of the local bodies. Alongside, the rural settings continued to receive funding for primary health-care facilities under the ongoing national programmes.
•However, the decision proved a body blow, specially to urban health services. The government funding for urban primary health services was not channelled through the State Health Department and the ULBs (which fall under different departments/systems in various States) did not make a commensurate increase in allocation for health. The reasons included a resource crunch or a lack of clarity on responsibilities related to health services or completely different spending priorities. Most often, it was a varied combination of these factors. The well-intentioned legislative step inadvertently enfeebled the health services more in the urban areas than the rural settings.
•In 2005, the launch of the National Rural Health Mission (NRHM) to bolster the primary health-care system in India partly ameliorated the impact of RLBs not spending on health. However, urban residents were not equally fortunate. The National Urban Health Mission (NUHM) could be launched eight years later and with a meagre annual financial allocation which never crossed ₹1,000 crore (or around 3% of budgetary allocation for the NRHM or ₹25 per urban resident against ₹4,297 per person per year health spending in India).
•In 2017-18, 25 years after the Constitutional Amendments, the ULBs and RLBs in India were contributing 1.3% and 1% of the annual total health expenditure in India. In urban settings, most local bodies were spending from less than 1% to around 3% of their annual budget on health, almost always lower than what ULBs spend on the installation and repair of streetlights. The outcome has not been completely surprising. Both urban and rural India need more health services; however, the challenge in rural areas is the poor functioning of available primary health-care facilities while in urban areas, it is the shortage of primary health-care infrastructure and services both.
Some obstacles
•Urban India, with just half of the rural population, has just a sixth of primary health centres in comparison to rural areas. Contrary to what many may think, urban primary health-care services are weaker than what is available in rural India. Regular outbreaks of dengue and chikungunya and the struggle people have had to undergo to seek COVID-19 consultation and testing services in two waves of the novel coronavirus pandemic are some examples. The low priority given to and the insufficient funding for health is further compounded by the lack of coordination between a multitude of agencies which are responsible for different types of health services (by areas of their jurisdiction). A few years ago, there were a few reports of three municipal corporations in Delhi refusing to allocate land for the construction of mohalla clinics (an initiative of the State Health Department) and even the demolition of some of the under-construction clinics.
•It is in this backdrop that the Fifteenth Finance Commission health grant — the urban share is nearly five-fold that of the annual budget for the NUHM and rural allocation is one-and-a-half-fold that of the total health spending by RLBs in India — is an unprecedented opportunity to fulfil the mandate provided under the two Constitutional Amendments, in 1992. However, to make it work, a few coordinated moves are needed.
Essential steps
•First, the grant should be used as an opportunity to sensitise key stakeholders in local bodies, including the elected representatives (councillors and Panchayati raj institution representatives) and the administrators, on the role and responsibilities in the delivery of primary care and public health services. Second, awareness of citizens about the responsibilities of local bodies in health-care services should be raised. Such an approach can work as an empowering tool to enable accountability in the system. Third, civil society organisations need to play a greater role in raising awareness about the role of LBs in health, and possibly in developing local dashboards (as an mechanism of accountability) to track the progress made in health initiatives. Fourth, the Fifteenth Finance Commission health grants should not be treated as a ‘replacement’ for health spending by the local bodies, which should alongside increase their own health spending regularly to make a meaningful impact. Fifth, mechanisms for better coordination among multiple agencies working in rural and urban areas should be institutionalised. Time-bound and coordinated action plans with measurable indicators and road maps need to be developed. Sixth, local bodies remain ‘health greenfield’ areas. The young administrators in charge of such RLBs and ULBs and the motivated councillors and Panchayati raj institution members need to grab this opportunity to develop innovative health models. Seventh, before the novel coronavirus pandemic started, a number of State governments and cities had planned to open various types of community clinics in rural and urban areas. But this was derailed. The funding should be used to revive all these proposals.
A much-awaited springboard
•India’s health system needs more government funding for health. However, when it comes to local bodies, this has to be a blend of incremental financial allocations supplemented by elected representatives showing health leadership, multiple agencies coordinating with each other, increased citizen engagement in health, the setting up of accountability mechanisms and guiding the process under a multidisciplinary group of technical and health experts. The Fifteenth Finance Commission health grant has the potential to create a health ecosystem which can serve as a much-awaited springboard to mainstream health in the work of rural and urban local bodies. The Indian health-care system cannot afford to and should not miss this opportunity.
📰 Afghanistan, the rise of a narco-terrorist state
A danger of a failed state in the neighbourhood combined with narco-terrorism will pose a threat to India’s security
•India’s anxieties over ungoverned spaces and lawless Afghanistan turning into a significant source of internal security threat are gradually turning into reality. According to a report by the United Nations Office on Drugs and Crime (UNODC), opium production in Afghanistan has crossed 6,000 tonnes for the fifth consecutive year. The reported rise in global opium prices has resulted in the exponential production of opiates increasing by 8%. The Taliban, cash-strapped and still looking to establish a semblance of order in the country they captured in August 2021, could indeed be looking to generate revenue from the illegal cash crop, as cases of smuggling and seizures of large consignments of drugs in India have started increasing, indicating a turn towards this trend.
Almost a free-for-all
•For the past several decades, Afghan opiates have entered India through circuitous routes, sea as well as air, involving Pakistan, Sri Lanka, African countries such as Mozambique and South Africa, and Qatar. Carriers of drugs, individuals arrested in various airports in the country with small quantities, as well as the massive recoveries made in various States of western India, have only been the proverbial tip of the iceberg. The huge recoveries of heroin in Gujarat alone — 3,000 kilograms in September and 120 kilograms in October — bear testament to the fact that the fall of Kabul and its capture by the Taliban may have initiated free-for-all narcotic smuggling waves, which unless checked, have the potential of destabilising India’s security.
A mammoth ‘illicit’ economy
•The fact that, under the Taliban, opium production would increase in Afghanistan was a foregone conclusion notwithstanding the initial statements by the Taliban leadership to gain international recognition. Over the years, the Taliban have minted money from this sector, by promoting its production, taxing it and also by overseeing its smuggling either into Pakistan or Iran, thereby building a mammoth illicit economy with strengthening linkages to terrorist groups as witnessed in the cases of the Organization of Al-Qaeda in the Islamic Maghreb (AQIM), the Islamic State, the Revolutionary Armed Forces of Colombia (FARC), Hezbollah and others.
•According to United Nations officials, the group likely earned more than $400 million between 2018-19 from the drug trade. The trend appears to have remained unchanged as in May 2021, a report by the United States Special Inspector General for Afghanistan Reconstruction (SIGAR) estimated that the Taliban derive up to 60% of their annual revenue from illicit narcotics. Notwithstanding the handful of European States where the domestic narcotics trade is well regulated, accompanied by official policies that consider access to narcotics as a matter of individual right, there is a global consensus that narcotics itself can devastate societies and money derived from the narco-trade can fuel organised crime and terror activities.
The world seems oblivious
•However, in today’s Afghanistan, the Taliban seem to be taking advantage of the vacuum and detached attitude of the international community. This could partly be rooted in the global failure in adopting an appropriate counternarcotic policy to rein in the narco-trade originating from Afghanistan between 2001 and 2020. The rise of a narco-terrorist state will have serious consequences for the U.S., Europe and the region.
•The UNODC’s achievement in this regard was limited to ensuring a minor dip in the area under poppy cultivation and production of opium. Promotion of alternate livelihood programmes and pushing farmers to grow other cash crops largely failed due to a variety of reasons. These included the limited reach of the central government in Kabul and a punitive policy advocated by the international community which sought the use of force to destroy standing opium crops without adequately compensating the farmers or providing them with alternative livelihoods. As a result, not only did the narco-infrastructure in Afghanistan remain largely intact but it also flourished by having developed a symbiotic nexus and indigenous facilities to produce methamphetamine pills. As the United States and the international community gradually sought to extricate themselves from the Afghan quagmire, production shot up and is projected to spike in the coming years.
Implications for India
•Organised crime develops its own survival and thriving dynamics. Countries with the best of intentions and abilities fail to turn the tide, which is fuelled by such an unholy nexus. Afghanistan, where neither the intention nor the ability to disrupt the trade exist, is emerging as a major narco-empire. Some of the members of the Taliban regime, particularly the Haqqani network, share well-documented connections with the organised crime network. Whether the global community in general and countries such as India in particular afford to take a detached view towards the enveloping situation remains a critical question. From New Delhi’s perspective, its efforts to curb terror finance at home would achieve only limited results if anti-India groups such as the Lashkar-e-Taiba and the Jaish-e-Mohammed, now yet again operating in Afghanistan, manage to tap into the money from such narco-trade.
Outreach to the Afghans
•The antidote to this phenomenon is a legitimate, responsible, empowered, and inclusive government in Kabul. Economic collapse of the Afghan state and the evolving humanitarian crisis must be prevented. Reaching out to the Afghans and amplifying their voices in having a government that is legitimate and acceptable to them would be a first step in the right direction. While the Delhi Regional Security Dialogue on Afghanistan (November 10, 2021) did try to reach out to the regional countries, India should look for new alliances in Central, West, and South Asia to stitch a coalition of the willing. It is time for New Delhi to step up and reach out to the larger sections of Afghan society including women and civil society groups, political leaders and business groups, who are looking for assistance in having a legitimate, representative and inclusive leadership in their country. A failed state in the neighbourhood combined with narco-terrorism cannot be ignored and will have serious consequences for India’s security in the days to come.
📰 India’s informal economy has not shrunk
An SBI Research study’s claim that there is greater formalisation of the economy is unfounded
•According to a recent State Bank of India (SBI) Research report, the informal economy in India has been shrinking since 2018. Formalisation, the report says, has taken place through the gross value-added (GVA) route, consumption through increased digital payments, and the employment route. Let’s examine each of these.
•The report claims that the share of the informal sector is just 15-20% in 2021 compared to 52.4% in 2018. If that was the case, India would have become a ‘miracle’ economy overnight, since no upper-middle-income economy in Latin America or the ASEAN or any low-middle-income country has achieved this kind of transformation. On the other hand, since the COVID-19 outbreak, informality of enterprises and workers has increased in all such economies.
•There is an internationally recognised definition of informality of enterprises and workers. In the 15th International Conference of Labour Statisticians (1993) of the International Labour Organization, household enterprises not constituted as separate legal entities independently of the households or household members that own them, and for which no complete accounts are available, are categorised as informal enterprises. In the 17th Conference (2003), informal workers were defined as those without social security. Based on these definitions, internationally, comparable estimates of both types of informality are available. India’s levels are 80% and 91%, respectively. The latter is higher because there are also informal workers within formal enterprises.
Misleading claim
•The SBI study adopts multiple definitions of formality (digitisation, registration in GST, cashless payments), which are not used by anyone. These could be possible instruments of encouraging formality, but cannot separately or even together be equated with formality. The SBI study confuses the shrinking of the informal sector’s share of the GDP due to demonetisation and COVID-19’s impact on the economy with formalisation. The informal sector was adversely impacted by the lockdowns and the consequent economic contraction. The sectors that were most impacted by the lockdowns were those with higher informality. Even formal sector activities which are considered informal (outsourcing and contractual activities) were curtailed heavily during the lockdowns. The decline in informal activities might be the cause of the fall in share of the informal sector of the GVA. To term this as formalisation is misleading at best and cruel at worst.
•We don’t know if this GVA fall is temporary or permanent. It has clearly led to a fall in employment, especially in the non-farm sector, while the share of agricultural workers in total employment rose sharply between 2018-19 and 2019-20 (NSO’s Periodic Labour Force Survey). Agriculture is almost entirely informal for enterprises as well as workers. Catastrophically, for already informal workers, the absolute number of workers in agriculture rose from 200 to 232 million between 2018-19 and 2019-20. This was a reversal of the trend of structural transformation in employment underway since 2004-05 — shown by the first-ever absolute fall in workers in agriculture from 2012 to 2019.
Registration on e-Shram
•Another reason that the SBI claims that informality declined is the number of workers registered in the new e-Shram portal. Since the portal’s launch, over 9.9 crore unorganised workers have registered themselves. However, registration means documentation, not formalisation, of workers. Workers who are ‘formal’ receive social security benefits. Giving such benefits is not the objective of the portal; the objective is to develop a national database of unorganised workers. After registration on the portal, the workers receive a card with a 12-digit unique number, which is good. The government has announced linking accident insurance with e-Shram registration.
•At present, there is no credible database for India’s unorganised workers. In 2020, government pleaded helplessness in providing numbers pertaining to the number of migrant workers who had suffered or died during the lockdowns. These migrant workers were and are part of the broad unorganised sector.
•Mere registration under this portal does not guarantee access to institutional social security benefits or coverage under labour laws. Benefits such as Provident Fund, gratuity and maternity benefits will remain outside the reach of unorganised workers as conceptualised in the Social Security Code of 2020. All these instruments were and are available only to establishments with 10 or 20 or more workers. Also, the SBI study notes that West Bengal tops the list in registration. This is no surprise. Over 1.3 crore unorganised workers are already registered under various social security schemes in West Bengal. A share of them is now registering themselves on the new portal.
•Further, the formal sector has been treated as a homogenous entity in the study. In reality, there are various layers within the formal sector. Not all workers engaged in the formal sector are ‘formal’. There has been large-scale informalisation of the formal sector over the last three decades through contractualisation and outsourcing of labour. Among wage workers, the proportion of non-permanent, casual and contract workers increased in the organised sector from 1999-00 to 2011-12. It marginally decreased after that but the pandemic once again changed the numbers. Thus, a significant portion of the output attributed to the formal sector is actually produced by an informal workforce within the formal sector.
A blurred distinction
•The systematic dismantling of employer-employee relations in the labour market blurs the distinction between formal and informal. The entire edifice of the formal sector is based on informal workers. There are layers of intermediaries between the employers and the workers to create a disconnect between them. Such a disconnect is deliberate rather than organic. For example, the majority of the output in construction is attributed to the formal sector. But most workers in the construction sector are informal. They don’t have access to social security benefits or protective labour laws. They remain informal throughout their lives even though their contribution is attributed to the formal sector. Thus, contrary to what has been asserted in the research, the formal sector’s contribution has been overestimated and the informal sector’s contribution has been underestimated.
•Eighty-four per cent of Indian non-farm establishments are informal by their own account. Some might get registered under miscellaneous laws but that does not imply that they have become formal. Registration under the Factories Act or Employees’ Provident Fund or State insurance means that these organisations are formal as the organisation needs 10 or 20 employees to be registered under these laws. But mere registration under other acts like local municipal acts or tax laws does not indicate formalisation.
