📰 Bubble in the air
Without regulation of crypto currencies, retail investors will have no protection from scams
•The crash in the price of cryptocurrencies is a timely reminder to retail investors to stay far away from this highly speculative asset class. Bitcoin, the most popular cryptocurrency, has lost over two-thirds of its value since its peak in November last year and has wiped out many retail investors. Other cryptocurrencies have witnessed even larger losses with some (Luna) plunging to zero. The current crash was a long time in the making. Cryptocurrencies were initially touted to be alternatives to fiat currencies. Since the supply of a lot of cryptocurrencies is limited by design, investing in them seemed like a good way to protect one’s wealth from inflation fuelled by central banks. But as it became obvious that cryptocurrencies have had very little acceptance as money, crypto-enthusiasts began to argue a slightly different case. Cryptocurrencies were now touted as an independent asset class like gold and silver that could serve as an effective hedge in times of crisis. The crash in the crypto market amidst wider market correction has put to rest the argument that crypto, as an asset class, is as good a hedge as precious metals. There is little reason to believe that cryptocurrencies possess any intrinsic value that can make them serve the role of widely accepted money or as a legitimate asset class such as precious metals.
•The acceptability of cryptocurrencies in the wider economy has remained minuscule and there are no signs of their use for purposes other than wild speculation. But the only tailwind that has kept cryptocurrencies rallying despite concerns about their fundamental or intrinsic value has been the climate of easy monetary policy adopted by central banks. Easy money from central banks fuelled the rise of a get-rich-quick industry that depended on selling to a greater fool. Just as Internet stocks and tulip bulbs were the hallmarks of liquidity-fuelled bubbles in the past, cryptocurrencies are the leading symbol of the current bubble in markets. But perhaps the biggest threat to their prospects has been an existential one. Governments and their central banks have been largely unwilling to recognise cryptocurrencies as a legitimate investment asset. They are also unlikely to recognise private cryptocurrencies as they infringe on the state’s fiscal and monetary authority. Moreover, this hostile attitude is at least partly to blame for the shady nature of the crypto industry at large. Retail investors looking for quick market gains have had to plunge into an unregulated space marked by scams and other pitfalls in the absence of a legal environment that can protect investor interests. So, regardless of the investment prospects of cryptocurrencies, a proper regulatory framework may help in protecting retail investors, at least from outright scams.
Despite an encouraging start in the 1950s, its discourse, communication and laws now are a concern
•In 1952, when the Indian Republic held its first Parliamentary session, 39 strong, intelligent, and passionate women leaders sat in the hallowed halls of power, challenging a centuries-old tide of men’s dominance over the polity.
A slide from the initial years
•At a time when women formed only 1.7% of the total members of the United States Congress and 1.1% of the Parliament of the United Kingdom, India was leading the way in the fight towards more inclusive world democracies with 5.5% women representation. The struggle for India’s Independence can never be detached from the contributions of thousands of our women across profession, class, caste, and religion. A testament to their invaluable contribution has to be their louder voice in our parliamentary democracy; what happened in 1952 was a highly progressive step, but 70 years hence, it seems we have strayed from that path.
•Despite a woman Prime Minister, a President, and a relatively higher percentage of women parliamentarians when compared to some of the other mature democracies in the past, our struggle with inclusivity has not eased. Due to systemic issues, Parliament continues to alienate women. The number of women representatives is still considerably small, but even more subtly, Parliament as a workspace continues to be built exclusively for men.
•India has witnessed a burgeoning movement for gender inclusivity during the past few years. The Supreme Court judgment (National Legal Services Authority vs Union of India, 2014) on gender identity has given the movement greater impetus. In solidarity, citizens have begun asserting their gender identity by specifying their personal pronouns (she/her, he/his, they/them, etc.). Parliament, being the pinnacle of law-making and the symbolic centre of our democratic aspirations, must reflect this change too. However, the matter seems to have largely escaped the notice of the Legislature.
Not gender neutral
•A closer look at our parliamentary discourse and communication reveals a concerning and disconcerting absence of gender-neutral language. For instance, after 75 years of Independence, and ‘Azadi ka Amrit Mahotsav’, Parliament often refers to women in leadership positions as Chairmen and party men.
•In the Rajya Sabha, the Rules of Procedure continue to refer to the Vice-President of India as the ex-officio Chairman, stemming from the lack of gender-neutral language in the Constitution of India. Additionally, references to inherently masculine pronouns are made over 150 times in the former and 600 times in the latter. The alarming degree of usage of masculine pronouns assumes a power structure biased towards men. This tends to manifest itself in parliamentary debates, for instance, when a senior woman MP from Tamil Nadu was referred to as “Chairman madam” in the Lok Sabha during last year’s winter session.
•The issue further extends to law-making. In the last decade, there have hardly been any gender-neutral Acts. Acts have made references to women not as leaders or professionals (such as policemen), but usually as victims of crimes.
•The root of such instances lies with a gender-conforming Constitution. In its present state, the Constitution reinforces historical stereotypes that women and transgender people cannot be in leadership positions, such as the President and the Vice-President of India, the Speaker of the Lok Sabha, the Governor of States, or a judge. It is not a criticism of the Constitution but of the failure of the many Union Governments which did not take the initiative of amending it. In the past, amendments have been brought about to make documents gender neutral. In 2014, under the leadership of the then Speaker of the Lok Sabha, Meira Kumar, the Rules of Procedure of the Lok Sabha were made entirely gender neutral. Since then, each Lok Sabha Committee Head has been referred to as Chairperson in all documents. This initiative is proof that amending legal documents to make them inclusive for all genders is an attainable goal if there is a will.
•Despite certain course corrections, both Houses of Parliament and Central Ministries have failed in one common aspect. In a compilation of ministerial replies to questions from the 17th Lok Sabha so far for 75 women Parliamentarians, it was found that 84% of the answers that used salutations (sir/madam) referred to women Parliamentarians as ‘sir’. During the 15th Lok Sabha, when we had a woman Speaker, only about 27% of the answers made this error. However, there is no indication of a clear reason for such lapses, either due to pure administrative errors or ignorance of the rules of addressal.
In other countries
•Internationally, even mature democracies that legalised universal suffrage after India, such as Canada (1960 for Aboriginal women), Australia (1962 for Indigenous women), and the United States (1965 for women of African-American descent), have now taken concrete measures towards gender-inclusive legislation and communication. Canada’s Department of Justice has guidelines for using gender-neutral language in all forms of legislation and legal documentation; the Australian government has incorporated gender-neutrality in its drafting Style Manual; the U.K.’s House of Commons declared in 2007 that all laws would be drafted gender-neutrally.
•When Parliament and government offices reinforce gender biases in their communication, stereotypical language in reference to women and transgender people becomes more palatable to the rest of the country. The country’s leaders must send the right message for citizens to follow. They can and must begin with an amendment to the Constitution and the entire reservoir of laws.
Moving ahead
•Once the language is corrected, the entire country, including Parliament, can focus on the deeper issues of the aspirations and growth of its woman workforce. In 2018, the U.K. Parliament conducted a gender audit to understand its culture, environment, and policies as a workspace. If the report is any indication as to what might also be the scenario in the Indian Parliament, with an even lesser number of women employees, it opens questions about whether there is a single, transparent appointment and promotion process for women staff in Parliament, and whether their professional growth is being hindered by other issues such as harassment and domestic responsibilities.
•In the 21st century, when people of all genders are leading the world with compassion, strength and ambitions, the Indian Parliament needs to reflect on its standing. Recognition and correction of past errors through amendments to rulebooks, laws, and the Constitution are just starting points, and must lead to sensitivity, equal treatment, and appreciation for the people of India, regardless of gender.
📰 Agnipath, a fire that could singe India
The Government’s defence recruitment plan could endanger the safety of the country and affect the stability of society
•It was on September 15, 2013 that Narendra Modi addressed an ex-servicemen rally at Rewari, Haryana as the Bharatiya Janata Party’s prime ministerial candidate, where he vociferously supported the demand of ‘One Rank One Pension’ (OROP) for all soldiers. Mr. Modi was then campaigning in poetry, and nine years later, as the Agnipath scheme for recruitment of short-term contracted soldiers was announced, he has been forced to contend with the reality of governing in prose. However hard the Government may try to obfuscate, the driving factor for this U-turn — from ‘One Rank One Pension’ to ‘No Rank No Pension’ — is economics.
Financial motivations
•The OROP demand became tricky to fulfil once Mr. Modi became Prime Minister, but it was officially instituted in November 2015 for more than 25 lakh defence pensioners. It came with an immediate annual financial implication of ₹7,123.38 crore and the actual arrears from July 1, 2014 to December 31, 2015 were ₹10,392.35 crore. The financial burden increased cumulatively over time and has substantially increased the budgetary expenditure on defence pensions. In the current financial year, ₹1,19,696 crore has been budgeted for pensions, along with another ₹1,63,453 crore for salaries — that is 54% of the allocation for the Defence Ministry.
•It has been argued that the savings in the pensions bill — which will show up on the books only after a couple of decades — would be directed towards the modernisation of defence forces. The armed forces do not have that kind of time available to them to postpone their already long-delayed modernisation. The money must come now. The Indian Air Force is already down to 30 squadrons of fighter jets against the 42 squadrons it needs, and the Indian Navy is at 130 ships when its vision was to be a 200-ship navy; the Indian Army is already short of 1,00,000 soldiers. The announcement of the Agniveer scheme is an implicit acknowledgement that the Indian economy is incapable of supporting the armed forces that India needs. It faces an active military threat from two adversaries, China and Pakistan, and the internal security challenges in Kashmir and the northeastern States. These realities cannot be wished away. Instead of expanding the economy to support the military, the Government has resorted to shrinking the military.
Damaging consequences
•As the short-term recruitment policy has neither been theoretically modelled nor tried out as a pilot project, the exact consequences of the move will only be known as they play out. But its adverse effect on the professional capabilities of the armed forces is certain. It starts with the very high turnover of young soldiers, the increase in training capacities and infrastructure and the augmentation of the administrative setup for greater recruitment, release, and retention of soldiers. An armed forces boasting of a poor teeth-to-tail ratio is further increasing the tail. The Indian Air Force and the Indian Navy employ their airmen and sailors in very specialised roles, which require technical skills, and a high degree of training and experience. They form the backbone of the system that keeps the warships at sea, the fighter jets in the air, and high-tech weapons and platforms operational. Because the short-term contractual soldier model (the Agniveer scheme) is going to take a few years to fully play out at an organisational level, the actual degradation of operational capability will only be known then.
•In the case of the Indian Army, the challenge is two-fold. The Indian Army has emerged from a legacy which traces to 1748. In the early years, says a paper by Syed Hussain Shaheed Soherwordi, the emphasis was on discipline and efficiency, and their separation from the fragmented Indian society. This turned the Indian soldiers into a professional, united and autonomous fighting force whose loyalty, in Stephen Rosen’s words, was to their ‘homogeneous military units’ for which they served ‘full time, long term’ rewarded with a secure pay and pension system. As the homogenous nature of the Bengal army was seen as one of the factors that contributed to the outbreak of the 1857 Mutiny, the British Crown thereafter maintained distinction and separateness of castes and class in the Indian Army, as described in the paper.
•Even after Independence, class-based recruitment — the euphemism for caste — has defined the nature and the character of the Indian Army, shaping its ethos and fighting capabilities. In an affidavit in court a couple of years ago, the Government asserted that the Army has “performed exceedingly well while maintaining the class composition in recruitment of presidential bodyguards and changing to All India class composition will not only affect the functioning of the PBG [President’s Bodyguard] Presidential but will also affect the seniority structure of the regiment”. It defended class-based units by claiming that “after selection, personnel are grouped based on functional requirements to have optimum operation effectiveness”.
•In the Agnipath proposal, the class-based recruitment has been replaced with an all-India all-class recruitment. The reasons for this drastic shift in the Government’s thinking are a secret but it will strike at the core of the organisational management, leadership structures and operating philosophy of the Indian Army. Even though the soldiers in the Indian Army are professionally trained, they also draw their motivation from their social identity — reflected in the characterisation of naam, namak and nishan — where each soldier cares for his reputation among the peers in his caste group or his village or his social setting. To replace that with a pure professional identity of a soldier will bring its own challenges in a tradition-bound army, where units showcase their campaigns in the 18th century as battle honours. Running a Gorkha regiment with a Jat soldier from Haryana, a Malayali from Kerala and a Meitei from Manipur needs massive restructuring, something the Army currently seems unprepared for. It is driven more by a hope that as an adaptive institution with great resilience, the Army will somehow find a way to deal with this upheaval while protecting its operational capabilities.
•There are other challenges thrown up by the model. There will be major problems in training, integrating and deploying soldiers with different levels of experience and motivations. The criterion of identifying the 25% short-term contracted soldiers to be retained could result in unhealthy competition. An organisation which depends on trust, camaraderie and esprit de corps could end up grappling with rivalries and jealousies amongst winners and losers, especially in their final year of contract. Even though the Government has kept the contract at four years to deny the Agniveer gratuity and is not counting the contractual period towards regular service, these provisions are bound to be challenged legally; and just like the OROP issue, could become a politically attractive demand for longer tenures and pensions to be picked up by the Opposition parties. Over time, this will lead to the salary and pension budget creeping back up again.
Political, social implications
•The Agnipath scheme also does away with the idea of a State-wise quota for recruitment into the Army, based on the Recruitable Male Population of that State which was implemented from 1966. This prevented an imbalanced army, which was dominated by any one State, linguistic community or ethnicity, as it happened in the case of Pakistan with its province of Punjab. Academic research shows that the high level of ethnic imbalance has been associated with severe problems of democracy and an increased likelihood of civil war, a worrying scenario for today’s India where federalism is being severely tested by the ruling party’s ideology.
•Coupled with this is the lack of hope in India’s economy, where over 45 crore Indians have stopped looking for jobs, there are high levels of unemployment and underemployment. It is to this mix that these few thousand young men who have been trained in inflicting organised violence will be thrown up every year. From erstwhile Yugoslavia to Rwanda — and closer home, during Partition — there are numerous examples of demobilised soldiers leading to increased violence against minorities. Today’s India is characterised by weak state capacity, where the state has ceded its exclusive right to violence to majoritarian groups. This provides a heady cocktail which only needs a spark to consume India.
•In India, the Indian Army has so far provided salary, uniform and prestige, an inheritance of the British who took care of the living conditions, facilities for the soldiers’ families, and post-retirement benefits and rewards, such as grants of land. This meant that military service remained attractive to many generations of the same families, anchoring them in tradition. It also resulted in social standing and privilege where pensions resulted in a comfortable life for the retired soldier. A short-term contractual soldier, without earning pension, will be seen as doing jobs after his military service that are not seen to be commensurate in status and prestige with the profession of honour. It will reduce the motivation of those joining on short-term contracts while diminishing the “honour” of a profession which places extraordinary demands on young men. The Government’s yearning for financial savings runs the risk of reducing the honour of a profession, the stability of a society and the safety of a country.
