📰 States should have a uniform policy on law and order: Shah
Home Minister calls for centralisation of data on terror and other crimes; each State to have a National Investigation Agency office by 2024 with powers to confiscate property in terror cases
•Union Home Minister Amit Shah said on Thursday that States should have a uniform law and order policy as certain crimes such as cross-border terrorism and cybercrimes transcend regional and international boundaries.
•Mr. Shah said that by 2024, to counter terror activities, each State would have a National Investigation Agency (NIA) office as the agency had been given “extra territorial jurisdiction” and additional powers to confiscate property in terror-related cases. He called for centralisation of data on terror and other crimes and said that following the principle of “one data, one entry,” the NIA had been entrusted with the task of maintaining a national terror database, the Enforcement Directorate a dataset on financial crimes and the Narcotics Control Bureau (NCB) on narco crimes.
•The Minister urged the States to utilise the National Intelligence Grid (NATGRID) that was operational now. The NATGRID brings datasets of 11 agencies on a common platform.
•Mr. Shah said, “The nature of crimes is changing, and they are becoming borderless, that is why all States will have to battle these by having a common strategy. To formulate and implement this under the spirit of ‘cooperative federalism’, cooperation, coordination and collaboration between the Centre and the States is required.”
•Union Home Secretary Ajay Kumar Bhalla said though law and order was a State subject, the Constitution provided that the Ministry of Home Affairs (MHA) could intervene in matters concerning national security and the Ministry from time to time sent advisories to States.
•Mr. Shah was addressing State Home Ministers, Home Secretaries and Directors-General of Police and Central Armed Police Forces (CAPF) at the two-day Chintan Shivir (brainstorming session) on various internal security issues in Haryana’s Faridabad on the outskirts of Delhi.
📰 The dismal case of slashing schemes and cutting funds
•Over the past three years, over 50% of existing central government-sponsored schemes have been discontinued, subsumed, revamped or rationalised into other schemes. The impact has been varied across Ministries. For example, for the Union Ministry of Women and Child Development, there are just three schemes now out of 19 schemes, i.e., Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0. Mission Shakti itself replaced 14 schemes which included the ‘Beti Bachao, Beti Padhao’ scheme.
•In the case of the Ministry of Animal Husbandry and Dairy, just two schemes remain out of 12. Additionally, the Ministry has ended three schemes which include Dairying through Cooperatives, National Dairy Plan-II, etc. For the Ministry of Agriculture and Farmers’ Welfare, there are now three out of 20 (Krishonnati Yojana, Integrated Scheme on Agricultural Cooperatives and the Rashtriya Krishi Vikas Yojana), while there is little information on the National Project on Organic Farming or the National Agroforestry Policy. There may be some who believe that a reduction in government schemes is a notable achievement. But does this lead to better governance, through less government? Are we reducing the state to the bare bones?
•For schemes that exist, there are challenges such as funding cuts, disbursement and utilisation of funds. As of June 2022, ₹1.2 lakh crore of funds meant for central government-sponsored schemes are with banks which earn interest income for the Centre.
•The Nirbhaya fund (2013) with its focus on funding projects to improve the public safety of women in public spaces and encourage their participation in economic and social activities is an interesting case; ₹1,000 crore was allocated to the fund annually (2013-16), and remained largely unspent. As of FY21-22, approximately ₹6,214 crore was allocated to the fund since its launch, but only ₹4,138 crore was disbursed. Of this, just ₹2,922 crore was utilised; ₹660 crore was disbursed to the Ministry of Women and Child Development, but only ₹181 crore was utilised as of July 2021. Yet, a variety of women-focused development schemes across States are being turned down or ended. Meanwhile, women continue to face significant risks while in public spaces.
•Farmers have not been spared either with fertilizer subsidies having been in decline over the last few years; actual government spending on fertilizers in FY20-21 reached ₹1,27,921 crore. In the FY21-22 Budget, the allocation was ₹79,529 crore (later revised to ₹1,40,122 crore amidst the COVID-19 pandemic). In the FY22-23 Budget, the allocation was ₹1,05,222 crore. Allocation for NPK fertilizers (nitrogen, phosphorus, and potassium) was 35% lower than revised estimates in FY21-22. Such budgetary cuts, when fertilizer prices have risen sharply after the Ukraine war, have led to fertilizer shortages and farmer anguish. How will we incentivise farmers to continue agricultural operations?
Employment programmes
•It is the same story with the rural poor. The allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) went down by approximately 25% in the FY22-23 Budget earlier this year, with the allocated budget at ₹73,000 crore when compared to the FY21-22 revised estimates of ₹98,000 crore. The Economic Survey 2022-23 has highlighted that demand for the scheme was higher than pre-pandemic levels as rural distress continues. Anecdotal cases show that actual funding disbursal for MGNREGA has often been delayed, leading to a decline in confidence in the scheme. The Garib Kalyan Rojgar Abhiyaan (June 2020, for a period of 125 days) sought to provide immediate employment and livelihood opportunities to the rural poor; approximately 50.78 crore person days of employment were provided at an expenditure of approximately ₹39,293 crore (against an announced budget of ₹50,000 crore, Ministry for Rural Development). One must also note that the scheme subsumed 15 other schemes. With between 60 million to 100 million migrant workers who seek informal jobs, such a scheme should have been expanded.
In health care too
•Now to health-care workers. For Accredited Social Health Activists (ASHA), who are the first responders, there have been delays in salaries for up to six months. Regularisation of their jobs continues to be a struggle, with wages and honorariums stuck at minimum levels.
•There is one more example. Biodiversity has also been ignored. Funding for wildlife habitat development under the Ministry of Environment, Forest and Climate Change has declined: from ₹165 crore ( FY18-19), to ₹124.5 crore (FY19-20), to ₹87.6 crore (FY20-21). Allocations for Project Tiger have been slashed — ₹323 crore ( FY18-19) to ₹194.5 crore ( FY20-21). A pertinent question is about meeting climate change obligations in the face of funding cuts.
•Rather than downsizing government schemes and cutting funding, one should right size the government. After the Goods and Services Tax reform, the Centre-State relationship has been transformed, with fiscal firepower skewed towards the Centre. Our public services require more doctors, teachers, engineers and fewer data entry clerks. We need to build capacity for an efficient civil service to meet today’s challenges, i.e., providing a corruption-free welfare system, running a modern economy and providing better public goods. Rather than having a target of fewer government schemes, we should raise our aspirations towards better public service delivery.
📰 Should governments sell liquor and run lotteries?
•Kerala Governor Arif Mohammed Khan recently criticised the State government for relying heavily on liquor and lottery to generate revenue. He said the State government was making poor people spend their earnings on lottery tickets and getting them addicted to alcohol. Should governments sell liquor and run lotteries? Nimai Mehta and Jayan Jose Thomas discuss the question in a conversation moderated by Prashanth Perumal J. Edited excerpts:
Should the government sell sin goods?
•Nimai Mehta: I don’t believe the government should be in sin business or in any business. But there are specific reasons why the government should not be involved in providing goods like alcohol. First, the role of the state is to provide public goods. The consumption of sin goods is instead linked with ‘public bad’. The negative effects of these sin goods disproportionately impact the weaker sections of society.
•Second, the role of the state needs to be considered not just from the supply side, but from the demand side as well, because the rising demand for alcohol is a public health concern. The Indian state, at least since Independence, has regulated all aspects of alcohol on the supply side. Despite that, there is a rapidly growing demand for alcohol. This needs to be brought into the picture when you want to assess the proper role of the state.
•Finally, historically, the state’s involvement in sin goods has been motivated by the desire to raise revenue. So, we’ve got this problem where the revenue-maximising objective takes precedence over public interest. Many States are heavily dependent on alcohol-based revenues. It’s not a healthy position for any state to be so dependent on a single commodity.
•Jayan Jose Thomas: I have a slightly different view. The state can play a positive role in regulating the sale and consumption of sin goods. An important instrument is taxes. Studies have shown that raising the tax rates on, and thereby the prices of, sin goods will discourage people from consuming them, at least in the long run. At the same time, the taxes collected form a significant source of financial resources for the state, which can be used for development programmes. So, some argue that such sin taxes create a win-win situation.
•Taxes on the sale of alcohol do form a considerable part of the revenues in several States. But this situation must be viewed against the larger context of Centre-State financial resources and responsibilities. In 2019-20, own tax revenues, collected by the States, accounted for only 43.5% of the total revenues of all States and Union Territories combined. State governments are heavily dependent on the financial devolutions from the Centre. At the same time, they have a greater responsibility for expenditure on social sectors. With the introduction of GST, there are only a limited number of goods and services — mainly alcohol and petroleum products — on which the State governments can independently set tax rates. So, if State finances are increasingly dependent on taxes from alcohol, it has mainly to do with the limited autonomy that the States enjoy in raising financial resources.
Can government monopoly in liquor and lottery lead to adverse consequences in terms of the product’s quality and price?
•NM: There is a lot of variation in the structure of state control over the alcohol industry in India. There are forms of direct and indirect control. These vary across States and from vary year to year, especially in the way excise and license fees are being set. But, yes, in principle, when you have a monopoly and the intention is to restrict supply, you should expect an increase in prices. You should also expect to see new entrants in the market, who could compete on quality, being discouraged. In the U.S., some 15 out of the 50 States have some form of direct control in the supply of spirits. If you look at the price of alcohol in those States, it is higher than in States with no controls. In States where the liquor trade was privatised, prices have come down, but they have not come down by much because price also depends on other factors such as indirect controls (for example, licensing policies and taxes) and/or consumer demand.
•Does government intervention increase the risk of capture of sin goods industries by special interest groups? For instance, some have argued that special interest groups in India have discouraged the consumption of low-alcohol beverages like toddy.
•NM: Among economists, there is a consensus that public goods such as health ought to be a primary concern of the state. But when it comes to practice, we should be taking into account the role of special interest groups. Legislators, politicians, bureaucrats, regulators, experts in the enforcement side... each of them has their own interests. Once we recognise that these special interest groups exist, the net effect is uncertain. Like in the case of toddy, you could have special interest groups coming together in a way that goes against true public interest. In the U.S., the FDA (Federal Drug Administration) decided to ban the sale of e-cigarettes by Juul, a multinational company. Many in the scientific community recognise that as a regressive step because vaping is less harmful than smoking tobacco. In this case, there was a mix of internal interests (in the form of the preferences of FDA regulators) and external interests (in the form of the interests of advocacy groups which were against e-cigarettes).
•JJT: I agree that the concerns of all stakeholders must be looked into while formulating policy interventions to restrict the consumption of sin goods. Consider, for instance, the tobacco industry. In 2017-18, it provided employment to 3.4 million Indians, 3 million of whom were women. Measures to limit the consumption of tobacco should go hand in hand with steps for providing alternative livelihood opportunities for those engaged in tobacco farming and processing.
What is the specific impact of governments selling sin goods on the poor compared to other classes?
•JJT: There are limitations to using taxes or high prices as the only instrument to restrict the consumption of sin goods. If a person addicted to alcohol is unable to let go of that habit despite high prices, his household will suffer. So, it is important to deploy other instruments too, such as public campaigns against the abuse of intoxicants. In any case, there is some reason for cheer. The proportion of men who drink alcohol in India decreased from 29% in 2015-16 to 22% in 2019-21 (NFHS data).
•NM: If you go back in time, you can see how the Temperance movement that began in the 1880s later transformed itself and fuelled the Independence movement. The concern has always been about drinking habits and the impact they have had on the vulnerable sections in society. During the Temperance movement, it was the lower castes and tribes that ended up joining the movement in large numbers. All those movements were directed against the role of the British Imperial state in encouraging the sale of alcohol. So, the poor have always had to bear a disproportionate burden of alcohol consumption. Now fast forward to 2016, when Bihar Chief Minister Nitish Kumar introduced a draconian prohibition law. He too was responding to the poor housewives in Bihar who had suffered as a result of excessive drinking by their husbands. India still has a large share of abstainers, but the drinking habits among the poor stand out. The poor tend to drink liquor that has higher alcohol content relative to upper- and middle-class individuals.
•Sin taxes can discourage consumption, but there is a regressive effect on the poor. This is because such taxes don’t work directly through a price effect, but rather through an income effect on the poor. So, while the middle and upper-middle classes may continue to consume their favourite alcohol, the poor may tend to switch to the consumption of illicit, lower quality alcohol that is cheaper but dangerous to health. Also, over the last two decades, there is a rise in demand for alcohol, as preferences are shifting. So, irrespective of what the sin tax is, if the demand itself is shifting outwards, there is a limit to which we can control demand simply through sin taxes. So, we need to take lessons from the Temperance movement.
Is the real problem then that alcohol consumption is becoming more socially acceptable?
•NM: Yes. The increase in consumption is on the part of women, and the middle and upper-middle classes. A rising aspirational demand is fuelling the rise in alcohol consumption. Also, norms of abstinence have been falling. Cultural and religious norms are no longer as effective as they may have been earlier. We have to rethink how this rising demand can be influenced by some form of intervention on the demand side by the state, but also in terms of individuals taking more responsibility for the social impact of their drinking.
•JJT: The fight against alcohol abuse, gambling, and so on must be long-term and multi-pronged. Taxing these goods alone will not help us win this fight. There have to be public education programmes to wean people away from, and thereby reduce the demand for, sin goods.
Governor Khan should not conflate role as Chancellor with constitutional duties
•Kerala Governor Arif Mohammed Khan has declared that he is withdrawing his pleasure as far as Finance Minister K.N. Balagopal is concerned. He expects constitutionally appropriate action by Chief Minister Pinarayi Vijayan. In other words, Mr. Khan wants Mr. Balagopal dismissed for remarks that he sees as seditious, undermining national unity and stoking regionalism. However, Mr. Vijayan has rejected the demand. It is difficult to agree with the Governor’s assessment that an observation that those who had seen only universities in Uttar Pradesh would not understand universities in Kerala is seditious or goes against national unity. In normal circumstances, when the Governor conveys his displeasure with a Minister’s conduct, it will have considerable persuasive value. However, in the backdrop of the unrelenting acrimony between Raj Bhavan and the Cabinet, it may have not evoked any serious response. Needless to say, the polite phrase in the Constitution that applies the doctrine of pleasure to a Minister’s tenure is nothing more than a reference to the will of the Chief Minister on the continuance or dismissal of a member of his ministerial Council.
•This constitutional position, however, does not mean that the underlying controversy over the appointment of V-Cs to universities in Kerala can be brushed aside. After the Supreme Court set aside the appointment made in the A.P.J. Abdul Kalam Technological University, Thiruvananthapuram, Mr. Khan directed nine other V-Cs to resign, flagging what he felt were similar legal infirmities in their appointment. His point was that just as it was in the case before the apex court, these V-Cs too were either appointed by the submission of a single name by Search Committees (instead of a panel of three to five names, as required under UGC regulations), or were chosen by committees that included the State’s Chief Secretary. The Governor/Chancellor was obviously wrong in fixing a short deadline for their resignation, and he subsequently converted the communication into show-cause notices to them, asking them to explain why their appointments should not be deemed illegal. It is a separate legal question whether the judgment in the case of one V-C is automatically applicable to all others. However, given its potential for litigation, the sooner the university statutes in Kerala are brought in line with the UGC regulations, the better. However, there is no doubt that Governor-Chancellors should not conflate their statutory powers to handle university matters with their constitutional role in Raj Bhavan. The tussle makes a good case for why Governors, whose overtly political functioning is an uneasy fact of political life, should not be tasked with being Chancellors.
