EPW August

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EPW August
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Content
Budget Transparency and Participation
Agriculture: Intentions and Actions
Reinventing Governors
Which Way for Public Libraries in India?
Case for Including Immovable Property in the GST
Tilting at the Windmills (Again)
Financial Sector, Monetary Policy and Budget 2014
Rangarajan's Measure of Poverty
10
No Cure for the Malaise
12
National Judicial Appointments Commission
12
Off With Its Head
15
Crimean Declaration of Independence
16
Banking with a Difference
18
Saving Sharmila
19
An Iron Fist in a Velvet Glove
20
Juvenile Public Rage
21
Protecting the Future
22
Union Budget and the 'Digital Divide'
22
Notes by vineetpunnoose on www.kiwipaper.com
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Content
When Will They Ever Learn
24
Trans-Pacific Partnership
25
India and Israel: An Embrace in Arms
28
Sex Ratio, Khaps and Marriage Reform
28
Health Service System in India
30
Masters of War
31
Fatwas and Muslim Women
32
Rejection of an Imbalance
33
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Budget Transparency and Participation
Sat, Aug 23, 2014
budget, EPW, economics,
The hallmark of a vibrant democracy is the strength and quality of participation by its
citizens. Electing representatives to Parliament and state legislatures every five years is
not enough. The real measure of participation is the extent to which citizens are actively
engaged in the political process during those five years. In particular, citizens should question
representatives continuously and hold them to account. Effective engagement in turn,
whether at the national or sub-national levels, depends on the citizens' access to timely
and relevant information as well as the establishment of formal spaces for participation
in the budget process. Further, instruments such as citizens' charters, right to information,
e-governance, report cards, and social audits have helped strengthen transparency in the
functioning of the government and empowered citizens with information required for a
meaningful citizen-government engagement. Yet, given the critical role of transparency,
accountability, and participation in ensuring good governance, more can and should be
done. To move towards the goals of strengthening transparency, accountability, and participation,
particularly with respect to budgets, there are a few realistic actions that India should take
now. First, the government should increase public participation in the budget formulation
process and publish a pre-budget statement to facilitate this. Second, the government should
strengthen sub-national budget transparency. Third, the government should mandate civil
society participation in the planning and budgeting of programmes that directly benefit
citizens through service delivery. The Fourteenth Finance Commission (FFC) represents
a significant opportunity to lay the foundation for achieving these objectives. The rest
of this note describes these recommendations in greater detail in the hope of encouraging
the FFC to pave the way for greater budget transparency, accountability, and participation
in India. In this context, if the budget is to be representative of the needs and demands
of citizens, the pre-budget process must include extensive engagement of civil society
as well as legislative members. Further, much of the information commonly included in
pre-budget statements - the government's fiscal objectives over the medium-term, broad
sectoral allocations, and expectations for broad categories of taxes and revenues is already
reflected in other budget documents disseminated to the public later in the year. Providing
such information earlier in the year in the form of a pre-budget statement would facilitate
greater debate around the government's budget policies and priorities and help ensure
that the outcomes of such discussions might be reflected in the draft budget. Finally, as
a convention/practice the government has already established a process for budget consultations,
which takes place in January every year; however, as the Ministry of Finance effectively
finalises the budget in December, the opportunity to influence the budget at this stage is
limited. Shifting these consultations to October would allow for these discussions to truly
have an impact on the budget. Moreover, formal mechanisms for public participation in
the national budget process build on the participatory planning and budgeting spaces included
in flagship programmes such as the National Rural Health Mission (NRHM) and Mahatma
Gandhi National Rural Employment Guarantee Scheme (MGNREGS). n India, the limited
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civil society engagement with budgets happens mostly during the implementation stage
and are confined to expenditure tracking, monitoring and social audit of programme implementation
at the micro level, and as a critical analysis/assessment of budget allocations and expenditures
at the macro level. At the state and sub-state levels this is constrained because of inadequate
and/or poor quality budget information accessible in public domain: often civil society
organisations (CSOs) have to struggle to get even the very minimal budget and expenditure
data to facilitate budget/expenditure tracking and monitoring. In the last two decades, especially
post the Right to Information Act as well as significant efforts of the Twelfth and Thirteenth
Finance Commissions, substantial progress has been made to increase budget transparency
at all levels. One would certainly agree on the fact that an important aspect of budget transparency
is the timely availability of locally relevant budgetary information. Disaggregated budgetary
information at the district and sub-district levels is often not shared in the public domain.
This actually restricts citizens' engagement in the wider debates and discussions on budgets
and its priorities. Further, the devolution of governance has also created participatory
spaces for citizen and CSO engagement, especially at the district and sub-district levels.
The peoples planning initiative in Kerala, wherein planning and budgeting for about 40%
of the development budget is done directly by gram sabhas and other citizen committees
is one good example. In Nagaland, the village development committees (VDCs) engage
directly with local development and budget allocations. But, these are exceptions. A few
suggested recommendations for the FFC to consider and suggest appropriate grants to
strengthen budget transparency, accountability and participation: * Recommending the
publication and dissemination of a pre-budget statement and related budget information
that will increase civil society and legislative participation in formulation of budgets; *
Further, to strengthen the quality of budget information in line with Sundaramurti Committee
recommendations, grants would be required for upgrading institutions, particularly the
treasury management system in the country; * Developing a rational basis for increased
and effective allocation of resources to the social sectors so that the objectives of the programmes
are effectively achieved. * Grants for institutionalised mechanisms with respect to better
access to and dissemination of quality budget information at the sub-national level, especially
district and sub-district levels. * Making mandatory civil society participation for planning
and budgeting (like PIPs, untied funds, etc) for programmes which directly benefit citizens
through service delivery and benefits.
Agriculture: Intentions and Actions
Sat, Aug 2, 2014
EPW, agriculture, economics,
For agriculture the period since 2004-05 has been different from previous periods in several
respects. The sector recorded 3.8% annual growth in value added in the decade since 2004-05
which is the highest in any decade since 1950-51 (Chand 2014). The decade also witnessed
a reversal of the slowdown in annual growth of agriculture, a slowdown which started
after the mid-1990s and breached the 2% mark between 1996-97 and 2004-05 Based on
the elasticity of gross domestic product (GDP) agriculture to terms of trade, it is estimated
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that about one-third of the growth in farm output resulted from an increase in real agricultural
prices. Some increase in real prices was justified to correct the decline witnessed during
1998-99 to 2004-05, but the ratio of the Wholesale Price Index (WPI) agriculture to WPI
(non-agriculture) has risen steeply after 2005-06 at an unprecedented pace. Beside a high
level of food inflation, seasonal and short-term price spikes of some commodities like
onions, tomatoes and potatoes are becoming more frequent, more severe and more lasting,
hurting consumers and causing economic instability. Another significant change witnessed
in agriculture is the decline in the workforce engaged in agriculture. It is for the first time
in the history of Indian agriculture that the absolute number of cultivators and agricultural
labour has started falling. It is important to put in place a development strategy to absorb
workforce leaving agriculture. It is more than 12 years since the formulation of the model
Agricultural Produce Market Committee (APMC) Act, but few states have implemented
it. In the absence of required institutional mechanisms and modernisation of agricultural
marketing, the price spread between farm and end users of agricultural products has been
widening, depriving producers of the ability to benefit from consumers' willingness to
pay for food commodities and depriving consumers of the benefit from a competitive market
model. Prices are quite important for incentivising production, but in India the price effect
dominates other factors like technology. The empirical relationship between prices and
agricultural growth implies that if agri-food prices do not increase in real terms (i e, they
increase at the same rate as non-agricultural prices), then agricultural growth collapses
to 2.6%. 1 The main causes of high food inflation in recent years have been the rising average
cost of food production, substantial hikes in minimum support prices, a widening price
spread between producers and consumers, and changes in dietary preferences. Controlling
cost push inflation in agriculture requires a paradigm shift from growth per se to efficient
growth, i e, growth accompanied with a decline in the real average cost of production.
The short-term option is to harness the potential of low productivity areas. The yield gap
data shows that there are plenty of opportunities to raise productivity of almost all the
crops through adoption of available technologies in low productivity states (Chand 2008).
The absence of an effective extension mechanism is the weakest link in taking already
developed and well-tested technologies to the farm level. This component has weakened
considerably in the National Agricultural Research System (NARS) comprising the Indian
Council of Agricultural Research (ICAR) institutes and agricultural universities. The focus
of NARS over a period of time has shifted to applied research and problem-solving research.
This has been yielding incremental gains but not breakthroughs. Thus, to have a breakthrough
in agricultural R&D and technology and to have science-driven growth, we need to create
a new set of research institutions for agricultural research on the pattern of Indian Institutes
of Technology (IITs), I Storage India has a good track record of being able to cope with
severe droughts without there being a serious disruption of its food economy. This could
be possible due to public stockholding of foodgrains. Over time, the country's production
base and requirement have risen sharply. India produces about 600 million tonnes (mt)
of food of vegetative origin, comprising 264 mt foodgrains, 268 mt fruits and vegetables,
34 mt edible oilseeds, and 30 mt sugar. More than three-fourths of this production, i e,
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450 mt, enters the market. Assuming that a month's supply is in transit and does not require
storage, the remaining 412 mt food produced in the country has to be put in some storage.
Reinventing Governors
Sat, Aug 2, 2014
governors, EPW, polity,
The utility of the post of governor has been a matter of public debate for some time. The
Constituent Assembly debated whether appointments being vested in the President amounted
to the governor being a representative of the centre at the provincial level. In 1967, a study
team of the administrative reforms commissions on centre-state relations expressed misgivings
about the way the post had been treated as a sinecure. Other committees questioned the
emphasis on the governor being merely an appointee of the central government and the
frequent removals and transfers made by various union governments. In 1979, a constitution
bench of the Supreme Court ruled that governors are not "subordinate or subservient to
the Government of India" and that the post is an independent constitutional office, "which
is not subject to the control of the Government of India". The governor is "constitutionally
the head of the state in whom is vested the executive power of the State". Twenty years
ago, the Justice Rajinder Singh Sarkaria Commission recommended clear guidelines for
the appointment and removal of the governor. These included recommendations that the
governor should be eminent in some walk of life, should not be a person belonging to the
said state, should be a person who has been relatively apolitical (at least recently before
appointment) and that the state government should have a say in the appointment. Only
a few of these recommendations - such as the governor not being from the same state have been put into practice. It is also difficult to deny that the governor holds a political
position and it makes sense to appoint someone who is not an active politician but surely
someone who has political experience and awareness; in other words a "political person".
Similarly, a substantial "cooling off" period should be made mandatory for politicians
before they are appointed. Yet, it must be remembered that some of the most "partisan"
governors have been bureaucrats and generals - the establishment definition of eminent
persons - who have been seeking post-retirement sinecures. An abolition of the governor's
position may well turn out to be a cure worse than the disease. Some of the more egregious
misuses of the governor's position have reduced over time. Thus Article 356 is not used;
there is not even a threat of its use in normal circumstances. With the increasing regionalisation
of the polity and the dependence of "national" parties on regional allies (even if the present
government by the BJP is technically a majority government), there has been a definite
reduction in the arbitrariness often associated with the actions by this central government
appointee. What is certainly needed is a review of the governor's powers, the process of
appointment and removal. Some of the conventions which have been neglected by the
central government may need to be given the force of law while new rules and conventions
may need to be put in place so that the ability of the central government to misuse this
office is curtailed, while the governor's ability to fulfil his or her constitutional mandate
is strengthened.
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Which Way for Public Libraries in India?
Sat, Aug 2, 2014
libraries, social, EPW,
In what was perhaps a first time mention by the head of government, former Prime Minister
Manmohan Singh, in his inaugural speech for the National Knowledge Commission (NKC)
in August 2005, acknowledged that public libraries are an "extremely important element
of the foundation of a knowledge economy". In pursuance of the NKC's recommendations,
the centre had in fact set up a high powered committee called the National Mission on
Libraries (NML) to take its agenda forward. The NML has taken some decisive steps towards
improvement in the so far badly neglected library sector, including a national census of
libraries, content creation and setting up of community information centres, upgradation
of existing public libraries, school and college libraries, use of school libraries as community
libraries, improvement in library and information science, education training and research
facilities, and so on. Most significant, the centre has now decided to digitally link nearly
9,000 libraries across the country under the NML. A proposal to spend nearly Rs 1,000
crore on this project is pending before the Planning Commission for its approval. 1 Envisaged
as a national institution, the public library was originally created to serve the masses, to
build capacities for and contribute to both formal education, and lifelong learning. Universalisation
of elementary education and eradication of illiteracy (the literacy rate in 1941 was 16%)
were the primary aims of the education policy of a newborn nation, and public libraries
were seen as integral to realisation of these aims. Is all of this germane, 65 years later,
to India's (arguably) thriving "knowledge economy"? A careful distinction between what
is possible, and what is important is perhaps still pertinent in a "knowledge economy"
where roughly 30% of the population still lives below an officially mandated "poverty
line" (membership criteria to be included in which are so frugal, it could well be termed
the hunger line). For instance it may be legitimate to ask, how does spending Rs 1,000
crore on digitising and connecting public libraries make sense in a context where a third
of the country's population does not have access to electricity? Power connectivity and
supply, as is well known, is much worse in our rural interiors - regions where public libraries
are in the most dire need. 4
Case for Including Immovable Property in the GST
Sat, Aug 9, 2014
EPW, economics, GST,
Including immovable property transactions in the tax base of the proposed Goods and
Services Tax will curb the generation of black money while improving tax buoyancy. A
The Goods and Services Tax (GST) offers a unique opportunity to address this problem
by integrating a prime generator of black money - the real estate sector - into the GST
base. At present, adequate opportunity to review the GST's structure exists. Over the past
five years, during the discussions between the centre and the Empowered Committee of
State Finance Ministers on the design of the GST, both parties have studiously been ignoring
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the elephant in the room - the treatment of real estate transactions. The Thirteenth Finance
Commission recommended that this be done. This recommendation did not find favour
with either the centre or the states. Transactions in immovable property originate from
both the construction and real estate sectors that have emerged as two key drivers of growth
in India today. The growth of the real estate sector has been spurred by increasing urbanisation,
higher incomes, and a favourable demographic profile. The size of the real estate market
can independently be culled from an examination of the income received from sale of immovable
property by all the states in the country and the average stamp duty applied. The total all-state
revenue from transactions in immovable property during 2011-12 was Rs 64,379.5 crore.
3 Assuming that only 70% of this income emanates from stamp duty, the revenue from
stamp duty is estimated at Rs 45,000 crore. Applying a "national" rate of 5% for stamp
duty, the volume of transactions for 2011-12 works out to Rs 9,00,000 crore, which was
10.02% of the GDP in 2011-12 at current market prices (Rs 89,74,947 crore). The size
of the transfer of the property market determined in this fashion appears significantly larger
than the earlier estimates of 5%-6%. Clearly the size of the market indicates that it is "too
big to ignore" and should be integrated into the GST base. Two features which arise from
a state-wise analysis are: (a) The aggregate revenue from transactions in immovable property
forms 11.55% of the overall own tax revenues of all states. (b) Immovable property tax
collection in the top-10 states aggregates to Rs 54, 504.50 crore, which forms almost 85%
of the aggregate collection in all the states during 2011-12. In Maharashtra, it is as much
as 16.45%. Apprehensions of these 10 states regarding revenue loss may have to be addressed
if this tax has to be successfully merged into the GST base. The White Paper on Black
Money (Ministry of Finance 2012b) recognises the need to control this scourge and foster
the growth of the legitimate economy. It identifies the real estate sector as one of the eight
sectors vulnerable to the generation of black money noting that "investment in property
is a common means of parking unaccounted money and a large number of transactions
in real estate are unreported or underreported". Both these reports do not appear to have
recognised the beneficial impact the inclusion of real estate transactions in the GST base
will have on controlling the generation of black money. Due to the escalating cost of land
in urban areas, there is an increasing incentive for both buyers and sellers to suppress the
sale price while registering the sale document. The seller avoids wealth tax and capital
gains tax and the buyer avoids stamp duty, registration charges and transfer fees. If input
tax credit paid on steel, cement, architectural services and other construction-related inputs
is allowed to be deducted from the final stamp duty payable on transfer of immovable
property, construction contractors and real estate dealers will be incentivised to record
all their purchases in their accounts. At present, all three tiers of government; centre, states
and local governments impose taxes on immovable property. These taxes are levied on
the stock of immovable property, i e, on persons holding it as well as on its flow on transactions
in immovable property. (a) The Indian Stamp Act, 1899, provides for levy of stamp duty
in respect of notified instruments which include deeds of sale of immovable property. As
per item 63 of the state list, the power to determine rates of stamp duty in respect of immovable
property is vested with the state governments. (b) As per Section 78 of the Registration
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Act, 1908, the state government determines the registration fees for documents which are
registered under the Act in lieu of services provided including prior sales search, making
copies, maintaining records. (c) The Panchayat Raj Acts and Municipal Acts enacted by
state governments provide for levy of a transfer duty in the form of a surcharge on certain
specified instruments including deeds of sale, gift, exchange, mortgage and lease. State
governments levy and collect this duty on behalf of the local bodies at the time the stamp
duty and registration charge are collected. It then transfers the proceeds to the concerned
local government. Transfer of immovable property must be included in the GST tax base
for the following reasons: (a) Levy of stamp duty, transfer duty and registration fee in
their present form without any input tax set-off leads to cascading of a consumption tax
with distortionary consequences. Inclusion of immovable property in the GST tax base
will provide significant relief even if the revenue neutral rate (RNR) is relatively higher
than the present effective rate because of the set-off available. (b) Though the Jawaharlal
Nehru National Urban Renewal Mission (JNNURM) reform initiative has largely succeeded
in bringing down stamp duties to about 5%, the addition of transfer duty and registration
duty effectively raises this to between 6% and 9%. This also excludes other costs associated
with property purchases including legal fees, broker's commission, and bank charges.
Assuming this forms another 1%, the aggregate tax and other charges levied on transactions
in immovable property is as much as 10% of the sale value. This significant charge without
any set-off for tax paid earlier in the value chain or the promise of a downstream credit
at the time of the subsequent sale, deters registration of such transactions leading to both
revenue losses as well as generation of black money. GST with its provision of input tax
credit will be an acceptable proposition for both buyers and sellers in the real estate market.
(c) The generation of black money can be effectively curbed by inclusion of real estate
in the GST tax base. Under this regime, all the buyers in the value added chain from the
contractor through the real estate agent to the final buyer will be strongly incentivised
to record their transactions and insist on invoices for their respective purchases. Presently,
while income tax clearances are obtained at the time of registration of immovable property,
no verification occurs relating to payment of sales tax on the construction and service inputs
to the property. This leads to significant amounts being not accounted for in sales price
and moving backwards, into consumption of cement, steel, paints, services, etc. Since
GST will provide input tax credit to the seller of the property, s/he will be incentivised
to insist on invoices for all purchases made. Gradually, all the components of real estate
and construction industry can be brought into the direct and indirect tax net. (d) The construction
and real estate sectors contribute significantly to GDP. They also have critical spillover
effects in other sectors of the economy. However, transfer transactions in this sector are
presently not being fully taxed. It is therefore necessary that this sector bears an equitable
burden of the GST and the tax distortions affecting the growth of other productive sectors
of the economy including manufacturing are removed. Tax Rate: The design of the GST
and the determination of the RNR are critical. If the RNR is below 12%, the merger of
real estate into GST will not meet significant opposition. This is because with the present
average rate of about 8% on property transfer, there may not be significant impact on purchasers
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given the input tax benefit provided. Tax Base: All real estate transactions - sale as well
as lease will be brought into the GST base with prospective effect from a notified date.
Tax will be levied on transactions relating to both old and new property. In respect of new
property, set off against input tax credit paid on construction materials and services will
be available against the GST payable. In respect of old property, GST will be levied on
the capital gain, being the difference between the purchase price and the resale price with
the purchase price being suitably indexed. Taxes To Be Subsumed: Both stamp duty and
registration fee would be subsumed into the GST. Exemptions: To ensure that small house
owners do not come under the ambit of the GST with concomitant registration and record-keeping
requirements, exemptions could be granted up to a threshold for both property value and
rental. This could be fixed at say Rs 50 lakh for value of property and Rs 2 lakh for annual
rental. Concomitant Charges: The government's obligation to continue to register documents
attesting the sale of immovable property and to maintain a database of such property must
subsist. Legal Implications: The application of GST on immovable property transactions
will mark a paradigm shift in immovable property legislation in India. It will require a
number of amendments to existing constitutional, central and state legislation.
Tilting at the Windmills (Again)
Sat, Aug 23, 2014
living will, EPW, polity, suicide,
the Supreme Court has once again been called upon to legislate in another fraught and
complex area - legalising living wills. 5 Common Cause, a non-governmental organisation,
has in a writ petition filed under Article 32, asked the Court to declare that the "right to
die with dignity" be recognised as an aspect of the "right to life with dignity" 6 and in
furtherance of this, pass orders to allow for the execution of "living wills". In the alternative,
the writ petition seeks the setting up of an expert committee consisting of "doctors, social
scientists and lawyers" to study the aspects of the issue of "living wills" and frame guidelines
in this respect. 7 Broadly, two reasons have been indicated by the three-judge bench for
referring the matter for hearing by the Constitution Bench; the conflicting judgments of
the Supreme Court in Gian Kaur vs State of Punjab 9 (Gian Kaur), and Aruna Ramchandra
Shanbaug vs Union of India 10 (Aruna Shanbaug), and the "important question of law"
which requires to be decided in the case. 11 The three-judge bench has not, however,
thought it fit to frame any questions of law or terms of reference for the Constitution Bench,
leaving it open to examine any and all issues within the scope of the writ petition. The
Constitution Bench recently issued notice to all the state governments and appointed amicus
curiae to assist it in this matter. 12 Undoubtedly the writ petition raises a substantial question
of law relating to the interpretation of the Constitution, viz, whether the right to live with
dignity guaranteed under Article 21 includes the right to die with dignity. However, a Constitution
Bench of the Supreme Court in Gian Kaur has already held that the right to live with
dignity includes the right to die with dignity. In Gian Kaur, the Supreme Court was only
considering the criminalisation of suicide and not with euthanasia or living wills per se.
The proposition laid down in Gian Kaur , with respect to the right to die with dignity,
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must be treated therefore as obiter dicta - binding on lower courts. 15 In Aruna Shanbaug
however, a two-judge bench of the Court was in fact concerned with a case where active
euthanasia was sought. A "living will" or an "advance directive" as it is also known in
some countries, is a legal document executed in advance by a person relating to the provision
of healthcare to such person when she is incapacitated and no longer capable of making
decisions for herself. It enjoins the executor and the medical practitioner to follow the
wishes of the executor of such a "living will" while providing medical treatment in cases
of such incapacitation including and up to the withdrawal of treatment. A living will is
the recognition of the common law principle that medical treatment, contrary to the intentions
of the person being treated, is an invasion of the right to bodily integrity of such person.
A person who is no longer capable of making such decisions about treatment does not
necessarily lose the right to be treated according to her wishes, if she has indicated such
a preference earlier. A living will is therefore the expression of such a wish, and in the
common law, capable of being recognised and enforced as a valid legal document. 18
five key questions that the Court will have to grapple with are: (1) Who will be competent
to execute a living will? (2) In what form will a living will have to be issued in order to
be valid? (3) Who is to ensure that a living will is properly obeyed? (4) What legal consequences
follow from the non-obedience to a living will? (5) Can a doctor, for reasons of conscience
or faith, refuse to execute a living will?
Financial Sector, Monetary Policy and Budget 2014
Sat, Aug 9, 2014
budget, Monetary Policy, EPW, international,
There is, however, a more generous take on the budget. It is believed in some quarters
that the hype and hoopla associated with the budget is an Indian phenomenon and that
the budget needs to be stripped off its frivolities and it should not be seen as much more
than the annual income-expenditure of the union government. In terms of allocating increased
funds the following deserve special mention: * Corpus of Rural Infrastructure Development
Fund (RIDF) was raised by an additional Rs 5,000 crore. * Allocation of Rs 5,000 crore
was provided for the Warehouse Infrastructure Fund . * A Long Term Rural Credit Fund
was proposed to be set up for the purpose of providing refinance support to Cooperative
Banks and Regional Rural Banks with an initial corpus of Rs 5,000 crore. * Amount of
Rs 50,000 crore allocated for Short Term Cooperative Rural Credit. * Rs 200 crore was
provided for "NABARD's Producers Development and Upliftment Corpus" for building
2,000 producers organisations over the next two years. Two comments are in order. First,
as the budget has been presented in July 2014, slightly more than one quarter of the year
has already passed. Considering that these allocations are to be spent within a period of
little less than nine months, these amounts could be decent. Second, in terms of continuity
with the previous budget, the Interest Subvention Scheme for short-term crop loans has
been extended. Budget 2014 announced a decision to infuse Rs 2,40,000 crore as equity
by 2018 in Indian public sector banks so that they are in line with Basel-III norms. What
would be the source of such additional capital? The budget went on to say, "Capital of
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banks to be raised by increasing the shareholding of the people in a phased manner". viewpoint
of the RBI that, "While the ownership structure and recapitalisation of public sector banks
are contingent upon government policy and the fiscal situation, there is a strong case for
subjecting them to the requirements of market discipline" Given the asset-liability mismatch
of banks, how are they going to fund it? Banks have been permitted to raise long-term
funds for lending to the infrastructure sector with minimum regulatory pre-emption such
as the cash reserve ratio (CRR), statutory liquidity ratio (SLR) and priority sector lending.
The details in this context have been provided by the RBI in its circular of 15 July on "Issue
of Long Term Bonds by Banks - Financing of Infrastructure and Affordable Housing".
Insurance Sector: The budget has proposed to increase the foreign direct investment (FDI)
limit of the insurance sector to 49% from the current level of 26%, subject to a rider that
management and control of the company will remain with the Indian partner. This is going
to bring some additional capital to the insurance sector while diluting their Indian ownership.
Capital Market: In terms of continuity, the budget has drawn the way forward for the capital
market in terms of completing the consultation process of the Financial Sector Legislative
Reforms Commission (FSLRC). Illustratively, Budget 2014 mentioned categorically the
recommendation relating to the enactment of the Indian Financial Code is expected to
ensure better governance and accountability. The budget has proposed International settlement
of Indian debt securities and revamping of the Indian Depository Receipt scheme to allow
issuance of depository receipts on all permissible securities. Besides, the budget proposed
extending a liberalised facility of 5% withholding tax to all bonds issued by Indian corporate
abroad and extending the validity of the scheme to June 2017. Two comments are in order.
First, an emerging capital market cannot be an end in itself of any government policy like
budget. It has to be linked with the general trends of household savings behaviour and
with provision of risk capital to the corporate sector without jeopardising investors' interest.
Thus, a fillip to equity at the cost of bank deposits may not be justified as a means to enhancing
savings. Second, after the global financial crisis, the conventional wisdom in many cases
of financial/capital markets has changed. To be oblivious to the new realities of financial
market is like suffering from ostrich-like behaviour.
Rangarajan's Measure of Poverty
Sat, Aug 2, 2014
poverty, Rangarajan poverty estimates, EPW, economics,
The main criticism of the Tendulkar methodology was that its poverty lines had no explicit
normative content and were based on the level of urban poverty as obtained from the earlier
Lakdawala methodology. In fact, while maintaining continuity with Lakdawala, Tendulkar
had explicitly delinked consumption poverty from calorie norms and focused on proper
treatment of price differentials over space and time. This led to significant upward revision
of estimates of rural poverty that were attributed to faulty price adjustments in the past
and corrected many cases where the Lakdawala method unrealistically measured a state
to have much less rural poverty than urban. But, discontinuing the calorie anchor went
against an established view. And, more significantly, there was general anger that too many
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who deserve public support would still remain excluded, especially in urban areas, if the
Planning Commission used Tendulkar estimates to continue its caps on the numbers of
people entitled to various government benefits. Rangarajan has addressed these concerns
by not only suggesting a calorie-plus norm that increases poverty numbers beyond Tendulkar
but by also endorsing the view that poverty estimates should not be used to cap entitlement
to government benefits. The resulting new calorie intake requirements are reported at 2,155
and 2,090 calories per capita per day in rural and urban areas, respectively. These imply
a large reduction from the rural norm of 2,400 calories per capita per day implicit in Lakdawala,
but the urban requirement remains almost unchanged at the earlier 2,100 calories per capita
per day Marking a return to Lakdawala from Tendulkar, these calorie norms constitute
the main normative basis of the new Rangarajan methodology. Supplemented by similarly
calculated intake norms for proteins and fats, the food component of the poverty line basket
is taken to be the actual food basket of those in the lowest fractile group that met all three
nutrient intake norms simultaneously. Based on the 2011-12 NSS data using modified
mixed reference period (MMRP), about 27% of rural and 17% of urban population with
monthly per capita expenditure (MPCE) below Rs 933 and Rs 1,181 were found unable
to afford the Rangarajan nutrition norms after allowing for their consumption of all other
items. What is striking about this, but left unmentioned in the Rangarajan Report, is that
all this effort at deriving norms based on nutrient intake actually yields numbers that differ
very little from Tendulkar poverty estimates, which were 25.7% rural and 13.7% urban
for 2011-12. Had Rangarajan stopped here, he would have delivered a resounding vindication
of the Tendulkar methodology from the normative point of view and offered too little an
increase in estimated poverty numbers to assuage those who had criticised Tendulkar for
underestimating them. This takes Rangarajan's final 2011-12 poverty line from Rs 933
to Rs 972 per capita per month in rural areas and from Rs 1,181 to Rs 1,407 per capita
per month in urban areas. The corresponding final Rangarajan poverty estimates are 30.9%
rural and 26.4% urban which, although only modestly more than Tendulkar in rural areas,
nearly doubles measured urban poverty. It is still to be seen whether this is enough to satisfy
the vocal urban critics, but at least Rangarajan has attempted to extend the normative concern
beyond food to some basic non-food essentials. However, this add-on treatment of non-food
essentials is problematic conceptually. It causes norm poverty line consumption bundles
to differ from the actual and also vitiates a welfare proposition central to the Tendulkar
methodology: that poverty lines in different places should allow the same poverty line
basket to be affordable everywhere. This matters because Rangarajan has otherwise accepted
the main Tendulkar innovations on spatial and temporal price indices to derive state-specific
poverty lines. On the whole it would have been more consistent if, like Tendulkar, Rangarajan
had fixed a normative all-India urban poverty line and from this derived state and sector-specific
lines based on Fisher price indices using actual consumption weights. This would have
avoided the main infirmity of the Rangarajan method which is that like Lakdawala before,
and unlike Tendulkar, his new method implies rather unrealistically that urban poverty
is higher than rural in a clear majority of Indian states.
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No Cure for the Malaise
Sat, Aug 23, 2014
EPW, national judicial appointments commission, polity, judiciary, NJAC,
Parliament's approval of the Constitution (121st Amendment) Bill, 2014 and the National
Judicial Appointments Commission (NJAC) Bill, 2014 raises more questions than answers
about the process of appointments to the higher judiciary. The combined effect of the two
bills is to establish a NJAC which will be responsible for appointment of judges to the
Supreme Court and high courts as well as transfer of judges between high courts. The establishment
of the NJAC marks the end of the judicial collegium, a committee comprising the Chief
Justice of India (CJI) and senior Supreme Court judges. In principle, there is a strong
claim that not having a preponderance of judges in a commission to appoint judges is in
violation of the independence of the judiciary. That judicial preponderance is essential
in a judicial appointments mechanism was held by the Supreme Court itself in The Second
Judges Case which established the collegium system. This is especially so in appointments
to the office of the CJI. For such appointments, the two senior-most judges on the NJAC
have to recuse themselves, since they will be in consideration for appointment as CJI. This
will mean the CJI is the only judicial member for this particular selection. This is symptomatic
of a larger concern with the bills - an inadequate safeguarding of transparency, particularly
in the details of the process. This is surprising, since the most egregious failing of the collegium
system was the secrecy of its functioning and the lack of reasons for its decisions. One
would have expected rectification of this deficiency to be the raison d'etre of these reforms.
On the contrary, the shortlisting of candidates, their final selection, and the exercise of
a veto in respect of certain candidatures can all be done by theNJAC in secret without
any reasons being provided. Safeguards to ensure that persons are appointed on the basis
of their ability rather than their connections are thus largely absent. There is no guarantee
that the spectre of nepotism and trade-offs that characterised several collegium appointments
will not be replicated in the NJAC. But as far as the separation of powers in India's constitutional
framework is concerned, we live in testing times. The Narendra Modi government is the
first in over two decades to command an absolute majority in the Lok Sabha. The judiciary,
having cited governance deficits to justify expansive and activist interpretations of the
Constitution in this time, might need to closely introspect about its interpretive approach
and wider public role.
National Judicial Appointments Commission
Sat, Aug 30, 2014
EPW, polity, judiciary, National Judicial Appointments Commission, article 124,
An assessment of the new law introduced to appoint judges argues that it will make the
judiciary subservient to the executive and thus throws a fundamental challenge to the Constitution
and Indian democracy. The petition filed by the Supreme Court Advocates-on-Record
Association states that Parliament does not have the power to change the basic structure
of the Constitution which it has done and hence the government should be restrained from
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sending the amendment bill to the states for ratification. The NJAC Bill is also challenged
on the ground that when it was introduced, Article 1241 and Article 217 were in full force
and effect and no legislation can go contrary to the Constitution. The two bills are therefore
a stillborn law, null and void. There was a similar challenge to the bill creating Telangana
before it became a law and the Supreme Court rejected the challenge on the ground that
only a law could be challenged and not a bill. Ironically, during the United Progressive
Alliance (UPA) regime, it was Arun Jaitley who made the point that no law could be made
altering Article 124 of the Constitution without a constitutional amendment first being
made but in its haste to set up a commission, the NDA seems to have forgotten this basic
proposition. The petition challenging the constitutional amendment states that the two
bills destroy the separation of powers and undermine the independence of the judiciary.
In plain language, this means that the executive can determine the composition of the judiciary,
making it an institution appointed by the executive. Given that in our system, laws made
by the executive can be challenged in front of the judiciary, it is imperative that judges
are not dependent on the executive for their appointment. It is obvious that under the new
dispensation, the government can veto the appointment of judges they consider unfriendly
to them. It is in these circumstances that the challenge is not only important but fundamental
to our democracy. Since 1950, judges have been appointed by the government in "consultation"
with the Chief Justice of India (CJI). For the first two decades, there was a near consensus
between the government of the day and the CJI. In 1981 the question arose whether "Consultation"
referred to in Articles 124(2) and 217(1) with the CJI meant "concurrence" in which case
the recommendations of the judiciary would be binding on the government. In the S P
Gupta case decided in 1981, the Court held by a majority that the recommendations of
the CJI were not binding on the government. Once this decision was rendered the government
obtained a licence to disregard the recommendations of the judiciary. While this was a
literal interpretation of the word "consultation", it had devastating political consequences.
It appears the recommendation made by the CJI were not accepted as an invariable rule;
change was on the cards. Judges of these courts are invariably sons of former judges or
sons of lawyers practising at the bar. The debate on who should appoint judges has never
really being thrown open to the public and we as a country do not have an articulated position
on this issue. In Court we are confronted with a binary position, either independence of
the judiciary or executive control. This process of reasoning is inherent to the legal method
and no nuances are allowed to emerge nor options considered. In 1993, once again, the
issue was taken to the Supreme Court and the judgment in the S P Gupta case was overruled.2
This time a bench of nine judges held that a collegiate opinion of a collective of judges
is binding on the government. The majority gave the following conclusions regarding appointments:
(1) All the constitutional functionaries must perform this duty collectively with a view
to reach an agreed decision so that the occasion of primacy does not arise. (2) In case of
Supreme Court the proposal is to be initiated by the CJI and in the case of a high court
by the chief justice of that high court. (3) In the event of conflict of opinion the view of
the CJI has primacy. (4) No appointment of any judge to the Supreme Court or any high
court can be made unless it is in conformity with the opinion of the CJI. (5) In exceptional
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cases, for stated strong and cogent reasons, disclosed to the CJI, indicating that the recommendation
is not suitable for appointment, the appointment recommended by the CJI may not be made.
But in case the CJI reiterates his recommendation then, the appointment should be made
in accordance with his recommendation. (6) The senior-most judge of the Supreme Court
should be appointed as CJI, if considered fit to hold the office. The nine judges bench
opined; (1) The opinion of the CJI, having primacy in the consultative process and reflecting
the opinion of judiciary, has to be formed on the basis of consultation with the collegium,
comprising of the CJI and the four senior most Supreme Court judges. The judge, who
is to succeed the CJI should also be included, if he is not one of the four senior most judges.
Their views should be in writing. (2) Views of the senior most judges of the Supreme
Court, who hail from the high courts where the person to be recommended are functioning
as judges, if not part of the collegium, must be obtained in writing. (3) The recommendation
of the collegium along with the views of its members and that of the senior most judges
of the Supreme Court who hail from the high court where the persons to be recommended
are functioning as judges should be conveyed by the CJI to the Government of India. (4)
The substance of the views of the others consulted by the Chief Justice of India or on his
behalf, particularly those of non-judges (members of the Bar). Should be stated in the memorandum
and be conveyed to the Government of India. (5) Normally, the collegium should make
its recommendation on the basis of consensus but in case of difference of opinion no one
should be appointed, if the CJI dissents. (6) If two or more members of the collegium dissent,
the CJI should not persist with the recommendation. (7) In case of a non-appointment of
the person recommended, the materials and information conveyed by the Government
of India, must be placed before the original collegium or the reconstituted one, if so, to
consider whether the recommendation should be withdrawn or reiterated. It is only if it
unanimously reiterated that the appointment must be made. (8) The CJI may, in his discretion,
bring to the knowledge of the person recommended the reasons disclosed by the Government
of India for his non-appointment and ask for his response thereto, which, if made, be considered
by the collegium before withdrawing or reiterating the recommendation. Women, scheduled
castes, scheduled tribes and religious minorities continued to be, by and large, excluded
from the judiciary. The long-standing demand has been for transparency and public participation,
greater representation for women, minorities, scheduled castes and scheduled tribes. The
bills introduced in Parliament do not address any of these. The Commission is composed
of the CJI, two senior-most judges of the Supreme Court, the law minister and two eminent
persons, to be selected by a selection committee consisting of the prime minister, the CJI,
leader of the opposition in the Lok Sabha or where no leader of opposition, the leader
of the largest single opposition party. There is no definition of who is an eminent person.
If past experience is anything to go by, these could be lawyers or former judges. It is the
function of this commission to recommend judges for appointment to the Supreme Court
and the high courts. Seeds of Authoritarianism The judiciary which is supposed to be independent
of the executive is the only institution to which we can turn to question anti-people laws.
To give just one example, the move to amend labour laws to take factories with less than
40 workers out of the ambit of the Factories Act will deprive workers there of health and
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safety benefits and is bound to be challenged. What was needed was public participation
in the matter of appointment of judges and equal opportunity to become a judge. The system
of nominations by the executive or the judiciary must be put an end to, instead, those who
consider themselves eligible must be permitted to send an expression of interest making
it possible for that person's antecedents to be evaluated. What happens in the Supreme
Court will change the course of the history of the nation. 1 Article 124 . Establishment
and constitution of Supreme Court: (1) There shall be a Supreme Court of India consisting
of a Chief Justice of India and, until Parliament by law prescribes a larger number, of not
more than seven other judges. (2) Every Judge of the Supreme Court shall be appointed
by the President by warrant under the hand and seal after consultation with such of the
Judges of the Supreme Court and of the High Courts in the States as the President may
deem necessary for the purposes and shall hold office until he attains the age of 65 years:
Provided that in the case of appointment of a Judge other than the Chief Justice, the Chief
Justice of India shall always be consulted: Provided further that - (a) a Judge may,
by writing under his hand addressed to the President, resign his office; a Judge may be
removed from his office in the manner provided in clause (4).
Off With Its Head
Sat, Aug 23, 2014
planning commission, EPW, polity, finance commission,
The Planning Commission, as the agent of "state planning", has been, in the eyes of free
marketers, the biggest culprit of all that apparently went wrong in the economy in the first
four decades after Independence. Those without a sense of history do of course have the
luxury of projecting self-serving opinions. The planners themselves in hindsight did accept
that many errors were made during the heyday of planning in the late 1950s and early 1960s,
especially in their neglect of the wage goods (food, clothing and such consumer goods)
and export sectors. Yet, the critics forget that India's diversified industrial base is a creation
of the planning era and that many of the stars of today like the first-generation of Indian
Institutes of Technology were "planned" institutions. The roots of India's strength in software
too can be traced to the pool of skilled scientific and engineering talent that was created
as part of the planning process. The unfortunate aspect is that in spite of the decline in
the importance of planning, Yojana Bhawan increased its power elsewhere - as an agency
that channelled as much resources to the states as flowed through the statutory transfers
of the once-in-five-years Finance Commission. In the name of addressing regional disparities
or special needs, the monster of centrally-sponsored schemes grew, so too other forms
of Planning Commission-directed transfers, such as additional central assistance and special
assistance. All this made the states supplicants of what all through remained a non-statutory
body. Central assistance to state plans left the states with little freedom to pursue their
own priorities and chief ministers had to make an annual pilgrimage to Yojana Bhawan
to seek additional funds.
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Crimean Declaration of Independence
Sat, Aug 30, 2014
crimea, russia, ukraine, EPW, international,
The right to self-determination was initially thought to be applicable in the colonial contexts.
However, in the neocolonial situations the right often collides with the territorial integrity
of the sovereign states. On 11 March 2014, the Supreme Council of Crimea and the Sevastopol
City Council adopted a joint resolution unilaterally declaring independence from Ukraine.
The declaration cited the precedent of Kosovo to justify the move to secede, and at the
outset, expressed desire to become a part of Russia following a referendum slated for 16
March 2014. Most western governments were quick to reject it as a violation of international
law as well as a derogation of sovereignty and territorial integrity of Ukraine. The Crimean
move for secession is not an aberration. It resembles similar unilateral declaration of independence
by Rhodesia from the United Kingdom (UK) in 1965 and the tailor-made declaration of
independence by Kosovo from Serbia. In a remarkable advisory opinion on 22 July 2010,
the International Court of Justice (ICJ) expressed the view that Kosovo's declaration
of independence did not constitute a violation of international law.1 Even if the ICJ was
seen as resorting to tight between legal and political aspects of such secession from established
states, the opinion came to be construed as providing legitimacy to secessionist movements
around the globe. In fact, the Declaration of Independence of the Autonomous Republic
of Crimea and Sevastopol has explicitly referred to the Kosovo advisory opinion. In turn,
it raises larger question for international law to grapple with this coming challenge in this
century. It raises a vital question as regards international law rising to the occasion to
grapple the with twin challenges of the balance between the right to self-determination
and the preserving of territorial integrity and sovereignty of established states. It has however,
been, argued that "secession is neither legal nor illegal in international law, but a legally
neutral act the consequences of which are regulated internationally" (Crawford 2006: 390).
It appears that the decision to recognise a state is based upon the political expediency rather
than legal one. In the first post-cold war assertion of power, Russia has justified its tacit
endorsement of secession of Crimea to protect its nationals and military forces inside
Ukraine, threats posed to ethnic Russians living there, and generally, to the Crimean population.
The concept of "Responsibility to Protect" (R2P) emphasises the responsibility for collective
action where a state fails to protect its own citizens. Interestingly, the United States
(US) and European Union (EU) claimed that the referendum violates Ukraine's constitution
and international law. Is Crimea's case set to become a precedent of "remedial secession"
outside the classical colonial and neocolonial context? Due to the strategic Black Sea
coast, Crimean region became a symbol of the power of the Russian empire. The tug of
war began with the election of the Kurultaj, the Parliament of the Crimean Tatars, along
with it the Russian hold in the region getting strong. It witnessed a large wave of Russian
migration in the peninsula that pushed Tatars into the corner and diminished their demography
as well as political influence. When Stalin came into power, repressions on Crimea started
which were especially directed against the Tatars, as they were accused of collaboration
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with the German troops during the first world war. This resulted in mass deportations of
the Crimean Tatars in May 1944. Crimea lost its autonomy and became an oblast within
the Russian Soviet Federative Socialistic Republic (RSFSR). In 1949, Sevastopol received
special financial rights and was directly subordinated to Moscow. To mark the 300th
anniversary of Treaty of Perejaslav , in 1954, the Crimean peninsula was made a part
of Ukraine. At that time almost 90% of the Crimean population was Russian. For the Russians,
independence and "loss" of Crimea were hard to accept. In early 1990s, the Autonomous
Republic of Crimea (ARC) was established. In April 1993 the Crimean Parliament again
dealt with a proposal of the Russian Parliament, which stated that Russia could possibly
support a referendum on Crimea. It was also ready to integrate Crimea as an independent
member in the Commonwealth of Independent States (CIS). In May 1994, the Crimean
Constitution of 1992 was reinstalled. On 23 August 1994, Sevastopol was declared a Russian
city and subordinate to the Russian legislation. In November 1995, the Crimean Parliament
adopted a new constitution according to which Crimea was to be a part of Ukraine and
Sevastopol part of Crimea. The 1996 Constitution of Ukraine was important for the relations
between Kiev and its capital Simferopol. It reiterated emphatically the territorial integrity
of Ukraine with Crimea as an inseparable part. In 21 October 1998, the Supreme Council
of the ARC adopted the constitution that was then approved by the Verkhovna Rada (Parliament)
of Ukraine on 23 December 1998. It was signed almost immediately by the president
of Ukraine, and entered into force on 12 January 1999. The Crimean Tatars were disenchanted
with the new law and did contribute in the general deterioration of the interethnic situation
in the peninsula. Thereafter, the Crimean Russians were campaigning for Crimea's separation
from Ukraine and reunification with Russia. On the other side, the Crimean Tatars were
campaigning for political recognition as the indigenous peoples of Crimea and for integration
into Ukrainian society and economy following their forced (1944) deportation to central
Asia. In practice, the autonomy of Crimea does not provide more rights to the peninsula
than to any other "oblast" of Ukraine. At the heart of Crimean crisis lay a paradox that
the Russian minority in Ukraine is the majority of Crimean region. This has brought Russia
into the picture as a natural claimant to protect the ethnic Russian minority. In the post-decolonisation
period, evolution of international law for exercise of right to self-determination appears
to be oblivious to the demands of ethnic groups as well as national, religious, cultural or
linguistic minorities. Thus, it has been legitimately contended that "indiscriminately granting
the right to self- determination to all ethnic groups and minorities would pose a serious
threat to peace and bring about the fragmentation of states into a myriad of entities unable
to survive" (Cassese 2005: 63). How to strike a balance still remains a quagmire. In the
case of Crimea, there are two important factors that would affect widespread support: first,
it is the hovering Russian presence unlike Kosovo, where the North Atlantic Treaty Organisation
forces had managed to trumpet for more widespread international support; and second,
western countries have not only adopted selectivity in Crimean quest for secession, but
also offered support to Ukraine to help counter any possible Russian role in Ukraine.
If behind the scene negotiations and diplomatic blitzkrieg does not yield to an acceptable
solution, it will lead to a stand-off with heavy cost to both the sides notwithstanding noisy
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western efforts that are based upon policy of convenience. International law cannot be
seen to be a tool for the purpose. Conclusions The unfolding of the Crimea drama could
be attributed to a variety of reasons. Ostensibly propelled by the effort to protect ethnic
Russian people, it seems to underscore far-reaching consequences in the rapidly changing
global order. Though Crimea was always a "loss" felt deeply within Russian society, it
was only after Kiev tried to tilt towards the EU that Moscow encouraged redemption of
Crimea. Notwithstanding this ground reality, international law has been invoked by the
powerful states to justify their actions. As per the famous S S Lotus3 case dictum, whatever
is not prohibited under international law could be said to be permissible. Secession could
be one such quagmire. Still, issues surrounding the Crimean declaration have proved again
that international law is indispensible in all vital issues of international relations. Even
as the UNSC has convened an emergency session on 13 April 2014, it seems, one does
not expect any dramatic change in the Crimean decision to join the Russian Federation.
The proposed UNSC "consultation" could merely chalk out a plan at best to persuade Russia
not to make further push in eastern Ukraine beyond mutually acceptable lines.
Banking with a Difference
Sat, Aug 9, 2014
EPW, international, banking, brics,
The world has one more multilateral development bank, the New Development Bank (NDB)
that was established on 15 July 2014. With authorised capital of $100 billion and initial
subscribed capital of $50 billion, the bank's founding partners are the countries in the
BRICS grouping (Brazil, Russia, India, China and South Africa). These five countries,
which share equally the paid-up capital in the form of actual equity ($10 billion) and guarantees
($40 billion), will remain dominant in perpetuity with their aggregate shareholding never
falling below 55%. Organisationally too the BRICS bank seeks to be even-handed: India
gets the first chair of a rotating presidentship, China gets to host the bank's headquarters
in Shanghai, South Africa gets to host the first regional office, the first chair of the board
of governors is from Russia and the first chair of the board of directors from Brazil. Consisting
of large countries, considered by some to be characterised by substantial potential for rapid
growth, they are seen to be among the possible future giants that would challenge the currently
dominant economies in the Organisation for Economic Co-operation and Development
(OECD). With two-fifths of the world's population and a fifth of the world's gross domestic
product (GDP), the BRICS are indeed a formidable grouping. That makes the NDB different
because most existing development banks are in terms of shareholding, voting rights and
management dominated by one or the other developed country, especially from among
a set defined by the United States (US), Germany, France and Japan. . The creation of
the NDB is seen as being a response to the intransigence of countries that dominate the
existing multilateral development banking infrastructure, especially the US, and a declaration
of the exasperation of emerging nations with the current global financial architecture. Its
founding membership also gives it a much greater chance of success than past attempts
like that with the Banco del Sur (Bank of the South) in establishing a successful competitor
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to the currently dominant multilateral development banks. It could, for three reasons. First,
in a world characterised by substantially enhanced possibilities of mobilising private resources
in debt and equity markets, poorer developing countries are discriminated against and
kept out of such markets. Since the NDB is owned and backed by governments in a set
of "emerging economies", it is likely to be able to mobilise substantial resources at reasonable
cost from private markets and channel them to needy countries. Second, inasmuch as the
allocation of these resources would be determined by the representatives of governments
from the five BRICS countries, it could direct resources to projects that are more in keeping
with the requirements of the Southern countries. Third, with control in the hands of the
BRICS governments that are subject to the influence of local democratic forces, the terms
on which the institution lends could in time reflect "Southern" requirements and sensitivities.
For example, there has been developing country recognition that the kind of policy conditionalities
attached to lending by the North-dominated Bretton Woods institutions limits national
policy space in ways that favour the dominant nations and discriminates against the development
interests of poorer countries and that of the disadvantaged sections of the populations in
them. If, therefore, NDB lending occurs on terms that are more sensitive to the requirements
of developing countries the impact can only be positive. In fact, conditionalities could
be so set as to distribute a part of the benefits to the poor among developing country populations.
Saving Sharmila
Sat, Aug 30, 2014
AFSPA, EPW, polity, Irom Sharmila,
For resorting to a form of protest that is used not just in India but also in many other parts
of the world, Sharmila was arrested, charged under Section 309 of the Indian Penal Code
( IPC ) for attempting to commit suicide, and force-fed through a nasal tube The law has
been in force in Manipur since 1958 when it was enacted. It is operative in the entire state,
barring seven assembly constituencies around Imphal, from where it was withdrawn in
2012. Currently the Supreme Court is hearing a petition filed by Extra Judicial Execution
Victim Families Association ( EEVFAM ) that has recorded 1,590 cases of disappearances
and encounter killings since the 1980 s . Filed in 2012, the petition asked the Court for
a special investigation team ( SIT ) to look into these cases. In 2005, the Justice B P Jeevan
Reddy Commission appointed by the United Progressive Alliance ( UPA ) government
had also made a strong case for the withdrawal of the law from Manipur. It termed AFSPA
"a symbol of oppression, an object of hate and an instrument of discrimination and high
handedness" and recommended a progressive withdrawal of the law. But neither of these
judicial commissions nor their considered recommendations appear to have made a dent
on the thinking of governments at the centre and the state or the army.
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An Iron Fist in a Velvet Glove
Sat, Aug 2, 2014
Juvenile Justice Act, EPW, polity,
Laudable amendments regarding adoption and the state of children's homes sit uncomfortably
alongside an alarming proposal permitting juveniles to be tried by regular courts for serious
offences in the proposed re-enactment of the Juvenile Justice (Care and Protection of Children)
Act, 2000. The bill proposes a comprehensive re-enactment of the existing Act - it sets
out guiding principles for authorities and agencies, strengthens inspection mechanisms
for the various rehabilitation institutions and takes important steps towards implementing
the 1993 Hague Convention on Protection of Children and Co-operation in Respect of
Inter-country Adoption. However, it also proposes to introduce provisions that will permit
juveniles (now replaced by "children") between the ages of 16 and 18 years to be tried
by regular criminal courts for certain serious offences. This is a change that threatens to
destroy in one fell swoop the reformative fabric of the Act and sits incongruously alongside
the bill's other progressive provisions. This article will therefore focus on this provision,
explaining the substance of the change that it seeks to effect and examining whether the
change complies with the Constitution as well as India's international obligations. The
article concludes by pointing out that this provision is incompatible with the "Fundamental
principles for care, protection, rehabilitation and justice for children" that the bill introduces.
Children below the age of 18 years who are charged with offences must be produced before
a Juvenile Justice Board (henceforth the board) which then proceeds to conduct an inquiry.
The board may order counselling, community service, payment of a fine or release on
probation of good conduct if it concludes that a child has committed an offence. The strictest
order that the Act permits is directing a child to be placed in a special home for rehabilitation
for a maximum period of three years. if the juvenile has attained the age of 16 and the
board is convinced that the offence committed is so serious in nature that it would not
be in his interest or that of other juveniles to send him to a special home, the board may
order the juvenile to be kept in a "place of safety" which is specifically not a jail or lock-up.
The board retains its power to pass any of the orders set out in the previous section. However,
in addition to this, Clause 14 of the bill imposes a mandatory duty on the board in the case
of specific offences - murder, grievous hurt by acid and rape, including gang rape - alleged
to be committed by a child who has completed 16 years on the date of commission of the
offence. In such cases, it must conduct an inquiry within one month from the date of production
of the child before the board "regarding the premeditated nature of such offence, the mitigating
circumstances in which such offence was committed, the culpability of the child in committing
such offence and the child's ability to understand the consequences of the offence". On
the completion of such inquiry, under Clause 17 of the bill, the board might pass an order
for the continued adjudication of the case under the Act or might transfer the case to the
court having jurisdiction over such offence, usually, the session's court. When the offences
are attempted murder, the use of criminal force with intent to disrobe a woman, various
categories of kidnapping offences, selling and buying minors for prostitution, and robbery,
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the board, in addition to taking into account the factors mentioned in the previous paragraph,
must also have regard to the previous history of commission of such offences by the child.
It may transfer the case to a regular court only if the child is found to be a repeat offender
of such offences. These changes mean that if the child is so transferred, he/she will be
tried by ordinary criminal courts, will be liable to face sentences ordinarily prescribed
for these offences under the Indian Penal Code (IPC) (except for the death penalty and
imprisonment for life without release) 4 and will be required to undergo imprisonment
in jails that are ordinarily created for adult offenders. Apart from turning the reformative
philosophy underlying the Act on its head, this provision also suffers from the following
legal defects. (i) Dangerous Rationale for Differentiation: (ii) Presumption of Innocence:
(iii) Pending Cases: The bill does not mention how cases pending against children above
the age of 16 alleged to have committed serious offences will be treated. Presumably, the
guarantee under Article 20(1) of the Constitution 8 will prevent such cases from being
transferred to ordinary courts; nevertheless, the bill ought to have contained a saving provision
to this effect. International Obligations India's international obligations towards children
in its jurisdiction (defined as human beings below the age of 18) are governed by the United
Nations Convention on the Rights of the Child (henceforth the Convention). 9 The Convention
does not absolutely prohibit States from arresting, detaining or imprisoning children below
the age of 18 years. It only requires that these measures be used as a "last resort and for
the shortest appropriate period of time". 10 Nor does it prohibit States from using judicial
proceedings against children alleged to have infringed the penal law. 11 Nevertheless,
there is an obligation on States to seek to establish measures, "whenever appropriate and
desirable...for dealing with such children without resorting to judicial proceedings. " 12
The phrase "appropriate and desirable" appears to allow State parties the discretion to
exclude certain categories of children or offences from the alternate, non-judicial measures
recommended in the Convention.
Juvenile Public Rage
Sat, Aug 2, 2014
Juvenile Justice Act, EPW, polity, juvenile,
Maneka Gandhi, has incorporated this demand in the final draft of the bill to amend the
Juvenile Justice (Care and Protection of Children) Act, 2000. While there are some other
welcome proposals in the draft bill, the one to empower the Juvenile Justice Board to decide
on whether juveniles involved in serious crimes should be sent to an observation home
or tried in a regular court smacks more of retribution than reformation or rehabilitation.
This proposal pertains to children between 16 and 18 years accused of crimes under Indian
Penal Code Sections 302 (murder), 326A (acid attack), 376 (rape and sexual assault), 376A
(rape resulting in death or vegetative state) and 376D (intercourse by management or staff
of an institution). Activists and organisations working with children in conflict with the
law point out that in the last three years, going by the National Crime Records Bureau,
crimes by juveniles range between 1% and 1.2% of the total number of crimes, with more
than 60% of juvenile crime linked to theft. In fact, a number of studies after the United
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States began "getting tough" on juvenile offenders from the 1980s onwards show that
juveniles incarcerated with adult criminals often get more hardened and inured to a deviant
way of life. Among the many urgent aspects of juvenile justice reform is the need to focus
on the abysmal state of our remand homes in terms of their physical condition as well
as the attitude of the staff. The second is the attitude of the police towards juvenile offenders
which necessarily affects investigation.
Protecting the Future
Sat, Aug 16, 2014
tuberculosis, EPW, science & tech, health,
Even as India grapples with the highest incidence of tuberculosis (TB) in the world and
the challenge of dealing with rising incidence of drug-resistant TB, we are confronted
with the unsurprising but equally horrifying discovery that the country has the highest
number of children infected with the disease. Diagnosing TB in children is difficult since
they do not produce enough sputum for the tests and even when they do, the most affordable
tests can diagnose properly only in approximately 30% of cases. Children are also much
more susceptible to contracting extra-pulmonary and tubercular meningitis or TB meningitis,
which makes diagnosis tougher. The fixed-dose combinations which are considered to
be the accepted treatment for children are not easily available and the development of appropriate
fixed-dose combination products has been slow, as WHO has noted. The Revised National
Tuberculosis Control Programme (RNTCP) along with the Indian Academy of Paediatrics
(IAP) has drawn up detailed measures for diagnosis and treatment of children with TB.
Under the RNTCP, the household contacts of sputum smear-positive pulmonary tuberculosis
patients are also screened for TB. Children under six years who are among such a household
but do not show signs of active TB disease are given Isoniazid preventive therapy, commensurate
with their body weight. More important, however, is drawing up a strategy that will battle
malnutrition along with the treatment of TB in children because this condition also leads
to mal-absorption of the drugs. The same socio-economic factors that form an obstacle
to adult TB patients complying with the treatment regimen are likely to affect the child
patients. The single-most important step would be to acknowledge that children with TB
constitute a priority segment so that measures on a war footing can be put in place. To
do that, as the leader of the research that led to discovery of the higher global burden points
out, quantifying the number of affected children is important. Without such quantification,
setting targets and monitoring of trends would be impossible.
Union Budget and the 'Digital Divide'
Sat, Aug 2, 2014
Digital divide, Digital India, EPW, economics,
The emphasis on use of digital technologies to bridge the "rural-urban gap" in the union
budget is limited to high talk and minimal allocations. The need for a more comprehensive
and peoples' participation-oriented rural action plan should have been the focus while setting
sectoral allocations, but that is not to be in this mid-year budget. government's commitment
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to bridge the rural-urban divide through communications, broadband connectivity and

other technology-driven interventions like virtual classrooms in rural schools and building
of information technology (IT) skills of rural youth. A good governance programme has
been announced titled "Digital India" and a National Rural Internet and Technology Mission
for services in villages. Jaitley wants to use IT for transparency and better service delivery
of government schemes. Among the most notable of UPA II programmes was the National
Optical Fibre Network (NOFN) which was announced in 2011 and was supposed to bridge
the digital divide by connecting 2.5 lakh village panchayats in two years and is nowhere
close. The budget provides a sum of Rs 500 crore to bridge the digital divide and Rs 100
crore for good governance. The finance minister talks about the imminent need to further
bridge the divide between digital "haves" and "have-nots" through a countrywide programme
titled "Digital India". Jaitley promises broadband connectivity at the village level, improved
access to services through IT-enabled platforms, and greater transparency in government
processes. He also proposes "E-Kranti" for governance and service delivery and a National
Rural Internet and Technology Mission for services in villages and schools, and training
in IT skills. However, under the same allocation he proposes increased indigenous production
of IT hardware and software for exports and improved domestic availability with special
focus on supporting software product startups. The two parts of the mission are so distinct
and disparate that it is difficult to visualise them under the same head. It is also difficult
to figure out if the component of hardware and software production will not take a lion's
share of the allocation meant to bridge the digital divide for the benefit of the rural poor.
Jaitley may have packaged rural broadband connectivity as part of "Digital India" but
it is in essence a continuation of the UPA government's floundering NOFN project which
proposed linking 2.5 lakh gram panchayats in two years through a network of optical fibre
and has overshot several deadlines since 2011. The latest deadline for the project is March
2016 at an estimated cost of Rs 20,000 crore to be met from the Universal Service Obligation
(USO) Fund. T The USO is part of the new telecommunications policy and is raised through
a levy as a percentage of the revenue earned by the telecom operators under various licences.
The total length of the fibre optics network is estimated to be more than 5 lakh kilometres
and when completed it would link rural and urban India with a 100 mega bits per second
(mbps) information superhighway. Jaitley's "Digital India" aims to do pretty much the
same at a paltry allocation of Rs 500 crore. It is noteworthy that the government is sitting
on a huge cache of funds collected through USO and the NOFN proposes to utilise only
a fraction of the collections so far. The finance minister has set aside Rs 100 crore each
for the expansion of community radio (CR) stations and for setting up a Kisan TV to disseminate
real time information regarding farming techniques, water conservation, and organic farming
among other things. While the allocation of Rs 100 crore for supporting 600 new and existing
community radio stations is a welcome step, it is nowhere close to covering the entire
country with a network of community-owned and managed radio stations. With each CR
station covering 15 to 20 square kilometres, there is scope for setting up tens of thousands
of CR stations in this vast country. Participatory communication through CR democratises
and decentralises media systems as key agents of empowerment and goes a long way in
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promoting gender equality (Pavarala and Malik 2007). It has been proved globally, and
beyond doubt, that precious lives and property worth hundreds of crores can be saved by
the use of CR in disaster management. Kisan TV too could have been modelled on a community
managed format where farmers would be able to share progressive techniques and best
farming practices in their own language, though that would require more than a token allocation.
The issues of rural broadband connectivity, community media, virtual classrooms or hospitals,
IT-enabled MIS services, tracking of foodgrain delivery systems, and rural media penetration
are intertwined and platform agnostic. It is immaterial whether connectivity comes through
fibre optics, satellite telephony, GSM/CDMA-based mobile phone networks, or a combination
of all, but what matters is the efficacy of the end use. The ultimate policy push has to come
not from token budgetary allocations but from pursuing a policy of spectrum commons
where resources like spectrum and cable networks are seen through the lens of their social
rather than market value. Sale of spectrum to the highest bidder might be an improvement
over opaque allocations of the past but it ignores the social value aspect of community
media altogether. The moot question remains if the government is willing to look at spectrum,
broadband and rural media penetration as issues of growth and poverty mitigation.
When Will They Ever Learn
Sat, Aug 16, 2014
disaster management, environment, malin, EPW,
In the case of Malin, the preliminary report of the Geological Survey of India suggested
that the use of heavy machinery to level the ground above Malin could have been one cause
for the 300-foot landslide. Only a detailed investigation will establish the precise reasons.
The report of the Western Ghats Ecology Expert Panel (WGEEP) led by Madhav Gadgil
has outlined in considerable detail how and why the biodiversity in the Western Ghats
has declined precipitously and the urgent need to address this. It has described the region
as the "water tower of peninsular India" that supplies water to 245 million people. It has
noted that much of the area that falls under the Western Ghats is threatened by human
activities and is further stressed due to climate change and the variability in the weather,
including sudden and heavy spurts of rain during the monsoon. And it has underlined the
unfortunate and stark reality that only 7% of the primary vegetation survives in the Western
Ghats. A multiplication of projects like Lavasa in this ecologically fragile area is a recipe
for disaster as it will necessarily mean a further denudation of forests, the use of heavy
machinery to flatten land, and road building that causes further stress. These artificial "hill
stations" also require waterways to be diverted or artificial water bodies to be created.
All this is contraindicated for the health of a region already under assault from ecologically
insensitive developmental activities. The problem we continue to face in India is that of
short-sighted developmental planning that will not factor in the long-term detrimental
environmental costs. After every so-called "natural" disaster, the same ground is covered,
with environmentalists on the one side talking about developing environmentally sustainable
parameters for development projects and governments on the other arguing that "progress"
should not be held hostage to the concerns of a handful of activists. The people caught
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in the middle of this argument are ordinary people, like the hapless residents of Malin.
There can and will be no ecologically sustainable or equitable progress in India if those
with the power to decide continue to ignore the hard, scientific facts laid out in reports
like that of the WGEEP.
Trans-Pacific Partnership
Sat, Aug 16, 2014
Trans Pacific Partnership agreement, EPW, international,
Negotiations towards concluding the Trans-Pacific Partnership agreement have reportedly

reached an endgame phase. The participating countries are now negotiating market access
for sensitive agricultural products, even as a wide gulf in positions exists on several rules
and regulatory framework issues. Negotiations have been under way for more than four
years to conclude a "high standard" Trans-Pacific Partnership (TPP) agreement. What
began as an attempt to forge a comprehensive free trade and investment initiative among
eight countries led by the US in Melbourne in March 2010 has now expanded to 12 countries
that account for a quarter of international trade and 40% of the world's gross domestic
product (GDP). 1 Claims have been made that the negotiations have reached the final
stages with some assessing it as 80% done even as there are reports about still unresolved
issues and a continuing gulf in positions on several sensitive and critical areas. The chief
negotiators and the trade ministers of TPP countries are now meeting every other month.
These are being supplemented by bilateral meetings and frequent gatherings of subject
matter specialists. What distinguishes the TPP from the more than 400 free trade agreements
(FTAs) globally under implementation or under negotiation is its size, scope, and depth
of proposed concessions. 2 It is seeking to take a more comprehensive approach towards
market access by eliminating tariffs and non-tariff barriers on goods, and by adopting a
negative listing approach to services commitments. Before proceeding further, however,
it must be stated that the TPP negotiations are being held most secretively and textual proposals
are not being revealed except to those intimately involved in the negotiations. Of the three
broad areas - market access, trade rules, and domestic regulations - that will cover the
29 chapters of the proposed agreement, it is market access in certain sensitive products
that appears politically most challenging since the potential impact of a concession given
or gained is immediately obvious. Trade rules of a World Trade Organisation (WTO) plus
character such as a higher level of protection for patents and copyrights than the Trade-Related
Aspects of Intellectual Property Rights (TRIPS) agreement or disciplines in newer areas
such as SOEs, environment and labour standards, and the scope for dispute settlement
are also proving difficult, particularly for developing countries such as Malaysia and Vietnam.
The US and Japan, the two largest TPP economies, are currently discussing what Japan's
most sensitive agriculture products (beef and pork, sugar, dairy products, rice, wheat, and
barley) are and the auto sector. 4 The US has made it known that it will take up market
access issues with Canada, in particular for dairy and poultry, soon after. On the other
hand, both Australia and New Zealand, who are major agricultural exporters, are very
keen to secure additional market access for their products to the US, Canada, and Japan,
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and it has to be seen if they will take kindly to the US cutting a separate deal with Japan
if its benefits are not extended to them. 6 The US has, however, been taking the line that
it will not enter into further market access negotiations with Australia and other TPP countries
with which it already has FTAs. What is interesting to note in the TPP is that market access
negotiations are not likely to arrive at one tariff reduction/elimination schedule for each
member that will apply to all the other participants. The final tariff reduction/elimination
schedule for each country may be a hybrid, where certain tariff lines may see a common
treatment extended to other members, whereas in other cases, particularly for sensitive
items, it may vary for each country. It has also to be seen how the US reconciles its position
of seeking high standards from others while its own agricultural lobbies are not keen at
all to open up their market any further. The TPP endgame will also be politically driven.
For the US to secure the passage of the TPP through both houses of Congress, it will require
passing a Trade Promotion Authority (TPA) bill to prevent Congress from suggesting
amendments to individual TPP provisions rather than confining itself to a yes or no vote.
A successful conclusion of the TPP could generate pressure for introducing similar "high
standard" disciplines in the WTO. Such a move will get a boost if the TTIP is finalised
with similar features. There is already a renewed push to conclude an Information Technology
Agreement-II (ITA-II), which is intended to cover far more products than ITA-I on which
duties will be eliminated by participating countries. Attempts are also being made to conclude
a similar zero duty agreement on environmental products. Twenty-three countries have
separately begun drawing up a plurilateral Trade in Services Agreement (TiSA) outside
the WTO. Developing countries, including India, will need to carefully consider the various
options and work out room for manoeuvre and not get forced into a situation where they
have to make sub-optimal choices. Striving to revive the Doha agenda should be actively
pursued. At the same time, conducive international trade and investment liberalisation
models should be developed without (a) the intrusive elements of the TPP that will limit
development policy options; (b) the WTO-plus levels of IPR protection that will come
at the cost of public interest; and (c) the linkages between what are non-trade issues such
as labour and environment standards with market access, simply because trade sanction
as a tool is available for the enforcement of such standards. The proposed Regional Comprehensive
Economic Partnership agreement among the Association of Southeast Asian Nations 10
plus six partners could provide a good forum for developing such a model since the guidelines
appear to have taken the above considerations into account. As for India, to shore up its
position, fresh efforts should be made to conclude the India-EU FTA. If the Indian economy
shows revival and takes to an accelerated growth path, the large and growing market will
be a draw and could persuade the EU. India would also need to actively follow the development
of global best practices in forums such as the OECD and APEC. Notes 1 The TPP traces
its origin to the much smaller Trans-Pacific Strategic Economic Partnership (P4) among
four small countries, Brunei, Chile, New Zealand, and Singapore, that came into force
in 2006. The US showed interest in joining the initiative during October 2008. Following
this, the Barack Obama administration pitched for making it more comprehensive and
"high standard". Australia, Peru, and Vietnam followed, joined by Malaysia in October
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2010, Canada and Mexico in October 2012, and Japan in March 2013. Korea has expressed
an interest to join. It is unlikely, however, that any new member will be admitted before
the TPP is concluded. 2 Negotiations also began in June 2013 between the European Union
(EU) and the US on concluding a similar ambitious Transatlantic Trade and Investment
Partnership (TTIP) between these two large economic entities, which account for close
to 30% of world trade and 45% of global economic output. Five rounds of negotiations
had been held till May 2014 and some preliminary offers exchanged. But discussions are
still largely at a conceptual phase. Among the many FTAs are also 23 bilateral FTAs between
different TPP member countries. In addition, there are five regional FTAs (ASEAN FTA,
NAFTA, ASEAN-Australia-New Zealand FTA, ASEAN-Japan FTA and the P4 Agreement
in which more than two TPP countries are members). 3 The chapter on regulatory coherence
is expected to require TPP members to set up a mechanism such as the US Office of Information
and Regulatory Affairs to conduct a cost-benefit analysis of new rules. The proposed disciplines
may also require prior notification to a regulatory coherence committee of the TPP about
proposed new domestic regulations. The SPS chapter is also expected to be based on a
science-based determination for food safety and not on the precautionary principles of
the European Union (EU). 4 The US and Japan had exchanged letters before Japan's entry
to the TPP that had already set out the terms of reference for bilateral resolution in the
auto sector. The US was keen to address non-tariff barriers in the Japanese automobile
market, which it has long felt is preventing greater access. It had also been agreed by both
that the US will bring down its tariffs in this sector for Japan (2.5% for cars and 25% for
trucks) over a very long staging period that is also backloaded to the maximum extent.
5 A bipartisan group of 63 members of US Congress pushed for a strong market access
deal with Japan in the TPP on the eve of President Obama's visit. On the other hand, the
Japanese Diet passed a resolution last year asking the government to exclude the five categories
of products - pork and beef, diary, sugar, rice, and wheat - from liberalisation in the TPP.
6 Australia and Japan announced conclusion of a bilateral FTA on 7 April 2014, during
Prime Minister Tony Abbott's visit to Japan. It was a good package for Australia in the
Japanese market, including beef, horticulture, and seafood items, but did not significantly
improve access in dairy, sugar, grains, pork, and rice. 7 US exports of yarn and fabrics
totalled $13.56 billion in 2012, much of it going to Central America Free Trade Agreement
(CAFTA) and North American Free Trade Agreement (NAFTA) partners. 8 Provisions
on government procurement already figure in bilateral FTAs between US and certain TPP
partners (Australia, Chile, Peru, Canada, Mexico and Singapore). Singapore, Japan and
Canada are also members of the limited GPA under the WTO that has recently been expanded
in scope. The four-member Trans-Pacific Strategic Economic Partnership Agreement between
Brunei, Chile, New Zealand, and Singapore also had government procurement provisions.
9 In a joint press conference with President Barack Obama, during his visit to Malaysia
on 27 April 2014, Prime Minister Najib Razak said,"He (Obama) fully understands our
sensitivities", and that the two sides will try to work out a deal in the near future. 10 A
leaked version of the IPR chapter revealed a counter-proposal by New Zealand, Canada,
Singapore, Chile, and Malaysia that did not contain many WTO-plus elements such as
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data exclusivity, patent term extension, and patent linkage. 11 Some business sources in
New Zealand, for example, have speculated that New Zealand could accept some US demands
on national drug pricing and reimbursement programmes of the Pharmaceutical Management
Agency (PHARMA) in return for an offer on dairy market access. Australia has indicated
that it would accept the ISDS if it gets a strong outcome in market access. Malaysia, on
the other hand, could show flexibilities if the exception for Bumiputras could be provided
on government procurement.
India and Israel: An Embrace in Arms
Sat, Aug 9, 2014
arms trade, EPW, international, israel,
The Narendra Modi-led Indian government refused to allow Parliament to pass a resolution
condemning Israel for its military attack on Gaza that began on 7 July and which has left
"literally no safe place for civilians" Given India's close ties with Israel since 1992, with
the latter now New Delhi's second largest armaments supplier, and the deep links between
the two countries' military and intelligence apparatuses in the fight against "Islamic terrorism",
New Delhi's policy of running with the hare and hunting with the hounds is certainly not
new. Indeed, in 1975, India even voted in favour of a UN resolution equating Zionism
with racism, and later, in 1988, invited the Palestine Liberation Organisation to open a
Palestinian embassy in New Delhi. But upon the victory of the United States in the protracted
cold war and the collapse of the Soviet Union, in 1992 the Indian government established
full diplomatic relations with Israel. Earlier, in 1991, India voted for the repudiation of
the UN resolution that equated Zionism with racism which it had supported in the mid-1970s.
In 2001, a deal for the purchase of the Israeli Phalcon Airborne Early Warning and Control
Systems was cleared Certainly, post-9/11, counterterrorism and intelligence sharing have
gained in importance - Mossad and the Research and Analysis Wing (RAW) are now in
close collaboration with each other. Moreover, the Indian Space Research Organisation
(ISRO) launched Israel's TecSAR military spy satellite in 2008, followed by an updated
version, RISAT-2, in 2009.
Sex Ratio, Khaps and Marriage Reform
Sat, Aug 2, 2014
social, EPW, gender, Khap Panchayats, women,
The recent move by the Satrol khap of Haryana to relax restrictive marriage norms and
induct women into khaps appears like a revolutionary move for these hidebound and regressive
bodies. The head of the khap, Inder Singh Mor, has stated that members can now marry
among its 42 bhaichara (brotherhood) villages, decreasing somewhat the difficulties of
finding brides in this state that suffers from a skewed sex ratio and bride shortage. Perhaps
an even more revolutionary step has been the creation of a woman's wing of the khap;
traditionally khaps have been all-male institutions dominated by older males that enforce
social control over their communities in keeping with rigid patriarchal, kinship, age and
gender norms. With Haryana's current sex ratio standing at 877 women for 1,000 men
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and an even more abysmal child sex ratio of 830 girls, the number of bachelors has been
piling up over the decades, driving many to look for brides in other states. . According
to the local media, around 50 men in each of Haryana's 7,000 villages have no prospects
of finding a bride locally. Some villages are known to have upwards of 200 bachelors looking
for brides. Recognising the relationship between bride shortages and sex selective abortions
of girls, these groups have demanded that the phenomenon be addressed seriously. The
child sex ratio in Haryana improved from 819 to 830 between 2001 and 2011. It is possible
that that the enforcement of the PCPNDT Act (Pre-Conception and Pre-Natal Diagnostic
Techniques Act 1994) and awareness campaigns conducted by government and non-governmental
organisations (NGOs) have played some role in this turnaround. The major contributions
though is likely to be that of declining fertility (the sex ratio at birth improves when fertility
transits from an average of three to two children (Bhalla et al 2013) and changing expectations
from educated and working daughters. Furthermore, this slight improvement will be reflected
in the marriageable age cohorts only after two decades and will not make much of a dent
given the past backlog of bachelors. It is therefore not surprising that Haryanvis have been
importing brides wholesale from the eastern states of West Bengal and Assam. Brides
from several other eastern and southern states can be found in almost every village of Haryana.
However, not to rock the boat all at once, the Satrol khap has decided to retain certain
other marriage norms. Mor states that the rule of village exogamy - prohibition of marriage
within the village - would still be maintained and as far as possible, people should try
and avoid marriage even within neighbouring villages. Another norm that has been retained
is the ban on swagotra marriage (marriage within one's own gotra). As more families
turn middle class, matchmaking criteria have shifted from mere landownership to education,
employment, and urban residence, and parents are willing to accept self-choice marriages
which meet appropriate caste and class criteria and even seek to arrange such matches
themselves. Class transformations rather than conscious social reform might thus be the
cause of current shifts occurring in marriage norms. Many Other Backward Classes (OBC)
communities are now the beneficiaries of reservations and in a tight job market this is
becoming a plus point in the marriage market. Of course, the recent inclusion of Jats in
the OBC list might dent this particular advantage of the other OBC communities. Indeed,
it is the influx of non-local brides, allowed to ease the marriage squeeze that is most likely
the reason for the Satrol khap's relaxation of the prohibition against inter-caste marriage.
Many community leaders in Haryana have pointed out that these brides have to be accepted
out of necessity. While Mor's pronouncements may provide legitimacy to cross-region
inter-caste marriages, they do not make clear whether marriages between any of the local
castes would be accepted or only those between the savarna (twice born) castes, which
exclude dalits. A significant number of marriages that have drawn the ire of khaps have
involved elopement of Jat girls with dalit boys. There have been some earlier attempts
by khaps to bring about a change in their public perception. In January 2014, leaders of
50 khaps who gathered in Meham in Rohtak district, decided to form committees to curb
honour killings while discouraging same gotra marriages (Siwach 2014). They were trying
to respond to the criticism that they were inciting and encouraging parents and relatives
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of eloping couples to punish the latter by death.

Health Service System in India
Sat, Aug 30, 2014
Rashtriya Swasthya Bima Yojna, social, EPW, health,
The Rashtriya Swasthya Bima Yojana was rolled out in 2008 for households below the
poverty line, enabling them to access health services in the public and private sectors. However,
experience from different countries shows tax-funded insurance systems work well only
in settings where public provisioning of healthcare services prevails. State-funded targeted
insurance schemes do not seriously mitigate inequitable access to health services in a fundamentally
private healthcare delivery market. Attainment of universal healthcareaccess is the present
goal of the Indian health service system. An insurance-based method of facilitating access
to health services has been chosen as the method for attaining this goal. The government
in 2008 launched the Rashtriya Swasthya Bima Yojana (RSBY), or the national health
insurance scheme, covering all households falling below the state-mandated poverty line.
It enlisted the services of the private and public sectors to cater for enrolled households.
There further exists a commitment of expanding insurance to cover India's vast unorganised
sector. 1 Insurance-Based Methods India has one of the most privatised health sectors
in the world. Decades of underinvestment and political indifference to the public health
service system have led to a burgeoning of the private healthcare market in the country.
The increased proliferation of the largely unregulated private sector in the past couple
of decades has coincided with declining investments in the public health service delivery
system in the country, as mandated by the structural adjustment policies of the early 1990s
The private sector received further impetus to expand in the new millennium when the
public-private partnership (PPP) model received official endorsement in the Tenth Five-Year
Plan (2002-2007) to improve healthcare accessibility among the people (Raman and Bjorkman
2008). In 2008, it received even bigger encouragement with the launch of the RSBY. This
government-funded insurance scheme for below the poverty line (BPL) families included
private providers in the list of empanelled hospitals where enrolled households could avail
themselves of treatment. Thus, though the scheme was financed by public money, both
public and private hospitals could be approached for treatment. A strong base of primary
care services even in rural areas was the key to improving health outcomes in both these
countries. Such a system mandated a higher level of public investment for it to be even
moderately successful, and in both these instances the governments showed a strong political
commitment to achieving their goal. Thailand spent 14.2% and Sri Lanka 7.9% of their
total public expenditure on health in 2011, the report noted. The figure for India was 4.4%
in 2011 (GoI 2011: 191). The Indian scenario could not be any more different. As mentioned,
it is one of the most privatised markets in the world. Government spending on health at
1.2% of gross domestic product (GDP) is amongst the lowest in the world. Public health
service provisioning is weak and has been marred by declining investments over the years.
The RSBY was launched by the Ministry of Labour and Employment in 2008 for all BPL
families. It provided them coverage for hospitalisation costs up to Rs 30,000 for five members
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of a family. 1 The primary objective was to provide financial security to enrolled households
to prevent them from going into debt while accessing healthcare services. Reducing their
OOP expenditure on healthcare was an obvious corollary, and by doing so it aimed to increase
their access to health services, resulting in improved health outcomes among those enrolled
(Selvaraj and Karan 2012). By bringing private health service providers under its purview,
it also aimed to better the availability of services among beneficiaries, who may have previously
suffered from its absence in their vicinity. Despite its good intentions, numerous studies
conducted on its functioning have highlighted discrepancies in its implementation. Beginning
with enrolment, which has been irregular and is still some way off from being universal
both across and within states Another troublesome aspect of the scheme has been the
low claims ratio among enrolled families, which has ranged from 0-15% in most districts,
pointing to low utilisation. Its problems seem to have taken over its functioning despite
it not even being a decade old, and it has begun to suffer from dwindling participation
(Bajpai and Saraya 2012). We take a look at the contrasting healthcare delivery models
of the US and Cuba. While the former is the prime exponent of an insurance-based system
of access in a healthcare market, the latter has a strong public health delivery infrastructure
providing universal coverage. The comparison, it is hoped, will help highlight the dangers
inherent in an insurance-based model of access in a largely privatised set-up. The US
has the highest rate of healthcare expenditure in the world - in 2011, it spent 17.6% of
its GDP on health. Yet its health outcomes lacked parity with the investment made (WHO
2012) and are marked by unequal utilisation rates across different class groups. In comparison,
a middle-income country like Cuba is able to attain similar health outcomes at the aggregate
level with a substantially lower level of investment in its health sector. The US healthcare
market is made up of a large number of private medical healthcare providers, where access
is facilitated by an individual's insurance package. Though public insurance is provided
to certain sections of the people, including the elderly and low-income groups, the targeted
nature of these governmental programmes has resulted in the exclusion of a large number
of genuine beneficiaries. Those without insurance have to either defer utilisation or avoid
the system altogether despite their need (Oberlander 2002). In contrast, the Cuban public
health service system spent a mere 5% per capita of what the US did on healthcare in 2011,
yet performed more effectively compared to its profligate counterpart.
Masters of War
Sat, Aug 23, 2014
defence, EPW, international, pivot to asia, india us defence agreement,
India and the US disagreed over the former's refusal to endorse the World Trade Organisation's
Trade Facilitation Agreement without a favourable agreement related to the aggregate
measures of support for the agricultural commodities of developing countries. But this
should not detract from the fact that both sides seemed determined to further strengthen
military and strategic ties. For Washington, the India-US strategic partnership is mainly
about incorporating New Delhi as a crucial part of its "pivot to Asia" strategy of undermining
the rise of China, and New Delhi too seeks to take advantage of this opportunity to enhance
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its position vis-a-vis China. The joint statement emphasises the need for India, the US
and Japan to come together and build transport and trade connectivity, including economic
corridors, between South Asia andASEAN, via Myanmar. Indeed, just last month, for
the first time in the last five years, India, Japan and the US conducted trilateral naval exercises
in the Malabar Straits. With Washington's more recent deterioration of relations with Moscow,
it is now trying to gain at Russia's expense; the latter India's foremost armaments supplier.
India is the world's largest armaments importer. It imports 70% of its total requirements
of weapons; around 75% from Russia, while only 7% come from the US. This is because
Russia makes provisions for co-production and technology transfer. But the US now seems
to want to capture this segment of the armaments market.
Fatwas and Muslim Women
Sat, Aug 2, 2014
EPW, gender, polity, women, muslim women, fatwa, Supreme Court,
The Supreme Court's ruling that clarifi es that though it is not unconstitutional to issue
fatwas, they are merely opinions of the issuer and not binding on anyone must be welcomed.
The Court has, however, taken a balanced view in not declaring the functioning of any
religious institution as illegal or against public interest. The Court could not have prevented
any individual or a body from expressing her/his/their religious views as Article 25 of
the Constitution guarantees freedom of conscience and right to freely profess, practise
and propagate the religion of her/his choice to every person. Those views however cannot
be enforced on a third person through any means. Article 26 guarantees every religious
denomination or any section thereof the right to establish and maintain institutions for
religious and charitable purposes, and to manage its own affairs in matters of religion.
There are two issues here - one concerns fatwas, which we will examine shortly and the
other is about the process of mediation, conciliation and arbitration in disputes between
two individuals, whether relating to matrimony or anything else. In the opinion of the apex
court, dar-ul-qazas are also an "informal justice delivery system with an objective of bringing
about amicable settlement between the parties". Arbitration/mediation/conciliation is
done through retired judges; individuals or institutions in which the disputants have faith
and subject themselves to - commercial and professional bodies; various socio-religious
and cultural institutions based on traditions, caste and biradaries (community brotherhood),
etc. Women's organisations too run counselling and mediation centres for matrimonial
disputes. Such institutions cannot be declared illegal or banned by the courts merely because
they decide disputes on the basis of religio-patriarchal traditions. The decisions of the khap
panchayats and dar-ul-qazas definitely need to be contested as they widen gender disparity,
weaken the status of women and strengthen patriarchal values and norms. However, banning
such bodies is not the solution as they reinvent themselves under other names and forms.
We need to strengthen secular and constitutional institutions for delivery of justice, make
it more accessible to the poor and weaker sections by reducing the costs involved, simplify
and demystify procedures and drastically reduce the time consumed in delivery of justice.
Fatwa" in Arabic literally means opinion. It is an opinion of the issuer normally on some
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point of the sharia. As there is no clergy in Islam, the opinion is not binding, howsoever
learned and qualified the issuer of the fatwa may be. A fatwa issued by the Dar-ul Ifta
normally ends with the words "but Allah knows better" after the opinion is expressed.
These words not only demonstrate the humility of the issuer of the fatwa but also indicate
its non-binding character. Similarly there have been numerous fatwas to oppose terrorism
that targets innocents, issued by ulema in India as well as others in Islamic world. Such
fatwas merit little attention in the media - both, due to lack of knowledge, and because
they go against the conventional view that Islam is a backward, violent and aggressive
religion. The media also thrives on negative news since coverage of conflicts rather than
events that are conducive to harmony and peace increase the TRPs. the fatwas issued by
the Darul Ifta established by the Darul Uloom have been drawing from the wahabi conservative
Islam and Hanafi school of jurisprudence. Muslim women have been the worst sufferers
as the conservative fatwas restrict their freedom and liberties. Women in the fatwas are
conceived as duty bearers towards their husbands and as having few rights. The fatwas
enable men to exercise considerable control over the bodies and movements of their wives
reducing them to objects for sexual gratification of their husbands, bearing children and
carrying out domestic chores. Needless to say this does not necessarily reflect the true
spirit of Islam. What Is to Be Done? Easy accessibility to constitutional and secular courts
is highly desirable for all citizens. The poor and marginalised sections, particularly the
women of a minority community fall prey to feudal-patriarchal religious institutions and
belief in divine curse. The Supreme Court's judgment which clarifies that though it is
not unconstitutional to issue fatwas, they are merely opinions of the issuer and not binding
on anybody is welcome. A fatwa is not enforceable against any citizen and an aggrieved
citizen has remedies against its enforcement. T The courts functioning under the constitutional
framework have done a lot for Muslim women's rights and entitlements and within the
Islamic framework - be it granting fair and reasonable maintenance for their lifetime to
divorced Muslim women, holding oral pronouncement of divorce in one sitting illegal,
on the custody of children, right of inheritance, protection of Muslim women facing domestic
violence, etc. Muslim women must utilise all spaces wherein they get better rights.
Rejection of an Imbalance
Sat, Aug 9, 2014
WTO, bali package, EPW, economics, trade facilitation,
India's timely decision at the World Trade Organisation (WTO) to link the adoption of
a protocol on a new Trade Facilitation (TF) agreement to finding a permanent agreement
on developing countries being able to maintain public stockholding programmes for food
security has caused an unusual storm. Adoption of the TF protocol would have cleared
the decks for launching a new work programme at the WTO that would have ignored the
previous decisions taken in the DDA negotiations since 2001 and would have been based
largely on Washington's main interests in obtaining greater market access for agriculture
and industrial goods, and services. The developmental issues in the DDA were all set for
a formal burial. Their angry criticism of India is that the country went back on the December
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2013 Bali Ministerial Declaration where it had surrendered its position on TF agreement
and agreed to an interim "peace clause" (WTO parlance for countries agreeing not to challenge
violations of any trade agreement) for public stockholding programmes for food security
till 2017. If India had intended to make a connection between the two, i e, the TF agreement
and a permanent solution for food security, it should have made it explicit at the Bali meeting,
they have argued. Members agreed to a binding TF agreement and nine other non-binding
decisions in agriculture and development based on political commitment and good faith.
It is also a fact that the developing and poorest countries accepted the TF decision grudgingly
as a payment to the US, European Union (EU) and other major exporting countries so
that their own unresolved Bali concerns would be addressed on a "prioritised" fast track.
(The nine issues where legally binding outcomes could not be finalised in the Bali package
include five in agriculture and four relating to the development dossier in the poorest countries.)
Against this backdrop, if India had agreed to the TF protocol, then, it would not have had
anything to look forward to, except some window dressing on other issues on the Doha
agenda. The US would have succeeded in burying the Doha Round and converting the
trade body into a house for only plurilateral - not multilateral - agreements on services,
information and technology products, environmental goods, and investment. There would
not have been any need to address the distortions from the Uruguay Round in agriculture
and other areas. That plan is now on hold because of India. Hence the US anger and hence
the orchestrated global media campaign against India, a campaign which many Indian
media outlets and "reformist" commentators have swallowed.
Page 34

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KI

Agriculture: Intentions and Actions

Which Way for Public Libraries in India?

Case for Including Immovable Property in the GST

Tilting at the Windmills (Again)

Financial Sector, Monetary Policy and Budget 2014

Rangarajan's Measure of Poverty

No Cure for the Malaise

National Judicial Appointments Commission

Off With Its Head

Crimean Declaration of Independence

Banking with a Difference

An Iron Fist in a Velvet Glove

Juvenile Public Rage

Protecting the Future

Union Budget and the 'Digital Divide'

Notes by vineetpunnoose on www.kiwipaper.com

India and Israel: An Embrace in Arms

Sex Ratio, Khaps and Marriage Reform

Health Service System in India

Fatwas and Muslim Women

Notes by vineetpunnoose on www.kiwipaper.com

Budget Transparency and Participation

Sat, Aug 23, 2014

budget, EPW, economics,

Notes by vineetpunnoose on www.kiwipaper.com

Sat, Aug 2, 2014

EPW, agriculture, economics,

Notes by vineetpunnoose on www.kiwipaper.com

Notes by vineetpunnoose on www.kiwipaper.com

Sat, Aug 2, 2014

governors, EPW, polity,

Notes by vineetpunnoose on www.kiwipaper.com

Sat, Aug 2, 2014

libraries, social, EPW,

Sat, Aug 9, 2014

EPW, economics, GST,

Notes by vineetpunnoose on www.kiwipaper.com

Notes by vineetpunnoose on www.kiwipaper.com

Notes by vineetpunnoose on www.kiwipaper.com

Sat, Aug 23, 2014

living will, EPW, polity, suicide,

Notes by vineetpunnoose on www.kiwipaper.com

Sat, Aug 9, 2014

budget, Monetary Policy, EPW, international,

Notes by vineetpunnoose on www.kiwipaper.com

Sat, Aug 2, 2014

poverty, Rangarajan poverty estimates, EPW, economics,

Notes by vineetpunnoose on www.kiwipaper.com

Notes by vineetpunnoose on www.kiwipaper.com

Sat, Aug 23, 2014

EPW, national judicial appointments commission, polity, judiciary, NJAC,

Sat, Aug 30, 2014

EPW, polity, judiciary, National Judicial Appointments Commission, article 124,

Notes by vineetpunnoose on www.kiwipaper.com

Notes by vineetpunnoose on www.kiwipaper.com

Notes by vineetpunnoose on www.kiwipaper.com

Sat, Aug 23, 2014

planning commission, EPW, polity, finance commission,

Notes by vineetpunnoose on www.kiwipaper.com

Sat, Aug 30, 2014

crimea, russia, ukraine, EPW, international,

Notes by vineetpunnoose on www.kiwipaper.com

Notes by vineetpunnoose on www.kiwipaper.com