THE HINDU – CURRENT NOTE 04 MAY
SC puts critics of Aadhaar-PAN linkage in a spot
Does right to choose apply for tax?
•Can a person who is voluntarily a part of a tax regime choose to say he will pay his taxes only in the certain way he wants to? Does he have a right to choose?
•“Yes, it is my right to choose a career. It is my right of choice to be a transgender. But away from these societal rights, when a citizen is part of a tax regime, can you say that I will pay taxes only the way I want to do it... Is there a right of choice in the limited context of tax laws?” Justice A.K. Sikri, who heads the Bench also comprising Justice Ashok Bhushan, asked on Wednesday.
•The question from the Supreme Court came even as the petitioners claimed that the mandatory linking of Aadhaar to PAN under the newly-included Section 139AA of the Income Tax Act is a “direct invasion” by the state into the citizens’ right to make free, voluntary and informed consent.
•Critics argued in the Supreme Court that Section 139AA is a “chilling trajectory the state has taken to dilute civil liberties.”
•“It completely takes away your political and personal choices. You are a dog on an electronic leash, tagged and tracked. Your progress hobbled,” senior advocate Shyam Divan, representing a petitioner, submitted.
•The government, represented by advocate Arghya Sengupta, quoted American jurist Oliver Wendell Holmes Jr. to say that “taxes are the price we pay for an orderly society.” Mr. Sengupta that after Aadhaar cards at 113.7 crore, voter ID cards are the most produced at 60 crore, revealing the number of people who want to be accounted for in the system.
Patna HC sets aside ban on ENA
•The Patna High Court on Wednesday set aside the Bihar government’s decision to ban production of Extra Neutral Alcohol (ENA) by several distillery and liquor companies in the State. After imposing total prohibition last year in April, the government on January 24 this year issued a notification saying the licences of ENA manufacturers would not be renewed.
•A group of companies like Global Spirits Limited, Distillery and Bottles Pvt Ltd and others challenged the notification. The petitioners submitted they had been given the licence to produce ENA, also known as industrial alcohol, after the government imposed total prohibition through its notification dated October 2, 2016.
•A full bench headed by the Chief Justice struck down the notification.
•Satyaveer Bharti, counsel for the spirit manufacturers, said the court observed that the government had no right to ban production of ENA as it is used in various other industries apart from making liquor. The verdict meant that investment to the tune of Rs. 100 crore had been safeguarded, he added.
•The court said: “The State does not have legislative competence to deal with the subject of alcohol unfit for human consumption. We see no reason to hold the provisions of Sections 13, 23 and 24(1) of the Prohibition Act as unconstitutional or ultra vires, as in the light of the declaration with respect to including ENA within the definition of Intoxicant to be not permissible, the applicability of these provisions to alcohol unfit for human consumption does not arise now.”
NITI Aayog for less teaching, more research
Favours hiring of faculty from abroad
•To ensure that investments in research better translate to more products and bolster “innovation and development” The National Institution for the Transformation of India (NITI) Aayog has recommended that faculty at “world class” institutions prioritise research and be allowed to “reduce their teaching responsibility,” if required.
•Such universities also ought to be allowed to recruit research staff from abroad and be encouraged to compete for research projects from industry. The so-called ‘world class universities’ are part of a government-outlined plan to raise funding for 10 public and 10 private universities and mould them into institutions that rank among the world’s best.
•The names of these institutions are expected to be made public later this year.
Vision document
•The NITI Aayog suggestions stem from a three-year vision document that outlines targets and goals the Ministries — from railways to environment — ought to achieve by 2020.
•Universities ought to be ranked according to metrics such as teaching, research output and funding won from the private sector.
•“Gradually, this model may be extended to bring other universities in the fold,” the report adds.
•The NITI Aayog also pitches for a new ‘National Science, Technology and Innovation Foundation’ headed by a distinguished scientist. This will coordinate with science and technology departments, ministries, governments and private sector bodies and deliberate on national issues and recommend interventions.
•Such an organisation will review progress of projects every six months and propose “course corrections” for achieving these goals.
Database of schemes
•The organisation also proposes a database of all existing schemes related to science and technology across ministries and departments. This will have information on the coordinating ministry, its objectives and available funds. Its key purpose would be to avoid “duplication of efforts, reduce approval times, increase accountability and collaboration between entities and measured outcomes,” the report adds.
•The organisation has also pushed for more public private partnerships.
•S&T projects, the report notes, are “different than those” in infrastructure primarily because they are riskier and take longer to fructify.
•“We should develop clear guidelines for implementing these projects…and administer a clear funding mechanism for government financing,” it notes.
•Given the government’s “limited funds” the NITI Aayog recommends research priorities to water management, agriculture, energy, waste management, health, connectivity and security.
UID can stall fake PAN: Centre
Tells SC that ‘conscientious objection’ does not make Aadhaar discriminatory
•Mandatory linking of Aadhaar with PAN cannot be considered discriminatory merely because there are “conscientious objectors” who refuse to take the Aadhaar in the name of freedom of choice, privacy and fundamental rights enshrined in the Constitution, the government told the Supreme Court on Wednesday.
National anthem
•Arguing before a Bench of Justices A.K. Sikri and Ashok Bhushan, the government compared the Aadhaar law to the Supreme Court’s recent order making it mandatory for the public to stand up when the national anthem was played in cinema halls.
•Counsel Arghya Sengupta, arguing for the government, said the court order might also have triggered conscientious objections. “But the order is a law nevertheless. You may not want to stand up for the national anthem, but that does not mean you sit down,” Mr. Sengupta argued.
•He said there could be all sorts of conscientious objections to different kind of laws.
•But thatt could not be the basis for declaring a law discriminatory.
‘No discrimination’
•To a query from the court whether there should be discrimination between people who want to pay their taxes — one who want to enrol for Aadhaar and the other who does not, Mr. Sengupta said the object of Section 139AA was not discrimination but to stop duplication of PAN.
•The government further argued against the absolute right to “informational self-determination”. The state seeks information at various points, including at the time of births, deaths and marriages.
•Later on, senior advocate Shyam Divan showed the court a news report of how hospital authorities accompanied by Aadhaar officials came to enrol a new-born in Gurgaon.
•Mr. Divan said even the Census Act, which took all kinds of personal data, did not allow disclosure of data collected even to a court of law.
•But Mr. Sengupta said privacy could not be imported to the Indian cultural milieu. “This is a country where if you get on a train, within five minutes people tell you their stories,” he submitted.
BrahMos missile achieves rare feat
The missile is capable of being launched from land, sea, sub-sea and air
•The Army carried out a successful test of the advanced BrahMos Block III Land Attack Cruise Missile (LACM) in the Andaman and Nicobar Islands on Wednesday. This is the second consecutive test of the missile in two days.
•The test in an operational configuration was carried by the Army’s South Western Command-based 1 strike corps.
•Testing BrahMos in the Andaman and Nicobar islands is a symbolic statement, as it brings the strategic Malacca straits under its range. Precise capabilities of BrahMos missile for quick sea access and denial in the event of a conflict, and its testing in the Andaman Sea is a reflection of the changing dynamics in the Indian Ocean.
•“This is the fifth consecutive time when the Block-III version of BrahMos LACM has been successfully launched and hit the land-based target in “top-attack” mode, an incredible feat not achieved by any other weapon system of its genre,” the Army said.
•BrahMos is a product of joint collaboration between India and Russia and is capable of being launched from land, sea, sub-sea and air against surface and sea-based targets.
•The range of the supersonic missile was initially capped at 290 km as per the obligations of the Missile Technology Control Regime (MTCR).
•Since India’s entry into the club, the range has been extended to 450 km and the plan is to increase it to 600km.
•These tests were carried out in full operational land-to-land configurations from Mobile Autonomous Launchers (MAL) at full-range.
Copybook launch
•“Meeting all flight parameters in a copybook manner while conducting high level and complex manoeuvres, the multi-role missile successfully hit the land-based target with desired precision, in both the trials demonstrating its accuracy of less than one metre,” the statement added.
•The steep dive capability makes it an ideal precision strike weapon to neutralise targets in a clutter.
•The Army which began inducting BrahMos in 2007, currently has three missile regiments and is in the process of adding more.
‘Data leaks not from UIDAI, but from States’
Aadhaar is foolproof, Centre tells Supreme Court
•Leaks of Aadhaar card details are not from the UIDAI, but at the State level, the Union government told the Supreme Court on Wednesday.
•“As of today, Aadhaar is foolproof. Biometric technology is the best system in 2016. There has not been a single leak from the UIDAI. The leaks of details may have been from the States... their offices and agencies,” advocate Arghya Sengupta, counsel for the Centre, submitted in the court.
•The Centre’s clarification comes in the middle of reports that data of over 130 million Aadhaar cardholders have been leaked from four government websites.
•Reports, based on a study conducted by the Centre for Internet and Society (CIS), a Bengaluru-based organisation, said Aadhaar numbers, names and other personal details of people have been leaked.
•The Centre was washing its hands of the alleged leaks for the second consecutive day in the Supreme Court.
A-G’s assurance
•On Tuesday, Attorney-General Mukul Rohatgi had emphatically assured the Supreme Court that biometrics of Aadhaar cardholders were safe and had not fallen into other hands. He said the biometric details were kept in a central database run by the Union government and the random 12 digit code was “impossible to break and may take over a 100 years to crack.”
•He submitted that all that was being reported as leaked was the Aadhaar number or a list of names of Aadhaar cardholders.
•“Just by getting hold of the PAN or Aadhaar number nothing is going to happen. What can people do with a bank account number or a SIM number? What can you do with such information? There is no way biometrics can be leaked,” Mr. Rohatgi had submitted in court.
•In his rebuttal, senior advocate Shyam Divan submitted that over 1,69,563 Aadhaar cards had been cancelled.
The dragon beckons
India should ask China if it’s willing to address its concerns so as to enable participation at the BRI meet
•On March 17, the United Nations Security Council adopted a resolution on security in Afghanistan. It includes a reference to regional development initiatives such as China’s Belt and Road Initiative (BRI). China promptly announced that this reference (possibly inserted at its instance) reflected a global consensus on the BRI. This is part of an intensifying campaign to mobilise high-level attendance at a summit — the Belt and Road Forum for International Cooperation (BRF) — being hosted by China in mid-May. The declared purpose is to review progress of the BRI, obtain perspectives of stakeholders and plan new trajectories of cooperation.
The grand design
•The BRI originated from two speeches by President Xi Jinping in Central Asia in 2013, outlining plans for China’s global outreach through connectivity and infrastructure development. The Silk Road Economic Belt includes land corridors from China through Central Asia and Russia to Europe with spurs to West Asia and to Pakistan — the China-Pakistan Economic Corridor (CPEC). The 21st century Maritime Silk Road links China’s east coast through major sea lanes to Europe in the west and the Pacific in the east. Together, they constitute the BRI (originally “One Belt One Road”, until the Chinese recently changed the name). The concept was subsequently fleshed out with multiple justifications and project ideas, finally giving it wings as the grand strategic vision of President Xi.
•Among Chinese objectives of the BRI are finding outlets for excess capacity of its manufacturing and construction industries, increasing economic activity in its relatively underdeveloped western region, and creating alternative energy supply routes to the choke points of the Straits of Hormuz and Malacca, through which almost all of China’s maritime oil imports pass. The political subtext is strengthening China’s influence over swathes of Asia and Africa, buttressing its ambitions to be a maritime power, and developing financing structures parallel to (and eventually competing with) the Bretton Woods system. It is a rich mix of economic, developmental, strategic and geopolitical motives. It is also the most ambitious global infrastructure project ever envisaged by one country.
•Connectivity and infrastructure development are unexceptionable objectives. Much of Asia lacks them and the finances required to develop them. The devil is in the detail. Analysts have highlighted a number of potential issues: Chinese overcapacity may override host countries’ development priorities in project selection; political tensions between countries may prevail over considerations of economic benefit; local elites may corner the “spoils” from new projects, thereby exacerbating social tensions; and financing strategies may result in countries sleepwalking into a debt trap (the Hambantota development projects in Sri Lanka provide a telling example). Much will depend on how sensitive China is to international and local concerns on these counts. However, even if only a part of the grand BRI design is eventually implemented, it could have a major political and economic impact.
India and the mid-May meet
•Officially, India says it cannot endorse the BRI in its present form, since it includes the CPEC, which runs through Indian territory under illegal Pakistani occupation (Gilgit-Baltistan). Some analysts have argued for the more “pragmatic” approach of a partial endorsement: as the initiative rolls out in various countries, India can engage with them (and with China) to promote projects that would be of benefit.
•Judging from recent Chinese actions, their major focus today is not so much securing endorsement for the BRI as ensuring high-level global attendance at the BRF. Whatever its other objectives, the principal role of the forum is to showcase international endorsement of President Xi’s strategic vision of economic cooperation for peace. The forum is timed to enable him to carry this aura of global recognition into the 19th National Congress of the Chinese Communist Party later this year, where he will put his policy stamp on his second term as party general secretary.
•As of April 21, China confirmed attendance of 28 heads of state and government at the BRF. They include leaders of Russia, Turkey, Pakistan, Sri Lanka, Myanmar and Indonesia. This is a relatively disappointing list. The U.S. of course, but also Germany, France and the U.K. will not be represented at the top level (because of their leaders’ domestic preoccupations). There are only two each from South Asia, Central Asia and Africa and none from West Asia. It is no wonder then that China is launching an all-out charm offensive to attract more quality attendance at the forum. India has also been a target, since it has apparently not yet conveyed the level of its attendance. China’s argument, that India would be “isolating” itself by staying out, is a pressure tactic: roads, ports and railways are public goods, which cannot be open to some and closed to others, based on nationality.
Scope for give and take
•India should ask China whether it is willing to address its concerns in such a way as to enable high-level Indian participation. Would China be willing to declare that the CPEC is not a component of the BRI but a separate bilateral China-Pakistan project?
•The sovereignty issue needs to be addressed. China’s Foreign Minister declared that the CPEC does not change Beijing’s stand on Jammu and Kashmir. A senior Chinese diplomat was more explicit, drawing attention to Article 6 of the 1963 China-Pakistan “boundary” agreement (in which Pakistan ceded the “Trans-Karakoram tract” to China), wherein the two sides agreed that after the J&K issue is resolved, China would renegotiate the boundary with the relevant sovereign country. Would China be willing to say the same today about the CPEC — that once the status of Gilgit-Baltistan is agreed bilaterally between India and Pakistan, China will renegotiate with the sovereign authority the terms of transit of the corridor?
•China argues that connectivity provided by the BRI would enhance economic cooperation and promote peace. Will it walk its altruistic talk and include the existing land corridor from India to Afghanistan, through Pakistan, in the BRI? This corridor would intersect the CPEC and may therefore open new routes for Chinese goods to both India and Afghanistan, besides promoting India, Pakistan and Afghanistan trade. With its investment in the CPEC now estimated at over $60 billion, its increasing bilateral assistance to Pakistan and its growing military presence in that country, China is in a strong position to persuade Pakistan to recognise that this is in its best economic interest: it may even transform the CPEC into a commercially viable project.
•The Indian government may have other ideas on reciprocal actions. The short point is that the strong Chinese interest for a high-level Indian presence at the BRF may provide New Delhi the opportunity to extract something of commensurate value in return.
Package to resolve NPAs gets Cabinet nod
Includes ordinance to amend Banking Regulation Act
•The government on Wednesday cleared a package to resolve the persistent rise in non-performing assets that is plaguing public sector banks and denting credit growth, a top government official said.
•The package, which includes an ordinance to amend the Banking Regulation Act of 1949 to empower the Reserve Bank of India to take more actions to check bad loans, is learnt to have been cleared by the government during the meeting of the Union Cabinet on Wednesday.
•“A package has been approved to resolve the NPAs problem. The Cabinet has recommended an ordinance which has to first go to the President Pranab Mukherjee to secure his assent,” a top government official said.
•Bad loans in the Indian banking system have gone up sharply in the last one year.
•According to Reserve Bank of India data, gross NPA, as a percentage of gross advances went up to 9.1% in September 2016 from 5.1% in September 2015. During the same period, stressed assets (which is gross NPA plus standard restructured advances and write-offs), moved up from 11.3% to 12.3% and some estimates suggested it had doubled since 2013.
PSU banks suffer
•Public sector banks share a disproportionate burden of this stress. Stressed assets in some of the public sector banks have approached or exceeded 20%.
•Some estimates suggest the total stress in the Indian banking system is about Rs. 14 lakh crore.
•The economic survey of 2016-17 has pointed out the twin balance sheet problem — that is, stressed companies on one hand and NPA-laden banks on the other — and advocates that a centralised Public Sector Asset Rehabilitation Agency (PARA) be established to deal with the problem of bad loans.
Disinvestment in hotels
•The Union Cabinet also kicked off the disinvestment process for hotels owned by the India Tourism Development Corporation (ITDC). The government’s stakes will be offloaded in Ashok Hotels in Bharatpur, Guwahati and Bhopal.
•“The government has decided to lease or sub-lease hotels or properties jointly with the concerned states or return the properties to the States, after fair valuation. States would then have the option to upgrade and operate the hotels by involving the private sector or to utilise the properties as per their requirements,” a central government spokesperson said.
•The Cabinet approved also a policy to give “preference to domestically manufactured iron and steel products” for government’s infrastructure policy.
•“The policy mandates to provide preference to Domestically Manufactured Iron & Steel Products (DMI&SP), in Government Procurement. The policy is applicable on all government tenders where price bid is yet to be opened,” an official statement said.
•The Centre also approved a National Steel Policy 2017 aimed at attracting Rs. 10 lakh crore investments in the steel sector by 2030-31.
•The policy projects creating crude steel capacity of 300 million tonnes (MT), production of 255 MT and “a robust finished steel per capita consumption of 158 kg by 2030-31, as against the current consumption of 61 kg.”
•The Cabinet further approved declaring Vijayawada Airport as an international airport, as per the provisions of the Andhra Pradesh Reorganisation Act, 2014. A central sector scheme, SAMPADA, was approved with an allocation of Rs. 6,000 crore in a bid to decrease agro-waste and modernise processing.
Govt. mulls changes to UDAN scheme to attract more players
Increasing route exclusivity for airlines among proposals
•The Centre may introduce changes to its regional connectivity scheme or UDAN to attract more players in the second round of bidding.
•“In a recent meeting, we have received numerous suggestions from stakeholders and we might bring some changes to UDAN ahead of the second round of bidding so that more airlines show interest,” said a senior Civil Aviation Ministry official.
•Allowing single-engine aircraft to fly under the scheme, increasing route exclusivity for airlines and higher subsidy for helicopters among others are some of the proposals which may be considered.
•Airlines had asked the Civil Aviation Ministry to increase the exclusive flying rights on UDAN routes from three to five years.
•“However, we do not favour increasing the exclusive rights to five years since we feel airlines get enough safeguards by operating exclusively on a route for three years,” said another Ministry official. Justifying exclusive flying rights, Civil Aviation Secretary R.N. Choubey had said last year that since routes become profitable after a certain point of time and airlines are taking risk to operate on regional routes, they should be “given some time to get fruits of the profit.”
Single-engine planes
•The airlines had also asked the Ministry to allow them to operate single-engine aircraft on routes under UDAN. However, the Directorate General of Civil Aviation is not in favour of the proposal due to safety reasons, according to a Ministry official.
•“We are persuading them to allow single-engine aircraft under the scheme,” the official said.
