📰 Make offices accessible to disabled: SC
•The Supreme Court on Friday upheld the right to dignity of the disabled while directing that government buildings providing public services should be made fully accessible to differently-abled persons by June 2019.
•Giving a slew of directions in an 87-page judgment, A Bench of Justices A.K. Sikri and Ashok Bhushan held that the target to have at least 20 to 50 State government disabled-friendly buildings across 50 cities by December 2017 should be fulfilled.
•The court rued that only seven States had met the target of having at least 50% of their government buildings accessible to the disabled. The court held that 50% of such buildings in the National Capital and State capitals should be made disabled-friendly by December 2018.
📰 Feed the cure: On paying TB patients
Giving TB patients money for an enhanced diet is a good step — but oversight is crucial
•The Central TB Division has said the government would hand over a sum of ₹500 a month to each of India’s 35 lakh diagnosed TB patients in order to strengthen the fight against the disease. The funds are intended to offset the loss of wages due to TB, and to help with travel and nutrition. Yet, much more needs to be done to protect TB patients from the effects of malnutrition, which has a complicated relationship with TB. An early study from a prisoner-of-war camp in Germany in the 1940s showed that Soviet inmates, who didn’t receive extra rations from the Red Cross as their British counterparts did, were around 16 times more likely to develop the disease. Since then, evidence linking low body mass index and nutritional deficiencies with higher rates of disease has piled up. It is a vicious cycle, because TB itself triggers malnutrition by hurting the patient’s appetite. One calculation suggests that half of all adult Indian TB patients get the disease due to malnutrition. Sadly, despite the evidence on the TB-diet link, it is still not clear how best to fix the problem, given the lack of research into interventions that can speed up recovery. A few small-scale studies have looked at cure rates among those patients consuming cereal-lentil powders or micronutrients such as Vitamin A and zinc, with mixed results.
•But lack of data isn’t a justification for inaction. In a guidance document this March, the Central TB Division proposed extensive interventions to tackle the problem. One recommendation was to double the rations under the public distribution system to families of TB patients, so that they are less likely to contract the disease. Because TB patients also need a high protein intake, the document recommends a second set of supplements, such as oilseeds and dried milk powder, which they wouldn’t have to share with the family. Given these recommendations and the scale of India’s malnutrition problem, the proposed assistance of ₹500 may not make any dent, especially if patients are not counselled on their ideal diet. India needs to fine-tune these interventions with further evidence so that policy can be more precisely targeted. Do pre-packaged protein powders work better than rations of cereals and pulses? Do TB patients need more of certain vitamins and minerals than healthy people do? These are difficult questions to answer. A recently announced 2000-subject study by the Indian Council of Medical Research in Jharkhand may go some way in plugging this knowledge gap, but more research is required. A better diet is a no-brainer for an illness like this, historically called “Consumption” because of how it ate away at patients. But understanding what constitutes such a diet, and making sure that patients get it, isn’t as straightforward.
📰 High growth doesn’t necessarily mean high inequality: Chancel
‘Bottom 50% in India has little access to quality education, health or transport’
•Inequality in India has accelerated in the recent decades, says Lucas Chancel, co-director, World Inequality Lab and of WID.world at the Paris School of Economics. He also maintains that high growth and high inequality need not go hand-in-hand, highlighting the example of China which has managed higher growth than India without the same degree of inequality. Excerpts from an e-mail interview:
Since 1991, has the widening of inequality accelerated?
•We observe a very sharp and progressive rise in inequality in India since the mid-1980s. The top 1% richest individuals captured 6% of [the] total income in the early 1980s, and the value is now of 22%. In 2000, the top 1% captured close to 15% of [the] total income. In fact, we do not have evidence of a clear trend-break over the period. According to our estimates, it was relatively steady. We, however, call for more data releases by the Indian Government to better assess this entire period. Overall, Indian inequality statistics remain very scarce and the government could do much more to increase the level of transparency and quality of the data.
While inequality has increased, are the bottom income levels better off now than they were, in terms of what services they can avail with their money?
•There has been higher average income growth in India since the 2000s than before, no one denies this. Income growth rates for the average Indian have been close to 4% per year once inflation is taken into account. The problem is that averages hide an important part of the picture. When we go beyond the average, we see that the poorest 50% of the population grew at 2.5% per year since the 2000s. This is non-negligible, but not very impressive either, especially when we compare this figure to the average or to very top groups (above 6% per year on average). Such differentials mechanically lead to a much higher concentration of incomes at the top. They also suggest that much more could have been done for the bottom groups. Overall, the bottom 50% in India still have little access to basic goods such as quality education, health or transport. Much more can be done in terms of investments for the bottom income groups. This will substantially increase income growth rates at the bottom, and the growth rates of the economy as a whole.
Can it be said that the government’s efforts over the last decade to increase the incomes among the poor has not made any difference?
•Our message is that much more could have been done. When the top 0.1% (eight lakh adults) capture as much total income growth as the entire bottom 50% (400 million adults), clearly, this shows that much more can be done for the bottom groups in this country.
Does the report only measure income inequality or does it measure inequality in other parameters?
•Inequality is indeed multidimensional: it is also about access to health, a fair justice system, education, a safe environment, etc. are all fundamental dimensions of inequality. The report focuses essentially on income and wealth inequality, which we measure in the entire world and in a systematic way, so as to allow comparisons across time and countries which is generally not possible with official economic inequality statistics.
•Even if we do not report statistics on the other dimensions of inequality, we show how connected non-economic inequality is to economic inequality. In the U.S., for instance, access to quality education is really determined by parental income. In India, this statement can be extended to access to quality health services and other forms of non-economic inequality. Indeed, reducing inequality in access to health or education is critical to reduce economic inequality.
The report contrasts the post-1991 period with the first three decades after independence. Would you recommend that India went back to the pre-1991 economic regime in order to reduce inequality?
•First, we should stress that it is up to Indian citizens to make their own choices. We are here to open debates, rather than close them. As researchers, we can highlight that much more equitable growth pathways seem possible in India. We can also point out what is being done elsewhere. Governments which succeed in achieving higher growth and lower inequality tend to have more progressive fiscal policies for instance, which are used to finance investments in education and health.
•There is no inheritance tax in India for instance, meaning that inherited wealth, gained just by sheer luck of being born in the right family, is taxed at 0% when the poor face high taxes on certain basic consumption goods! Progressive taxation (that is, the richest should contribute more because they have the ability to do so) is essential to finance public investments in education or health for everybody.
Growth vs inequality. A high level of the former will lead to a high level of the latter. Do you agree?
•China was able to achieve growth rates which were four times higher than India (800% total growth since 1980 vs. 200% in India) with close to half the level of inequality observed in India (the top 1% capture 14% of total income vs. 22% in India). Indeed, the two countries have very different political systems and institutions, which means that comparisons are only valid up to a certain point.
•But when we look at all countries around the world, we see that high growth for bottom income groups and for the middle classes can be achieved without skyrocketing inequality.
📰 Sri Lanka urged to repeal Prevention of Terror Act
UN experts say the act is an enabler of arbitrary detention
•Reiterating a long-pending demand from human rights activists and some politicians in Sri Lanka, visiting UN experts on Friday urged the government to repeal the Prevention of Terrorism Act (PTA).
•Following a 10-day visit to the island, the UN Working Group on Arbitrary Detention pointed to “significant challenges” to Sri Lankans enjoying the right to personal liberty, resulting in “arbitrary detention across the country”. The PTA of 1979, they observed, was one of the key enablers of arbitrary detention for over four decades. “Any new legislation must be in accordance with international human rights law and best practices,” the experts said in a statement issued here.
•While the Sri Lankan government maintains that no arrests have been made under the PTA after 2015 — when the President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe combine rose to power — the UN Working Group said it was “gravely concerned about the numerous severe restrictions to fair trial guarantees that the application of the PTA entails”.
Threats and torture
•The three-member delegation pointed out that under the PTA, a suspect cannot access legal assistance until the court proceedings commence. “In practice, this means that any statements, including confessions, which normally form an essential part of the prosecution under the PTA, are given in the absence of lawyers,” members said.
•The Working Group also underscored instances where persons convicted under the PTA had allegedly been subjected to harassment, intimidation, threats and torture to extract confessions.
•Successive governments have used the PTA against Tamils in the north and east during the war and after, at times arresting large groups of people by surrounding villages. In the south, the government used it in the late 1980s, during the second armed insurrection led by the leftist JVP, in an apparent attempt to curb dissent.
•In 2016, the Sirisena-Wickremesinghe administration began drafting a new legislation to counter terrorism that would replace the PTA. However, several lawyers and human rights practitioners have voiced concern about the draft carrying forward problematic elements from the PTA, particularly those which sanction torture.
📰 ‘We expect Indian aid on Rohingya issue’
Bangladesh seeks UN resolution
•Commending India’s role in the 1971 war with Pakistan to liberate Bangladesh, a senior Bangladesh Minister said here on Friday that Delhi needs to play “a similar diplomatic role” to resolve the Rohingya crisis.
•Engineer Mosharraf Hossain, Minister of Housing and Public Works of Bangladesh, who was in Kolkata to attend Vijay Diwas marking the surrender of the Pakistani Army in 1971, said India should influence the international community to bring Myanmar under pressure to take back the Rohingya refugees.
•Since August 25, nearly 650,000 Rohingya Muslims have reached Bangladesh fleeing violence in Myanmar’s Rakhine state.
•“We would look forward to India’s role. The way India played a diplomatic role earlier [in 1971] to liberate us, we would expect them [India] to play a similar role now. We would expect India to initiate a resolution in the UN to ensure [Rohingya] return [to Myanmar],” Mr. Hossain said.
•The Minister added that pushing the refugees back to Myanmar is not an option.
📰 A closer look at the lines
China’s remarks on bilateral ties and the border issue lay the initiative for corrective measures at India’s door
•Last week, ahead of the 20th round of the now moribund talks between the Special Representatives of India and China entrusted with finding an early settlement of the border question, the Chinese Foreign Minister, Wang Yi, after meeting External Affairs Minister Sushma Swaraj and the National Security Adviser, Ajit Doval, set out parameters that he implied needed to be bilaterally addressed with urgency. In sum, the remarks constitute quite a lecture. They lay the initiative for corrective measures comprehensively at New Delhi’s door and make it difficult to gloss over their implications. Whereas, the statements made by New Delhi appear, in contrast, to be conciliatory and more hopeful.
•The set of remarks, therefore, broadly underpin the direction of ties with China in the near term. A course correction is being sought, months after the Doklam crisis has been perceived to have been set at rest.
The import
•While it is not clear if it is a negotiating tactic, here is the listing, in no particular order of priority, so the import of the Wang Yi stipulations is not lost in translation: that India-China relations were at a crucial moment at present; he used the phrase “critical period” after he met Ms. Swaraj. That both countries needed to make the “correct choice regarding the future direction of bilateral relations”. That the results of the efforts made for “overall development momentum were unsatisfactory”. The most important thing to do was (emphasis added) “genuine cultivation of mutual trust”. So long as mutual trust continued to be absent, “some individual issues will keep fermenting and spilling over, thus eroding the overall situation of bilateral relations”. That the “Dong Lang incident caused by the Indian border troops’ illegal crossing of the China-India boundary into the Chinese territory was a severe test for bilateral relations… lessons should be learned to prevent similar incidents from happening again”. That the two countries “should properly control and handle problems left over from history and some specific issues in bilateral relations by putting them in the right place of China-India relations, without politicizing and complicating them to hamper the overall development of China-India relations”.
•Mr. Wang also set out some tasks that needed to be undertaken: both sides should enhance strategic communications at all levels, restore established dialogue mechanisms (emphasis added), deepen practical co-operation in various fields “and meanwhile, well manage existing differences and well safeguard peace and tranquillity in border areas”. He also specifically alluded to the benefits that await India were it to come aboard the Belt and Road Initiative, which New Delhi has shown some reluctance towards. Thus some of the Chinese goals and the problems have been clearly set out in public.
•This is the clearest confirmation yet that the “dialogue mechanism” —where the two Special Representatives (SR) meet, and set up with so much fanfare in 2003 — may have over the last decade-and-a-half or so, been more or less transformed into an exercise in general fatuity. Just like the Joint Working Group that looked at clarifying the border areas before the SRs came along. In the meanwhile, four Special Representatives have changed — Brajesh Mishra, J.N. Dixit, M.K. Narayanan, as well as Shivshankar Menon. Will Ajit Doval, or the one who follows him eventually, or the one afterwards, be able to make a difference?
A slide
•It is also significant that Mr. Wang’s candid remarks should come days after the tenth round of the Working Mechanism for Consultation and Co-ordination on India China Border Affairs, (WMCC) which concluded with a positive spin having been imparted to them as having been “constructive and forward looking”, but without firm dates for the next meeting.
•What a slide it has been. The SR dialogue was set up after lengthy diplomatic negotiations had yielded the “Political Parameters and Guiding Principles for the Settlement of the Boundary Question”. The hard-fought principles set out that the eventually delineated boundary would “be along well-defined and easily identifiable natural geographical features” and that the due interest of the settled populations in the border areas would be taken care of. It was expected that the exploration for the framework for the boundary settlement would commence thereafter.
Clarity on the border
•In the meanwhile, some of the expectations had rewritten themselves. The Joint Working Group — that had been clarifying the border areas with a view to leading up to exchange of maps on a mutually agreed scale on where the Line of Actual Control (LAC) lay in each others’ perception — had run itself into the ground. This was after sample maps were exchanged in the Middle Sector without having been able to progress to the Western and Eastern Sectors. There was a time when as many as four lines ran across the border areas: one where we perceived the LAC to be, one where the Chinese perceived the LAC to be, one where we perceived the Chinese perceived the line to be and one where the Chinese perceived where we thought our line lay. The last two lines were somewhat guess-worked from the military graffiti, tell-tale traces that our armies leave behind when they foray into the border areas asserting perceptional rights through patrols, the same way as animals mark territory. It is not even clear whether we have spoken of each other’s perception of the LAC for the last decade.
•This after China had till the middle of the 1980s seemed open to a process that would let India keep the areas in the East while they held on to those in the West. The fond hope was of an “LAC plus” solution. That changed as well. As did the pious intention to earnestly look for an early solution. Utterances of visiting Chinese premiers introduced new nuances into the diplomatic liturgy, emphasising the complexity of the issue, underlining the difficulty of its resolution, and, thereby, leaving it to future generations to grapple with. Instead of enlarging commonalities, what is being expanded instead are the divergences: whether it is China’s opposition to India’s entry into the Nuclear Suppliers Group, or its steadfast support to Pakistan’s mollycoddling of terrorist groups that are inimical to India, or its pointed message to encourage Bhutan to settle its boundary dispute with China in a way that would make the Indian Army’s presence in Doklam eventually redundant. Just look at the Chinese penetration of the area we consider to be our backyard: whether it is Sri Lanka, Nepal, and now the Maldives. Can Bhutan be far behind?
•To this day, even though a military hotline between the two army headquarters had been agreed upon years ago, it has not materialised. This is something that would be logical, even imperative, given that both countries have improved their border infrastructure in terms of roads and accessibility in such a way that increases the possibilities of troops chancing upon each other. Therefore, transgressions will increase in terms of frequency, duration, depth, and intensity. The aim should be to evolve a stronger mechanism to manage the border areas more effectively to ensure equilibrium. This must include a more robust code of military conduct, even though neither side has sought to alter border reality through use of force.
•It is time New Delhi put more effort into strengthening India’s presence in those areas where we are present, where we consider to be them as our border, and live with it rather than to wait for Beijing to alter reality again. It is easier to make provisions to better live with it than to squander energies resolving it. If we don’t let the boundary question detain us, we will be in a better position to enlarge the areas where we can more fruitfully, in the Asian Century, engage the Chinese in line with the bilateral intentions that envisaged the simultaneous rise of both China and India.
📰 Cabinet nod for Bill making instant triple talaq a crime
This Bill will adjudicate all cases of instant triple talaq across the country except Jammu and Kashmir.
•The Union Cabinet on Friday approved a Bill that makes instant triple talaq or talaq-e-biddat a criminal offence and a Muslim husband resorting to instant talaq can be jailed for up to three years.
•The government intends to introduce the Bill in the winter session of Parliament that got under way on Friday. “I cannot discuss details of the Bill. All I can say is that it aims to provide a shield to the helpless victims of triple talaq,”said Law Minister Ravi Shankar Prasad.
•Last month, the Law Ministry had written to all the States for their comments and asked them to revert urgently.
•“Many States have supported the Bill,” said the Law Minister, without indicating if any Opposition-ruled State disapproved of the move.
•The proposed Muslim Women Protection of Rights on Marriage Bill will deal with complaints against instant triple talaq across the country, except Jammu and Kashmir.
•The issue of ending instant triple talaq was part of the BJP’s political campaign in the Uttar Pradesh elections and on Friday Prime Minister Narendra Modi is said to have told his colleagues that it was a ‘historic move’ to ensure gender justice.
•The Congress said it supports progressive laws that stop practices like instant triple talaq but would comment on the proposed Bill only after the contents are made public.
Subsistence allowance
•As per provisions of the draft Bill, earlier reported by The Hindu, a husband who resorts to instant triple talaq can be fined or face a jail term of up to three years.
•Instant triple talaq in any form — oral, written or electronic form — has been banned and made a cognisable offence. The Bill also provides for a subsistence allowance of a harassed Muslim woman and her dependent children and the custodial rights of minor children. In August, the SC had passed a landmark judgment terming instant triple talaq “llegal and unconstitutional.”
•However, government sources say data suggests even after the judgement, there have been 66 cases of instant divorce until November. And before the judgment, there were 177 cases with Uttar Pradesh and Bihar recording the maximum number of cases.
•Prime Minister Modi had set up an inter-ministerial group to examine the issue after the Supreme Court judgment and it included top Ministers such as Arun Jaitley (Finance), Rajnath Singh (Home), Sushma Swaraj (External Affairs), Ravi Shankar Prasad (Law), his deputy P.P. Chaudhary and the junior Minister in the Prime Minister’s Office Dr. Jitender Singh.
Landmark judgement
•In August last, the Supreme Court passed a landmark judgement calling instant triple talaq as illegal and unconstitutional. However, government sources say, data suggests that even after the judgement, there have been 67 cases of instant divorce. Before the judgement, there were 177 cases of instant divorces, with Uttar Pradesh and Bihar recording the maximum number of cases.
•Post the Supreme Court verdict, Prime Minister Narendra Modi set up a group of ministers comprising Finance Minister Arun Jaitley, Home Minister Rajnath Singh, External Affairs Minister Sushma Swaraj and Law Minister Ravi Shankar Prasad.
•The issue of ending instant divorce was part of the BJP's political campaign in the Uttar Pradesh elections and the party believes it paid dividends among the Muslim women who have been victims.
📰 SC refuses Gujarat Congress leader’s plea to cross-verify 25% VVPAT-EVM votes in State polls
A three-judge Bench refused to entertain the plea, saying that the judiciary cannot question the discretion of the EC
•An “11th hour” plea by Secretary, Gujarat Pradesh Congress, to direct the Election Commission of India to count and cross-verify at least 25% of Voter Verified Paper Audit Trail (VVPAT) paper trail with the Electronic Voting Machines (EVM) votes polled in the State Assembly elections fell flat in the Supreme Court on Friday.
•A three-judge Bench of Chief Justice Dipak Misra, Justices A.M. Khanwilkar and D.Y. Chandrachud refused to entertain the plea, saying that the judiciary cannot question the discretion of the Election Commission (EC) to restrict the exercise to just one random booth per constituency.
•“How can the court substitute the discretion of the Election Commission? And why have you put the margin at 25%? Why not 5% or 10% or even 30%? We cannot encroach into the Election Commission’s authority,” Justice Chandrachud orally observed.
•Justice Chandrachud observed that the plea seemed to suggest that the Election Commission’s exercise to conduct a random match of VVPAT-EVM votes in one booth per constituency was “malafide”.
•“Do you have any cogent material to show us that the EC’s decision was taken arbitrarily? We can only exercise our judicial powers after positively concluding that EC has exercise its powers arbitrarily. We have to be slow in a case when the EC has already taken a decision. How can we discredit a process?” Justice Chandrachud said.
•Chief Justice Misra said the election has already concluded in Gujarat.
•Senior advocate Abhishek Manu Singhvi, for the petitioner, argued that the EC itself is open for random checks to verify whether the VVPAT paper trail and EVM vote count match. Expanding the checks from just one booth in a constituency to 25% of the votes polled would only further the cause of a clean election.
•“Progressively all countries have stopped the use of EVMs. Only India and South Africa use them. Others have declared it unconstitutional… there has already been complaints about EVMs in the first phase of the Gujarat elections,” Mr. Singhvi submitted.
•The plea does not in any way “thwart or obstruct” the objective of a clean election, it only furthers the cause, Mr. Singhvi argued. He later scaled down the demand for cross-verification of votes to 20%, and then to at least 10%.
•But the court did not relent. Justice Chandrachud said that the cause of clean elections is anyway covered when a candidate reserves the right to demand a re-count of votes polled from the Returning Officer concerned. This safeguard is provided notwithstanding the the “one-booth formula” directed by the EC, Justice Chandrachud pointed out.
•The plea was finally allowed to be withdrawn by the court, which suggested that the petitioner could, in the future file a writ petition under Article 32 of the Constitution, suggesting ways to further reform the VVPAT laws.
📰 Changed priorities
The government’s move will shift attention away from recovery of bad loans to selling assets of defaulting corporates
•It is ironical that while the 2017 Forbes India List says that the combined net worth of India’s 100 wealthiest stood at a whopping $479 billion, top corporate borrower groups in India are unable to repay loans and make timely interest payments.
Tackling NPAs
•The government has taken the high moral ground to deal with the menace of non-performing assets or NPAs that have brought many public sector banks on the verge of bankruptcy. It sounded the bugle for errant promoters with its ordinance of November 23 amending the Insolvency and Bankruptcy Code (IBC) 2016. Many are of the view that if the errant promoter is disqualified from the bidding process it will lead to further losses for banks.
•However, the ordinance is not likely to either eliminate errant promoters or hugely escalate bank losses apart from the deep haircuts already suffered. It merely signals the government’s intent to shift attention away from recovery of bad loans to selling the assets of defaulting corporates.
•The May 2017 ordinance directed banks to accept deep haircuts on their non-performing loans. However, there was no explicit direction from the government as the majority owner of public sector banks to recall the outstanding loans and recover as much as possible against the personal guarantees of promoters.
•Paeans are being sung in praise of corporate defaulters for their stellar role in the development of the infrastructure sector. The Mumbai and Delhi airports are being cited as examples of the success of the public-private partnership (PPP) model. The fact that defaulting corporates such as GMR Infrastructure, GVK Power and Infrastructure, and Jaiprakash Associates borrowed more money than they could repay is being overlooked and their inability to repay is sought to be justified by “circumstances beyond their control”.
•These corporates have not been downgraded on their creditworthiness parameter although the Reserve Bank of India (RBI) has been monitoring all large loans through the Central Repository of Information on Large Credits (CRILC) since 2014. Would the government show the same leniency to the 32,000 odd home buyers of Jaypee Infratech and waive off their home loans since they may not get possession of their flats due to “circumstances beyond their control” ?
Corporates-bank nexus
•The fact that lending banks in case of large borrowers were operating as a consortium of a score or more of banks obviates the need for any investigation into the corporates-bank nexus that caused this loss of lakh-crores of depositors’ money. In all fairness, this hit being taken by banks for the sake of development should be treated as a government bailout of the corporate sector. Alternatively, it could be seen as the RBI making credit available to defaulting corporates at negative rates of interest.
•The recent ordinance makes the resolution professional all powerful. It is now up to the resolution professional to decide who will be eligible to bid for the defaulter companies or their assets.
•The ordinance conveys the urgency of impeccable antecedents of bidders so as to exclude wilful defaulters as well as companies whose interest and charges are outstanding for a period of one year or more. An existing promoter is eligible to bid for majority control only if all dues are paid. A defaulting promoter is not even allowed to bid indirectly through or along with other parties since “connected persons” are excluded from eligibility. A strict interpretation of the ordinance would mean that the loan accounts of each one of the 400-odd defaulter corporate borrowers are technically classified as NPAs. Otherwise they would not have reached this stage of resolution.
•These accounts are likely to have been through various rounds of unsuccessful restructuring in the past. Having failed to repay even the reduced amounts of loan and interest to the banks, their past credit history should raise serious questions on their antecedents. Hence, the promoters of these companies should not qualify as eligible bidders. So far, none of the first 12 corporates referred to the IBC has been debarred from bidding back their companies after driving them aground. Thus, the ordinance creates the scope for disqualifying an existing promoter or including a rank outsider into the bidding process.
•The Insolvency and Bankruptcy Board of India (IBBI) is the regulator set up on October 1, 2016 under the Insolvency and Bankruptcy Code. The resolution professionals entrusted with the responsibility of sorting out the insolvent companies or individuals can be registered with any one of the three insolvency professional agencies. The IBBI is assisted by the disciplinary, advisory and technical committees. A quick glance at the IBBI website reveals that the advisory committees on corporate insolvency and liquidation are chaired by several top corporates.
•While there is nothing unusual about government consultation with corporate India, the appointment of corporates as heads of important corporate insolvency advisory committees under IBBI does not inspire confidence in the credibility of the resolution process. The recent ordinance may end up being used selectively to defeat the very objective of penalising the errant promoter. The banks will only lose if resolution is sidetracked by the ensuing power struggle among corporate India to purchase distressed assets at rock-bottom prices.
📰 Centre raises duty on electronic items
Customs tariff increase covers mobile phones, TVs; move to lend a fillip to ‘Make in India’ programme
•The Centre has increased customs duty on several electronic items including televisions, mobile phones and microwaves, making the import of these goods more expensive and thus lending a fillip to its ‘Make in India’ programme.
•The custom duty on push button phones, including mobiles, and on smart electricity meters has been increased to 15%, from 10% now, as per a notification issued by the Ministry of Finance. The duty on products like monitors, projectors, water heaters, microwaves, TVs and lamps and light fittings has been doubled to 20%.
•“This is a major policy shift from the Government, as the peak customs duty rate for many electronic products has effectively been increased from 10% to 15% or 20%,” said Pratik Jain, Leader - Indirect Tax, PwC India. “This seems to be with the twin objective of increasing revenue as well as to encourage more manufacturing and value addition in India.”
•Mr. Jain said the duty increases had been made under “emergency powers” included in the customs laws, and could prompt manufacturers in other industry segments to push for similar protection from imports.
•“Some announcements can be expected in the upcoming budget about these changes and policy direction in this regard,” he added.
•Anwar Shirpurwala, Executive Director of MAIT, the IT hardware industry body, said the move was aimed at boosting domestic manufacturing and not at making products costlier. “There may be some impact on the prices of products that are imported... manufacturing infrastructure is being built in India and this move will help push it further.”
•Likewise, Abhishek Jain, Tax Partner at EY India said, “To foster the national initiative of Make in India, the Government has raised the basic customs duty for various electronic products like mobile phones, microwave ovens, television sets, LED lamps, cameras. This would make import of these goods costlier and industry would be forced to explore domestic manufacture of these goods to reduce cost instead of importing these goods.”
•Manish Sharma, President CEAMA and President and CEO, Panasonic India and South Asia said, “This shall not lead to major price hike as the duty structure for local manufacturing remains unchanged, but will boost indigenous manufacturing & generate more employment opportunities.”
‘Apple to be hit’
•Meanwhile, Reuters reported that the rise in tax to 15% on handsets will make imports of phones — including most of Apple’s iPhone models — more expensive at a time the company’s revenue growth is slowing in India’s $10 billion smartphone market.
•Pankaj Mohindroo, president of the Indian Cellular Association, said the increase will boost domestic manufacturers who are making about 500 million cellphones a year, more than double the output three years ago. Eight out of 10 phones sold in 2017 have been made locally, data from Counterpoint Research showed. Samsung assembles in India most of the handsets it sells in the country.
•Apple currently only assembles its iPhone SE models in India and imports others. The company has sought a range of incentives and tax relief from the government for it to expand its manufacturing in India, but government officials have said they are unlikely to make exemptions for Apple.
•Tarun Pathak, an associate director at Counterpoint Research, said the tax notification, will impact mobile phone companies dependent on imports.
•“It will impact Apple the most as the company imports 88% of its devices into India. Either this will lead to increase in iPhone prices or force Apple to start assembling more in India.”
•Aside from cellphones, the government also raised the import tax on video cameras to 15 % from 10 % and doubled the one on television sets 20 %, its statement said
•On Monday, a delegation of Indian telecoms equipment manufacturers met Finance Minister Arun Jaitley, seeking government help to promote the domestic industry while he prepares the budget for 2018/19.
•India’s goods imports in the seven months ending October rose 22 % to $256.4 billion from a year earlier, raising concerns among policymakers.
📰 Govt. to return MDR to boost digital payments
To cover transactions of up to ₹2,000
•The Centre said it would reimburse the merchant discount rate (MDR) applicable on digital transactions up to ₹2,000 for the next two years to give a fillip to digital payments in the country. This will be applicable on transactions done using debit cards, UPI BHIM application or Aadhaar.
•The decision, cleared by the Cabinet, was expected to cost the exchequer more than ₹2,500 crore.
•“The government today has taken a major decision that to accelerate digital payments in the country. The MDR charges on transactions up to ₹2,000 shall be reimbursed by the government to the banks,” said Ravi Shankar Prasad, Electronics and IT Minister.
•MDR is payable by the merchant to the bank when a payment is made at a merchant point of sale.
•“Citing MDR, many people make cash payments inspite of having debit cards,” he said.“Similarly, MDR is charged on payments made to merchants through BHIM UPI platform and AePS,” he said, adding the consumer and the merchant would not suffer any additional burden in the form of MDR now, thereby leading to greater adoption of digital payment modes.
•As per government’s estimates, the total MDR to be reimbursed to the banks in respect of transactions worth less than ₹2,000 in value would be ₹1,050 crore in FY 2018-19 and ₹1,462 crore in FY 2019-20.
•The Minister said debit card transactions worth more than ₹2.18 lakh crore had been carried out between April-September 2017. “Going by this trend, we expect that by the end of the financial year, we will see debit card transactions amounting to over ₹4.37 lakh crore.”
•Digital transaction below ₹2,000 account for about 15-20% of the payments in terms of value. In volume terms, it was much higher.
•A Committee comprising Secretary, Department of Financial Services, Secretary Ministry of Electronics & IT and the CEO, National Payment Corporation of India (NPCI) will look into the industry’s cost structure of such transactions to determine reimbursement level.
•“The committee will also see that the scheme is not misused,” Mr. Prasad said.
📰 EU leaders agree to move Brexit talks to next phase
•Two days after parliamentarians inflicted a major legislative defeat on the British government, Prime Minister Theresa May won a domestic political reprieve, as the EU said it would give the green light for Brexit talks to move to the crucial phase 2. The EU had insisted that until certain issues on the terms of Britain’s exit were resolved talks could not move onto the far more complex theme of the terms of the relationship that Britain would have with the EU once it had exited, including the nature of any transitional relations that would exit to smoothen the process. European Council President Donald Tusk tweeted his congratulations to Ms. May on Friday morning, on the second day of talks in Brussel.
•The agreement is something of a formality — but significant nonetheless — after the meeting between Ms. May and Mr. Tusk last week, in which he agreed enough progress had been made. “Today is an important step on the road to delivering a smooth and orderly Brexit and forging our deep and special future relationship,” Ms. May said on Friday.
•Welcoming the “sufficient” progress that had been made on addressing the issues in the first phase of negotiations, the European Council said that the talks would now cover transitional arrangements as well as the longer term relationship but warned that progress was contingent on the commitments made in the first phase to be “respected in full and translated faithfully into legal terms as quickly as possible”. This condition is an oblique reference to concerns about comments made by the Brexit Secretary David Davis, who cast a shadow over the deal agreed last week by suggesting that the commitments made were just a statement of intent.
•The Council also insisted, in its guidelines for the next phase of negotiations also published on Friday, that during any transitional period (Britain has proposed a period of around two years) EU rules, regulations, budget, trade policy and laws would continue to apply to Britain. “Such transitional arrangements… must be in the interest of the Union,” said the Council. These conditions are unlikely to go down well among so-called Hard Brexiteers who are keen for free movement, and the application the European Court of Justice’s rulings to stop applying to Britain from the earliest date possible (March 29, 2019).
•“Phase 2 will be more difficult than phase 1,” said Jean Claude Juncker, President of the European Commission, on Friday, acknowledging the tough road ahead.
•The Council also said the terms of a future trade agreement between Europe and Britain could also only be concluded after Britain fully left the EU. “The Union will be ready to engage in preliminary and preparatory discussions with the aim of identifying an overall understanding of the framework for the future relationship,” it said, calling on Britain to provide “further clarity”, on what it sought for the future relationship.
•Whatever the challenges, the developments mark a milestone in the British government’s progress towards the Brexit deadline, which the government is currently attempting to enshrine in legislation. The first phase involved difficult negotiations on three major issues: what the rights of EU citizens in Britain would be and vice versa, how much Britain would have to pay to “divorce” the EU, and how exiting the single market and the customs union could be reconciled with keeping an open border between Ireland (an EU nation) and Northern Ireland (part of the United Kingdom and therefore set to leave the EU). While the Irish issue in particular has not been dealt with entirely, Europe acknowledged that sufficient progress had been made, and that further progress would continue to be monitored.
•On Wednesday night, 11 rebel Conservative MPs teamed up with opposition parties to push through an amendment to the Brexit legislation, requiring parliament to be given a meaningful say on the terms of Britain’s exit and future relationship with Europe. A further parliamentary battle is expected next week when the government attempts to push through an amendment that would enshrine the deadline of March 29, 2019 in legislation — something that a number of Conservative MPs have also indicated they will oppose.
📰 Slowdown bottoming out, says RBI’s Patel
‘Financial markets have shown resilience, stability amid heightened volatility’
•Reserve Bank of India (RBI) Governor Urjit Patel said with growth picking up in the second quarter of the current financial year, the economic slowdown may have bottomed out.
•“Our recent growth numbers may have disappointed some in the first quarter of this fiscal year, but the second quarter has recorded an uptick and the slowdown may well be bottoming out,” Dr. Patel said in a speech delivered on December 7 at a conference organised by CAFRAL on “Financial System and the Macroeconomy. The RBI uploaded the text of the speech on its website on Friday.
•Official data released this month, showed gross domestic product (GDP) in the July-September quarter expanded 6.3% year-on-year, snapping a four-quarter slowdown. Growth in the preceding quarter was 5.7%.
‘Efficiency augmenting’
•Dr. Patel said while structural changes, such as the introduction of the Goods and Services Tax (GST), may result in temporary disruptions, they were “efficiency augmenting” in the medium to long term. He said the current account deficit “remains within sustainable levels”, and other indicators of external viability also reflected a healthy improvement.
•The RBI chief said international investors had warmed to the Indian economy as reflected in the sizeable foreign investment inflows.
•“Meanwhile, domestic financial markets have shown resilience and stability in spite of escalation of global geopolitical uncertainty and heightened volatility in financial markets. These developments have enabled the build-up of buffers against unforeseen shocks.”
•At the same time, building up adequate buffers in foreign exchange reserves was a natural “self-insurance” to manage risks arising out of volatile capital flows.
•Commenting on inflation, the central bank governor said while some disinflation was underway and inflation expectations were, perhaps, getting re-anchored, “considerable caution and vigilance” was warranted.
•The monetary policy committee has left interest rates unchanged for two successive bimonthly policy reviews, citing concerns about the outlook for inflation. The RBI has also retained a ‘neutral’ policy stance.
📰 NGT once again bans plastic use in Haridwar, Rishikesh to save Ganga
Green panel imposes ₹5,000 fine on violators
•Reiterating its previous orders, the National Green Tribunal (NGT) on Friday imposed a ban on plastic items, including plastic bags and cutlery, in Haridwar and Rishikesh.
•Further, the bench headed by NGT chairperson Swatanter Kumar banned the sale, manufacture and storage of all such plastic items, till Uttarkashi. The green panel specified that the ban would be applicable to towns in Uttarakhand, along river Ganga and its tributaries.
•The Tribunal said a fine of ₹5,000 would be imposed on those violating the order. Action would be taken against erring officials as well.
‘Complete prohibition’
•In a judgment passed in 2015, the NGT had observed: “Plastic waste and other municipal waste is being thrown directly into river Ganga and its banks are full of such waste. There is no proper system for collection, segregation and disposal of municipal solid waste in the entire city of Haridwar.” said: In a bid to check further pollution of the river, the green panel had imposed a ban on the use of plastic. “There shall be complete prohibition of use of plastic in the entire city of Haridwar and Rishikesh and particularly on the banks and flood plain of river Ganga. Plastic will not be used for any purpose whatsoever, that is serving food, commodities, packaging or even carrying the plastic in that area.” the bench had said.
•As part of the project to clean the river, the bench had held, “Under no circumstances, plastic carry bags of any thickness whatsoever would be permitted. The procurement, storing and sale of such plastic bags, plates, glass, spoons are hereby prohibited.”
•Further, the Tribunal had also prohibited the authorities from throwing municipal waste, construction and demolition waste into Ganga and its tributaries.
•The green panel passed the directions while hearing a plea filed by environmentalist M.C. Mehta, and observed that despite previous orders passed by the Tribunal, plastic was still being used, which in turn was polluting the river.
📰 India should secure infrastructure against cyber threats, says Kaspersky Labs founder
Eugene Kaspersky says India is one of the most important from a cybersecurity aspect because of its population and economy.
•India needs to worry about terror groups attacking critical infrastructure such as power plants, telecom and banking systems, says Eugene Kaspersky, founder of the world’s biggest private cybersecurity firm. Excerpts
Is India particularly vulnerable or a target for cyberattacks, especially from adversarial neighbours such as China and Pakistan?
•India is one of the most important countries from a cybersecurity aspect because of its large population, Internet literacy, and as a growing economy. I hope and believe we will never have an inter-state cyberwar, simply because all nations are equally vulnerable. Cyberweapons are like a nuclear weapon now, a deterrent. But I am worried about cyberterrorism. There are many groups that are responsible to no one and they are the worst case scenario for us.
In 2015, you investigated the Bangladesh Central bank cyberheist, which nearly robbed the country of a billion dollars, which you had traced to the North Korea-based cybercriminal Lazarus group. Have you seen any traces of that group targeting India banks?
•There are many indicators that the Bangladesh attack was connected to Lazarus, and that it is based in North Korea. But we don’t really have hard data as that is the nature of cyberinvestigations. But there are many indicators that groups like Lazarus and attacks like WannaCry of 2016 could have the same source-code, which could have been shared.
What should Indian companies and the government be most worried about?
•Like every other country, securing critical infrastructure is most important: power plants, power grids, water supplies and transportation. We work regularly with the Indian government and signed an MoU with the CERT (Computer Emergency Response Team) last year. We exchange information about the latest threats, and were able to share information about the last WannaCry attack in real time.
There have been concerns that with the push for a more “Digital India” without enough cybersecurity literacy, Indians will face more hacking especially financial attacks. Are those concerns valid?
•Unfortunately they are. It is not possible to stop innovation, and not possible to stop countries like India from growing and improving lives through Internet, smart cities and other projects. But if these are done in non-secure ways, they will become targets.
•Cybersecurity must be incorporated in projects here right at the beginning, not at the end, or you will have a weak foundation that is vulnerable to cyberattacks. Every 40 seconds, a computer connected to the Internet is hacked. Today, we see 300,000 new malicious applications or file every day, and malware, that can sabotage your systems have already cost the world 430 billion dollars.
In India, there is a debate over electronic voting machines. Do you think they can be hacked?
•We can’t say as we have not looked at Indian EVMs specifically.
•But if a machine is connected to a network or the Internet, then yes, it is possible to hack the machine. This is why we suggest strict security audits right at the first stage, where governments want to use e-systems.
You are a Russian company, but Russia also has this reputation in the U.S. and Europe for conducting cyberattacks, subverting the election process … how do you respond to that?
•The reality is that much of this is media hype and hackers exist in every part of the world. I think all countries should now agree to an international convention against state-sponsored cyberhacking. Organisations like the UN, BRICS, EU, and global powers must recognise that by damaging each other’s cyberspace, all states are making themselves vulnerable.
