The HINDU Notes – 14th February 2018 - VISION

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Wednesday, February 14, 2018

The HINDU Notes – 14th February 2018

πŸ“° Sri Lanka’s first national unity government in trouble

President, PM fail to reach consensus on coalition’s future after local poll reverses

•Crisis gripped Sri Lanka’s first national unity government on Tuesday, with President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe failing to reach consensus on the future of their coalition government, following the huge defeat their parties suffered in the recent local government elections.

•Late on Tuesday evening, the leaders met at the President’s home — their third encounter after the poll results were released on Sunday — along with members of the Cabinet and some Ministers. They decided to set up a committee to chart out the next steps and “reform proposals” for their cohabitation government. The panel will come out with a report within three days, sources told The Hindu.

•“The President said we should not drag this anymore. He was very keen we resolve this soon,” said Ranjan Ramanayake, a Deputy Minister, who was present at the meeting.

•While the two parties tried reaching an agreement, Prime Minister Wickremesinghe on Tuesday came under pressure to resign, according to reliable sources. One of the early indications came on Sunday, when President Sirisena told Mr. Wickremesinghe that his Ministers were “not willing to work with him [the PM] any more,” The Hindu has learnt.

Historic election

•Mr. Wickremesinghe’s United National Party (UNP) and the Sirisena-led faction of the Sri Lanka Freedom Party (SLFP), its traditional rival, have been in government together since 2015, after they jointly ousted former President Mahinda Rajapaksa in a historic election. The other faction of the SLFP supports Mr. Rajapaksa and sits in the Opposition.

•In the February 10 local government polls, the partners in national government contested separately and lost to the newly formed party, Sri Lanka Podujana Peramuna (SLPP), or Sri Lanka People’s Front, backed by Mr. Rajapaksa. The SLPP won in 239 out of the 341 councils, pushing the UNP, which seemed a favourite during the campaign, to a distant second spot with 41 councils. Mr. Sirisena’s SLFP won just 10 councils.

•While the growing differences in the uneasy coalition became evident during the campaign, the results have only deepened the fissures. “There is no way we will support this government as long as Mr. Wickremesinghe is Prime Minister,” said Dilan Perera, State Minister of Highways and a prominent SLFP member.

•Referring to a bond scam at the Central Bank, in which a former governor appointed by the Prime Minister has been accused of causing losses worth billions to public institutions, Mr. Perera told The Hindu on Tuesday: “We lost this election because of the scam. If he [PM] is a true democrat, he should resign immediately.”

•The President is said to have raised the issue at the late-night meeting as well, saying such a “drastic measure” was necessary to politically counter Mr. Rajapaksa, supported by a significant section of the Sinhala-Buddhist electorate, a top source told The Hindu.

•However, there were no indications from the PM of stepping down. Some SLFP members reportedly approached the Speaker and senior UNP member Karu Jayasuriya, asking him to take over as PM.

•“He [Mr. Jayasuriya] clearly told them that he would not do that unless PM Wickremesinghe asks him to,” a political source said.

•Observing that there was no need for their leader to resign, that too on the insistence of SLFP which has just faced one of its worst election debacles, UNP members have accused the party of constraining it while in power, and being unreasonable post-elections.

•Meanwhile, a section of the UNP sought to pressure its leader, Mr. Wickremesinghe, to break off the coalition, citing the party’s 106-member strength in Parliament, political sources said. The UNP, the senior partner in the ruling coalition, needs seven more MPs to reach the majority mark in the 225-member House.

•Even as the coalition partners explore ways to reconfigure the national unity government, the Rajapaksa camp is said to have reached out to Mr. Sirisena Tuesday evening, offering “conditional support” in parliament, until “early [national] elections”.

•“Or, they are welcome to sit with us in Opposition,” said Namal Rajapaksa, opposition lawmaker and son of the former President.  The SLFP is yet to respond to the offer.

•Amid the political developments, Indian High Commissioner to Sri Lanka Taranjit Singh Sandhu met President Sirisena and PM Wickremesinghe in separate meetings. Informed sources said the meetings were “pre-arranged”, for discussion of bilateral issues “of mutual interest.”

πŸ“° Ramallah recall: On India’s Palestine policy

Narendra Modi’s visit signals India’s strategy to grow ties with Israel and Palestine separately

•Prime Minister Narendra Modi’s visit to Palestine underlines the delicate balance New Delhi has adopted in this long-standing and seemingly intractable conflict. India, which has been a champion of the Palestinian people’s national aspirations, has built strong ties with Israel in recent years. Last year Mr. Modi became the first Indian Prime Minister to visit Israel; the Ramallah visit has come just weeks after his Israeli counterpart, Benjamin Netanyahu, visited India. On the other hand, late last year India voted along with a vast majority of member-states at the UN General Assembly against U.S. President Donald Trump’s decision to recognise Jerusalem as Israel’s capital. Last week in Ramallah, the Palestinian National Authority’s administrative headquarters, Mr. Modi reiterated India’s support for the Palestinian cause, saying it “hopes that Palestine soon becomes a sovereign and independent country in a peaceful atmosphere”. Both sides also signed a number of agreements for India-funded projects in the West Bank. India’s policy objective is clear and rooted in political realism. It wants to maintain the balance in its relationship with both Palestine and Israel, and strengthen bilateral ties with each separately.

•This balance is vital for India, for which Israel is a source of defence equipment and agricultural technology. But Israel also faces political isolation internationally over its occupation of the Palestinian territories and does not have diplomatic ties with most countries in West Asia. As reflected in the UNGA vote, international public opinion is overwhelmingly against the occupation. India, which has vital interests in the Gulf and enjoys good ties with the region’s Muslim countries, cannot afford to be seen to be politically closer to Israel at the expense of ties with Palestinians. So it is not a coincidence that the Prime Minister’s visit to Palestine took place against the backdrop of India’s deepening ties with Israel. With the Ramallah visit, the message Mr. Modi is sending out is that India’s partnership with Israel is not at the expense of its principled support for the Palestinian cause. Still, changing nuances in India’s position were on display during the visit. Traditionally, India has supported the creation of an independent Palestine within the 1967 borders, with East Jerusalem as its capital. According to this line, Israel would have to withdraw from the West Bank and East Jerusalem and either pull out the Jewish settlements or do a land-swap with the Palestinians as part of a final agreement. Mr. Modi carefully avoided any reference to the borders or to the capital. In effect, India’s support for the two-state solution remains, but it has now stopped short of the specifics.

πŸ“° China will ‘take action’ if India sends troops to Maldives: Global Times

Editorial in tabloid 'Global Times' warns that ‘India should not underestimate China's opposition to unilateral military intervention’.

•China’s state-run tabloid Global Times on Monday warned that Beijing will retaliate if New Delhi unilaterally decides to send troops to the crisis-hit Maldives.

•“Without U.N. empowerment, there would be no righteous cause for any armed force to intervene. China will not interfere in the internal affairs of the Maldives, but that does not mean that Beijing will sit idly by as New Delhi breaks the principle. If India one-sidedly sends troops to the Maldives, China will take action to stop New Delhi,” the daily said in an op-ed.

•It warned that, “India should not underestimate China's opposition to unilateral military intervention.”

•The article linking China’s “action” only as a response to India’s possible military intervention follows signals from the Chinese officialdom that Beijing does not want to exacerbate tensions with India over the Maldives issue.

•“It [the Maldives development] should not become another problem [between China and India],” an official source told The Hindu last Thursday.

•Chinese foreign ministry spokesperson Geng Shuang quoted Foreign Minister Wang Yi following his meeting with Mohamed Saeed, the special envoy of Maldivian President Abdulla Yameen on Thursday that “China will not interfere in the internal affairs of the Maldives”.

•A diplomatic source said in a conversation with The Hindu that the two visits in December to India- by Mr. Wang and state councilor and politburo member Yang Jiechi had built on the “fresh start” talks in September between Chinese President Xi Jinping and Prime Minister Narendra Modi during the BRICS summit in Xiamen.

•The meeting took place soon after the Doklam standoff between Indian and Chinese troops in the Sikkim sector was defused.

•In a timely gesture, the Chinese side has re-opened the gates of the Kailash-Mansarovar pilgrimage for Indian travelers through Nathu La in Sikkim . The route was closed last year in the wake of the Doklam face-off.

“Exercise restraint”

•The Global Times op-ed counseled India to “exercise restraint” in view of the “tense situation” in Male. “This is the country's internal affairs and China firmly opposes outside interference. More than that, China should take necessary measures to stop India if New Delhi moves to intervene militarily”, the daily observed.

•The latest crisis in Maldives unfolded earlier this month, when the Yameen administration imposed an emergency in defiance of the Supreme Court ruling that quashed the conviction of opposition leader Mohamed Nasheed, and ordered the release of 12 jailed parliamentarians.

πŸ“° U.S. Senate begins debate on immigration

Status of ‘Dreamers’ is a priority issue

•The U.S. Senate on Monday started an open-ended debate on immigration, a highly divisive topic that has eluded political consensus for years now. The debate, which may last the entire week, is not on any specific Bill. Rather, Senate Majority Leader Mitch McConnell has picked up a random Bill into which amendments that get the support of 60 Senators could be inserted. But getting 60 votes is not easy in the chamber, in which the Republicans have a narrow majority of 51-49.

•The most urgent immigration question relates to ‘Dreamers’, those who came to the country illegally when they were children. President Donald Trump has announced the discontinuation, starting March 5, of an amnesty given to nearly eight lakh such people. He has also linked the offering of a path to citizenship for ‘Dreamers’ to a severe curtailment in the existing legal immigration regime. The Democrats are resisting the move, and Senate Minority Leader Chuck Schumer on Monday called for a Bill that only deals with the question of ‘Dreamers’ for now.

Nothing much on H-1B

•The Secure and Succeed Act, being championed by a group of Republican Senators, is closely aligned to Mr. Trump’s views. It proposes family-linked visas only for spouses and minor children, an elimination of the diversity visa lottery, and the construction of a border wall. It does not mention anything about skilled workers’ immigration. 

•There are several Bills that deal with the H-1B programme but one being pushed by Republican Orrin Hatch is in focus, given the Senator’s proximity to the President. Mr. Hatch’s Immigration Innovation Act proposes changes to the visa programme that will allow higher wages and an easier route to permanent residency for skilled workers. The administration has not made its views known on this, and indications are that its immediate priory lies in dealing with illegal immigration and border security. 

•It was in 2013 that the Senate debated immigration the last time. It approved an overhaul of the system but the House did not hold a vote, killing the proposal. However, Republican Senators who argued for a path to citizenship for the country’s 11 million undocumented residents found themselves in a spot in 2016 when Mr. Trump built his campaign on an anti-immigration platform. 

•At present, Republican lawmakers have little appetite for any measure that does not find approval by Mr. Trump and his base. “Now is the time to back up the talk with the hard work of finding a workable solution. That means finding an agreement that can pass the Senate, pass the House, and which the President will sign. Not just making a point... The time for political posturing is behind us,” Mr. McConnell said on Monday.

πŸ“° Kim stresses need to boost inter-Korea talks

Expresses gratitude for ‘warm welcome’

•North Korean leader Kim Jong-Un said that he wants to boost the “warm climate of reconciliation and dialogue” with South Korea after his high-level delegation returned from a visit.

•Mr. Kim gave instructions for measures aimed at more inter-Korean engagement after his younger sister Kim Yo-jong led a three-day visit to the Pyeongchang Winter Olympics, state media reported on Tuesday. It did not specify what those instructions were.

‘Sincere efforts’

•Mr. Kim also gave his gratitude to Seoul for their “sincere efforts” to prioritise the delegation’s visit, which were “very impressive”, KCNA said.

•The U.S. has appeared to endorse deeper post-Olympics engagement between the two Koreas that could lead to talks between Pyongyang and Washington.

•The South’s President Moon Jae-in said on Tuesday that the U.S. is open to talking with North Korea, Mr. Moon’s spokesman told a briefing.

•A senior military official stationed at the border between North and South Korea said that North Korea has lowered the volume of its border propaganda broadcasts since the Olympics’ opening ceremony on February 9. “I still hear it, but it is much less than before,” said the official.

πŸ“° India in pact with UAE to spur energy security

ADNOC to invest $400 mn in storage

•Prime Minister Narendra Modi’s recent trip to the UAE has resulted in two agreements being signed that will strengthen India’s energy security, said Petroleum and Natural Gas Minister Dharmendra Pradhan.

•“Two highlights of the PM’s visit were the signing of the Concession Agreement between an Indian consortium and Abu Dhabi National Oil Company for award of 10% stake in Lower Zakum Offshore oil field, and an agreement between Indian Strategic Petroleum Reserves (ISPRL) and ADNOC to operationalise the filling up of a strategic petroleum reserve cavern in Mangalore,” he said at a press conference. The Lower Zakum oil field is coming up for rebidding for 40% of its capacity, of which 10% had been awarded to India.

•The second agreement allowed ADNOC to invest in the strategic crude oil storage facility in Mangaluru.

•“ADNOC will invest about $400 million [for] storing crude in one ISPRL underground rock cavern... of capacity 5.86 million barrels.”

πŸ“° ‘Colleges that perform well can apply for autonomy’

They can start new courses, set syllabi and fix fees: UGC

•Colleges that perform well will now be able to apply for autonomous status, which will permit them to start new courses and programmes, set syllabi and even “fix fees for courses at their own level”.

•The University Grants Commission has notified guidelines for this change.

•To be eligible for such autonomy, the colleges must have been given ‘A’ grade by the National Assessment and Accreditation Council, which means a Cumulative Grade Points Average of at least 3 on a scale of 4.

•The conferring of autonomous status will empower colleges to “review existing courses/programmes and, restructure, redesign and prescribe its own courses/programmes of study and syllabi; formulate new courses/programmes within the nomenclature specified by UGC; evolve methods of assessment of students performance, conduct of examinations and notification of results; and announce results, issue mark sheets, migration and other certificates.”

Reservation policies

•Reservation policies will apply to these colleges too.

•However, the degrees, including PhDs, shall be awarded by the university with the name of the college on the degree certificate. The colleges will continue to be affiliated to the university but will enjoy autonomy to take their own decisions. Autonomous status will initially be granted for 10 years, but can be extended for five years at a time.

Own faculty

•Such colleges will also have the right to appoint their own faculty and principal as per existent UGC regulations.

•“Colleges (of any discipline) whether aided, partially aided and unaided/self-financing are eligible provided they are under Section 2(f) of the UGC Act. The college should have at least 10 years of existence,” the notification says.

πŸ“° Centre to states: Strengthen cyber security

•IT Minister Ravi Shankar Prasad on Tuesday asked states to focus on strengthening the cyber security ecosystem to push adoption of digital services in the country, a senior official said.

•The minister met IT ministers and secretaries from almost all states during a two-day conference to discuss the roadmap on making India a trillion-dollar digital economy by 2025.

•“The minister requested every state to continuously monitor the traffic of websites and set up cyber security centres,” an official who attended the meeting told The Hindu.

•“It was also discussed that there should also be audit from time to time of sensitive centres such as nuclear power stations, financial hubs and IT hubs,” another source said. The Centre will send officials for such audits.

•According to the source, Mr. Prasad was informed that financial institutions and the government are the targets for nearly 40% cyber attacks, including phishing, denial of services attacks and ransomware.

•In addition, Mr. Prasad, who is also the Law Minister, asked the states to ensure that no one is denied any benefits for not having an Aadhaar card.

πŸ“° The danger of counterfactuals

To ascribe Partition to the machinations of the Congress is to distort a very complex history

•In democracies, citizens have a right to know why, where and how the government spends public money. Each year we, therefore, await the Prime Minister’s response to the President’s address in the Budget session of Parliament. This year, Prime Minister Narendra Modi’s speech was less about the financial implications of the intended policies of his government, and more about blaming the Congress for the disasters that track Indians since 1947. In the process, he neatly sidestepped the basic obligation he owes us: accountability.

•Equally troubling is his rather rash allegation that the Congress was responsible for the partition of the country, and for the division of Jammu and Kashmir. We know that representations of history tend to wander far away from actual events, and even construct them. But Mr. Modi’s explanation of the Partition has little to do with one of the most catastrophic divisions of territory and people in the subcontinent. It has more to do with a personal obsession.


•The claim that if Sardar Patel had been the head of the government, Kashmir would have remained united belongs to what is called counterfactual history. In a somewhat random comment, the famous French mathematician Blaise Pascal (1623-1662) wondered whether the history of the world would have been different if Cleopatra’s nose had been shorter. Interestingly, the observation inspired RenΓ© Goscinny and Albert Uderzo, authors of the delightful comic book series AstΓ©rix. Throughout the story of a group of gutsy Gauls fighting the Romans, Getafix the venerable druid, extols Cleopatra and her perfect nose and yearns to rub noses with her. We envy Cleopatra her nose, but we simply do not know whether a shorter version would have given us a different history. We can only speculate. But speculation is hardly history, an endeavour that is deeply contested.

•The Partition, which led to one of the biggest mass migrations in world history, and to the death of an estimated one million people or more on both sides of the border, is one of the most debated issues among historians. The puzzle can hardly be under-estimated. Till the middle of the 1940s, Partition was just one of the political alternatives before the country. Historians tell us that Jinnah preferred a federation because the Muslim population was spread across India, and Nehru wanted a centralised and unified state. How did these differences spill over into the calamity of the Great Partition? The complex answers historians give to the question, ‘why Partition’, are based on meticulous research of documentary, literary and biographical sources.

•Most scholars agree that the causes can be traced to the turn of the 19th century. The colonial project, intent on intellectually colonising Indians, proceeded to shape a loose, plural and de-centred tradition known as Hinduism, cast it in the mould of Semitic religions, and create a ‘unified’ faith. A homogeneous version of Hinduism, and later Islam, politicised religious identities and harnessed them to competitive nation-making projects. Colonial policies gave an added fillip to this politicisation through group representation. By the early 20th century, the politicisation of religious identities led to communal violence.

•Another group of historians focusses on the role of elites in the making of independent nation states. Elites proceeded to tap religious identities, forge a constituency, and mobilise struggles for independence and for a separate state. In recent times, attention has shifted from the causes of the Partition to its consequences: murder, rapes, mutilation, displacement, and generalised suffering. People were mercilessly removed from their homes and hearths in a land that had suddenly become another country. And yet another strain of writing on Partition focalises the making of new nation states through the creation of boundaries, passports, recovery of abducted women, and consolidation of territory.

•We can hardly discern one reason for the Partition. To ascribe the tragic event to the machinations of the Congress party distorts the multiple, complex and often contradictory developments that led to the separation of Pakistan from India. More significantly, the Prime Minister ignores the role of his own constitutive community, and its ideology of Hindutva, in the making of the Partition.

Cause for unease

•History has taught us a bitter lesson. If a political movement is successful in tapping deep structures of sentiment in a society, these sentiments must already be there, lurking under the skin of a shallow modernity expected to usher in a secular age. After all, religion cannot be harnessed to the cause of communal mobilisation until it has some grip on people’s minds and psyches. Yet, this neat formulation — customised prejudice translates into murderous assaults on the ‘other’ community — gives us cause for unease. People may or may not be inclined towards religiosity, and yet might hesitate to dine or socialise with members of another community. But this does not mean that they ritually inflict harm on the bodies of other people. We can believe that others have their own reasons for thinking and doing what they think and do, and we have different reasons for thinking and doing what we wish to do. For many reasons, people construct symbolic and spatial barriers between themselves and others.

•Note, however, that the bracketing-off of identities is a social phenomenon. Despite these social barriers, forms of cooperation can and do arise in the workplace, in social and political organisations, in and through movements, and through associational life. When these identities are transformed into political weapons in pursuit of symbolic or material gains, a sociological phenomenon translates into a political movement that lays exclusive claims upon the body politic. The politicisation of identities leads to open and ruthless competition for all sorts of power, invariably at the cost of human lives.

•What is important is that the transition from, often, hidden animosities to violence involves a trigger. The trigger is provided by organisations that belong to the religious right and/or entrepreneurs and merchants of hate who excel in excavating unarticulated sentiments of resentment against other communities, and in playing up incidents that otherwise can be easily passed off as minor. The trigger stokes and evokes hellfires of hatred, devastating violence, and eternal damnation. When politicised religious identities compete for the same spatial and material resources, communities are motivated to inscribe in-erasable injuries on others, and on the polity.

Each new morn

•The Partition teaches us that the eruption of insane political violence under the banner of ‘this’ or ‘that’ religion, the suspension of civil ties between erstwhile neighbours, and the merciless brutality inflicted upon the bodies of children, men and women leaves ineradicable scars on collective memories, and destroys civilisations. We should have learnt that religious identities, once evoked, cannot be controlled. The history of religious strife in the subcontinent establishes that the trajectories of identity politics are unexpected, and that they take unforeseen and shocking routes. These routes inevitably lead to devastation. “Each new morn,” says Macduff of war in Shakespeare’s Macbeth, “New widows howl, new orphans cry, new sorrows Strike heaven in the face, that it resounds.” Yet, till today, communal organisations continue to trigger the brutalisation of social and political identities, creation of divides, exacerbation of hitherto muted schisms, and the creation of new ones. We have, it appears, not paid heed to these warnings. If we had, India would not re-enact the horrors of the Partition.

πŸ“° For govt., Aadhaar may be an enabler for people with no proof of identity: Justice Chandrachud

“If you have no proof of identity, you cannot get Aadhaar in the first place,” says senior advocate Kapil Sibal.

•Aadhaar may be seen by the government as an enabler for every Indian who does not possess even a single proof of identity, Justice D.Y. Chandrachud observed on Tuesday.

•“You may be wrong to assume that every Indian has one or the other proof of identity. Suppose the government was to assert that there is a large segment of society, like migrant labourers, who have absolutely no proof of identity... If that is so, then the Aadhaar policy of the government is an enabler,” Justice Chandrachud, who is part of the five-judge Constitution Bench led by Chief Justice Dipak Misra, said.

•“Aadhaar provides people with no proof of identity an opportunity to be enabled with an identity to access their entitlements,” he stated.

•To this, senior advocate Kapil Sibal, for petitioners, said “if you have no proof of identity, you cannot get Aadhaar in the first place. Let us get this clear. The intent of the Aadhaar Act is not to give anyone the benefit of an identity. The Act is a mechanism to authenticate identities. And even then, why should the authentication of identity be linked to biometrics?”

•At one point, Justie A.K. Sikri tried to reason that biometrics was sought because the government viewed Aadhaar as a panacea for the problem of fake identities.

•“The government’s rationale seems to be that with other identity documents open to duplicity, let us have at least one identity with biometrics,” Justice Sikri told Mr. Sibal

•“If a person has a fake or duplicate ID like a passport or voter’s card, he should be dealt with separately under the law. Laws are broken and offences are committed in all civilised societies, that does not mean that those of us who do not want to breach the law are subject to the same restrictive conditions,” Mr. Sibal responded.

•The arguments were led on how the government has made Aadhaar the only proof of identity, to the negation of all others like ration cards to passports to voter ID card, to avail of benefits, welfare, subsidies and services.

•“So, ultimately you are saying that the violation in Aadhaar is an absence of choice. That is, Aadhaar takes away the right of a citizen to establish his identity by any mode,” Justice Chandrachud addressed Mr. Sibal.

•Mr. Sibal agreed, saying Aadhaar underscores an endeavour to make “the State our master and we its underlings”.

•Mr. Sibal said restricting the identity of the citizen to one document — Aadhaar — was unconstitutional. He said the State takes away a citizen’s fundamental right to choice under Article 21 of the Constitution in order to enable him to exercise another fundamental right, for example, the right to travel.

•“To take a train ticket, I can only show Aadhaar as proof of my identity,” Mr. Sibal illustrated.

•But Justice Chandrachud asked whether the government could impose “reasonable conditions” for permitting certain rights. He said the government made a condition that people who got government jobs should not form a union.

•At this point, Chief Justice Misra intervened to interpret Mr. Sibal’s submissions.

•“If I have understood you right, you are trying to say that any restraint on a fundamental right must be within the constitutional framework... You are saying that to get the benefit of a fundamental right, no statute can ask you to surrender or barter another fundamental right,” the Chief Justice paraphrased Mr. Sibal’s arguments before the latter concluded his arguments in the case.

•Senior advocate Gopal Subramanium began his arguments for the petitioners, emphasising the fundamental right of privacy upheld by a nine-judge Bench of the Supreme Court in August last. “Privacy is the soul of the self,” he submitted.

•The arguments will continue on February 15.

πŸ“° Centre to consolidate small savings laws

‘Move aimed at removing ambiguities’

•In a bid to consolidate the legislations pertaining to small savings schemes, the government is proposing a merger of the various laws into a Government Savings Promotion Act.

•“The government gives highest priority to the interest of small savers, especially savings for the benefit of girl child, the senior citizens and the regular savers who form the backbone of our country’s savings architecture,” the government said in a release. “In order to remove existing ambiguities due to multiple Acts and rules for small saving schemes… [the government] has proposed merger of Government Savings Certificates Act, 1959 and Public Provident Fund Act, 1968 with the Government Savings Banks Act, 1873.” “All existing protections have been retained while consolidating PPF Act under the proposed Government Savings Promotion Act,” the release added.

Benefits retained

•“No existing benefits to depositors are proposed to be taken away through this process. The main objective in proposing a common Act is to make implementation easier for the depositors as they need not go through different rules and Acts for understanding the provision of various small saving schemes, and also to introduce certain flexibilities for the investors.”

•The government added that, apart from offering higher interest rates compared to bank deposits, some of the small savings schemes also enjoy income tax benefits. There will be no changes to this through the proposed amendment.

•The release also clarified that the apprehension that certain small savings schemes will be closed is without basis.

πŸ“° ‘New RBI norms to spur surge in NPAs’

Early identification of stress and resolution will prevent future ever-greening, says Moody’s unit ICRA

•The Reserve Bank of India’s new norms directing banks to start insolvency proceedings on accounts, if stress is not resolved in 180 days, could result in a jump in bad loans, according to Moody’s unit ICRA.

•“In our view, the revised framework on resolution of stressed assets issued by RBI is likely to increase the reported non-performing asset (NPA) levels of the banks in coming quarters,” ICRA said.

•The RBI said that for accounts where a bank’s exposure exceeds ₹2,000 crore, a resolution plan must be implemented within 180 days from the date of first default, and in case a resolution is not implemented, lenders should file an insolvency petition within 15 days of the expiry of the 180 days.

•“This has been the case with most of the NCLT 2 list of borrowers, whereby the resolution plans failed for most of the borrowers and were referred under IBC; this is expected to further spike up the credit provisioning requirements for banks during FY2019,” ICRA said.

•The RBI had sent two lists of firms against which insolvency proceedings could be taken at the National Company Law Tribunal. Banks have to make a 50% provision in respect of accounts that are subject to insolvency proceedings. In comparison, the provisioning norm for sub-standard assets is 15-20%.

Proactive resolution

•The RBI norms, announced on Monday, entail proactive resolution of stressed assets with lenders needing to finalise the resolution plan as an account slips into special mention account category. SMA category indicates the time period over which repayment on a loan has not been made. Banks’ gross NPAs and standard restructured advances were estimated at 12.6% as on September 30, 2017. The RBI had estimated SMA 2 advances (where repayment is not made for more than 60 days) to be 3.5% of gross advances.

•ICRA said overall stress levels of banks including SMA0 (overdue between 1 and 30 days) and SMA1 (overdue between 31 and 60 days) borrowers was much higher than the reported GNPA level of 10.3% as on September 30.

•“While in the short-term this will increase the pain for the borrowers as well the lenders... early identification of stress and resolution will prevent future ever-greening of loans and ensure a good financial health for the banking system in the long-term,” said Karthik Srinivasan, Group Head, Financial Sector Ratings, ICRA.

•KPMG said RBI should have been more accommodative on provisioning. Genuine business cycles and economic cycles that could lead to payment delays should have been factored in, observed Manish Aggarwal, Partner & head resolutions - special situations group, KPMG India.

πŸ“° Citi India prohibits use of its cards to buy bitcoins

Move follows RBI’s concerns over trade in cryptocurrencies

•Citi India announced its customers cannot use its credit and debit cards to purchase or trade in cryptocurrencies. The lender has informed its customers about the decision. This is the first instance that a bank in India has taken such a step.

‘Potential risks’

•“Given concerns both globally and locally including from Reserve Bank of India cautioning members of the public regarding potential economic, financial, operational, legal and customer protection and security-related risks associated in dealing with bitcoins, other cyptocurrencies and virtual currencies, Citi India has decided not to permit usage of its credit and debit card towards purchase or trading of such... currencies,” the foreign lender said in a communication to its customers.

•The move is in line with Citigroup’s global policy that has barred usage of cards for purchase of and trade in cryptocurrencies.

•Recently, the banking regulator had voiced concerns over virtual currencies and said it had not given any licence or authorisation to any entity or company to operate trading platforms or deal in bitcoins or any virtual currency.

•“The creation, trading or usage of VCs including bitcoins, as a medium for payment, are not authorised by any central bank or monetary authority,” the Reserve Bank of India had said.

πŸ“° United India Insurance chief expects PSU insurers’ merger by March 2019

Move may not affect competition or manpower, says United India Insurance MD

•The proposed merger of three public sector insurance firms may be completed by early 2019, said M.N. Sarma, chairman and managing director of United India Insurance Co. Ltd.

•Talking to the media on the sidelines of a National Insurance-ASSOCHAM Summit, he said that a meeting of all the three heads of the respective insurance PSUs had been convened on February 16 in New Delhi to discuss the budget proposal.

•Finance Minister Arun Jaitley had in the Budget, proposed a merger of three general insurers — National Insurance Co. Ltd., United India Insurance and Oriental Insurance Company Ltd.

‘Operational advantages’

•“There are a lot of operational advantages and savings that will accrue from this proposed merger,” Mr. Sarma said even as he expressed confidence that neither competition nor manpower would be affected by the creation of a single entity. “The issue is to make the companies stronger,” he added.

•To a question on the management of the assets of these three companies, he said that all the finer points would be worked out progressively.

•Earlier at the event on connecting wellness to health awareness, he mooted the idea of pursuing a carrot-and-stick policy to incentivise people to buy health insurance cover while leading a more healthy life. “Unless the rod is used, people will not fall in line.. insurers could then give discounts to the insured for staying healthy,” he said.

•National Insurance chairman-cum-managing director K. Sanath Kumar said that an awareness campaign was needed to remove the air of distrust between the insurer and the insured while encouraging people to take care of their health. R. Chandrasekharan, secretary general of the General Insurance Council said that health insurance was not for aggrandisement of the hospital chains but for helping a person in health distress.

πŸ“° Woods and trees: On the state of Indian forests

We must review the strategy to revive forests, and move away from monoculture plantations.

•The Environment Ministry’s ‘India State of Forest Report 2017’ based on satellite imagery, may present a net positive balance in the form of 24.4% of India’s land area under some form of forest or tree cover, but this is but a broad-brush assessment. According to the report, forest and tree cover together registered a 1% rise over the previous estimate two years ago. However, such an estimate listing very dense, moderately dense, open and scrub forests mapped through remote sensing does not really provide deep insights into the integrity of the green areas. The emphasis in environmental policy to raise forest cover to 33% of the geographical area will yield some dividends. There has been an increase over the baseline cover of 20% at the turn of the century. Yet, tree cover is not the same as having biodiverse, old-growth forests. The ecosystem services performed by plantations that have a lot of trees grown for commercial purposes cannot be equated with those of an undisturbed assemblage of plants, trees and animals. India may be endowed with 16 major forest types, and 221 types and sub-types based on the Champion and Seth classification, but retains very little of its ancient forests after centuries of pre-colonial and colonial exploitation. Latter-day development pressures are also taking their toll. Forest restoration should, therefore, aid the return of native vegetation.

•In its audit of various regions, the Ministry’s report has calculated a cumulative loss of forests in Mizoram, Nagaland and Arunachal of nearly 1,200 sq km. The impact of such a terrible loss must be seen against the backdrop of the Northeast representing a global biodiversity hotspot. Any gains achieved through remediation programmes in Odisha, Assam, Telangana, Rajasthan, Himachal Pradesh, Uttar Pradesh, Jammu and Kashmir and Manipur cannot compensate for it adequately. Naturally, environmental economists have come to regard the calculation of national accounts of wealth and development as weak, because governments do not add the benefits of functions such as flood control and climate moderation to the value of forests. Such a failure erodes the gains made by many communities, because lost natural capital contributes to material losses. India must review the programmes that it has been pursuing to revive forests, and move away from monoculture plantations that are favoured by even forest development corporations in many States. Scientific reforms to bring true nature back are needed. The latest assessment categorises more than 300,000 sq km of area as open forests with a tree canopy of 10-40%. These lands provide the opportunity to bring back diverse, indigenous trees. Such a measure, combined with a policy against allowing open cast mining, can bring about a renaissance. Dedicated efforts will be required to protect the precious forests of the Northeast.

πŸ“° Straw management now mandatory in Punjab

The move is aimed at saving the environment from air pollution

•In an attempt to check the dangerous trend of stubble burning, the Punjab government has decided to make use of Super Straw Management System while using the combine harvester machines mandatory for harvesting the paddy (rice) crop.

•“These instructions are aimed at saving the environment from air pollution caused by stubble burning,” said Punjab Pollution Control Board chairman K.S. Pannu, adding that the owners of combine harvesters desirous of undertaking the harvesting of paddy in the State would now have to attach super straw management system with the harvester combine.

•“We have also instructed that no harvester combine shall be allowed to harvest paddy in Punjab without functional super straw management system,” said Mr. Pannu. He added that the instructions have been issued under section 31 A of the Air (Prevention and Control of Pollution) Act, 1981.

•Mr. Pannu said that Punjab has been declared air pollution control area. “Punjab Agricultural University, Ludhiana, has also recommended that super straw management system be attached to self-propelled combine harvesters, which cuts the paddy straw into small pieces and spread the same. With this method, farmers are not required to burn paddy straw before sowing the next crop,” he said.

πŸ“° How to handle Big Data

There are infinite ways to analyse data, but great caution must be exercised

•The Hollywood film Moneyball (2011) is about the Oakland Athletics baseball team and the attempt by its manager to put together a competitive team on a lean budget using data and computer analytics rather than depending on mere biases to recruit new players. The film stands out for focussing the spotlight on data science by showing that the art of data science is more about asking the right questions than just having the data.

•It is difficult to imagine the great volume of data we supply to different agencies in our everyday actions, bit by bit through surfing the Internet, posting on social media, using credit and debit cards, making online purchases, and other things where we share information about our identity. It is believed that social media and networking service companies such as Facebook may already have more data than they are leveraging. There are infinite ways to slice and dice data, which itself is quite daunting as at every step, there is potential to make huge mistakes.

•Careful data mining from Big Data might help understand our behaviour in order to facilitate planning. But there are examples of blunders being made with a load of information at one’s fingertips. The problem with so much information is that there is a much larger haystack now in which one has to search for the needle.

The Google project

•Here is an example. In 2008, Google was excited about “Big Data hubris” and launched its much-hyped Google Flu Trends (GFT) based on online searches on Google for flu-related information with the aim of “providing almost instant signals” of overall flu prevalence weeks earlier than data out out by the Centers for Disease Control and Prevention (CDC), the leading national public health institute in the U.S. But much of it went wrong; GFT missed the 2009 swine flu pandemic, and was wrong for 100 out of 108 weeks since August 2011; it even missed the peak of the 2013 flu season by 140%. Google tried to identify “flu” with the search pattern. Usually, about 80-90% of those visiting a doctor for “flu” don’t really have it. The CDC tracks these visits under “influenza-like illness”. Understandably, the Net search history of these people might also be an unreliable source of information. While GFT was promoted as the poster project of Big Data, it eventually became the poster child of the foibles of Big Data. In the end, it focussed on the need for correctly using the limitless potential of Big Data through efficient data mining.

•Data blunders often arise out of bias, low-quality data, unreliable sources, technical glitches, an improper understanding of the larger picture, and lack of proper statistical tools and resources to analyse large volumes of data. Moreover, Big Data invariably exhibits fake statistical relationships among different variables, which are technically called “spurious correlations” or “nonsense correlations”. Relying too heavily on a particular model is also a common mistake in Big Data analyses. Therefore, the model should be wisely and carefully chosen according to the situation.

•“Big data may mean more information, but it also means more false information,” says Nassim Nicholas Taleb, author of The Black Swan: The Impact of the Highly Improbable However, today’s world is obsessed with collecting more and more data while being inattentive to the necessity or capacity to use them. There is a possibility of getting lost in the waves of data. As a statistician, I firmly believe that unless there is serious need, we should restrain ourselves from collecting data as searching for the needle in haystacks should not be made unnecessarily difficult. The errors are bound to increase exponentially with more and more redundant information.

•Mining and geological engineers design mines to remove minerals safely and efficiently. The same principle should be adopted by statisticians in order to mine data efficiently. Big Data is more complex and involves additional challenge. They might involve the use of some skills involving analytics, decision-making skills, logical thinking skills, problem-solving, advanced computational expertise and also statistical expertise. So, using some routine algorithm is not enough. Too much reliance on available software is also a serious mistake.

•So, where are we headed with so much data, most of which are useless? What is the future of so much reliance on data, where a lot of spurious correlations could dominate our lifestyle and livelihood? Let me bring in another Hollywood film, Spielberg’s Minority Report (2002) which is set in Washington DC in 2054, where the ‘PreCrime’ police force is capable of predicting future murders using data mining and predictive analyses. However, when an officer is accused of one such future crime, he sets out to prove his innocence! Does data mining depend more on probabilistic guesswork much like the danger inherent in a game of dice? Does this Spielberg film depict the future of data mining? And is the future dystopian or Utopian?

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