The HINDU Notes – 20th July 2019 - VISION

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Saturday, July 20, 2019

The HINDU Notes – 20th July 2019

📰 Assam NRC: SC questions need for sample reverification

Centre and the State make a joint plea to indefinitely extend deadline for publication of final NRC from July 31.

•The Supreme Court on Friday questioned the plea made jointly by the Centre and Assam to indefinitely extend the deadline for publication of the final National Register of Citizens (NRC) from July 31 in order to conduct a “sample reverification” process to quell a “growing perception” that lakhs of illegal immigrants may have infiltrated the list, especially in the districts bordering Bangladesh.

•The Centre and Assam urged the court for more time to cross-check “wrong inclusions and exclusions” in and from the draft NRC published on July 30, 2018.

•They said a 20% sample reverification of names included in the draft NRC should be conducted in districts bordering Bangladesh and a 10% sample reverification in the remaining districts.

•But the court orally voiced its scepticism. It referred to reports filed by Assam State NRC Coordinator Prateek Hajela’s reports and said reverification seemed to have been already done during the disposal of claims in the NRC process.

•“Mr. Hajela’s report says while disposing of claims, 80 lakh names have been reverified. That means at least 27% of names have been reverified, and you are asking for 20%... So, is there need for a sample reverification? If we are satisfied that verification has been done properly, then there is no need for a sample reverification, isn’t it?” Chief Justice of India Ranjan Gogoi, who is accompanied by Justice Rohinton Nariman on the Special Bench, asked Solicitor General Tushar Mehta, appearing for both Assam and the Centre.

‘Mistakes have crept in’

•Mr. Mehta said the findings in Mr. Hajela’s reports may not truly reflect the reality on the ground. “There is a growing perception. They must have done excellent work, but mistakes have crept in. The quantum of people included in certain areas is more... Wrongful inclusions are manifold in the bordering districts, lakhs of illegal immigrants have been included in the draft NRC list. The problem is the border districts are more prevalent,” he submitted.

•He said the wrongful inclusions may be because local officers were used in the NRC process and they may have come under local influences.

•“There should be proper reverification... There should be no room for a lack of confidence in an NRC exercise that takes away the rights of the people and will uproot them. Though, of course, illegals should be uprooted as India cannot be the refugee capital of the world,” Mr. Mehta urged the court.

•However, the Bench adjourned the case to July 23. It asked Mr. Mehta to go through what Mr. Hajela had to say on the issue of reverification in his reports to the Supreme Court on July 10 and 18.

•“Mr. Mehta, you are not the only fountain or source of information [about what is happening]. We have our own sources of information and Mr. Hajela has his own,” Chief Justice Gogoi addressed the Solicitor General.

•“I claim not to be a fountain of information, My Lord... And it should not be so,” Mr. Mehta responded.

•The court asked Mr. Hajela to redact paragraphs in his reports that do not strictly deal with reverification before handing them over to Mr. Mehta.

•“There is no national secret in them that needs to be kept from the government,” Mr. Mehta protested lightly.

•“Mr. Mehta, we wish to hear this statement from your lips in other cases too,” came Justice Nariman’s riposte.

‘Supplementary lists can be published on July 31’

•Meanwhile, Mr. Hajela quoted from his report that supplementary lists containing the latest additions and exclusions made after the claims and objections stage could be published on July 31. This would be followed later by a consolidated list, he submitted.

•The Assam government, also represented by advocate Shuvodeep Roy, said the 20% sample reverification should target the border districts, where the incidence of illegal migration from Bangladesh was higher and where population growth had been reported higher than the State average as per Census reports.

•Both the Centre and the State have said the reverification exercise should be conducted by Class 1 officers of the State government from other districts who had knowledge and experience of handling the process of enquiry/investigation. The applications further sought an order that the sample reverification should be undertaken at a place different from where the NRC exercise happened. The Assam government agreed that this would cut out the possibility of local influences, biases/threats and so on.

•The application filed by the Union Home Ministry tries to impress upon the court the “unprecedented large scale of complexities” involved in the NRC process. The Ministry told the court that the NRC exercise had created apprehensions in the minds of the citizens and could very well impact social harmony, law and order in the State. Tensions could rise with just a few days left before the culmination of the ongoing NRC process.

•“It is pertinent that the exercise of sample reverification must necessarily follow before the publication of the final list,” the application said.

•The draft NRC list had included 2,89,83,677 persons as Indian citizens. But a total of 40,70,707 persons were left out. They were found ineligible to be considered for inclusion. The Centre said reverification should be done for both inclusions and exclusions.

📰 Karnataka crisis: confidence vote on July 22

Governor’s second direction also ignored, Speaker adjourns Karnataka House

•Despite two directions from Karnataka Governor Vajubhai Vala to Chief Minister H.D. Kumaraswamy to hold the trust vote on Friday, the process got put off to Monday, with Speaker K.R. Ramesh Kumar adjourning the Assembly.

•All eyes are now on the Governor’s possible moves, while the Congress-JD(S) government seems to have got another chance to hang on at least till Monday. Coalition leaders are hopeful of the tide turning in their favour in the Supreme Court.

•The adjournment came after a protracted discussion on whether a Governor could set such deadlines at all, but only after the Speaker extracted an assurance from the Chief Minister and Congress Legislature Party leader Siddaramaiah that the trust vote would not be postponed beyond Monday.

•While the Governor’s first letter to the Chief Minister sent on Thursday had set 1.30 p.m. on Friday as the deadline to prove his majority, the strongly-worded second one gave him time till the end of the day. The Governor had also sent a communiqué to the Speaker the previous day stating he desires a floor test by the end of Thursday.

•In his second letter to the Chief Minister, the Governor expressed suspicion that “detailed debates and discussions appear to be merely to delay the floor test.”

•He said, “I am receiving various reports about the attempts being made for horse-trading. This can be averted only and only if the exercise of conducting floor test is conducted at the earliest and without any delay.”

•He added that these facts and circumstances convey “a very sorry state of affairs.”

•However, the debate through the day in the House was around the Governor’s right to set deadlines when the process of trust vote is under way in the House. The Chief Minister took exception to the letter and said, “The Governor cannot act as an ombudsman of the legislature.” He said that he was “pained by the second love letter from the Governor.”

•Rural Development Minister Krishna Byre Gowda said the Governor could not set deadlines once the Chief Minister has moved the confidence motion and accused the BJP of “misusing” Constitutional offices, amid shouts of “Go back Governor” from the treasury benches.

📰 No municipal approval needed for houses of urban poor

The New Municipal Act will bring about transformation: CM

•In a major benefit to the urban poor under the New Telangana Municipalities Act. 2019, Chief Minister K. Chandrasekhar Rao has announced in the State Assembly that no municipal approval is needed for construction of Ground plus I houses in plots up to 75 sq. yards.

•They will have to merely pay ₹1 for registration and ₹100 for property tax to bring them on municipal rolls for house numbers and provision of water connection and other civic amenities. The Government, he said, also proposed to give new door numbers to all houses with ‘QR’ code in the State for safety and security.

Online permission

•As part of citizen-friendly urban governance, one need not go to municipal office for building construction permissions in area up to 500 sq. metres and 10 metres of height. Online permission will be given automatically if every document is in order within stipulated time or it will be deemed approved.

•The Act brought in heavy penalties for violations of the rules. For property tax, online self certification will be enough but if the flying squads led by Collector detect any discrepancy, then the property owner will be slapped with a penalty of 25 times the accurate amount. Significantly, the Act has strict provisions for demolition of illegal constructions without notice.

Layout approvals

•Another major feature is that layout approvals with self-certification will be given by the Collector who is given ample powers of regulation by the Act to rid the State of land mafia and illegal layouts. Common spaces in a layout for roads, parks should be registered to municipality before final layout approval is given.

•“I am there in every sentence of the Act drafted without affecting the spirit of the Constitution,” said Mr. Chandrasekhar Rao, explaining the Act which has provisions in place to bring about transparency, remove corruption for issuing birth, death and other bonafide certificates, reduce human interference in sanctioning approvals and permissions. Importantly, it has provisions to ensure accountability of employees and representatives of local bodies.

No political interference

•The Chief Minister said the new Act was required to ensure that every body — ward councillors, chairpersons and and in-charge officers — does discharge their responsibilities or face stern action of being removed from their posts by the District Collector. The Act ensured no political interference and no Minister could stay the orders.

•The rot has set into urban local bodies over the decades, undermining the spirit of the Panchayat Raj movement. It could not be set right with a tablet or tonic and a surgery was the only option. The courts had questioned the government on Building Regularisation Schemes after allowing violations, he said.

Clear objective

•“I am bringing this Act with a clear objective of people’s welfare and free them from harassment and exploitation. Some may not be happy with the Act but I am optimistic that in three years the State will witness great transformation,” said the Chief Minister The Act would pave the way for creating liveable conditions with clean and green environment, he said.

•The Telangana Municipalities Act will apply to all the 140 urban local bodies — 128 municipalities and 12 corporations, including seven new ones. The Greater Hyderabad Municipal Corporation however has its own Act of 1955 for now.

•The Act would also empower the Municipal Administration Director to transfer employees any where to break the monopoly of employees in local bodies and spare people of harassment.

📰 The NEP and liberal arts education

The draft’s endorsement of critical thinking would have gained credibility if it had promoted liberal values

•A few months ago, a school principal told me about her conversation in the morning assembly with children of the middle (Grades VI-VIII) section. She had asked them for suggestions to turn the school into heaven. Some children suggested a garden, with trees, grass, and flowers blossoming all year round. Others pointed out that the school already had a nice garden. They suggested that heaven should have peace, so we should end all fights. The assembly ended with everyone taking a vow to stop all fighting in the school to make it like heaven. A short while later, two boys came scuffling into the principal’s office, quarrelling and seeking her intervention. On inquiry, one of them said, “Ma’am, didn’t you say you want our school to be like heaven?” Then he pointed at the other boy and asked, “What is he doing here, Ma’am? He fights with me all the time.”

•This story came back to me when I started reading the section on higher education in the 480-page draft of the National Education Policy (NEP). I had completed my reading of the section on school education, so I was ready to be told how a future generation that spends its school years under the guidance of the proposed new policy will spend its college years. For improvement in learning at school, the draft NEP wants critical thinking and creativity to be treated as the cornerstones of intellectual development from early childhood onwards. As a term, critical thinking or inquiry has gained enormous popularity of late. It does not mean ‘critical’ in the common sense. How the term has evolved in recent educational theory implies the ability to place ideas and problems in a larger context in order to locate creative links and clues by using information and concepts drawn from different subjects. Imagine our youngsters proceeding to higher education after this kind of intellectual training at school: you can picture a transformed college classroom.

Pivotal to reform

•In the draft NEP, the section for higher education opens with ‘liberal arts’ as the key to reform. This is another term that has been gaining currency in India over recent years, but its history is rather different from that of critical thinking. In India, owing to our colonial history, we are more used to the term ‘liberal’. In modern education, ‘liberal arts’ refers to undergraduate courses in America’s elite private universities. For years, I have been looking for a suitable term in my mother tongue, i.e. Hindi, to convey the many layers of meaning underlying the word ‘liberal’. The common translation is ‘udaar’ or large-hearted. (I am sure this is the term they will use when the draft NEP is made available in Hindi.) The idea of liberalism as large-heartedness or intellectual generosity ran into trouble when ‘neo-liberalism’ gained centre-stage in economic policy. The only way one might notice some generosity in it was by recognising the state’s willingness to loosen its grip. Neo-liberalism has now settled in, transcending ideological boundaries, but its impact on liberal arts education in America is far from clear. Many scholars have suggested that the turn towards neo-liberal policies has weakened critical thinking in liberal arts courses. This matter has suddenly become relevant for us in the wake of the draft NEP proposing both critical thinking and liberal arts, virtually in the same breath.

Applying critical thinking

•Implementing the draft NEP in my own mind, I thought of using critical thinking to reflect on the prospects of liberal training. The late Professor Ravinder Kumar, an eminent historian of modern politics, was a self-avowed liberal. I once heard him explain why liberalism is the hardest social doctrine to practice. He said the capacity to tolerate your adversaries, with curiosity to understand them, calls for a mutual agreement. If there is no such consensus, i.e. liberal outlook is practised by one side only, it can be frustrating, and might even lead to a tragic failure of liberalism itself. When I hear about liberal arts courses being offered in private universities, I often wonder what future awaits them. How will they face a world in which the ‘narrow domestic walls’ are rising higher and higher? This metaphor was used by Tagore, a bold liberal, who wanted India to become a ‘heaven of freedom’. ‘Where knowledge is free’, the same poem said. The liberal arts undergraduate courses I am referring are to cost ₹8 lakh per year.

•The draft NEP’s support for liberal arts comes with a plea for increased public funding. It also cites employability as a justification. Even more interestingly, the argument excavates historical grounding. It says: “Indian universities such as Takshshila and Nalanda... definitively emphasised the liberal arts and liberal education tradition.... The critical Indian concept of liberal arts has indeed become extremely important in the modern day employment landscape of the 21st century, and liberal arts education of this kind is already being extensively implemented today (e.g. in the United States in Ivy League schools) with great success. It is time India also brought back this great tradition back to its place of origin.” (pp. 223-224).

•The resounding, elaborate commendation of liberal arts in the draft NEP brought me back to the principal’s story about turning her school into heaven. The boy who asked her about his classmate — “What is he doing here, Ma’am?” — was asking a fundamental question pertinent to the future of liberal values. The youngster’s query demonstrates that he has internalised the spirit of the age. Many children do that. Their questions carry valuable material to understand our times better and more objectively than we might be able to do as adults, submerged as we are in our ethos, feeling forced to cope with it. The boy’s query contained the hope that principal Ma’am, being the custodian of heaven, will exercise her authority to adjudicate in his fight. What were her choices? There were mainly two: to expel the alleged fighter or to ask the complainer to talk to his adversary. Only the latter would qualify as a liberal administrative measure.

•Perhaps this is what the draft NEP also wants in its push for the liberal arts, as a futuristic substitute for the monochromatic ‘BA’ our system is used to and stuck in. Since the draft NEP is committed to critical thinking, surely its writers had cast a glance at the larger ethos and noticed the demise of several bastions of liberal education. Had they evinced even moderate concern, their endorsement of the liberal arts would have gained credibility. Unless liberal arts graduates are to be produced exclusively for export, their training would have to include the smartness to not let anyone know what exactly you believe in. One suspects that their American counterparts already receive such training.

•Let me get back to the heaven alluded to in the principal’s story. Trees and peace apart, a school turned into heaven will surely have to resolve the problem of fear, so endemic to our education system. The boy who wanted the principal to adjudicate was not afraid of indicating to her his own preferred solution. It was implied in the question: ‘What is he doing here?’ This stance also carries the hope of impunity from being charged of intolerance. As a grown-up he might say: ‘If we want to preserve our neatly fenced heaven, why can’t we expel from it the people we don’t appreciate?’ We might add: isn’t this already being argued in many liberal countries, so why should we hesitate? My principal friend, however, followed her instinctive good sense and sent the two boys away, asking them to talk it over and play without a quarrel together.

📰 Inclusion over exclusion: on Assam NRC

Fears of a vocal section should not override the rights of NRC claimants to due process

•With the Supreme Court-led process of updating the National Register of Citizens in Assam nearing its deadline of July 31, the complexities involved in the gargantuan exercise have dawned upon the executive. Both the Central and State governments have sought an extension. But it remains to be seen whether the Court, which has insisted on sticking to the timelines, would relent when it hears the matter on July 23. The first draft NRC published on the intervening night of December 31 and January 1, 2018 had the names of 19 million people out of the total 32.9 million who had applied for inclusion as citizens. The second draft NRC, published on July 30 last, upped it to 28.9 million but left out four million found ineligible. Around 3.6 million of them subsequently filed citizenship claims. An “additional exclusion list” was issued last month containing 1,02,463 names included earlier in the draft list. In anticipation of millions being ultimately left out, the Assam government is moving to set up 200 Foreigners’ Tribunals to handle cases of people to be excluded from the final NRC, as part of a larger plan to establish 1,000 such tribunals. The State government is also preparing to construct 10 more detention centres; six are now running out of district jails.

•A humanitarian crisis awaits Assam whether the final NRC is published on July 31 or after. In the run-up to the final publication, case after case has emerged of persons wrongfully left out of the list. The process has left no group out of its sweep, be it Marwaris or Biharis from elsewhere in the country, people tracing their antecedents to other Northeastern states, people of Nepali origin, and caste Hindu Assamese. The prime targets of this exercise, however, are Hindu Bengalis and Bengali-origin Muslims of Assam — more than 80% of the 4.1 million people named in the two lists belong to these two groups. Yet, the rationale of the Centre and State in seeking a deadline extension, as found in their submissions in the Supreme Court, betrays an exclusionary bias. The joint plea sought time to conduct a 20% sample reverification process in districts bordering Bangladesh and 10% in the rest of the State to quell a “growing perception” that lakhs of illegal immigrants may have slipped into the list. This, despite the State NRC Coordinator’s reports to the apex court suggesting that up to 27% of names have been reverified during the process of disposal of claims. It hasn’t helped that the Central government keeps holding out the prospect of unleashing a nationwide NRC to detect and deport illegal aliens, when it has no index to base such an exercise on — the 1951 register was exclusive to Assam. The accent should be on inclusion, not exclusion. The wheels of justice cannot pander to the suspicions of a vocal majority without giving the excluded access to due process.

📰 Lok Sabha clears Bill on NHRC constitution

Piecemeal and cosmetic, says Shashi Tharoor

•The Lok Sabha on Friday passed The Protection of Human Rights (Amendment) Bill 2019 by voice vote.

•The Bill expedites the process of appointment of chairperson and members of the National Human Rights Commission (NHRC) and provides for, among others, including the chairpersons of the National Commission for Backward Classes, the National Commission for the Protection of Child Rights and the Chief Commissioner for Persons with Disabilities as members of the NHRC.

•In his reply in the House, Minister of State for Home Nityanand Rai said the government was sensitive to the rights of humanity and was committed to strengthening the Human Rights Commission.

Promises transparency

•“With this Bill every section of society has now received representation. We are a government that stands for the human rights of victims not of terrorists and perpetrators of sexual crime. The amendment will ensure transparency in the appointment of chairman and members of the commission and will help fill all the vacancies,” he said.

•The debate witnessed sharp exchanges between the Opposition and Treasury benches.

•Congress leader Shashi Tharoor, initiating the debate, pointed out several gaps in the Bill and asked the government to bring a fresh one. He claimed that the Bill was “piecemeal and cosmetic”.

•Mr. Tharoor alleged that human rights were being violated in the detention tribunals in Assam over the National Register of Citizens and claimed that as many as 57 people committed suicide after failing to produce citizenship documents.

•He said it was ironic that the government had brought the Bill at a time when human rights activists like Indira Jaising and Anand Grover were being “stifled,” activist Sudha Bharadwaj was being targeted and environment activists were being deplaned while wilful defaulters were allowed to flee the country.

•BJP MP and former Mumbai Police commissioner Satya Pal Singh alleged that rights activists often targeted the police and government institutions and take foreign funding. “They never speak against terrorists, they will never speak against Naxals,” he said.

📰 Assam tribal body seeks inclusion of STs on 12-member panel

•An apex body of the scheduled tribes (STs) of Assam has resented the “snub” by the Centre while constituting a high-level committee on the implementation of Clause 6 of the Assam Accord.

•This clause of the Assam Accord, signed in August 1985 to end a six-year agitation for the ejection of illegal migrants from the State, says “constitutional, legislative and administrative safeguards, as may be appropriate, shall be provided to protect, preserve and promote the cultural, social, linguistic identity and heritage of the Assamese people”.

•The Centre had formed the 12-member committee headed by retired Gauhati High Court judge Biplab Kumar Sarma on Tuesday. None of the members belong to any of the more than 20 scheduled tribes of Assam accounting for at least 15% of the population.

•“We appreciate the Centre’s move, but a panel for safeguarding the interests of the indigenous people is ridiculous without the real sons of the soil – the tribal people who have been marginalised more than any other group. The Centre has insulted us,” All Assam Tribal Sangha secretary-general Aditya Khakhlari said.

•Mr. Khakhlari is a Bodo, the largest ST community in the Kachari group that is considered the earliest inhabitants of Assam.

•The tribal body demanded the inclusion of a retired civil servant or any other capable person from among the tribes.

📰 RTI Bill introduced amid Opposition flak

Centre to set service terms of panel

•Amid protests by the Opposition parties, a Bill to amend the Right to Information (RTI) Act and give the Union government the power to set the service conditions and salaries of Information Commissioners was introduced in the Lok Sabha on Friday.

•The Bill was eventually introduced after the Treasury benches won a vote with 224 MPs supporting it and nine opposing.

•Though the Congress opposed the introduction of the Bill with senior leader Shashi Tharoor calling it an “RTI elimination Bill”, the party chose to walk out when Hyderabad MP Asaduddin Owaisi demanded a vote.

Power with Centre

•The new Bill seeks to change the status of the Information Commissioners who are on a par with the Election Commissioners, and states that the term of office, salaries, allowances and other terms and conditions shall be “as prescribed by the Central government”. Currently, Section 13(5) of the Act provides that these are equivalent to that of the Chief Election Commissioner for the Chief Information Commissioner and to an Election Commissioner for an Information Commissioner.

•“The functions being carried out by the Election Commission and the Central and State Information Commissions are totally different. The Election Commission of India is a constitutional body... On the other hand, the Central Information Commission and State Information Commissions are statutory bodies established under the Right to Information Act, 2005,” the Bill said.

•Introducing the amendment, Minister of State in the Prime Minister’s Office Jitendra Singh said the Bill is aimed at institutionalisation and streamlining of the RTI Act. He said it strengthened the overall RTI structure, corrected anomalies and described it as an enabling legislation for administration purposes.

•“Has it ever happened that the CIC has the status of a Supreme Court judge but the judgment can be appealed in a High Court,” asked the Minister as the Opposition protested.

•Leader of the Congress in the Lok Sabha Adhir Ranjan Chowdhury said the draft law was a threat to the independence of the Central Information Commission while Mr. Tharoor said this Bill was actually an “RTI elimination Bill” removing two greater powers of institutional independence.

•Trinamool Congress leader Saugata Roy sought that the Bill be referred to a parliamentary standing committee. He said only 26% Bills were referred to such panels in the last Lok Sabha.

📰 Centre rejects SEBI plea to amend provision for transferring reserves

Finance Bill says 75% of surplus be shifted to govt. coffers

•In what could spark the souring of ties between the Centre and the Securities and Exchange Board of India (SEBI), the Finance Ministry has refused pleas from the capital markets regulator to amend the provision that mandates that about 75% of its surplus be transferred to the Centre’s coffers.

•The Finance Bill 2019, passed by the Lok Sabha on Thursday, has a provision stating that the SEBI must set up a reserve fund into which 25% of its surplus is to be transferred. The remaining amount is to be transferred to the Centre.

•“The [SEBI] Board shall constitute a reserve fund and 25% of the annual surplus of the general fund in any year shall be credited to such reserve fund and such fund shall not exceed the total of annual expenditure of preceding two financial years,” the Finance Bill says.

•“After incurring all the expenses… and transfer to reserve fund… the surplus of the general fund shall be transferred to the consolidated fund of India,” it added. This decision has been opposed by the SEBI, with Chairman Ajay Tyagi meeting Finance Minister Nirmala Sitharaman earlier this week, and also writing a letter to the Ministry enumerating his objections. It is learnt that this letter is along the lines of the one written by SEBI employees earlier this month to the Prime Minister.

•The decision, SEBI felt, would impinge upon the financial autonomy of the regulator, a complaint against the Centre that RBI has also raised in the past regarding its own funds. The recent tension between the RBI and the Finance Ministry was also about the transfer of reserve funds to the Centre, and what this implied for the central bank’s autonomy.

•“Any move to transfer the surplus funds of the SEBI to the CFI will amount to the fee levied by the SEBI becoming a kind of additional tax on the market participants, and will result in a perverse incentive for increasing such generation of revenue for the government, limiting the flexibility of the SEBI to calibrate the imposition of such fees,” the employees’ association letter to Mr. Modi said.

•“Further, the proposal will also impinge on the financial autonomy of the SEBI as it will have to seek government approval for capital expenditure, which can range from setting up IT infrastructure, expanding the organisational capacity, or any other physical and soft infrastructure that SEBI may require in the light of continuously evolving global securities markets to increasing its employee strength.”

•Government officials said Mr. Tyagi also felt that including this provision in the Finance Bill, which would amend the SEBI Act, was premature since the issue was still under discussion in the Financial Stability and Development Council, the financial sector regulator.

•The Finance Bill is a money bill. This means that, once passed by the Lok Sabha, it can become law unchanged even if the Rajya Sabha proposes to amend it. In effect, passing the Finance Bill in the Lok Sabha means that the government has chosen to ignore SEBI’s concerns.

📰 Green shoots of economic growth

Without factoring in agriculture, the vision of a $5-trillion economy will remain a distant dream

•India’s dream of becoming a $5-trillion economy by 2024 is now in the open with a ‘blue sky’ vision envisaged in the Economic Survey this year. The document lays down a clear strategy to augment the growth of key sectors by shifting gears as the current economic conditions are smooth in terms of macroeconomic stability to expand growth. However, unless there are adequate investment reforms in primary sectors, steps taken to augment growth in other sectors would be futile.

Investment is the key

•According to the Food and Agriculture Organisation (FAO), insufficient investment in the agriculture sector in most developing countries over the past 30 years has resulted in low productivity and stagnant production.

•In India, with a steadily decreasing share of 14.4% in Gross Value Added since 2015-16, the sector’s contribution to a $5-trillion economy would be around $1 trillion — assuming a positive annual growth rate hereafter.

•Investment is the key to unlocking the potential of a developing economy. However, the myopic policy regime in the past several decades has resulted in sluggish investment growth in the farm sector. Therefore, strengthening the sector with an enabling investment package (both public and private) is critical.

•First, the wave of investment should touch segments such as agro-processing, and exports, agri-startups and agri-tourism, where the potential for job creation and capacity utilisation is far less. Integrating the existing tourism circuit with a relatively new area of agri-tourism (as a hub-and-spoke model), where glimpses of farm staff and farm operations are displayed to attract tourists, would help in boosting the investment cycle and generate in-situ employment.

•Second, investment needs to be driven to strengthen both public and private extension advisory systems and the quality of agri-education and research through collaboration and convergence. It would also serve as a stage to demonstrate resource conservation and sustainable use through organic, natural and green methods, and also zero budget natural farming.

•Third, given that India has the highest livestock population in the world, investment should be made to utilise this surplus by employing next-generation livestock technology with a strong emphasis not only on productivity enhancement but also on conservation of indigenous germplasm, disease surveillance, quality control, waste utilisation and value addition. This would lead to a sustained increase in farm income and savings with an export-oriented growth model.

•Fourth, investment in renewable energy generation (using small wind mill and solar pumps) on fallow farmland and in hilly terrain would help reduce the burden of debt-ridden electricity distribution companies and State governments, besides enabling energy security in rural areas.

•Fifth, a farm business organisation is another source of routing private investment to agriculture. Linking these organisations with commodity exchanges would provide agriculture commodities more space on international trading platforms and reduce the burden of markets in a glut season, with certain policy/procedural modifications.

Pivotal role for data

•Finally, data is the key driver of modern agriculture which in turn can power artificial intelligence-led agriculture, e-markets, soil mapping and others. Currently, there are issues of enumeration, maintenance and accessibility to help maintain agri-data on various fronts. There also needs to be a centralised institutional mechanism to help maintain farm level-data available for real time (virtual) assessment, while also helping plug the loopholes in subsidy distribution, funding and unrealistic assumption in production estimation. This will help in effectively implementing and monitoring various schemes for a pragmatic food system.

•It is widely accepted that resource conservation comes with behavioural change, which needs dedicated investment in behavioural farm research sets. Perhaps this would help find a way to leverage nudge policies/choice architecture for resource conservation, fertilizer use, irrigation and electricity consumption. Above all, there is a need to converge fragmented investments (public, private and foreign) to address the structural weaknesses in the agriculture sector, enunciated in the Economic Survey 2016-17.

Trickle-down effect

•Though economic transition has seen significant growth contribution from services and industry, agriculture remains the most trusted sector in helping alleviate poverty, hunger and malnutrition and ensuring better income distribution.

•An earlier experience of BRIC (Brazil, Russia, India and China) nations has shown that a 1% growth in agriculture is at least two to three times more effective in reducing poverty than similar growth in non-agricultural sectors. Public investment in agriculture research and development in terms of percentage share in agri GVA stands at 0.37%, which is fairly low in comparison to between 3% and 5% in developed countries.

•Also, in real terms, current investment can create an enabling environment to route private investment in R&D. Therefore, public investment in agriculture should see a commensurate rise with a healthy mix of education, research and extension encouraging ‘blue-sky thinking’ in all segments, while pushing for a targeted pruning of public expenditures on subsidies, kind transfers, loan waivers and populist measures.

•Agriculture and its allied sectors are believed to be one of the most fertile grounds to help achieve the ambitious Sustainable Developmental Goals (SDGs). However, with the current pace of agriculture growth, India requires ‘patient capital’, as financial returns to investment are unlikely to materialise in the initial years. An inclusive business model facilitating strong investor-farmer relations should be created, with a legal and institutional framework for governance. Expanding institutions is essential to accommodate the developmental impacts of foreign agricultural investment.

📰 RBI’s Das, PSB chiefs discuss rate cut

Banks to identify one district in a state to make 100% digitally enabled in one year

•Reserve Bank of India Governor Shaktikanta Das met chief executives of public sector banks (PSBs) on Friday where the need for a deeper rate cut by the banks was discussed.

•The meeting, ahead of the monetary policy review announcement on August 7, discussed various issues, including challenges of credit flow to the productive sectors of the economy.

•“The Governor acknowledged discernible improvements in the banking sector while underscoring that several challenges still remain to be addressed, particularly with regard to the stressed asset resolution and credit flows to needy sectors,” the RBI said in a statement,

•Among issues discussed in the meeting, the statement mentioned, “Less than desired level of transmission of monetary policy rates”.

•While the central bank has reduced the repo rate by 75 bps in 2019, banks have been reluctant to reduce lending rates. Even after the third 25 bps rate cut in a row by the RBI in June, banks responded in cutting lending rates by 5-10 bps.

•With headline retail inflation still below the RBI’s medium target of 4%, and growth continues to be sluggish, the central bank is expected to lower interest rate further.

•The meeting also noted improving recovery efforts by banks and resolution of stressed assets as facilitated by revised framework for resolution announced by the RBI on June 7, 2019.

•The Governor also discussed the credit and deposit growth on the back of a slowing economy.

•Strengthening internal control mechanism for improved fraud risk management, recent initiatives to address issues relating to NBFCs and the role banks can play in mitigating lingering concerns - were also discussed during the meeting, the statement said.

•“The Governor also underlined the importance of expanding and deepening digital payments ecosystem in line with the recommendations of the Report of the Committee on Deepening of Digital Payments and Reserve Bank’s Payment System Vision Document 2021,” the statement said.

•In this context, on the suggestion of the Governor, it was agreed that banks will identify one district in each state to make it 100% digitally enabled within one year in close coordination and collaboration with all stakeholders.

•“To the extent feasible, such districts may be converged with the ‘Transformation of Aspirational Districts’ programme of the Government of India. IBA is also expected to play a catalytic role in this regard,” RBI added.