The HINDU Notes – 04th October 2019 - VISION

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Friday, October 04, 2019

The HINDU Notes – 04th October 2019

📰 Sheikh Hasina to focus on economic agenda during India visit

No problems in New Delhi-Dhaka ties, says the visiting Bangladesh Prime Minister.

•Bangladesh will try to highlight economic opportunities in relation with India, visiting Prime Minister Sheikh Hasina said here on Thursday. The comments showed Dhaka’s desire to foreground the economic agenda which has been overshadowed by the fallout of the National Register of Citizens (NRC) in Assam and Home Minister Amit Shah’s description of Bangladesh citizens as “infiltrators”.

•“There are no problems in bilateral ties. I have come here to discuss economic issues,” said Ms. Hasina in response to a question from The Hindu during a public reception held at the Bangladesh High Commission.

•Ms. Hasina addressed the World Economic Forum (WEF) soon after arriving here on Thursday and presented Bangladesh as a fast-growing economy and an attractive investment destination in South Asia.

•“It is time for global investors, particularly Indian entrepreneurs, to invest in Bangladesh in areas like education, light engineering, electronics, automotive industry, artificial intelligence — beyond the conventional menu,” said the visiting leader in her speech at the WEF.

•Ms. Hasina is scheduled to hold official talks with Prime Minister Narendra Modi on Saturday, and several agreements are expected to be signed. According to sources, both sides are in talks for agreements for a Special Economic Zone and a skill development centre. Talks are also to take up Ganga barrage which has been stuck because of mutual differences. It is expected that issues like NRC are also likely to come up during the discussions.

•A high level Bangladesh source pointed out that Dhaka recognises there is considerable divergence between the assurances given by External Affairs Minister S. Jaishankar on the National Register of Citizens and the statements regarding the same by Home Minister Amit Shah. The NRC exercise in Assam left out 1.9 million people out of the list of citizens and subsequently Mr Jaishankar said that the future of these NRC-excluded is an internal matter of India. However Home Minister Amit Shah has repeatedly asserted that the NRC-excluded people will not find space in India.

•“We understand that the diplomatic comments on the issue are made keeping in mind Prime Minister Modi’s growing global stature. And we are aware of the greater political clout of the Indian Home Minister who caters to the domestic audience driven by the ideology of Hindutva,” said the source.

•He said that the NRC would have remained an internal issue of India if it was contained after the Assam chapter and warned of its negative fallout for South Asian region. “It will be difficult for India to reverse the dynamics of NRC if it is implemented as part of the Hindutva agenda,” said the senior official expressing Dhaka’s concern about NRC.

📰 Making political parties accountable

A Supreme Court judgment on non-governmental organisations throws light on the powers of an undiluted RTI

•Recently, the Supreme Court in D.A.V. College Trust and Management Society Vs. Director of Public Instructions held that non-governmental organisations which were substantially financed by the appropriate government fall within the ambit of ‘public authority’ under Section 2(h) of the Right to Information Act, 2005. Under this section of the RTI Act, ‘public authority’ means “any authority or body or institution of self-government established or constituted by or under the Constitution and included... any non-government organisation substantially financed directly or indirectly by funds provided by the appropriate government.”

Wide ramifications

•Owing to the reasoning given by the court, the judgment can potentially have wide ramifications in the discourse pertaining to the ambit of the RTI regime on national political parties.

•In D.A.V., the top court held that ‘substantial’ means a large portion which can be both, direct or indirect. It need not be a major portion or more than 50% as no straitjacket formula can be resorted to in this regard. For instance, if land in a city is given free of cost or at a heavily subsidised rate to hospitals, educational institutions or other bodies, it can qualify as substantial financing. The court resorted to ‘purposive’ interpretation of the provisions by underscoring the need to focus on the larger objective of percolation of benefits of the statute to the masses.

•In 2010, the Association for Democratic Reforms (ADR) filed an application under the RTI to all national parties, seeking information about the “10 maximum voluntary contributions” received by them in the past five years. None of the national political parties volunteered to disclose the information. Consequently, ADR and RTI activist Subhash Agarwal filed a petition with the Central Information Commission (CIC).

•In 2013, a full bench of the CIC delivered a historic judgment by declaring that all national parties came under ‘public authorities’ and were within the purview of the RTI Act. Accordingly, they were directed to designate central public information officers (CPIOs) and the appellate authorities at their headquarters within six weeks.

•In 2013, The Right to Information (Amendment) Bill was introduced in Parliament to keep political parties explicitly outside the purview of RTI that lapsed after the dissolution of the 15th Lok Sabha. Notwithstanding the binding value of the CIC’s order under Section 19(7) of the Act, none of the six political parties complied with it. Quite interestingly, all the parties were absent from the hearing when the commission issued show-cause notices for non-compliance at the hearing.

•Finally, in 2019, a PIL was filed in the Supreme Court seeking a declaration of political parties as ‘public authority’ and the matter is sub judice. Irrespective of the ideological differences among these political parties on almost all the issues under the sun, non-compliance of the RTI mandate has been a great unifier.

•Drawing an analogy between the Supreme Court’s judgment on D.A.V. and the political parties’ issue which is sub judice, it can be argued that national parties are ‘substantially’ financed by the Central government. The various concessions, such as allocation of land, accommodation, bungalows in the national and State capitals, tax exemption against income under Section 13A of the Income Tax Act, free air time on television and radio, etc. can easily satisfy the prerequisite of Section 2(h) of the RTI. If an entity gets substantial finance from the government, there is no reason why any citizen cannot ask for information to find out whether his/her money which has been given to the entity is being used for the requisite purpose or not.

On accountability

•Applying the purposive rule of interpretation which is discernible from the preamble of the RTI Act, the ultimate aim is the creation of an ‘informed’ citizenry, containment of corruption and holding of government and its instrumentalities accountable to the governed. Under the anti-defection law, political parties can recommend disqualification of Members of the House in certain eventualities under the Tenth Schedule of the Constitution.

•The Law Commission opines that political parties are the lifeblood of our entire constitutional system. Political parties act as a conduit through which interests and issues of the people get represented in Parliament. Since elections are predominantly contested on party lines in our parliamentary democratic polity, the agenda of the potential government is set by them.

•As noted by Dr. B.R. Ambedkar in his famous Constituent Assembly speech, “The working of a Constitution does not depend wholly upon the nature of the Constitution. The Constitution can provide only the organs of State…The factors on which the working of those organs of the State depend are the people and the political parties they will set up as their instruments to carry out their wishes and their politics.” It is hoped that the top court will further the positive advances made in this direction. Since sunlight acts as the best disinfectant and our political parties tirelessly claim themselves to be apostles of honesty and integrity, it is expected that they would walk the talk.

📰 All creatures great and small

It has become clear that the welfare of humans and other animals is closely interlinked

•World Animal Rights Day falls on October 4. It coincides with the feast of St. Francis of Assisi, the patron Saint of animals and the environment. As far back as the 12th century, he recognised the importance of extending compassion towards animals. Today, with the help of scientific inquiry we have learnt that it is in our best interest to extend compassion to other living beings, be it by protecting their habitats or refraining from intensively farming them. It has become increasingly clear that the welfare of humans and other animals is closely interlinked.

Pressing problems

•Consider, for example, the bee, whose population is declining at an alarming rate today because of climate change, pesticides and habitat loss. Bees pollinate 70 of nearly 100 crop species that feed 90% of the world. Insects help in the decomposition of organic materials, including bodies of the dead, and enrich the soil. Dung beetles evolved 65 million years ago and, as their name suggests, eat dung, recycle nutrients and improve the quality of the soil. Half of the world’s species are insects, so if insects go extinct, the consequence would be complete degradation of our soil consequently leading to the disappearance of all remaining life.

•A second dimension of concern for animal rights centres on farming. We keep billions of animals intensively confined in factory farms for meat, eggs and dairy. There are serious repercussions of these practices, both for animals and humans. Hens kept in battery cage farms see the sun twice in their lives — once on the way to the farm and the second on the way to the slaughterhouse. These factory farms are responsible for the formation of dead pools around them, have a massive odour, and attract pests. The people who live in the vicinity of these farms suffer from several health issues including breathing problems. Hence, while it may make financial sense to cram animals into factory farms, the consequences can be considerable. To mitigate this, the system of intensive farm animal production needs to become more humane and less exploitative, for both animals and people. Governments can take a first step by prohibiting the cruelty of battery cages.

•The deleterious impact of animal agriculture, including pastoral activities, is captured in research that shows that the Amazon fires were caused by ranchers who wanted to use the land for cattle grazing and farming. Indian forests are also being degraded by the excessive pressure of animal agriculture. The United Nations has found that “livestock production is one of the major causes of the world’s most pressing environmental problems, including global warming, land degradation, air and water pollution, and loss of biodiversity”.

Animal welfare

•Our legal system treats animals as if they are non-sentient commodities that can be owned and disposed by people. Animal husbandry has an entire department dedicated to it. Thousands of crores are invested in slaughterhouses. Conversely, animal welfare is relegated to one board, which must look after the welfare of billions of animals in the country. Policy reform in this space is such a low priority that while parking fines are at least ₹10,000 in Mumbai, the penalty for beating an animal in India is ₹50. It is time for our government to depute a Ministry and budget for the welfare of animals.

•Animal lives can be saved by commercialising the innovations of plant-based and cultured or clean meat. Clean meat is grown in a lab from a small sample of cells taken from an animal. Both plant-based meat and clean meat are free of the negative externalities that animal meat production is responsible for, such as climate change, and are healthier as they are also free of antibiotics.

•We hold the future of billions of animals in our hands. We have an opportunity to translate our philosophy of Vasudhaiva Kutumbakam into action. We must act in our collective best interest.

📰 The brick and mortar of FDI 2.0

‘List or trade in India’ should be used as a strategic policy tool to enable Indians to become shareholders in MNCs

•Foreign Direct Investment (FDI 1.0) has been welcome in India irrespective of whether or not its equity structure includes Indian public shareholding. However, the world has undergone a structural change with the emergence of Internet Multinational Companies (MNCs) such as Microsoft, Google, Facebook and Twitter that are based on ‘winner-takes-all’ platform business models. These firms are characterised essentially by inequitable dynamics, since they distribute most gains to themselves vis-à-vis their host countries. This situation demands a policy response.

•Perhaps this is one of the reasons why China banned Internet MNCs. This led to China creating nine out of the 20 global Internet leaders. China strategically deploys a quid pro quo policy. MNC firms are mandated to transfer technology, share patents and enter into 50:50 joint ventures with Chinese partners in return for market access. Given our political system, India will obviously need to follow a new FDI 2.0 policy to achieve more desirable outcomes.

•Rather than accepting the ‘winner MNC takes it all’ as fait accompli, FDI 2.0 should harmonise interests of all stakeholders including Indian consumers, the government and investors. FDI 2.0 could deploy ‘List or Trade in India’ as a strategic policy tool to enable Indian citizens become shareholders in MNCs such as Google, Facebook, Samsung, Huawei and others, thus capturing the ‘upside’ they create for their platforms and companies. This is equitable to all, since Indian consumers contribute to the market value of MNCs.

•In 1978, the Indian government adopted a policy that required equity dilution by 100% foreign-owned companies. This led to the ‘Listing of MNCs’, and many of which then provided handsome returns to both MNCs and Indian shareholders. It is estimated now that listing Indian subsidiaries of MNCs alone could add as much as ₹50 lakh crore to equity market capitalisation. This could make capital markets deeper and valuations more reasonable. ‘List or Trade MNCs in India’ could become a potent extension to ‘Make in India’ to disseminate prosperity. In contrast to 1978, the proposals we present here are based on incentives, more capital market-friendly and in line with the practices followed by Mexico, China, Bangladesh and other countries.

A road map for India

•India could implement the following set of proposals: Proposal 1 (List in India): Majority (more than 51%) foreign-owned Indian-listed MNCs could be eligible to domestic company tax rate whereas unlisted MNC subsidiaries could be subjected to a higher tax rate. Many countries such as Bangladesh, Vietnam and Thailand have used tax incentives to attract listing by MNCs.

•Mexico is most successful in attracting cross listings. For example, AB InBev, Coca-Cola, Walmart and Citigroup are listed in Mexico. To ensure the success of this proposal, the government will need to reconsider the present policy of allowing 100% MNC-owned subsidiaries to compete with their listed Indian counterparts that erodes the value accruing to Indian shareholders.

•Proposal 1, by itself, will not achieve the objective of increasing Indian participation in the fair value of Internet MNCs. This is because of complex issues in revenue booking that result in low profits in Indian subsidiaries. Hence, there is a need for additional initiative by way of proposal 2 to enable Indian investor participation in the ownership of parent MNCs’ shares.

•Proposal 2 (‘Trade in India’ i.e. U.S. dollar-denominated parent MNC Shares to be ‘Admitted for Trading’ on Indian bourses]: In this proposal, Indian investors could buy shares of parent MNCs (where global profits and value get consolidated). This can be permitted within the $250,000 Liberalised Remittance Scheme (LRS) limit. Indian bourses could admit only S&P 500 stocks. The Mexican Stock Exchange allows trading of international shares listed in other stock exchanges. India could replicate such models.

Mirroring Mexico

•For successful implementation of Proposal 2, the Indian government may need to facilitate following measures:

•Permit Indian bourses to implement international trading system on the lines of Mexico.

•Parent MNCs in S&P 500 with business interests in India could be mandated to facilitate trading of their shares in India. MNCs would readily agree as it does not envisage listing in India.

•For taxation purposes, no distinction should be made between transactions in comparable domestic and foreign securities.

•LRS implementation for buying foreign stocks in GIFT City/NSE/BSE could be simplified and work as single click functionality.

•Educate Indian investors about the value of diversification of their portfolio in international stocks for achieving better risk adjusted returns.

•The government could facilitate access to ultra-low cost (<=0.04%) S&P 500 Index Funds such as Admiral Shares (VFIAX) and ETFs using Indian e-KYC. Indian MFs charge fees from 0.54% to 2%. They are at least 13 times more expensive.

•For Proposal 2, one important issue that needs to be addressed pertains to U.S. Estate taxes. For Indian citizens, U.S. estate taxes @40% apply above portfolio value of $60,000.

•To mitigate this burden, the National Securities Depository Limited (NSDL) could design a sovereign trust for holding parent MNC stocks. The NSDL could then issue BharatShares to retail investors. Nominees of the government of India would get voting rights in parent MNCs. In addition, the government could make available a ‘Fully Disclosed Model’ for holding foreign stocks in line with our NSDL/Central Depository Services Ltd (CDSL) system. The prevalent ‘Omnibus model’ carries the risk of U.S broker default because investors’ shares are held in the U.S. broker’s name. For this reason, it could also lead to higher tax liabilities in India.

•Summing up, increasing Indian equity ownership of MNCs would offer diversification benefits and make Indians more prosperous. Wealth distribution through mutual funds would create a virtuous cycle of innovative ideas, entrepreneurship, employment, consumption, higher taxes, social and physical infrastructure for the benefit of Indian society. MNCs would earn the goodwill of Indian consumers while expanding their investor base. In other words, this is a win-win for all stakeholders.

📰 Co-operative banks: Is dual regulation the problem?

How are cooperatives overseen and what could have allowed the PMC Bank to get away with such large bad loans for years?

•Usha Thorat: One needs to go back to history. Cooperative banks came directly under the RBI’s radar in 1966 but faced the problem of dual regulation. The Registrar of Cooperative Societies (RCS) is in control of management elections and many administrative issues as well as auditing. And the RBI brought them under the Banking Regulation Act as applicable to cooperative societies, which included all the regulatory aspects, namely, the granting of the licence, maintaining cash reserve, statutory liquidity and capital adequacy ratios, and inspection of these banks. So, in a sense, urban cooperative banks have been under the radar of the RBI, but because of dual regulation, one always had a feeling that one did not have as much control over these banks in terms of supercession of boards or removal of directors, as the RBI has over private sector banks.

•The Madhavpura Mercantile Cooperative Bank issue turned out to be huge because it had a significant percentage of its assets as loans to Ketan Parekh, not unlike the case we are seeing now. And because it was an active bank in liquidity and money markets, Madhavpura used to provide liquidity to many other banks, so a huge number of cooperative banks had deposits with Madhavpura. So, a closure of that bank would have meant the closure of several other banks too. There was a lot of talk between the RBI, and the Central and Gujarat governments and a package was put together for Madhavpura. It was challenged, but finally it did go through with a staggered repayment of deposits and infusion of funds from the Deposit Insurance and Credit Guarantee Corporation (DICGC). I don’t recall whether the legal challenge was finally disposed of.

•Why I am talking of Madhavpura is that maybe some parts of its resolution can be examined today. After this episode, RBI decided to squarely deal with the problems of cooperative banks. It issued a vision document in 2004-05 and stopped all licences of new branches and new bank entities. There was a proliferation of licences issued between 1991 and 1998. Under the vision document, a Memorandum of Agreement was entered into by the RBI with each of the States, where the State accepted an audit by professional auditors, and constituted a Task Force for urban cooperative banks. The TAFCUB was co-chaired by the RCS and the RBI Regional Director and was required to provide a bank-by-bank solution to those banks that were not maintaining minimum capital ratios. Not giving any new licences or new branches also pushed existing cooperative banks to come forth to take over the weak ones. This worked very well and a number of cooperative banks were delicensed, merged or liquidated. By 2017-18, as stated in the RBI Financial Stability Report, there were only four urban cooperative banks with capital adequacy ratios below the regulated threshold.

Given this background, what do you think led to the PMC Bank crisis? Was it because of some regulatory aspects falling between the two stools of the RBI and RCS?

•UT: I don’t think so. As I said, there was a forum for the RBI and the RCS to work together. Moreover, since 2004, a number of banks have been brought under all-inclusive directions where there have been significant weaknesses. So, the RBI has been taking action when it is clear that a bank is not able to carry on its operations in a manner that protects the interests of the depositors. But in PMC’s case, it is a fraud, total hiding [of the problem] — a huge exposure to a single entity in the real estate sector was camouflaged under a whole lot of dummy accounts. Reporting to RBI and probably the auditors too was false. So, primarily, the CEO and the Board are responsible. It is not due to dual regulation.

•How could this happen? Does this throw up fresh challenges on the kind of information the RBI should be looking for? Should it be doing a forensic audit? Is it possible to do this for more than 1,400 urban cooperative banks? How do you realise there is a problem brewing? I think there is a serious need to understand how the exposure was camouflaged, how did this not get reflected in other returns filed, etc.

Professor Dev, given the role played by cooperative banks over the years to extend credit in rural India, what do you make of suggestions that they may have outlived their utility?

•S. Mahendra Dev: Cooperative institutions play a significant role in credit delivery to unbanked segments and financial inclusion. But their role has declined with the expansion of scheduled commercial banks and adoption of technology. Even urban cooperative lenders are facing competition from payment banks, small finance banks, and NBFCs (non-banking finance companies). We have about 1,500 urban cooperatives, but there are nearly 96,000 rural banks, including primary agriculture credit societies. Long-term credit extended by them is declining, but there is still a role in agriculture for rural cooperative societies. On the urban front, however, there is a need for change partly because of some of these scams that Ms. Thorat mentioned.

•In the case of PMC Bank, as per RBI, there are three problems — major financial irregularities, failure of internal control and systems, and underreporting of exposures. It is well known that PMC Bank has extended 73% of its assets to HDIL, which has created a panicky situation for depositors. The RBI has had to clarify that Indian banking is safe. The problem is, of course, dual control by the RBI and the RCS, with the State government also playing a role and politics sometimes entering the space. The management, Board and auditors are responsible. It’s a governance and transparency issue that also affects public sector banks, private banks, and NBFCs.

•So, what should be done? I am in favour of merging and converting some of the cooperative banks to small finance banks. The RBI has announced a scheme for voluntary transition of urban cooperative banks into small finance banks, in line with the recommendations of a high-powered committee chaired by former Deputy Governor of the RBI, R. Gandhi. This would enable them to have most of the products available with commercial banks, and help get a pan-India presence. But there are many conditions on share capital, loan sizes and loans to priority sector. So, you can’t convert all of them but there can be a gradual move towards that.

Ms. Thorat, do you think small finance banks would be better governed?

•UT: Let’s again look at the things the RBI has tried to do in the last four-five years. First, there was a committee under H. Malegam which recommended a board of management of fit and proper persons, other than the board of directors. Directors are elected by members and very often the borrowers get to nominate their own persons, while depositors are not really represented as these banks accept deposits from non-members. So, the idea was to have a board of management in actual control of operations as opposed to elected directors. I think this must be done immediately as an incentive for those who want to continue to grow. We should perhaps tell these banks, you must put this in place, otherwise there will be no more branch licences and we can impose restrictions on your loan book. There must be a push for a fit and proper management, otherwise the elected director can get away with fraud. Then all we can do is cope with the aftermath of his or her actions.

•Having said that, you will find that a majority of the cooperative banks have been doing a good job — meeting the needs of small businesses and even rural credit — very much what we call inclusive finance. Just about 50 or 60 of these 1,500 banks are large. So the RBI’s supervisory resources have to be really focused on these larger banks mostly operating across the country like commercial banks.

•Second, the RBI has given the choice to urban cooperative banks to convert to small finance banks. That option is there for those players with more than ₹50 crore capital and 15% capital adequacy. This is an incentive as they will then be able to grow their capital by issuing shares at a premium. Today, the biggest hurdle for an urban cooperative bank is to raise capital. For them, the RBI might like to incentivise conversion into small finance banks. It can say that for further growth the larger urban cooperative banks should either appoint a board of management that meets the RBI’s norms for fit and proper or become small finance banks. The challenge in banking supervision and regulation lies in knowing the quality and engagement of the Board, the key personnel and their conflicts of interest and connections.

•Third, RBI has also said that for urban cooperative banks there could be an umbrella organisation promoted by the banks themselves to raise capital as a joint stock company can from the markets.

•This incident poses a challenge for supervision. It comes back to how exposures can be hidden, which can be done in any bank or NBFC, not just a cooperative. The supervision system should be able to catch much more underreporting or false reporting and ensure accountability of the Board and the auditors. Criminal action has been initiated against the managing director, but what about all the directors? Is it possible that the directors or the Board were not aware of the exposure? In any case they are liable.

•I think we should also look at the extent of deposits of other cooperative banks in such large urban co-operative banks. Perhaps it is time to review whether an urban cooperative bank should accept deposits of other urban cooperative banks. Because this means depositors of smaller banks may also suffer.

•The frequency and intensity of supervision has to be clearly based on the size of the bank and the assessment made of the governance standards in the banks. All banks — small finance banks, cooperative banks and leveraged institutions like NBFCs — are open to the risk of poor governance. There is no option but to look at the fit and proper character of the directors.

Demonetisation helped push a lot of cash savings into the formal financial sector. But given this fresh crisis of confidence among bank customers, what can the government and the regulator do to restore their faith?

•MD: Many depositors opt for cooperative banks because they give a higher interest rate. Even the RBI’s staff cooperative has deposits parked with PMC. The confidence comes from governance and regulation. RBI has been urging cooperative lenders to act professionally. We need confidence-building for all banks, not just for cooperatives, but even NBFCs. A recent study showed that small cooperatives are doing better in terms of non-performing assets and other aspects, while large urban cooperatives are not doing well. So, we have to look at how to supervise large cooperatives better.

📰 Toilet targets: On ending open defecation

The campaign to end open defecation can succeed only if it takes communities with it

•India’s declaration on the 150th birth anniversary of Mahatma Gandhi that its rural areas are now open defecation-free will be acknowledged around the world as a milestone in its developmental journey. Cleanliness and sanitation were central to Gandhi’s concerns for his vast number of impoverished countrymen, and should ideally have been pursued zealously by governments in free India, along with good housing and access to clean water. In 2014, the NDA government made total sanitation a high priority, with the avowed goal of bridging decades of neglect through a policy focused on toilet construction. That 110 million toilets were built under this programme since then counts as an achievement in itself, even though many of these structures have been bootstrapped to ramshackle dwellings; many do not meet construction standards. Forward-looking as it is, the campaign for universal sanitation and an end to open defecation cannot go far if toilet access is the sole metric of success. One independent survey shows toilets are not used by up to half the population in some places, underscoring the challenge ahead. It is welcome, therefore, that an ODF-Plus programme has been adopted by the Ministry of Jal Shakti to encourage toilet use and create the infrastructure to manage solid and liquid waste in every village. This is a long road, and the Central government can hope to achieve sustainable outcomes only if it prioritises citizen rights and community participation. The campaign has erred in its approach in many instances, opting for coercive methods that produce dreadful consequences.

•Development literature makes it clear that bringing one set of freedoms to people, including material benefits, cannot compensate for the loss of others, notably freedom from oppression. This bears mention in the context of Swachh Bharat Abhiyan and its efforts to end open defecation, since officials and campaigners have resorted to violence, public shaming and the threat of deprivation of welfare benefits to bring about compliance. Such methods must be ended immediately and voluntary participation encouraged. Of concern too is a possible resort to illegal manual scavenging, since many toilets built under the Swachh mission are not of the prescribed twin-pit design, and will need periodic evacuation. Despite widely reported cases, the Centre does not appear to be eager to eliminate manual waste removal through a war-like effort, under which all States will install sewage and sludge treatment plants. Neither are States keen to strictly enforce the law that makes the practice punishable. In the years ahead, making sanitation universal and sustainable will depend not just on toilets, but on providing decent urban and rural housing, and strengthening another key determinant of development — the right to a good education.