The HINDU Notes – 14th March 2020 - VISION

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Saturday, March 14, 2020

The HINDU Notes – 14th March 2020





📰 PM calls for SAARC videoconference on COVID

All leaders in the eight-nation regional grouping, except Pakistan Prime Minister Imran Khan, welcome his suggestion

•Prime Minister Narendra Modi on Friday called for a videoconference summit of leaders of the South Asian Association for Regional Cooperation (SAARC) to discuss a common strategy to tackle COVID-19.

•All leaders in the eight-nation regional grouping, except Pakistan Prime Minister Imran Khan, welcomed Mr. Modi’s suggestion.

•It was received with some surprise, as SAARC has had no summit-level meeting since 2014.

•The meetings have been shelved since due to India-Pakistan tensions and Mr. Modi’s decision not to attend the summit in Islamabad.

•Though Pakistan did not offer any immediate response to the message on Friday, officials in New Delhi indicated they were ready to organise the conference as early as Saturday.

•“I would like to propose that the leadership of SAARC nations chalk out a strong strategy to fight coronavirus. We could discuss, via videoconferencing, ways to keep our citizens healthy. Together, we can set an example to the world, and contribute to a healthier planet,” said Mr. Modi in his message, which urged the leaders to “leave no stone unturned to ensure our people are healthy”.

Date not set

•The External Affairs Ministry declined any comment on when the conference would take place, but a senior official told The Hindu that it was likely to be held “soon”. He said the COVID-19 situation had “lent itself to an opportunity” with SAARC.

•South Asia accounts for only 125 of the 44,067 confirmed cases of COVID-19 so far, but there are fears of an escalation in the numbers given the density of population in the region.

•While SAARC member-states occupy just 3% of the world’s landmass, they account for 21% of its population.

Reactions pour in

•Within hours of the tweets by Mr. Modi, Nepal Prime Minister K.P. Sharma Oli, Sri Lankan President Gotabaya Rajapaksa, Maldivian President Ibrahim Solih and Bhutan Prime Minister Lotay Tshering tweeted their responses welcoming the idea of the SARS-CoV-2 videoconference.

•Bangladesh’s Minister of State for Foreign Affairs Shahriar Alam tweeted on behalf of Prime Minister Sheikh Hasina, saying that she “welcomes the proposal and looks forward to a constructive dialogue with [SAARC leaders] who consented to discuss the way forward at this testing time for the region and the world.”

•In Afghanistan, Sediq Sediqqi, spokesperson of the recently re-elected President Ashraf Ghani, announced Mr. Ghani’s readiness to devise a “unified strategy” to fight the virus in the region.

‘Timely proposal’

•Meanwhile, the SAARC secretariat, based in Kathmandu with new Secretary- General Sri Lankan diplomat Essala Weerakoon now at the helm, called Mr. Modi’s offer a “timely proposal” and offered its services to facilitate the conference.

•Mr. Modi has in the past held similar videoconferences to inaugurate infrastructure projects in neighbouring countries and for the launch of the GSAT-09 “SAARC satellite” in May 2017.

•Set up in 1985, SAARC was the first such grouping for the South Asian region.

Shifted focus

•However, in the past few years, due to the government’s decision to call off all talks with Pakistan until cross-border terrorism ends, New Delhi has shifted focus to other regional groupings that do not include Pakistan, like the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the Bangladesh-Bhutan-India-Nepal (BBIN) grouping, and the Indian Ocean Rim Association (IORA).

•It remains to be seen whether Mr. Modi’s offer to convene the SAARC leadership meeting, albeit just for the COVID-19 crisis and only over a videoconference, will lead to a revival of the SAARC forum itself.

📰 RS nod for ‘Vivad Se Vishwas’ Bill

It gives a second chance to taxpayers to settle their dues

•The Parliament on Friday approved the Direct Tax Vivad Se Vishwas Bill, 2020, which will give taxpayers a chance to settle tax disputes by paying their dues without any interest or penalty till March 31.

•The Bill, passed by the Lok Sabha on March 4, was approved by the Rajya Sabha on Friday by a voice vote. The Vivad Se Vishwas scheme waives off interest and penalty on pending tax if paid by March 31. For payments made after March 31 and till June 30, a 10% penalty would be charged.

•In her response to the discussion on the Bill in the Upper House, Finance Minister Nirmala Sitharaman said the scheme was not giving amnesty and that those already being prosecuted under the Income Tax Act would be excluded from it.

Rs. 5 crore limit

•Replying to questions raised by MPs during the discussion, she said the 75% tax on undisclosed cash deposited at the time of demonetisation would still apply. She said a cap of Rs. 5 crore in dues had been included in the scheme in order to prevent large-scale evasion or fraud-related cases trying to take advantage of the scheme.

•Earlier in the day, DMK MPs P. Wilson and Tiruchi Siva raised concern about the Hindi name of the Bill, which, they both said, would be a violation of Article 348 of the Constitution.

•Ms. Sitharaman said: “I do understand the importance of mother tongue and regional languages. In this case, I yield by saying, I give an assurance that we will have circulars going to all the regions to highlight each of the points in this scheme in the respective regional languages.”

📰 Rupee rebounds after RBI intervenes

Central bank assures adequate liquidity support

•The rupee made a sharp recovery after touching a record low of 74.50 a dollar in early trade following intervention and assurance of liquidity by the Reserve Bank of India.

•The rupee opened weak at 74.39 a dollar compared with the previous close of 74.24 and then touched the day’s low of 74.50. The previous record low was on October 9, 2018 when the rupee closed the day at 74.39 a dollar.

•On Friday, the rupee closed the day at 73.80 a dollar, up 44 paisa from its previous close.

•The turbulence in the financial market steered the central bank into making a statement, saying it would take steps to ensure adequate liquidity and that the situation was being monitored closely.

•Markets around the globe are facing volatility due to risk aversion; investors are holding liquidity even as COVID-19 keeps spreading. Trading was halted in the domestic equities market after hitting their lower circuits on Friday.

•“The Reserve Bank of India is closely and continuously monitoring the rapidly evolving global situation and will take all necessary measures to ensure that money, debt and forex markets remain adequately liquid and stable, and continue to function normally,” the RBI said.

•On Thursday, the RBI announced that it would open a six-month dollar sell-buy swap window to pump in liquidity in the foreign exchange market. The central bank will conduct U.S. dollar-rupee sell-buy swaps worth $2 billion on March 16, to ‘begin with,’ in its effort to fight market volatility.

•The central bank observed mismatches in the U.S. dollar liquidity had become accentuated across the world but added that the level of foreign exchange reserves remained at comfortable levels to meet any exigency. Latest data released by the RBI showed the country’s foreign exchange surged $5.69 billion to reach an all-time high of $487.23 billion in the week to March 6 due to an increase in foreign currency assets.

📰 Scheme for Yes Bank gets Cabinet nod

Quite a lot of engagement by RBI is happening to bring in other investors: FM

•The Union Cabinet on Friday approved a reconstruction scheme for Yes Bank, as proposed by the Reserve Bank of India, under which the State Bank of India (SBI) will acquire 49% stake in the ailing bank.

•“The Cabinet has approved the reconstruction scheme for Yes Bank as was proposed by the RBI. The decision to provide a reconstruction scheme keeps at its core the protection of depositors’ interest, keeps at its core providing stability to Yes Bank, and also keeps at its core keeping a stable financial environment, banking system,” Finance Minister Nirmala Sitharaman said at a press conference after the Cabinet meeting.

•Sharing key features of the restructuring plan, the Finance Minister said SBI would invest up to 49% of the equity in the crisis-ridden bank. “Other investors are also being invited, and quite a lot of engagement by the RBI is happening to bring in other investors.”

•Ms. Sitharaman said there would be a three-year lock-in period for SBI, but only for up to 26% of investment by them. For other players too, the lock-in will remain at three years. However, it will be for 75% of their investments.

•Additionally, “The authorised capital itself has been raised from Rs. 1,100 crore to Rs. 6,200 crore, so that we can accommodate immediate and also subsequent raising of capital requirements,” she said.





•The Minister added that further details of the plan would be available in the notification, which would happen as soon as possible. The new board would have at least two directors from SBI as its members.

📰 Centre to reimburse tax to exporters

A decision to approve the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi here

•The government on Friday approved a scheme for reimbursement of taxes and duties, which were not refunded previously, to exporters with a view to give boost to the country’s dwindling outbound shipments.

•A decision to approve the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi here.

•The reimbursement of taxes such as duty on power charges and VAT on fuel in transportation and farm sector captive power generation; mandi tax; stamp duty on export documents; CGST and compensation cess on coal in power production; central excise duty on fuel used in transportation would make Indian products competitive in global markets, Commerce and Industry Minister Piyush Goyal told reporters.

•Finance Minister Nirmala Sitharaman in September last year had said this scheme will incentivise exporters at an estimated cost of Rs 50,000 crore to the exchequer.

•These measures are compliant with the WTO (World Trade Organisation) norms. India is a member of WTO, which frames norms for global trade, since 1995.

•Goyal also said sectors and products under RoDTEP scheme will be notified in a phased manner and the MEIS benefits for those sectors and items will be withdrawn.

•This scheme was announced by Sitharaman in her Budget speech on February 1.

•Goyal said with the rolling out of this new scheme, the Merchandise Export Incentive Scheme (MEIS) will be “phased out“.

•It is proposed to digitally refund to exporters, duties and taxes levied at the Centre, State and local levels.

•Goyal said duties/taxes/levies not refunded in any other scheme will be refunded under this new scheme, which will be rolled out soon by the Department of Revenue.

•The move assumes significance as a WTO dispute resolution panel has ruled that MEIS was not in compliance with the global trade norms.

•Under the WTO rules, certain duties like state taxes on power, oil, water, and education cess are allowed to be refunded.

•Further, the commerce minister said as India has graduated from the category of the least developed countries, it cannot give subsidies for exports.

•So far, exporters have been getting refund under duty drawback and GST paid on raw materials or intermediates.

•The scheme, he said, will help in providing a level playing field to domestic exporters in the international markets.

•The ministry will hold a detailed consultations with stakeholders concerned for inclusion of products, which would avail refund.

•The Department of Revenue will priorities and soon fix RoDTEP rates for different goods/sector and will notify in a phased manner and accordingly MEIS will be rolled back for those items.

•“It will be given to exporters through transferable scrips. All the process will be online to minimise human interface,” he said.

•“Stakeholders meeting will be held for fixing the rates. We will take data and see what all cost they bear,” Goyal said adding “We will use the next 6-8 months to talk to the industry, work out the input taxes which do not get refunded“.

•A monitoring and auditing mechanism will be put in place.

•The country’s exports contracted for a sixth month in a row by 1.66 per cent in January to $25.97 billion.

•During April-January 2019-20, exports slipped 1.93 per cent to $265.26 billion, while imports declined 8.12 per cent to $398.53 billion, leaving a trade deficit of $133.27 billion.

•Undet thr scheme, a mechanism would be created for reimbursement of taxes/ duties/ levies, at the central, state and local level, which are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products.

•An official statement said that an inter-ministerial Committee will determine the rates and items for which the reimbursement of taxes and duties would be provided.

•Transferable duty credit/electronic scrip will be issued as part of refund to the exporters, which will be maintained in an electronic ledger.

•“The refunds under the RoDTEP scheme would be a step towards ‘zero-rating’ of exports, along with refunds such as Drawback and IGST,” it said.

•It added that at present, GST taxes and import/customs duties for inputs required to manufacture exported products are either exempted or refunded.

•However, certain taxes/duties/levies are outside GST, and are not refunded for exports.

•“The sequence of introduction of the scheme across sectors, prioritization of the sectors to be covered, degree of benefit to be given on various items within the rates set by the Committee will be decided and notified by the Department of Commerce ,” it said.

•The rebate would be claimed as a percentage of the Freight On Board (FOB) value of exports.

•A monitoring and audit mechanism, with an Information Technology based Risk Management System (RMS), would be put in to physically verify the records of the exporters.

•“As and when the rates under the RoDTEP Scheme are announced for a tariff line/ item, the MEIS benefits on such tariff line/item will be discontinued,” it said.

📰 Temples of critical thinking and debate

To be among the best in the world, Indian universities must be freed from excessive interference and politicisation

•In the recent subject-wise ranking of world universities by Quacquarelli Symonds (QS), Indian institutions improved with 26 departments or schools placed in the top 100 of their respective disciplines. Science, technology and business studies were the fields in which our universities showed their mettle. While this is a reason to celebrate, not even a single Indian university features in the QS ranking of the world’s top 150 in overall parameters. The Indian Institutes of Technology (IITs) of Bombay and Delhi are at the 152nd and 182nd places in the overall rankings, while IISc Bangalore appears at the 184th position. There is much for India to learn from those who are miles ahead of us.

•QS’s top 10 in overall terms include five American universities (MIT, Stanford, Harvard, Caltech and Chicago), four British universities (Oxford, Cambridge, UCL and Imperial College) and one Swiss university (ETH Zurich). All the five American names in this list are private universities, while the British and Swiss institutions are public universities which have nonetheless enjoyed significant autonomy from governmental control over decades.

•One common factor behind the success of the topmost universities is the freedom with which they operate. They have been major centres of innovation in teaching and research thanks to independence from bureaucratic or corporate meddling and political intervention by parties of the day. They could remain centres of extraordinary excellence in a sustained way by according primacy to matters of the mind, i.e. intellectual ideas and solutions to problems, and avoiding becoming hostage to dogmatic thought.

Pluralistic centres

•All the great universities of the world are ideologically pluralistic, with a mix of right, left and centre among their faculty and students. There is no institutional line or official position on any issue. Professors and students are free to choose whatever opinion they prefer. No one is penalised for holding a pro- or anti- view on social, economic, political, cultural or scientific matters.

•The top universities are also excellent at attracting and retaining talent. They hire professors very selectively, based on outstanding scholarly abilities. They reject a large number of candidates for admission as students, and admit only the brightest and the most meritorious. This ruthless streak comes at the expense of social inclusion and access considerations, but some institutions must be allowed to generate knowledge as an end in itself so that they reach the summit of intellectual endeavour. Top universities incentivise publication and citation of research in an unforgivingly rigorous way. If an Assistant Professor does not produce brilliant publications in the most reputed journals of her field, she may lose her job and not get tenured as an Associate Professor. By insisting on tough standards which are never lowered or relaxed, these universities promote a meritocratic culture as a habit.

•Big universities also inculcate critical thinking, debating and writing abilities in their students. They encourage students to look at issues through interdisciplinary lenses and to challenge their own professors. They award grades to students who are argumentative and who question conventional wisdom in the classroom and in assignments. This type of interactive pedagogy produces champion graduates who have a reputation for cutting-edge skills and knowledge in the job market compared to peers from second- or third-tier universities.

•The world’s best universities are known for involving their own alumni in governance and reforms. Top global universities are also super-smart financial managers. Many of them, especially the U.S. universities, have sophisticated alumni offices through which they raise funding, which can exceed the revenue from student tuition fees. By 2019, the total endowment of Harvard was worth $40 billion, which is made up of over 13,000 individual funds. Harvard invests this money in a variety of financial instruments and generates phenomenal income from it.

•Since the top Anglo-American universities go back centuries, it is arguable whether such type of elite institutions can be quickly and easily replicated outside the U.S. and the U.K. These big universities are products of historical circumstances which relied on private philanthropy, colonial plunder or governmental subsidies to reach the level they are at today.

The China example

•Still, a muscular push from the government of China with massive state funding has propelled Chinese universities into the top tiers in barely two decades. In the QS world rankings on overall basis, Tsinghua University is ranked number 16, Peking University is at 22, Fudan University is at 40, and Zhejiang University is at 54. This is a miraculous leap forward.

•In India, as the government is cash-strapped and lacks the kind of resources which the Chinese state deployed to pump-prime Chinese universities, our only viable path to world class universities are in the form of enlightened private philanthropy and borrowing best practices from established iconic universities.

•Avoiding politicisation, ideological rigidity and nepotism, and freeing our universities from excessive interference and over-regulation, are prerequisites for success. Most importantly, our universities must have the drive to excel and compete with Chinese or Western universities. Insularity and self-congratulatory frog-in-the-well attitudes have held us back for long.

•Ingrained mediocrity and laid-back culture which result in inadequate training of students in theories and methodologies have to be overcome. A nationalistic passion for India to be recognised as a top educational hub must underpin the strategies and activities of our universities.

•The government’s decision to identify 20 Institutes of Eminence (IOEs) which will get maximum autonomy from bureaucracy in order to climb up the world rankings is a step in the right direction. The selected IOEs must innovate with new degree programmes, expanded variety of faculty members and digital learning platforms.

•India has miles to go in higher education. Unlike in authoritarian and top-down China, there is little likelihood of a meteoric breakout of multiple Indian universities into the top 100 of the world at a rapid clip. India’s democratic and contested character renders change evolutionary and cumulative. Still, with long-term vision and selfless leadership, our universities can eventually make it.

📰 The ambit and the limits of ‘diaspora diplomacy’

It is necessary for New Delhi to look at the political choices of Indian migrants abroad through a more realistic lens

•Joint rallies by U.S. President Donald Trump and Prime Minister Narendra Modi in Ahmedabad last month and at Houston last September were unique for their concept and for their crowd sizes, but also for the promise they held out to the leaders themselves: of audiences that would blend support for Mr. Trump with that for Mr. Modi politically. As a result, speaking beyond bilateral relations, both leaders paid tribute to the three million people of Indian origin who are American citizens, who will vote in elections this year.

•In Ahmedabad, Mr. Trump referred to Indian Americans as “truly spectacular people”. In Houston, Mr. Modi said the 2016 election of Mr. Trump, who had used the slogan “Abki Baar Trump Sarkar” during his campaign, had “lit up millions of faces with joy”. Mr. Modi’s recall of the slogan sent a not-so-subtle message ahead of the upcoming U.S. presidential poll, where Mr. Trump is seeking re-election. The result of both rallies and the speeches was a heady concoction for both politicians, seeing the Indian diaspora not just as a part of India’s “soft power”, but a fully transferable political vote bank as well.

Pitching to both audiences

•Mr. Modi has also brought this dual effect into play in several diaspora rallies worldwide. At each of them, he has spoken of initiatives taken by his government for Indians, and also those for the diaspora, pitching to both audiences at one time. In Israel, for example, Mr. Modi spent much of his speech on talking about his agricultural programmes, which was meant for domestic audiences watching his speech on television, and then announced the start of a direct Air India flight to Tel Aviv, to big cheers from his live audience. The government has also frequently blurred the line between Indian expatriates and Persons of Indian Origin (PIO) in describing India’s strength abroad. In March 2017, the Ministry of External Affairs raised the issue of attacks on Indians strongly with the U.S. government, after three incidents of suspected hate crimes. Only one of the three was an Indian citizen, the rest were Americans of Indian extraction. This is an important distinction from the past.

Transferability of votes

•India has the world’s largest diaspora, about 17.5 million and receives the highest remittance of $78.6 billion from Indians living abroad (Global Migration Report 2020). Members of the diaspora, often seen as more “successful” and therefore more influential, can have a big impact on their relatives back home, and this makes for a potent combination for any politician. Mr. Modi’s joint rallies with former U.K. Prime Minister David Cameron, former Canadian Prime Minister Stephen Harper, Israeli Prime Minister Benjamin Netanyahu all included this promise, and saw those leaders make campaign pitches to the Indian community that Mr. Modi had gathered, even as Mr. Modi’s popularity with his voters back home benefited from their presence at his rallies.

•However, the promise of the diaspora’s dual power is based on certain faulty premises, and it is necessary and timely that the government re-analyses the benefits accrued from the diaspora’s political presence through a more realistic lens.

•To start with, the transferability of votes has not yet been proven conclusively. Six months after the April 2015 rally, Mr. Harper lost general elections in Canada. Mr. Cameron lost the referendum on Brexit and resigned seven months after the November 2015 rally, and Mr. Netanyahu has had to face re-elections after failing to secure a majority in any of the three polls that followed his July 2017 joint rally with Mr. Modi in Tel Aviv.

•One obvious reason is that the Indian community isn’t large enough to make a difference in the voting patterns in any of these countries. The second is that the population that comes out for the rallies doesn’t represent the entire diaspora. Take the case of U.K. general elections last December, where the Boris Johnson-led Conservative party sought to wrest the support of the traditionally Labour-leaning British-Indian community, and even featured Mr. Modi in its campaign advertisements. The results, which gave the Conservatives a massive win, didn’t however make the case for transfer of votes. A report on the 30 constituencies in the U.K. where ‘Asians’ (a majority of whom are of Indian origin) constitute more than a quarter of the voting population showed that Labour won 29 of the 30 seats, the same that it had also won in 2017 elections, and while its vote share dropped, that mirrored its average losses across the U.K.

•In the upcoming U.S. election, it remains to be seen whether the Trump outreaches at Houston and Ahmedabad bring in a haul of new Indian-American voters, but the statistics are daunting. In the 2016 election, 77% of Indian Americans voted for Hillary Clinton while just 16% voted for Mr. Trump.

•The second issue is that politically active members of the Indian diaspora don’t necessarily support the Indian government’s actions, and often, because they are of Indian origin, hold the government in New Delhi to higher standards than they do others. The U.S. House Foreign Affairs Committee Chairperson for Asia, Ami Bera, voiced his concerns quite plainly about Kashmir and the Citizenship (Amendment) Act (CAA) during a visit to India last month, for example, saying that the India that he “loved” was “democratic and secular”. The sponsor of the U.S. House resolution on Kashmir (HR745) Pramila Jayapal; co-chair of U.S. Presidential candidate Bernie Sanders’s campaign Ro Khanna; and former presidential contender Kamala Harris, have all been openly critical of the government’s actions. The conclusion for the government is that it cannot own only that part of the diaspora that supports its decisions, and must celebrate the fact that members of the Indian diaspora, from both sides of the political divide, are successful and influential.

Interest and ‘interference’

•Third, the government must ensure that its focus on the diaspora doesn’t become a factor in its bilateral relations. While it is perfectly legitimate and laudable to ensure the safety and well-being of Indian citizens in different parts of the world, as the Modi government has done, it must tread more lightly on issues that concern foreign citizens of Indian origin.

•Addressing the Lok Sabha in 1957, former Prime Minister Jawaharlal Nehru said about the diaspora, “We want to have no vested interests at the expense of the population of those countries…if they adopt the nationality of that country we have no concern with them. There may be sentimental concerns but politically they cease to be Indian nationals.” (A reply to debate on foreign policy in Lok Sabha; September 2, 1957).

•Subsequent governments have distanced themselves from this rather cold-blooded view and warmed up to the diaspora, but none have raised the concerns of the diaspora with foreign governments, on visas and other issues, like the present one has.

•The introduction of India’s internal politics into this equation is another new angle, one that led the British Foreign Office to remonstrate with India about interference last December. A tweet, subsequently deleted by an office bearer of the ruling Bharatiya Janata Party last month, that threatened to “play a role” in U.S. elections in response to criticism from Mr. Sanders, was also a troubling symptom of this. Politically affiliated Indian diaspora chapters are now also playing old India-Pakistan fault-lines amongst immigrants, which in the past were fuelled by Pakistani agencies. In California primaries this month, local “Hindu-American” groups protested against Democratic candidates like Ro Khanna for joining the Congressional Pakistan caucus and for criticising New Delhi’s actions. (Mr. Khanna won the primary).

•Finally, the government must consider the impact that policies conflating the PIOs with Indian citizens could have on the diaspora itself. Most immigrant Indian communities have been marked by their ability to assimilate into the countries they now live in. Much of that comes from a desire to be treated as equal citizens, not as immigrants, while a few also have bad memories of anti-immigrant sentiments in the 1960s and 1970s in Europe and the U.S., when they were targeted and accused of “divided loyalties”. Laying claim to their kinship and culture and taking pride in their success is one thing. It would be a mistake to lay claim to their politics, however.