📰 Pakistan to stay on FATF grey list till 2021
Proposal for on site inspection fails
•The Financial Action Task Force (FATF) on Friday decided to keep Pakistan on the “grey list” till the next review of its compliance with the recommendations made in February next year.
•“Pakistan has made progress across all action plan items and has now largely addressed 21 of 27 action items. As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan by February 2021,” said an FATF statement issued in Paris at the end of the Plenary session, on the decision to keep Pakistan in the list of “Jurisdictions under increased monitoring” or grey list.
•At the FATF Plenary, sources said, Turkey proposed that members should consider Pakistan's good work and instead of waiting for completion of the remaining six of the 27 parameters, an FATF on-site team should visit the country to finalise its assessment.
•On-site teams are permitted only after jurisdictions complete their Action Plans. Such visits would signal exit from the grey or black list. When the proposal was placed before the 38-member Plenary, no other member seconded the move. It was not supported even by China, Malaysia and Saudi Arabia, according to sources.
•The FATF finally decided to keep Pakistan in the “grey list”. Pakistan has now almost four months to comply with the recommendations as its performance will now be put to scrutiny in the next plenary in February 2021. The points on which Pakistan failed to deliver included inaction against charitable organisations or non-profit organisations linked to terror groups banned by the UNSC.
Remits first tranche to 16 States, 2 UTs
•Kicking off its borrowing plan to meet the GST compensation shortfalls faced by States, the Centre on Friday borrowed and transferred ₹6,000 crore to 16 States as well as the Union Territories of Delhi and J&K.
•The government indicated that it planned to release ₹6,000 crore every week to the States till the approved borrowings to meet the shortfall are met.
•At this rate, it could take about 13 weeks or about three months to complete the envisaged borrowing.
•As of now, 21 States had selected the Centre’s option to borrow ₹1.1 lakh crore out of the total ₹2.35 lakh crore GST compensation shortfall estimated for 2020-21.
•With seven States — including Kerala, West Bengal and Punjab — yet to convey their acceptance to the Centre’s proposed solution to meet the GST shortfalls, the Finance Ministry has so far granted permission to raise about ₹78,500 crore to meet the shortfall pertaining to 21 States.
‘No shortfall for 5 States’
•The Ministry on Friday said that five of these 21 States did not actually face any shortfalls in compensation receipts at this point.
•The approved borrowing limits for GST compensation shortfalls for five States —Arunachal Pradesh, Sikkim, Manipur, Mizoram and Nagaland — amount to just ₹739 crore.
•“Twenty one States and two UTs opted for this special window involving back-to-back borrowing coordinated by the Ministry of Finance. Out of these, five States did not have any shortfall on account of GST compensation,” the Ministry said, adding that the first tranche of borrowings was done on Friday and transferred to the remaining States and UTs.
•“The borrowing is at an interest rate of 5.19%. It is intended to make weekly releases of ₹6,000 crore to the States. Tenor of borrowing is expected to be broadly in the range of 3 to 5 years,” the Ministry said.
Repayment from cess
•The interest on these borrowings, as well as the principal, is to be repaid from future GST cess collections, with the GST Council extending the applicability of the cess levied on sin or luxury goods over and above the highest GST rate of 28%, beyond the original deadline of June 2022.
•Earlier this month, the Centre had released ₹20,000 crore to States from GST compensation cess collections garnered so far this year.
•The States that received the first tranche of borrowed funds on Friday include Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Tripura, Uttar Pradesh and Uttarakhand.
📰 India’s UN journey, from outlier to the high table
As a non-permanent UNSC member now, it needs to uphold the Charter principles in the backdrop of a turbulent world
•The 75th anniversary of the founding of the United Nations (UN) is an opportunity to look at the major trends, patterns and future challenges as far as India is concerned in terms of safeguarding its interests and promoting common good. That the UN is indispensable is uncontested despite the clamour for reforms to strengthen its role. As Prime Minister Jawaharlal Nehru once observed in his address to the UN General Assembly on December 20, 1956, “Of course, even if the United Nations did not do anything wonderful, the mere fact of the United Nations itself has been of great significance to the world....”
Membership and phases
•Seven and a half decades of India at the UN may be viewed with reference to roughly three distinct phases. In the first phase until the end of the Cold War in 1989, India had learnt the ropes of exploring and enhancing its diplomatic influence as a moderating force in easing armed conflicts in Asia and Africa by disentangling them from the superpower rivalry. In parallel, the Indian leadership learned the hard way that the UN could not be relied upon to impartially resolve vital security disputes such as Jammu and Kashmir.
•As such, it strove to utilise the UN only to focus on common causes such as anti-colonialism, anti-racism, nuclear disarmament, environment conservation and equitable economic development. India, in a clever way, seemed to claim the moral high ground by proposing, in 1988, a bold, but obviously impractical, three-phase plan to eliminate nuclear weapons from the surface of earth. But it resisted attempts by neighbouring countries to raise bilateral problems. This was reflected during the Bangladesh liberation war and after. In essence, a loss of face for India in the 1962 border war against China meant a definitive redesign of the country’s diplomatic style to privilege bilateral contacts over the third party role by the UN.
A demanding decade
•The 1990s spelled the most difficult decade for India in the world body, as the years were marked by the sudden end of the Cold War, the disintegration of the Soviet Union and the resultant emergence of the United States as the unrivalled power in world politics. Besides, the uncertain political climate caused by unstable coalition governments along with the balance of payments crisis constrained the country’s capability to be active in various bodies, especially in the Security Council (UNSC) and the General Assembly.
•There was a change in India’s foreign policy which was reflected in voting patterns at the UN. To cite a few examples, India showed pragmatism in enabling the toughest terms on Iraq even after eviction from occupied Kuwait, or in reversing the hitherto stated position on Zionism as racism. At the same time, growing militancy in Kashmir in the early 1990s emboldened Pakistan to internationalise the dispute with accusations about gross human rights violations by India. Clearly, India had to work hard to seek favours from Iran and China in the Human Rights Commission to checkmate Pakistan.
•The threat posed to respect for sovereignty principle by NATO intervention against Yugoslavia in 1999 without the authorisation of the UNSC deeply disturbed India, but its efforts, in partnership with Russia and China, to call for an end to aerial attacks did not garner much support in the UNSC. Further, the extent of India’s diplomatic difficulties was exposed when it suffered a humiliating defeat in the hands of Japan in the 1996 contest for a non-permanent seat in the UNSC.
•This, however, did not mean that India could not draw red lines on questions of serious consequences to its security. India resolutely stood against indefinite extension of the Non-Proliferation Treaty in 1995, and it stoutly rejected the backdoor introduction for adoption of the Comprehensive Test Ban Treaty in 1996. It is notable that these two developments at the UN perhaps pushed India to surprise the world in 1998 with its Pokhran nuclear weapon tests, ignoring the likely adverse reaction from the nuclear club.
Winds of change
•Remarkably, the 21st century opened new avenues for India to shine at the UN. The impressive economic performance in the first decade, thanks to economic liberalisation and globalisation policies, helped a great deal in strengthening its profile. This is only aided by its reliable and substantial troop contributions to several peacekeeping operations in African conflict theatres. Alongside, India has emerged as a responsible stakeholder in non-traditional security issue areas such as the spread of small and light weapons, the threat of non-state actors acquiring weapons of mass destruction, and the impact of climate change. In a related dimension, India has scaled up its contributions to development and humanitarian agencies, while India’s share to the UN assessed budget has registered a hike from 0.34% to 0.83%.
•Finally, India’s growing popularity is evident in the successful electoral contests for various prestigious slots in the UNSC, the Human Rights Council, the World Court, and functional commissions of the Economic and Social Council, at times defeating the nominees of China and the United Kingdom. However, two major initiatives India has heavily invested in are stuck without much hope of a timely outcome. The first relates to the draft Comprehensive Convention on International Terrorism it drafted and revised with the hope of helping consensus. But it encountered reservations from among Islamic and other countries on provisions regarding definition of terrorist and the convention’s application to state armed forces.
Security Council expansion
•Equally important is the question of equitable expansion of the UNSC to enable India to attain permanent membership along with other claimants from Asia, Africa and Latin America. The move has been stuck for more than 25 years because of a lack of unity among the regional formations. It also includes stout opposition from some 30 middle powers such as Italy and Pakistan which fear losing out to regional rivals in the event of an addition of permanent seats, and the intrigues masterminded by one or two permanent members. Although India enjoys by far the greatest support,the only realistic possibility seems to settle for a compromise, i.e. a new category of members elected for a longer duration than the present non-permanent members without veto power.
•India’s future role will probably depend on its ability to weather the impact of the multiple crises it now faces on account of an unabated economic slowdown and a troubled relationship with China. This is pertinent as India will soon begin its two-year term as a non-permanent UNSC member (January 1, 2021). Its areas of priority will continue to be the upholding of Charter principles, mounting effective punitive measures against those who support, finance and sponsor terrorists, besides striving for securing due say to the troop contributing countries in the management of peace operations. It is reasonable to assume (based on earlier patterns) that India will work for and join in consensus on key questions wherever possible. But it may opt to abstain along with other members including one or two permanent members.
Once in the seat
•In the midst of the currently volatile situation as characterised by the Trump administration’s disdain towards multilateral institutions, the changing U.S.-China equation, China’s growing political isolation on account of the spread of the novel coronavirus, and China’s aggressive territorial forays in eastern Ladakh and the South China Sea, India may face challenges and opportunities in the UNSC. In an unlikely scenario of China succeeding in convening a formal meeting on Kashmir to please Pakistan, India may have to choose either to abstain in the vote since it is a party to the dispute or vote against any unfavourable proposal that might be tabled. Exercising the latter option would be the first of its kind in India’s voting record at the UNSC. On the other hand, the growing proximity with the U.S. may prompt India not to stay neutral in order to counter balance China.
