The HINDU Notes – 12th January 2022 - VISION

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Wednesday, January 12, 2022

The HINDU Notes – 12th January 2022


📰 India’s passport rank improves to 83 from 90

The current rankings are for first quarter of 2022 and India shares the position with Sao Tome and Principe in Central Africa, behind Rwanda and Uganda.

•India’s passport power has improved this quarter compared to 2021. It now ranks at 83rd position in the Henley Passport Index, climbing seven places from 90th rank last year. However, in 2020, its rank stood at 84 while in 2016, India was ranked 85th along with Mali and Uzbekistan. Japan and Singapore top the index.

•The current rankings are for first quarter of 2022 and India shares the position with Sao Tome and Principe in Central Africa, behind Rwanda and Uganda.

•Since 2005, Henley Passport Index ranks world’s passports according to the number of destinations their holders can access without prior visa and is based on data from International Air Transport Association (IATA).

•India now has visa-free access to 60 destinations worldwide with Oman and Armenia being the latest additions. India has added 35 more destinations since 2006.

•A statement by Henley and Partners said that in 2006 an individual could, on average, visit 57 countries visa-free. “Today, that number has risen to 107, but this overall increase marks a growing disparity between countries in the global north and those in the global south, with nationals from countries such as Sweden and the US able to visit more than 180 destinations visa-free, while passport holders from Angola, Cameroon, and Laos can only enter about 50,” the statement said .

📰 Extending GST compensation as a reform catalyst

The transition to GST is still in progress and an extension will provide comfort to States to help roll out crucial changes

•It has been claimed that the implementation of the Goods and Services Tax (GST) in India was a grand experiment in cooperative federalism in which both the Union and the States joined hands to rationalise cascading domestic trade taxes and evolve a value-added tax on goods and services. Although the rate structure was presumed to be revenue neutral, the States agreed to forgo their revenue autonomy in favour of tax harmonisation. This was in the hope that it would turn out to be a money machine in the medium term due to improved compliance arising from the self-policing nature of the tax.

The calculation

•To allay the fears of States of possible revenue loss by implementing GST in the short term, the Union government promised to pay compensation for any loss of revenue in the evolutionary phase of five years. The compensation was to be calculated as the shortfall in actual revenue collections in GST from the revenue the States would have got from the taxes merged in the GST. This was estimated by taking the revenue from the merged taxes in 2015-16 as the base and applying the growth rate of 14% every year. To finance the compensation requirements, a GST compensation cess was levied on certain items such as tobacco products, automobiles, coal and solid fuels manufactured from lignite, pan masala and aerated waters.

•Unfortunately, the compensation saga was not without controversy. In the first two years of its implementation, the amount of compensation to be paid to the States was modest and the compensation cess was sufficient to meet the requirements. In fact, the cess collections exceeded the compensation requirements by ₹21,466 crore in 2017-18 and ₹25,806 crore in 2018-19.

Reason for mistrust

•In 2018-19, the shortfall in the payment requirement from the cess collections was ₹24,947 crore which could be met from the surpluses of the previous two years kept as balance in the compensation fund. However, in 2020-21, due to the most severe lockdown following the novel coronavirus pandemic, the loss of revenue to States was estimated at ₹3 lakh-crore of which ₹65,000 crore was expected to accrue from the compensation cess. Of the remaining ₹2.35 lakh-crore, the Union government decided to pay ₹1.1 lakh-crore by borrowing from the Reserve Bank of India under a special window and the interest and repayment were to be paid from the collections from compensation cess in the future. However, the entire compensation payment episode plunged the Union-State relationship to a new low, creating humongous mistrust.

•The agreement to pay compensation for the loss of revenue was for a period of five years which will come to an end by June 2022; and considering the uncertainty in revenue collections faced by the States, they are keen that the compensation scheme should continue for another five years.

Core issues

•Although it was hoped that the tax structure would stabilise in the first five years, the reform is still in transition.

•First, the technology platform could not be firmed up for a long time due to which the initially planned returns could not be filed. This led to large-scale misuse of input tax credit using fake invoices. The adverse impact on revenue collections due to this was compounded by the pandemic-induced lockdowns.

•Second, this is the only major source of revenue for the States and considering their increased spending commitments to protect the lives and livelihoods of people, they would like to mitigate revenue uncertainty to the extent they can. They have no means to cushion this uncertainty for the Finance Commission which is supposed to take into account the States’ capacities and needs in its recommendations has already submitted its recommendations; the next Commission’s recommendations will be available only in 2026-27. More importantly, the structure of GST needs significant changes and the cooperation of States is necessary to carry out the required reforms.

A case for amendments

•It is very well acknowledged that the structure of GST requires significant reforms. Notably, almost 50% of the consumption items included in the consumer price index are in the exemption list; broadening the base of the tax requires significant pruning of these items.

•Second, sooner or later, it is necessary to bring petroleum products, real estate, alcohol for human consumption and electricity into the GST fold.

•Third, the present structure is far too complicated with four main rates (5%, 12%, 18% and 28%). This is in addition to special rates on precious and semi-precious stones and metals and cess on ‘demerit’ and luxury items at rates varying from 15% to 96% of the tax rate applicable which have complicated the tax enormously. Multiple rates complicate the tax system, cause administrative and compliance problems, create inverted duty structure and lead to classification disputes. Reforming the structure to unify the rates is imperative and this cannot be done without the cooperation of States. They would be unwilling to agree to rationalise rates unless the compensation payment for the revenue loss is continued.

•Thus, extending the compensation payment for the loss of revenue for the next five years is necessary not only because the transition to GST is still underway but also to provide comfort to States to partake in the reform. GST is the most important source of revenue to States and any revenue uncertainty from that source will have a severe adverse effect on public service delivery.

•Similarly, reforming the structure to complete the process of transition to a reasonably well-structured GST is important not only to enhance the buoyancy of the tax in the medium term but also to reduce administrative and compliance costs to improve ease of doing business and minimise distortions. It has been pointed out by many including the Fifteenth Finance Commission that the compensation scheme of applying 14% growth on the base year revenue provided for the first five years was far too generous. The issue can be revisited and the rate of growth of reference revenue for calculating compensation can be linked to the growth of GSDP in States to ensure the comfort of minimum certainty on the revenue. This will incentivise them to accomplish the reform in the true spirit of cooperative federalism.

📰 Hate speech in the time of free speech

It is important that specific and durable legislative provisions be enacted to combat hate speech

•The rising frequency of hate speech in India has not gone unnoticed. The Supreme Court has agreed to hear a petition on the events organised by the Hindu Yuva Vahini in Delhi and by Yati Narsinghanand in Haridwar on December 17 and 19, 2021, respectively, wherein calls to violence were made against Muslims. But the laws dealing with hate speech are ineffective and deficient. So, the Supreme Court has been asked to review hate speech laws and various High Courts have been called upon to provide interpretation of ingredients of hate speech. The lack of clear legislative guidance has meant that we are seeing discordant judicial outcomes. Nevertheless, this growing incidence of hate speeches, especially those targeting minorities, in combination with the judicial ambiguity has provided an opportunity to chart legislative reforms.

Criminalising hate speech

•Hate speech is neither defined in the Indian legal framework nor can it be easily reduced to a standard definition due to the myriad forms it can take. Black’s Law Dictionary has defined it as “speech that carries no meaning other than the expression of hatred for some group, such as a particular race, especially in circumstances in which the communication is likely to provoke violence.” Building on this, the Supreme Court, in Pravasi Bhalai Sangathan v. Union of India (2014), described hate speech as “an effort to marginalise individuals based on their membership in a group” and one that “seeks to delegitimise group members in the eyes of the majority, reducing their social standing and acceptance within society.”

•The current legislative set-up has several provisions to criminalise offences which can be characterised as hate speech. The High Court of Karnataka, in Campaign Against Hate Speech v. The State of Karnataka (2020), was of the opinion that the Indian Penal Code illegalises speeches that are intended to promote enmity or prejudice the maintenance of harmony between different classes. Specifically, sections of the IPC, such as 153A, which penalises promotion of enmity between different groups; 153B, which punishes imputations, assertions prejudicial to national integration; 505, which punishes rumours and news intended to promote communal enmity, and 295A, which criminalises insults to the religious beliefs of a class by words with deliberate or malicious intention, contribute to combating hate speeches. The Supreme Court has upheld the view that the objective behind such provisions is to “check fissiparous communal and separatist tendencies and secure fraternity so as to ensure the dignity of the individual and the unity of the nation”.

•The Supreme Court, in State of Karnataka v. Praveen Bhai Thogadia (2004), emphasised the need to sustain communal harmony to ensure the welfare of the people. In the Pravasi Bhalai Sangathan case, the Supreme Court underlined the impact hate speech can have on the targeted group’s ability to respond and how it can be a stimulus to further attacks.

•The Madras High Court has on several instances dealt with the issue of hate speech, characterising it as small spark capable of merely lighting a lamp to destroying a forest. In G. Thirumurugan Gandhi v. State (2019), the Madras High Court explained that hate speeches cause discord between classes and that responsibility attached to free speech should not be forgotten. Summing up these legal principles, in Amish Devgan v. Union of India (2020), the Supreme Court held that “hate speech has no redeeming or legitimate purpose other than hatred towards a particular group”.

•Despite judicial guidance from the Amish Devgan case, uncertainty around interpretation of hate speech has resulted in the adoption of varying standards. The Madras High Court, in Maridhas v. State (2021), quashed an FIR alleging hate speech involving targeting of minorities by holding that the ‘YouTuber’ is entitled to protection under Article 19(1)(a) of the Constitution and distinguished this case from the application of the ‘Who? What? Where? test’ laid down in the Amish Devgan case. Per contra, the Madras High Court, in the case of Fr. P. George Ponnaiah v. Inspector of Police (2022), gave no relief to the petitioner by holding him to be a person of influence. By doing so, the High Court has failed to appreciate that a YouTuber with more than 4 lakh subscribers and a periodic record of publishing motivated content would have more influence than a priest with a limited audience from an isolated incident. It is trite that statements made by ‘persons with influence’ having the mere likelihood of breach of peace have to be construed to constitute hate speech.

•Unfortunately, divergent decisions from constitutional courts expose the lack of established legal standards in defining hate speech, especially those propagated via the digital medium.

Policy prescriptions

•The Law Commission of India, in its 267th report, recommended the insertion of two new provisions to criminalise and punish the propagation of hate speech: Section 153C and Section 505A of IPC. Section 153C was drafted to cover an offence committed when any person uses threatening words which are intended to cause fear, or commends hatred for the purpose of inducing violence through words, spoken or written, visible representation or signs on the grounds of race, caste, religion, sex, gender identity and other characteristics. Section 505A was to include provisions penalising causing of fear, alarm, or provocation of violence. Furthermore, the 189th Report of the Parliamentary Standing Committee on Home Affairs, in 2015, recommended the incorporation of separate and specific provisions in the Information Technology Act to deal with online hate speech. None of the recommendations have been acted upon and this has partly given rise to ambiguity in construing hate speech by various constitutional courts.

•Much of the existing penal provisions deal with hate speech belong to the pre-Internet era. The need of the hour is specialised legislation that will govern hate speech propagated via the Internet and, especially, social media. Reference can be drawn to the Australian federal law called the Criminal Code Amendment Act, 2019, which imposes liability upon Internet service providers if such persons are aware that any abhorrent violent material, which is defined to include material that a reasonable man would regard as offensive, is accessible through the service provided by them.

•Action commonly taken against modern-day hate speeches have a whack-a-mole effect wherein the underlying objective of inciting communal disharmony or hatred, despite the detention of the offender, survives through digital or social media platforms for eternity. Thus, taking cue from best international standards, it is important that specific and durable legislative provisions that combat hate speech, especially that which is propagated online and through social media, is enacted by amending the IPC and the Information Technology Act. Ultimately, this would be possible only when hate speech is recognised as a reasonable restriction to free speech.

📰 Treating the planet well can aid progress

An integrated perspective is necessary as social and environmental problems cannot be addressed in isolation anymore

•The 2020 Human Development Report of the United Nations Development Programme (UNDP), titled The Next Frontier – Human Development and the Anthropocene proposed a planetary pressure-adjusted Human Development Index (HDI). Ever since the UNDP took up computation of the HDI driven by the vision of Mahbub ul Haq and articulated by Amartya Sen in 1990, there have been adjustments such as inequality-adjusted HDI. Besides, there was computation of several other indices such as Gender Development Index, Gender Inequality Index, and Multidimensional Poverty Index to flag the issues that warranted the attention of policymakers.

Human-induced change

•The environment is one such issue now considered to be an essential component to be factored in to measure human development. The concept of the planetary boundary was introduced by a group of scientists across the world, led by J. Rockström of the Stockholm Resilience Centre in 2009. This was to highlight that human-induced environmental change can irrevocably destabilise the long-term dynamics of the earth system, thereby disrupting the life-supporting system of the planet. Both global and local evidence indicate that biodiversity loss, climate change, land system/land-use change, disruption of biogeochemical cycles, and scarcity of freshwater availability are a threat and increase the vulnerability of society. The purpose of the planetary pressure adjusted HDI, or PHDI, is to communicate to the larger society the risk involved in continuing with existing practices in our resource use and environmental management, and the retarding effect that environmental stress can perpetuate on development.

Impact on country rankings

•When planetary pressure is adjusted, the world average of HDI in 2019 came down from 0.737 to 0.683. This adjustment has been worked out by factoring per capita carbon dioxide (CO2) emission (production), and per capita material footprint. The average per capita global CO2 emission (production) is 4.6 tonnes and the per capita material footprint is 12.3 tonnes.

•The global ranking of several countries was altered, in a positive and negative sense, with adjustment of planetary pressure. Switzerland is the only country in the group of high human development countries whose world rank has not changed with adjustment of planetary pressure, although the HDI value of 0.955 has come down to 0.825 after the necessary adjustment. Among 66 very high human development countries, 30 countries recorded a fall in rank values ranging from minus 1 for Germany and Montenegro to minus 131 for Luxembourg. It succinctly brings out the nature of planetary pressure generated by the developed countries and indirectly indicates their responsibility in combating the situation.

•In the case of India, the PHDI is 0.626 against an HDI of 0.645 with an average per capita CO2 emission (production) and material footprints of 2.0 tonnes and 4.6 tonnes, respectively. India gained in global rankings by eight points (131st rank under HDI and 123rd rank under PHDI), and its per capita carbon emission (production) and material footprint are well below the global average.

Challenges in India, SDGs

•Nevertheless, India’s natural resource use is far from efficient, environmental problems are growing, and the onslaught on nature goes on unabated with little concern about its fallout — as evident from a number of ongoing and proposed projects. At the same time, India has 27.9% people under the Multidimensional Poverty Index ranging from 1.10% in Kerala to 52.50% in Bihar, and a sizable section of them directly depend on natural resources for their sustenance. Kerala has an exemplary achievement in human development with an HDI value of 0.775, well above the all-India average. However, on the environmental front there are several challenges which warrant concrete actions; otherwise, the gains of human development may not be sustained.

•The twin challenges of poverty alleviation and environmental safeguarding that former Prime Minister Indira Gandhi first articulated in her lecture during the Stockholm conference on the human environment in 1972 still remain unattended. Fifty years have passed. There is little change in the scenario. In fact, the situation is much more complex now.

•Since the Stockholm conference was held, there have been several summits and initiatives by the United Nations, the latest being the adoption of 17 Sustainable Development Goals (SDG) with a specific target to meet by 2030. The SDGs have acquired high priority in the context of the issue of climate change and its impact on society. Human-induced climate change has emerged as an important issue of global deliberations. The Sixth Assessment Report (AR6) of the Intergovernmental Panel on Climate Change (IPCC) 2021 laid stress on limiting global temperature rise at the 1.5° C level and strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. This was reaffirmed in the Conference of Parties (COP) 26 at Glasgow in 2021.

•‘No poverty’ and ‘Zero hunger’ are the first and second SDGs. According to NITI Aayog (2020-21), out of 100 points set for the grade of Achiever, India scored 60 (Performer grade, score 50-64) for no poverty and 47 (Aspirant grade, score 0-49) for zero hunger, with wide State-level variations. India’s score in the SDGs of 8, 9, and 12 (‘Decent work and economic growth’; ‘Industry, Innovation and Infrastructure’ and ‘Responsible Consumption and Production’, respectively) — considered for working out planetary pressure — are 61 (performer), 55 (performer) and 74 (front runner), respectively.

Better awareness now

•There are wide gaps in managing the environment. The Chipko movement (1973) in Uttarakhand and the Silent Valley movement (the late 1970s) in Kerala are two of the most well-known modern-day people’s movements for environmental protection in India that inspired several other environmental movements during the last five decades. Subsequently, there is now widespread awareness about the environment and several initiatives both at the level of the government and the community.

•However, standalone environmental safeguarding actions are not sufficient to navigate the Anthropocene (the “unofficial unit of geologic time to describe the most recent period in earth’s history when human activity started to have a significant impact on the planet’s climate and ecosystems”). It is now well established that there are interdependencies of earth system processes including social processes, and their relationships are non-linear and dialectic. Therefore, the central challenge is to nest human development including social and economic systems into the ecosystem, and biosphere building on a systematic approach to nature-based solutions that put people at the core.

Local level involvement

•It is now essential to consider people and the planet as being a part of an interconnected social-ecological system. Social and environmental problems cannot be addressed in isolation anymore; an integrated perspective is necessary. This can be conceived and addressed at the local level, for which India has constitutional provisions in the form of the 73rd and 74th Amendments.

•The remarkable advances in earth system science and sustainability research along with enabling technology of remote sensing and geographic information system have helped to document and explain the impact of human activities at the ground level and stimulate new interdisciplinary work encompassing the natural and social sciences. They also provide insights into how to mitigate these impacts and improve life. What is required is a reorientation of the planning process, adoption of a decentralised approach, a plan for proper institutional arrangements, and steps to enable political decisions.