Selected Articles from Various Newspapers & Journals
Drowned by State Failure
The boat disaster in the Ganga on Makar Sankranti day that
killed at least 24 people is another reminder that safety in public transport
remains a low priority for governments. As with road accidents, mishaps in the
inland waterways and lakes take a terrible toll of lives regularly, with no
effective administrative response. In the Ganga Diara tragedy near Patna, a
large number of people had apparently crammed themselves into a small vessel for
a free ride after witnessing a kite festival. The relief offered to the kin of
the dead and injured both by the Centre and the Bihar government should not,
however, obscure the fact that the loss of life was entirely the result of
official failures. This was obviously the result of serious neglect of safety
norms for which accountability must be fixed. It is essential that a judicial
commission be constituted to inquire into the incident, to determine whether the
laws on transport using inland waterways are being implemented and to issue
directions for the future. The country boat involved appears not to have used
its engine at the time of the accident, but the absence of safety training for
operators is painfully evident.
The Centre, which talks of a paradigm shift in freight and
passenger transport using inland waterways, should respond to the shameful
national record on boat safety by firmly implementing existing laws and
introducing new measures along with the States. Just last year it expanded the
National Waterways programme and notified several stretches of rivers and canals
for a new deal for inland water transport. Under the amendments to the
colonial-era Inland Vessels Act made in 2007 - which is to be further modernised
- it is incumbent on the States to apply some provisions of the Motor Vehicles
Act to accidents, compensation and insurance against third-party risks for
powered boats. Just as in the case of motor vehicles, registration of inland
vessels other than small personal non-powered craft must be made mandatory. This
will help enforce construction standards, subsidy for transport boats, passenger
insurance and accident compensation. In the latest tragedy, the problem also
appears to have been inadequate supply, which forced people to pack themselves
into the available boats. If this is true, the Bihar government must own full
responsibility and prevent a recurrence. The heart-rending spectacle of children
and their kin perishing on what should have been a day of celebration must stir
the conscience of governments whose duty it is to provide safe and adequate
public transport, and one at which they fail badly.
Vagaries of the job market
The mismatch between the number of people who annually reach
working age and the availability of jobs has been a matter of constant concern
globally during the better part of the period since the global financial crisis
of the last decade. The International Labour Organisation's latest forecast that
a few more millions are set to join the pool of the jobless during this year and
the next, is in line with its own previous estimates. In any case, with the
growth in global gross domestic product registering a six-year low in 2016,
expectations of generation of new jobs were always going to be low. But a
no-less-serious concern in the 'World Employment and Social Outlook 2017'
pertains to the stubborn challenge of reducing the extent of vulnerability that
currently affects about 42 per cent of the total working population. This
concern refers to lack of access to contributory social protection schemes among
the self-employed and allied categories, unlike their counterparts in the
wage-earning and salaried classes. The former segment accounts for nearly 50 per
cent of workers in the emerging economies and 80 per cent in developing
countries. The hardships faced by these 1.4 billion working people will become
more apparent when seen in the backdrop of either the absence of strong welfare
legislation or its effective enforcement in a majority of these countries. It is
no surprise that besides Sub-Saharan Africa, South Asia has been the most
affected by such volatile conditions.
To be sure, the overall share of these vulnerable workers
dropped from 46 per cent of total employment in 2015 to 42 per cent in 2016. But
the latest report projects only a mere 0.2 percentage point rate of reduction
through 2017-18. In comparison, it says the proportion of the population in jobs
characterised by vulnerability declined by an average annual rate of 0.5
percentage points in the previous decade. As a result of the relatively slow
reversal rates in more recent years, these numbers are projected to increase
globally by 11 million a year. The other implication of an increase in the
number of people facing vulnerable working conditions is the real danger this
poses of a slowdown in reducing the incidence of working poverty. It is this
celebrated rise in income levels in the lowest rungs of the population that lent
the current phase of globalisation the social and political legitimacy, a phase
that has otherwise posed the risks of economic dislocation and unprecedented
mass migration. The challenge for policymakers worldwide is to ensure that
incomes do not fall below the levels of basic subsistence as the world marches
towards the poverty reduction targets under the 2030 Sustainable Development
The pragmatist's pivot to India
The death of Akbar Hashemi Rafsanjani on January 8 was a
landmark for the Islamic Republic of Iran. Rafsanjani was a pivotal figure in
the country's path since the 1979 revolution: a founding father, a military
leader in the war with Iraq, and twice President. More parochially, his
presidency also saw a historic shift in ties with India, laying the groundwork
for the cooperation that has unfolded, haltingly, over the past 20 years.
It was Rafsanjani who warned that Mahmoud Ahmadinejad's victory in 2009 would
bring "Islamic fascism", blamed the Bashar al-Assad regime for the use of
chemical weapons in 2013, and supported Hassan Rouhani's successful bid for the
presidency that same year. He was pushed to the margins of politics, had two of
his children jailed, and was blocked from returning to the presidency himself.
And so the mourners thronging the streets of the capital last Tuesday - never a
comfortable sight for the regime - included the rare sight of supporters of the
Green Movement, crushed by force in 2009, and vocal critics of Russia, alongside
which Iran is fighting in Syria.
Rafsanjani's flexibility also played a role in the evolution
of Iran's ties with India. In the early 1990s, the situation was delicate. In
September 1993, P.V. Narasimha Rao became the first Indian Prime Minister to
visit Iran since the revolution. This, President Rafsanjani noted, was "a
turning point". In March 1994, Iran bailed out India in the UN Commission on
Human Rights, blocking a consensus on Kashmir. Five months later, in August,
this bonhomie was interrupted.
Mr. Rouhani, then secretary of Iran's powerful Supreme
National Security Council and deputy speaker of parliament, paid a visit to
India. Iran's now-President spoke his mind: on the "persecution" of minorities,
on the Babri Masjid, and on the importance of India-Pakistan talks, including
"true" representatives of Kashmiris, such as the Hurriyat Conference, to resolve
the conflict in the Valley. This "unfortunate departure from diplomatic norms",
as one Indian newspaper put it at the time, cast a pall over relations. Worse
still, in October, Rafsanjani cancelled his own visit, concerned at being
associated too closely with India while the then Organization of the Islamic
Conference (OIC) was preparing once more to censure India on Kashmir. The snub
was taken badly in India.
In substantive terms, Rafsanjani signed a three-way
India-Iran-Turkmenistan transit agreement, allowing India to avoid Russian or
Ukrainian ports. He also urged a Tehran-Delhi-Beijing axis - his proposal,
sandwiched between India's 1993 and 1996 border agreements with China, was
perhaps less quixotic than it looks today. Indian officials, in turn, batted
away American criticism of Iran, going so far as to mock then U.S. Treasury
Secretary Robert Rubin for complaining that his trip to Delhi had coincided with
Rafsanjani's. India's warm welcome to both was itself a foreshadowing of what, a
decade later, would come to be called multi-alignment.
Economic diplomacy has only grown in importance, as a rising India has looked to
Central Asia and Iran has emerged from the sanctions straightjacket. This
explains last May's historic agreement over the Chabahar port, even if Iran is
considerably more relaxed than India about Gwadar, China's regional
infrastructure plans, and the Chinese navy's presence in the Indian Ocean. Last
year, India's oil imports from Iran trebled from the previous year, pushing it
into fourth place in the ranking of Indian suppliers, and there is pressure on
the Reserve Bank of India to allow Iranian banks to open branches in India,
which would boost the relatively modest amount of bilateral trade.
Afghanistan is a more complicated story, with Tehran now
openly flirting with parts of the Taliban even as Delhi and Kabul draw closer
together. Recall that Taliban leader Mullah Akhtar Mansour's death in a U.S.
drone strike in May 2016 came as he was returning to Balochistan from Iran,
possibly after a long stay. Although Taliban delegations have been coming to
Iran for years, they attended December's International Islamic Unity Conference
in Tehran with no semblance of secrecy.
As for the Tehran-Washington balancing act, this has eased in
recent years as the Obama administration in the U.S. has taken a softer
approach. With Boeing and Airbus queuing up to sell to Iran, it's easier for
India to do so. But Donald Trump will assume the presidency in three days,
surrounded by congenital Iran hawks such as National Security Advisor Michael
Flynn, Defence Secretary James Mattis, and CIA Director Mike Pompeo. Within the
past few days, President-elect Trump has repeated, to a British newspaper, his
view that Barack Obama's nuclear deal with Iran is "one of the worst deals ever
made". He will not rip it up on Inauguration Day. Neither Europe nor Mr. Trump's
apparent hero, Russian President Vladimir Putin, would agree to a reimposition
of sanctions. But with Mr. Rouhani seeking re-election this year, and hardliners
breathing down his neck, it's not difficult to imagine a spiral of U.S. and
Iranian steps that leads to its unravelling. Will the self-styled arch-dealmaker
demand that American support to India on Pakistan require a quid pro quo from
India on Iran?
A wake-up call
A flurry of videos has emerged in the social media in recent
days showing jawans of both the paramilitary forces and the Army complaining
against a host of issues from diet to colonial-era practices. While these are
disciplinary breaches, they are a good reason to initiate a detailed study into
the internal health of our security establishment. The present lot of videos
began early last week when BSF constable Tej Bahadur Yadav posted a series of
them complaining about burnt parathas and watery lentil curry served along the
Line of Control. It was almost as if he was opening the floodgates. From the
Army, Lance Naik Yagya Pratap Singh of 42 Infantry Brigade expressed his
grievances against the sahayak system. He alleged that professional soldiers
were being forced to wash clothes, polish boots and walk dogs for senior
officers, and that he was being victimised with court martial proceedings for
complaining against the practice. Nursing Assistant Naik Ram Bhagat of the Army
complained in another video about their rations, that they were only getting
about 40 per cent of the menu items allotted. He also complained about the buddy
system in the Army, in which soldiers are deputed to be with officers and end up
doing their personal chores. Yet another video of an Army jawan showed him
singing about the difficulties they face and discrimination by officers. He
spoke about leave being denied for 10 months, poor food and other issues.
The videos quickly grabbed national attention. From the Prime
Minister's Office to the Army chief, the senior leadership has been quick to
respond. Both the PMO and Home Minister Rajnath Singh sought an immediate report
from the paramilitary forces, while Chief of the Army Staff General Bipin Rawat
ordered the provision of grievance and redress boxes. However, many of the
responses, especially from the middle- and senior-rung leadership of the Army
and the paramilitary forces, spelt almost outright denial. Without doubt the
videos are serious disciplinary breaches, and they must be viewed keeping in
mind the possibilities of such rampant access and use of social media ending up
assisting the enemy. The resort to social media to air grievances could
compromise national security, especially when the forces are in sensitive
locations. But that should not take the attention away from the larger malaise
reflected in them, and it is in tackling them that the senior leadership, both
in the executive and the security establishment, must spend time now. The videos
are a wake-up call.
In the nick of time
The Goods and Services Tax Council has made some
breakthroughs on outstanding negotiables that were holding up the introduction
of the indirect tax regime. A compromise has been reached between the Centre and
the States on the formula for administrative control over taxpayers under the
GST, which will subsume myriad existing State and Central levies on commercial
activity. By giving up on its formula to split such control by assuming the
authority to levy GST on all services entities and manufacturing firms with Rs.
1.5 crore or more annual turnover, the Centre has shown a willingness to meet
the States more than halfway. The new control-sharing system appears simpler to
administer. Now, 90 per cent of all GST assessees with a turnover of up to Rs.
1.5 crore will come under the watch of the States and 10 per cent under that of
the Centre, with both getting to assess half of the firms with a turnover over
Rs. 1.5 crore. More important, it gives States, many of which had claimed at
recent GST Council meetings revenue losses following the demonetisation of
currency notes, the leeway to claim that they have struck a better deal with the
Centre on a reform that is now inevitable.
With the Centre finally laying to rest its hopes of an April
1, 2017 rollout and eyeing a 'more realistic' July 1 date, it has some room to
tinker with a few indirect taxes in the Budget to provide a short-term pre-GST
stimulus to the economy that is facing a flurry of growth downgrade projections.
Since the trickiest issues between the Centre and the States are now resolved
and only legislative drafts remain to be approved when the Council meets next on
February 18, it is an opportune time to address some of the concerns raised by
another key stakeholder - industry. Firms have indicated they would need about
six months to gear up for the new tax regime once the laws, rules and all the
minutiae of implementation, including the rates for different products and
services, are known. More clarity and finesse are also needed on the harsh penal
provisions, including the power to arrest, proposed in the draft GST law (that
lists out 21 offences) and the creation of an anti-profiteering authority that
can act against firms that fail to pass on benefits of tax rate cuts to
consumers. While it is important to protect the consumer, a clear rule-based
framework is necessary to ensure that one of the biggest gains envisaged from
GST - an exponential change in ease of doing business - isn't scuttled by fears
of a return to inspector raj. For a government committed to ending tax
terrorism, taking a step back to meticulously review the possible gaps between
intent and implementation may be worthwhile - even if it means delaying the
launch by a few fortnights.
The real meaning of independence for RBI
The demonetisation decision has led several observers to
express concern about the autonomy and institutional integrity of the Reserve
Bank of India (RBI). Many of those against demonetisation on a matter of
principle (or practice) are blaming the RBI for 'caving in' to the government's
diktat and surrendering its independence. But in holding that view, they are
betraying a great deal of misunderstanding about precisely what autonomy for the
RBI entails. The RBI is not a self-governing Republic.
A cursory reading of the RBI Act (Section 7 on Management)
lays out things quite unambiguously. Part (1) of Section 7 states: "The Central
Government may from time to time give such directions to the Bank as it may,
after consultation with the Governor of the Bank, consider necessary in the
public interest." Parts (2) and (3) spell out the roles for the Central Board
and Governor. There is a clear 'seniority' principle with (1) taking precedence
over (2) which takes precedence over (3).
Unsurprisingly, the decision to demonetise high-denomination
currency was taken by the government in public interest after consultation with
the RBI. Whether the government or the RBI issued the first memo on the matter
is just squabbling over the irrelevant. The RBI Board did its duty by
ratifying/recommending the action and it was then left to the Governor and his
officers to implement the decision. Any other sequence of events would be
disturbing. Surely, the RBI could not take a policy decision as major as
demonetisation unilaterally. Nor indeed could it turn it down unilaterally.
The central goal of central bank independence was to ensure
low and stable inflation via the autonomous conduct of monetary policy. It is
important to note that is not the central bank's discretion to decide what the
targeted rate of inflation ought to be (or indeed what the optimum rate of
growth should be); that remains the job of the elected government. But once that
target is laid down, the central bank must ensure that it meets those targets
with complete operational autonomy.
In India, until the monetary policy framework and an
inflation target were spelt out last year, it was the RBI which decided what a
reasonable rate of inflation should be. To be accurate, it was the RBI Governor
- just one person - who had complete control over monetary policy goals and
decisions. That was vesting too much independence in an unelected official. The
proper way to conduct monetary policy is via explicit goals laid out by the
elected government which are then executed by a group of experts - a Monetary
Policy Committee - rather than one individual, without any interference from the
Still, on the setting of interest rates, even before the
creation of an explicit monetary policy framework, the RBI has had its
autonomous way under successive governors and with different political
dispensations in office. This has led to tensions between the Finance Ministry
and the RBI but rarely, if ever, any encroachment on the RBI's space.
Consider also RBI's roles beyond the conduct of monetary
policy. The RBI is the government's debt manager, a function that has been
proposed to be hived out to an independent debt management agency but resisted
by the central bank. The separation of debt management from the RBI is not an
assault on the RBI's independence by the government. Instead, it is to remove
the conflict of interest that exists in the RBI's functions of setting interest
rates, and management of the government's debt. The latter could influence the
former when it ought not to. The RBI's independence to carry out its primary
mandate, the efficient conduct of monetary policy, will only be enhanced by
hiving off the debt management function.
The third major role played by the RBI is in the regulation
of the banking system. Like any regulatory agency, RBI must be allowed to
operate at an arm's length from the government while doing its work. Again,
there is no evidence to suggest that the government has interfered in any way.
Remember that the government plays a separate role in the banking sector as the
owner of public sector banks which control nearly 70 per cent of all lending.
The RBI is the regulator, not owner, of banks. Unsurprisingly, both the RBI and
the government play critical and visible roles in banking but that does not mean
that they are stepping on one another's turf.
There has not been any assault on the RBI's autonomy - in the setting of
interest rates or in the regulation of banks or in other operational spheres.
The government, when it exercises its right as sovereign, whether to set an
inflation target or to demonetise high-value currency, is acting well within the
norms of the law and the spirit of democracy. Any attempt by unelected officials
to obstruct would only be abuse of their autonomy.
Focussing on the marginal farmer
The sluice gate on the Bhakra main line canal in
Khanauri-Kalan village in Sangrur district, Punjab, has become infamous.
According to reports, it is a suicide point for farmers and their families.
Typically, 30-45 corpses are found in the canal on average every month. Farmers'
suicide in Punjab is a major worry: over 2,632 farmers are reported to have
committed suicide between 1995 and 2015,in the land famed for its Green
Revolution, according to State government records. Mansa district alone accounts
for 1,334 suicides. Adding farm labourers raises the total to 4,687 reported
suicides. The reasons for this vary: cotton crop has been whittled by
whiteflies, basmati's market price has declined, the local moneylender has hiked
up rates to 20 per cent. The farmer ekes his way to penury.
Farmer suicides are not a new trend. According to the
National Crime Records Bureau (NCRB), 2,195 marginal farmers reportedly
committed suicide in 2015 (of which 834 were in Maharashtra), while 3,618 "small
farmers" undertook such drastic steps, with Maharashtra alone seeing 1,285. More
curiously, a larger number of small farmers rather than marginal farmers
reportedly committed suicide in States like Maharashtra, Telangana and
Karnataka. Somehow, small farmers are also bedevilled by the agricultural
crisis, and this is not the case in just the traditional drought-stricken
Agriculture in States like Punjab is typically a monoculture
of wheat and paddy. When input costs associated with fertilizers,
crop-protection chemicals and seeds rose, along with fixed costs associated with
agricultural equipment such as tractors and submersible pumps, agriculture
became economically unviable. Prices have risen - of arhar seeds and staple
crops like paddy and sugarcane, of fertilizers and plain barley. The old days of
farmers handing seeds as family heirlooms to their sons are long gone. Hiring
labourers and animals is expensive. With an increase in application of
crop-protection chemicals, soya bean has seen a massive jump in pesticide cost.
Given a jump in input costs, cultivation costs have gone up in multiples. The
total cost of cultivation for wheat rose three times from 2004-05 to 2012-13.
While traditionally the blame is cast on the usurious local
moneylender, NCRB data highlight that 2,474 of the 3,000 farmers who were
reported to have committed suicide in 2015 had loans from local banks, while
those who had loans from moneylenders were just 9.8 per cent of the total.
Maharashtra reported 1,293 such suicides for indebtedness, while Karnataka had
946. Meanwhile, farmers in Punjab are estimated to have an outstanding debt of
Rs. 69,355 crore. Somehow, the traditional moneylender is seemingly more
"flexible" than local banks.
Solving this crisis requires an inclusive approach. Our
policies should encourage integrated pest management, an approach that focusses
on combining biological, chemical, mechanical and physical means to combat pests
with a long-term emphasis on eliminating or significantly reducing the need for
pesticides. In Vietnam, over 2 million of the Mekong Delta's rice farmers
adopted a "no spray early" rule, curbing insecticide applications within the
first 40 days of rice planting. Predatory beetles that commonly prey on rice
pests were sustained, encouraging the crop while cutting pesticide use by over
50 per cent.
The local fertilizer industry needs support - timely delivery
of subsidies would improve working capital requirements, enabling them to manage
costs through internal sources rather than external loans. Delayed payments can
cause an interest outgo of Rs. 3,500 crore for fertilizer firms annually. State
seed policies should focus on encouraging contract farming, along with
identification of new genotypes for treating pest and disease syndromes, as well
as adverse weather conditions. Precision-farming techniques like Systematic Rice
Intensification can help increase seed production in this regard.
Courtesy: Various News Paper