Front Page / NATIONAL [The Hindu]
[1] U.S., Germany slam India for NGO funding norms
[2] HC upholds life for 11 in Bilkis Bano case
[3] Rise & fall of Swachh cities
Editorial/OPINION [The Hindu]
[1] Different clocks
[2] The long arc to Ankara
[3] The scale of progress, so far
Economy [The Hindu]
[1] Higher coal tax may benefit economy: IMF
[2] Equity ETFs rise on investor interest
Indian Express
[1] Road to bankability
Live Mint
[1] Advice and dissent on India’s fiscal path
Front Page / NATIONAL [The Hindu]
[1] U.S., Germany slam India for NGO funding norms
Context
UN Human Rights Council members questioned India’s Foreign Contribution Regulatory Act (FCRA), Armed Forces Special Powers Act, criminalisation of homosexuality and the exclusion of marital rape in Indian laws on sexual violence.
Issues highlighted
The attack on the FCRA act came from nearly a dozen countries, mostly from Europe. The charge was led by the U.S. and Germany, who called the Act and the government’s actions “arbitrary”.
Australia, Ireland, Norway, South Korea, Denmark and the Czech Republic were among other countries calling for a review of the FCRA that has led to the licences of about 14,000 of NGOs being cancelled because of alleged violations.
The government also faced criticism on violence against religious minorities from a number of countries. Pakistan’s statement was the sharpest, accusing India of failing to protect minorities “especially Muslims” from “mob violence” and “attacks by extremist groups affiliated to the government.”
Attacks on Africans in India appeared as a new subject of concern at the HRC proceedings.
India’s counter stand
Supported by a rights-oriented constitutional framework, secular polity, independent judiciary, free and vibrant media, vocal civil society, and a range of national and State-level commissions that monitor compliance with human rights, India continues with its endeavours towards observance of human rights.
[2] HC upholds life for 11 in Bilkis Bano case
Context
THE BOMBAY High Court on Thursday upheld the life imprisonment of 11 men convicted for the gangrape of Bilkis Bano and murder of her family members during the 2002 Gujarat riots.
What has happened?
The court convicted police personnel and doctors under Section 201 (causing disappearance of evidence of offence, or giving false information to screen offender) and Section 218 (public servant framing incorrect record or writing with intent to save person from punishment) of the Indian Penal Code.
Bilkis’s supplementary statement was not recorded as soon as the police were informed of the rape, the court said, adding that the police had “gagged the mouth of Bilkis so that her cry for justice would not be heard by anybody”.
The court observed that Bilkis was not sent for medical examination on the day that she reported the incident.
[3] Rise & fall of Swachh cities
Context
Why did some cities rise and others fall in the ‘Swachh Survekshan-2017’ ranking?
What has happened?
Chandigarh slipped to the 11th spot from number 2 last time, which the Mayor blamed on ‘public feedback’.
Indore got to the top spot among all the entries due to a “mega public movement and wholehearted people’s participation.
Tiruchirapalli slipped from third rank in 2016 to sixth. It is still the cleanest in the south zone among cities with fewer than 10 lakh people. Officials said the slip was due to the participation of a greater number of cities this year.
Tirupati, making an entry at number nine into the national top 10, scored with a mix of beautification measures and proliferation of public toilets. The temple town also bet on WoW (Well-being out of Waste), increasing door-to-door waste collection, waste segregation, placing litter bins at commercial complexes and using GPS-fitted dumpers, besides starting a biogas plant.
Visakhapatnam, ranked third this year, built over 12,000 individual household toilets under Swachh Bharat Mission and was certified Open Defecation-Free by the Quality Council of India.
Mysuru City Corporation lost precious marks for failing to complete 406 individual toilets on time and fell to 5th rank from first. Surat rose to number four from six, after it segregated waste more, covering 300 societies, cleaned roads, bridges, underpasses and gardens twice a week and ordered compulsory cleaning of all public and private buildings.
Greater Hyderabad Municipal Corporation, ranked 22, got an overall score of 1,605 out of 2,000 based on citizen feedback, municipal self declaration and on-site observation. Over 2.3 lakh citizens voted in the city, which was ahead of Mumbai, Bengaluru and Chennai.
Editorial/OPINION [The Hindu]
[1] Different clocks
Context
Madhya Pradesh has decided to shift its financial year that now runs from April 1 to March 31, to align it with the Gregorian calendar year — that is, January 1 to December 31
Technical difficulties
The next State Budget will be presented in December or January, but the State’s transition plan for the changeover isn’t clear beyond its intent to speed up spending of funds earmarked in its Budget for the 12 months until March 2018, so that they are utilised by December 2017.
M.P. may start 2018 with a clean slate but will have to wait till February for clarity on the Union government’s priorities for the coming year and till April for Central funds.
It will, in addition, be a fresh nightmare for firms adapting to the Goods and Services Tax regime that will be introduced in the middle of this financial year. Additional uncertainties and differing tax deadlines for States are not likely to enthuse investors
Committee
Centre had appointed a committee under former Chief Economic Adviser Shankar Acharya on the desirability and feasibility of changing the fiscal year in line with the calendar year, aligning it with the practice in most countries as well as multilateral agencies. Its recommendations are still not in the public domain.
[2] The long arc to Ankara
Context
Turkish President Recep Tayyip Erdoğan was in India earlier this week and tried to give a boost to sagging ties between Delhi and Ankara.
What has happened?
His visit came against the backdrop of his narrow win in a referendum on April 16 which gave him sweeping executive powers as President giving rise to fears about a lack of adequate safeguards for democratic rights in Turkey.
Given his growing regional and global isolation as he seems intent on dismantling the secular traditions of Turkey, Mr. Erdoğan has been trying use Islamism to shore up his credibility.
Political issues
His visit to India was also informed by this larger agenda. Ahead of his trip, he had suggested a “multilateral dialogue” on Kashmir, even offering to mediate between India and Pakistan
Not that this was a surprise as Mr. Erdoğan has been a vocal supporter of the Organisation of Islamic Cooperation’s position on Kashmir. During his visit too, the only India-related terrorism he referred to was the threat from Naxalism.
On India’s entry into the Nuclear Suppliers Group, the Turkish stance has been to push for Pakistan’s case along with India’s.
Towards that end he was willing to support India’s bid for a permanent seat in the United Nations Security Council, even as he called for major institutional reforms. The story is complicated as Turkey is a member of the group called Uniting for Consensus which opposes expansion of permanent membership in the Security Council. And this group includes Pakistan.
India host Cyprus President Nicos Anastasiades just before Mr. Erdoğan’s arrival but Vice President Hamid Ansari also recently visited Armenia, a country which accuses Turkey of having killed an estimated 1.5 million Armenians during World War I. Turkey does not recognise Cyprus, the northern part of which is under Turkish occupation since 1974.
Focus on economic issues
Mr. Erdoğan clearly wanted to keep the focus on economic and trade ties as he was accompanied by a large business delegation. At a time when Europe is not so welcoming to Turkey, new markets in Asia are needed. India and Turkey have decided to increase their bilateral trade from $6.4 billion to $10 billion by 2020. The two nations are also exploring cooperation in areas such as construction, infrastructure development, renewable energy, and tourism.
[3] The scale of progress, so far
Context
Agenda 2030, a comprehensive development agenda, was adopted in the United Nations General Assembly by member states on September 25, 2015.
However, since it’s not binding on member nations, there is apprehension that it may end up becoming another of the Millennium Development Goals, which were only partially achieved.
UN and SDGs tracking
The High-level Political Forum comprising the political representatives (heads of states or ministers) of the members meets every July at the UN in New York to review progress on Agenda 2030. The Voluntary National Reviews (VNR), — voluntary and country driven — form the basis of this review.
In 2016, 22 presented their performance review on sustainable development goals (SDGs). This year, 44 nations including India have volunteered. The themes of review this year are Goals 1, 2, 3, 5, 9, 14 and 17 of Agenda 2030, respectively.
The process in India
In India, the process is led by NITI Aayog, Research and Information System for Developing Countries, a think tank attached to Ministry of External Affairs, and the Ministry of Statistics and Programme Implementation.
Civil society is anxious as it wonders whether it will have a say in the official VNR report. However, Indian civil society led by Wada Na Todo Abhiyan (WNTA) — an umbrella CSOs’ platform — has geared up for a shadow report on SDGs.
The government has already identified existing programmes and policies which are linked to different goals under SDGs.
Economy [The Hindu]
[1] Higher coal tax may benefit economy: IMF
Context
An annual Rs. 150 per tonne increase in tax on coal from 2017 to 2030 could prevent over 2.7 lakh deaths from air pollution, raise GDP by 1% by 2030, reduce carbon dioxide emissions by 12% and generate net economic benefits of about 1% of GDP, according to IMF.
Details
Outdoor air pollution from fossil and non-fossil sources prematurely killed an estimated 0.53 people per 1,000 of the population in 2010 in India, or about 6.5 lakh in total.
Fossil fuel taxes can provide a significant source of easily-collected revenue, which is especially valuable when revenues from broader taxes on labour, capital, and consumption are insufficient due to a large concentration of economic activity occurring in the informal sector.
[2] Equity ETFs rise on investor interest
Context
Equity exchange-traded funds (ETFs) saw significant growth in the financial year 2016-17 (FY17) with the total assets under management (AUM) increasing three-fold on the back of higher demand from both retail and institutional investors.
Why is it growing?
The key drivers of the increase in AUM of equity ETFs are increasing popularity of ETFs among retail investors, investments by pension funds including Employees’ Provident Fund Organization in equity through the ETF route and the Government of India using the ETF route for disinvestment.
What is ETF?
ETF is a fund comprising a group of securities, which is traded like an individual stock on an exchange. A retail investor can buy ETFs for as little as Rs. 100 and then trade on the exchange with a minimum trading lot of one unit and carry significantly lower fund management costs.
As on March 2017, there were 47 equity ETFs trading in India out of which 34 were benchmarked to the Nifty family of indices. Of these funds, 13 ETFs track the benchmark 50-share Nifty. There are ETFs that track other indices as well like Nifty CPSE, Nifty Bank, Nifty Next 50, Nifty 100, Nifty PSU Bank and Nifty Quality 30 among others.
Indian Express
[1] Road to bankability
Context
The conflict between the political narrative (the government cannot bail out the rich industrialists) and economic necessity (the need for a haircut by banks and the fact that interest compounding itself would have added 80 per cent to the corpus of bad loans in the last four years) makes choices hard and the way forward complicated.
What needs to be done?
Financing micro enterprises
There are about 50 million MSMEs contributing to about 38 per cent of India’s GDP, 40 per cent of national exports, 45 per cent of manufacturing output and 20 per cent of employment. Formal credit will make their businesses more stable.
Old private sector banks (OPSB)
We have 13 OPSBs with 4 per cent share of banking assets. Their transformation will greatly aid the modernisation of Indian banking.
Non-bank finance companies (NBFC)
The sluggishness and constraints of public sector banks provide a space for the NBFCs to operate in India. The RBI should raise minimum capital requirements of the NBFCs to, say, Rs 100 crore and impose some listing requirement for the NBFC or its holding company within three to five years. Bigger NBFCs will be able to reach unserved segments better and will also be more robust.
Public sector banks
There is a need to change the concept of government ownership away from 51 per cent to becoming the single largest owner, as was even recommended in the Narasimham Committee report. This will address the triple issues of governance reform, HR reform and capital constraints.
Cooperative banks
We need to push the JAM trinity and relook at the need for the cooperative bank sector.
Payments banks
The RBI created two new bank categories — small banks and payments bank. In my view, the history of small banks in India is a history of failure. Payments banks, however, are an interesting innovation but, in their current form, they are an unviable business proposition. They are allowed to only accept deposits of Rs 1 lakh or less and invest these in government securities and make money by participating in the payments business. They can then also address the gap in funding to micro enterprises, currently dependent on the traditional money lenders.
National Housing Bank (NHB)
The NHB should be merged with the RBI, like the FMC was merged with SEBI.
Live Mint
[1] Advice and dissent on India’s fiscal path
Context
The report of the Fiscal Responsibility and Budget Management (FRBM) review committee (chaired by N.K. Singh) prescribes a fiscal path over a six-year period of fairly severe fiscal tightening going up to the year 2023.
Issues
Time Frame
There is a commitment that the outstanding debt of general government in India, summing across Centre and states, will not exceed 60% of gross domestic product (GDP) by 2023, and that the Central component of this will not cross 40% of GDP.
It prescribes the FD path only for the Centre, and only up to 2022-23, it does not in fact carry a fiscal vision going beyond six years.
The medium-term debt and FD targets have to be specified, and the consistency requirement between the two formally upheld, since debt is the accumulation of fiscal deficits over time, mediated by the nominal rate of GDP growth.
Anomalies in Fiscal deficit target
The FRBM committee’s target for the general government FD is set at 5% of GDP (there is some confusion about how the FD target will be split between the Centre and states, with chapter 4 saying 2.5% each, but chapter 5 showing states going down to 2% by 2023, and further down to 1.7% by 2025).
The nominal GDP growth rate assumed is 11.5%. Staying with general government for the moment, an FD held steady at 5% will move the economy at that nominal GDP growth rate towards a resting debt level of 48.5% of GDP. So is 48.5% of GDP the eventual debt target visualized by the committee? If so, that is at odds with chapter 4, which strenuously strives to establish 60% as the prudent level for debt—as a target, not just as a ceiling.
The FD target of 5%, through a back-of-the-envelope calculation first used by the 12th Finance Commission, is based on very uncertain estimates of the household financial savings rate.
Debt target
The national debt target of 60% is split into 40% for the Centre, 20% for states. The states’ debt target has been set (roughly) at where their debt level currently stands. State borrowing through securities is under the operational control of the Centre.
The debt target of 40% for the Centre is arrived at through an econometric exercise, unfortunately modelled on a long-discredited 2010 paper by Carmen Reinhart and Kenneth Rogoff.
Revenue deficit (RD)
The committee prescribes a target of 0.8% of GDP for the Centre, but there is no need for a separate RD limit. Dual limits on the FD and RD were adopted in India so as to protect capital expenditure, given by the difference between the FD and the RD.
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