- Front Page / NATIONAL
- International
- Editorial/OPINION
- Close out the war on corruption
- Restore the ceasefire
- Treat contempt with contempt
- Take note, the fault lies in the system
- ECONOMY
- Indian Express
- Live Mint
Click here to Download 9 PM Daily Brief PDF (24th November 2016)
Front Page / NATIONAL
Apex court slams Centre over Lokpal
Context
Court asks whether Lokpal amendment can be implemented by way of an ordinance.
Backdrop
The Lokpal and Lokayuktas Act has not seen the light of day since it was made into law in 2013. Subsequent amendments to the Act are in limbo.
No leader of opposition
One of these amendments is to make the leader of the single largest Opposition party in the House a part of the high-profile search committee to appoint the Lokpal in case there is no recognised Leader of the Opposition (LoP) in the Lok Sabha. Currently, the 16th Lok Sabha has no recognised LoP.
SC’s stance
For a government which “seems to be always interested in cleansing the system,” the Centre has been uncharacteristically “dragging its feet” on the appointment of anti-corruption ombudsman, Lokpal, to usher in probity in public life
- Questioning the political will of the government, SC bench asked whether the Lokpal amendment could be implemented by way of an ordinance
- Attorney general submitted that an ordinance could not be brought in as parliament is in session
Judicial legislation
The petitioner requested court to direct the parliament to amend the law. To this the Attorney general objected and said that the judiciary could not direct the legislature to pass an amendment, and such an order would amount to judicial legislation by the Supreme Court
Situation now
The court has scheduled the hearing for December 7.
Himalayan projects face flood risk
Context
Potential hydro power projects in the Himalayan region would need to factor in chances of increased floods from the formation of new lakes and the expansion of existing ones due to melting glaciers.
What has happened?
A modelling study by Swiss researchers on the impact of climate change in the Himalayas has been done. India accounts for 129 of the hydro projects analysed under the study
Observations made in the study
- GLOF discharge: 441 hydro-power projects spanning India, Nepal, Pakistan and China, that is, 66% of constructed and potential hydro power projects, are on possible Glacier Lake Outburst Floods (GLOF) tracks, which means they could be drown with extra water from melting glaciers. Almost a third of these hydro power projects could experience GLOF discharges well above what these dams account for.
Increase in lakes
In the Beas basin, six lakes in 1989 had increased to 33 in 2011, and in the Parvati Valley catchment area, there was an increase from 12 lakes (in 1989) to 77 lakes (in 2014). Most of the Himachal Pradesh lakes were relatively small or with a capacity of a million cubic metres, and only a few of them had a capacity larger than 10 million cubic metres of water.
Collaborative research
The Indian Himalayas Climate Adaptation Programme, which coordinated research into Himalayan glaciers and their potential impact downstream, is set to receive an additional $3.5 million CHF (Swiss Francs; approx. Rs 24 crore) in funding for the next phase of the programme.
Read more: GLOF
International
Bangladesh seeks peaceful solution to Rohingya crisis
Context
The foreign office has handed a formal letter to Myanmar asking the authorities to intervene so that the Rohingya Muslims fleeing the conflict-zone can return to their homes.
What has happened?
Bangladesh has expressed “great concern” over the ongoing crisis in Myanmar’s Rakhine State where a military operation against “Islamist jihadists” has triggered a humanitarian emergency.
Backdrop
Tension has been rife on the Myanmar-Bangladesh border after militants allegedly linked to AqaMul Mujahidin group launched attacks on Myanmar’s border police and the army, resulting in the deaths of a dozen law enforcers early November.
- The Myanmar Army has since been conducting operations in Rakhine, home for the country’s over a million Rohingya people
- Hundreds of Rohingyas were now floating in boats in the Naaf river, struggling to enter Bangladesh territory
Bangladeshs’ stance
Bangladesh has already tightened its border security by deploying more personnel to prevent a further influx of Rohingyas as officials say the country already hosts a large number such refugees from Myanmar.
- Bangladesh has requested Myanmar to take immediate steps to take back the Rohingyas already entered Bangladesh recently
Global angle
The UNHCR on November 18 urged Bangladesh to keep its border with Myanmar open for the Rohingyas.
Read more:Rohingya refugee crisis, UNHCR
Editorial/OPINION
Close out the war on corruption
Context
Demonetisation done, the government must now draw up a firm strategy to show the door to the corrupt and lax in higher bureaucracy.
Issue tackled: Corruption
Author, a former CBI director, has stated that after demonetization government must now go after the corrupt in the organized industry and higher bureaucracy.
Go after the big fish
Author states that government must target corruption prevalent amongst the Class 1 officers selected through UPSC examination. Author states that to correct this,
- Plugging the loopholes: Obvious loopholes within the law must be plugged to discipline those who deviate from the law
- Time oriented punitive measures: Author states that officers in higher bureaucracy know that the judicial process against them would take a very long time to establish proof so they continue their corrupt practices with impunity. Making punishments certain over a reasonable period of time will help in this case.
- Compulsory retirement: Author reminds the reader of the provision of compulsory retirement in the Conduct rules under which a civil servant could be retired on the following grounds,
- If he had either reached the age of 50 or had put in 25 years of service, and if he had ceased to work effectively or if his integrity was suspect
Author states that this provision which was earlier resorted to in mid-1970s should be used again to send a strong signal that neither corruption nor laxity in their duties would be tolerated.
More on Compulsory retirement: Read it here
Preparing list for compulsory retirement
Author says that for preparing a list of officers who need to be compulsorily retired following method can be followed,
- The list should be prepared by a committee of officers who are known for their honesty and integrity
- This list can then be vetted (carefully examined) by another group
- The list should then pass on to PM and his one or two cabinet ministers like Home minister and finance minister
Conclusion
Author concludes by saying that corruption need to be tackled as a long term issue. Short term measures like demonetization might halt it temporarily but it will resurface again with a changed modus operandi unless systemic changes and policy measured are introduced.
Restore the ceasefire
Context
As the most powerful and cohesive power in the region, India needs to chart a road map to restore the ceasefire on the Line of Control.
In the following article author has tried to bring home the fact that both Pakistan and India should consider restore the 2003 ceasefire along LoC. During the ceasefire, life had returned to normal in the valley but now a retaliatory cycle threatens to diminish the progress made over all those years.
Conclusion
Author concludes by stating that it is imperative for both countries to put a hold to the firing and shelling along the border for it is the citizens that suffer the most. Also, economic plans of both the nations are going to work only if there is peace in the region.
Treat contempt with contempt
Context
Author, an advocate, talks about the recent contempt notice issuedby Supreme Court against Justice Katjuand whether unwarranted &scandalous abuse of judges should attract punishment under Indian Law.
Borrowed from England
India got its law on “scandalising the court” from England.
- One of the earliest such cases decided there was R v. Almon (1765). A publisher in Piccadilly, London, had printed a pamphlet which accused Chief Justice Mansfield of acting “officiously, arbitrarily, and illegally”. He was hauled up for contempt of court. Justice Wilmot held that courts would lose all their authority if people were told that “Judges at their Chambers make Orders or Rules corruptly”.
- Even in England this was used sparingly and judges utilised the civil defamation suits like in 1992, Justice Popplewell succeeded in a defamation suit which he filed against the Today newspaper which had insinuated that he had fallen asleep during a murder trial
- It should be noted that in 2013 England abolished the offence of scandalizing the court altogether. The reason being that civil defamation suits were used in its place and that most of the scandalous attacks came from disappointed litigants or their friends”. To initiate proceedings against them would “merely give them greater publicity”.
Note: US does not have a law to punish anyone for scandalizing the court
In India
Contempt of court was offence in colonial India too.
- For instance, in 1908, the Bombay High Court hauled up N.C. Kelkar, publisher of Bal Gangadhar Tilak’s English-language newspaper, The Mahratta, for contempt because an article in the paper had accused Justice Davar of dishonestly conspiring with the government for securing Tilak’s conviction. Justice DinshaDavar had sentenced Tilak to be transported to a prison in Burma for six years upon his conviction for sedition.
- In the 1960s, a defamation suit had been filed by KrishnarajThackersey against the prominent Bombay tabloid, Blitz, in the Bombay High Court. The case was decided by Justice V.M. Tarkunde, who awarded damages of Rs.3 lakh to Thackersey. Soon thereafter, an article appeared in the periodical Mainstreamwhich alleged that Justice Tarkunde’s close relatives had been given a large loan from Bank of India, in which Thackersey was a director, as a quid pro quo (a favour or advantage granted in return for something) for the judgment. The article was not very direct in making this point, but it made insinuations and relied on innuendos. Finding this to be in contempt of court, in Perspective Publications v. State of Maharashtra, the Supreme Court held that “the obvious implications and insinuations” in the article “immediately create a strong prejudicial impact” in the minds of the readers “about the lack of honesty, integrity and impartiality” of Justice Tarkunde in deciding the defamation suit.
Time to reconsider contempt of court provision
Author states that Justice Katju’s remarks can be brushed aside as something “too silly” to be taken seriously and judges should be able to thrive in a tough climate.
- Contempt powers today are unnecessarily designed to try and maintain a good public image for the judiciary
- Punishing those who criticize court or its judges can be best silence with impeccable work ethic. In the words of Justice Frank Murphy of the U.S. Supreme Court, “Silence and a steady devotion to duty are the best answers to irresponsible criticism”
Conclusion
Author concludes that courts must have punitive powers to maintain dignity and decorum of day-to-day proceedings. For example, if a person starts shouting slogans during an ongoing court proceeding, flings a shoe at a judge hearing a case, or calls him corrupt in open court, the judge must have the power to remove that person from court and to penalise him so as to prevent this from happening again. But wild, scandalous abuse heaped on judges on blogs or social media websites are perhaps best left ignored.
PS: You can read more on the contempt notice issued to former Justice Katjuhere
Take note, the fault lies in the system
Context
This is not the first time demonetisation of high-denomination notes has been tried as a means to ‘eradicate’ black money.
Article talks about possible effects of demonetization, ingenious ways in which black money hoarders can circumvent the move and post transition challenges.
A comprehensive article on Demonetisation and its different aspects and dimensions will be created by Forumias
ECONOMY
SEBI eases rules for angel funds
Context
The move is aimed at helping boost investment in the early stages for start-ups in the country.
What has happened?
The Securities and Exchange Board of India (SEBI) has liberalized norms for angel funds to invest in early-stage entities as part of its attempts to facilitate fund-raising for start-ups
Who is an angel investor?
An angel investor or angel (also known as a business angel, informal investor, angel funder, private investor, or seed investor) affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.
- Angel investors provide more favorable terms compared to other lenders, since they usually invest in the entrepreneur starting the business rather than the viability of the business. Angel investors are focused on helping startups take their first steps, rather than the possible profit they may get from the business. Essentially, angel investors are the opposite of venture capitalists
Regulations amended
SEBI decided to amend the SEBI (Alternative Investment Funds) Regulations, 2012 based on the recommendations received from the ‘Alternative Investment Policy Advisory Committee’ that was constituted under the chairmanship of N. R. Narayana Murthy
- Upper limit increased: the upper limit for number of angel investors in a scheme has been increased from forty nine to two hundred
- Angel Funds will also be allowed to invest in start-ups incorporated within five years instead of the earlier norm of three years
Minimum investment
The requirements of minimum investment amount by an angel fund in any venture capital undertaking has been reduced from Rs.50 lakh to Rs.25 lakh.
- Lock-in requirements: The lock-in requirements of investment made by angel funds in the venture capital undertaking has been reduced from three years to one year
- Investment overseas: Allowed to invest in overseas venture capital undertakings up to 25 per cent of their investible corpus in line with other Alternative Investment Funds (AIFs)
Unlisted NCDs
- FIIs (Foreign Institutional Investors) have been allowed to invest in unlisted non-convertible debentures (NCDs) and securitized debt instruments of a public or private company based on the guidelines issued by the Ministry of Corporate Affairs (MCA)
Earlier situation: Earlier, FIIs were allowed to invest in such securities only if it was issued by a company from the infrastructure sector
Exchange disclosure
All such agreementsbetween company management personnel and shareholders that assure a certain compensation or share in profits to the employee entered into during the last three years will have to be disclosed to the stock exchanges and companies will have to seek an approval from the public shareholders of the company
- All such agreements entered into during the last three years will have to be disclosed to the stock exchanges and companies will have to seek an approval from the public shareholders of the company
Read more: Angel investor,NCDs, FIIs
Goldman forecasts dip in GDP growth to 6.8% in FY17
Context
According to Goldman Sachs, post the ‘dramatic currency reform’ the liquidity shortage would be a significant constraint on domestic activity, which in turn would affect GDP growth.
What has happened?
Goldman Sachs has forecast a deceleration in India’s GDP growth to 6.8 per cent this fiscal, down from 7.6 per cent last financial year, due to demonetisation.
The research note by Goldman Sachs also observed that
- The currency reform should help to move economic activity into formal channels, accelerate financial inclusion, and increase government revenue
- Large, young, lower-income economies of India, Indonesia, and the Philippines have higher growth potential in theory. But in practice, much will depend on domestic policy and the pace of economic reform.
Read more: Goldman Sachs
Indian Express
Don’t join the debate
Context
Demonetisation is the prerogative of the executive. The Supreme Court should let it be.
Author,after painting a gloomy picture wrt legislative and executive parts of the democratic machinery, warns Supreme Court, the temple of justice in the eyes of common man, should take care that it doesn’t breach executives’ domain over demonetization issue.
Just give it a go through.
What Marrakesh achieved
Context
The proclamation on climate change has just about managed to make sure that the pre-2020 commitments made by the developed world remain on the discussion table.
Marrakesh COP22 has already been covered in the brief dated 11th November 2016, 22nd November 2016
Just give it a go through once.
Streamline the appointments
Context
The judiciary must give up its reluctance to accept performance indicators and impart transparency to the collegium process.
Backdrop
Memorandum of Procedure (MoP) is stuck as of now due to the tussle over judicial appointments between SC and centre. Centre in the latest iteration had sent following recommendations,
- Aseparate secretariat to deal with the process of appointments and/or transfers
- Veto powers for the Union government to reject a candidate on the ground of national security
- Ascreening committee of retired Supreme Court judges to vet the names
But the collegium has rejected the above recommendations
In the latest development, the collegium rejected the Centre’s plea for “reconsideration” of 43 names recommended for appointment as judges in various high courts and sent the files back to the government.
Author, a member of NITI Aayog, after listing out pending vacancies in judiciary makes a case for reforming the collegium system as it is riddled with a glaring lack of transparency.
Author cites a letter written by SC judge Chelameswar wherein he says that he will not attend meeting of the collegium henceforth stating that “the system of selection of judges is not at all transparent. No reason, no opinion is recorded. Just two people decide the names and come back to the meeting and ask for a yes or no. Can a judge of the SC or HC be selected in such a manner?”
Making selection process transparent
Author suggests that a suitable yardstick can be developed to quantify the performance of judges in SC and HCs
- Recently, the Vidhi Centre for Legal Policy has developed such a judicial performance evaluation system for judges of the SC and high courts. Author says that the system developed might not be perfect but suitable adjustments can be made to it.
Conclusion
Author concludes by saying that judiciary should not be reluctant to accept performance indicators and impart transparency to the judicial appointment process. Moreover, in the light of huge backlog of cases a screening committee will only help in saving precious time of the court.
Partial cure
Context
Article talks about the Code of Conduct that was released by IIPA for e-pharmacy sector.
What has happened?
The Indian Internet Pharmacy Association has released the Self-regulation Code of Conduct” for the e-pharmacy sector, an attempt to adhere to the highest professional standards and to have proper safeguards to ensure consumer’s health and safety
The Indian Internet Pharmacy Association (IIPA) is body formed by online pharmacy retailers in the country.
Code of conduct
- Valid copy of prescription: e-pharmacies will process scheduled medicines “only against a valid copy of prescription (physical or scanned) of a registered medical practitioner and ensure that no schedule X and other sensitive habit-forming medicines are processed through their platform
- Consumer redressal mechanism: devise mechanisms to address consumer queries or grievances
- Legal sale: E-pharmacy must ensure that the medicines are dispensed through licensed pharmacies only. They must make reasonable effort to ensure that all the pharmacy partners (before facilitating the sale of any medicines through such pharmacy partners) are duly registered under the Drugs And Cosmetics Act/ Rules
- Effective packaging and handling: must make suitable arrangements to ensure that the medicines are packed, transported and delivered in such a way that their integrity, quality, and effectiveness are preserved
- Partnering with government: E-pharmacy players must partner with government for any recall of medicines and collect adverse events of medicines (consumer reports) and comply to submit them to National Centre for Pharmacovigilance.
Issues
Prescription drug abuse: Author says that using dated prescriptions or using medicines legally bought by a person who no longer needs them is rampant in India
- No survey has been done to provide extent of the prescription drug abuse. First step towards addressing this problem should be to carry a comprehensive survey regarding the problem
Proper regulation
Author says that Drugs and Cosmetics Act 1940 is not equipped to deal with e-pharma business which is likely to witness huge growth in future
- There should be mechanisms that allow proper tracking and monitoring of sales of drugs, check the authenticity of online pharmacists and scrutinize prescriptions and details of patients
- Proper care should also be taken to ensure patients’ privacy.
Live Mint
How to spur private investment?
Context
Implement the bankruptcy code, push for out-of-court debt restructuring mechanisms and recapitalize state-run banks.
Steps taken
Author states that presently bank credit for corporate has become scarce due to increasing stressed assets (NPAs). To solve these issues, many reforms have been introduced like,
- To better recognize the extent of the problem through the Asset Quality Review (AQR),
- Increase banks’ loan loss provisions (A loan loss provision is an expense that is reserved for defaulted loans or credits. It is an amount set aside in the event that the loan defaults)
- Improve corporate governance of public-sector banks
- Recapitalization of public sector banks
- Restructure stressed assets in a sustainable way through several asset-restructuring schemes (and move away from the unviable “extend and pretend” restructuring exercises that delayed the process)
Way forward
Author says that now the process needs to be taken forward with following steps
- Implementing the new bankruptcy code
- Moving ahead with out-of-court debt-restructuring mechanisms
- Actively recapitalizing public-sector banks rather than waiting for them to raise capital in the markets
Conclusion
Author concludes by stating that an increased push to successfully implement declared plans for addressing bank-corporate issues will stimulate investment recovery and increase growth.
Raising resources using climate-resilient bonds
Context
As the likelihood of climate disasters goes up, the need to mobilize additional finance to address the losses is greater.
Author, in this article, has made a case for climate resilient bonds.
What is a bond?
A bond is a debt instrument with which an entity raises money from investors. The bond issuer gets capital while the investors receive fixed income in the form of interest. When the bond matures, the money is repaid.
What is a climate resilient bond?
A climate-resilient bond could take several forms, most common being a green bond
What is a green bond?
A green bond is very similar to a bond. The only difference is that the issuer of a green bond publicly states that capital is being raised to fund ‘green’ projects, which typically include those relating to renewable energy, emission reductions and so on. There is no standard definition of green bonds as of now.
- Green bonds are issued by multilateral agencies such as the World Bank, corporations, government agencies and municipalities. Institutional investors and pension funds also have appetite for such bonds. For instance, investment funds BlackRock and PIMCO have specific mandates from their investors to invest only in bonds which fund green projects. The issuer provides periodic reports about the project.
- In March, the Exim Bank of India issued a five-year $500 million green bond, which is India’s first dollar-denominated green bond.
For more on Green bond: Refer to this link
Publicly issued bond
Climate resilient bond can take the form of another type bond i.e. publicly issued bond which is used to insure against the outcome for a specific climate risk
Example: The government of West Bengal could issue a tax-free—yielding market return—bond for a five-year duration. In case of major flooding due to a rise in precipitation in West Bengal during the duration of the bond issue, the investment is forfeited by the investor and has to be used by the state to cover the loss and damage caused by the flooding.
Another form of climate resilient bond
Another efficient form of climate-resilient bonds is when the funds raised to protect against climate risks are used for adaptation activities.
- Borrowing & Sharing: This form of climate-resilient bonds combines two important aspects, one of borrowing from the debt market for climate projects, and the other of sharing the climate risk between multiple individual investors
- Public money needed: Such a bond would require public money to pay market or higher rates of return on the investment, which would be used for adaptation projects such as flood barriers that reduce the loss from climate disasters.
- When disaster strikes:In case of a climate disaster, the bond investors forfeit their capital up to the limited liability of their investment meaning liability would have to be declared beforehand by the government.
- No disaster:In the absence of a disaster, the climate-resilient bond would work like any ordinary debt instrument with the capital and interest paid out in accord with the terms of the bond issue
Need for such alternative sources of climate financing
- High incidence adverse climate events: In the last 14 years alone, we have witnessed 131 instances of major flooding, several instances of heat and cold waves as well as major drought. All of these have far-reaching financial impacts
- Adversarial cost of extreme climate events: Research by the Council on Energy, Environment, and Water (CEEW), in collaboration with the Indian Institute of Management, Ahmedabad, and the Indian Institute of Technology, Gandhinagar, estimates that direct costs of extreme events spurred by climate change in India are $5-6 billion per annum
- Lackadaisical behavior of developed countries: Though a commitmentto raise around $100Billion by 2020 by developed countries exists but the green climate fund set up for that purpose has received only $3Billion as of now. So, we cannot depend upon developed part of the world to help us out in our journey towards clean energy development, mitigation strategies and adaptation mechanisms in the light of a changing global climate.
Statistics: High costs
- Spending on adaptation actions across five sectors—agriculture, forestry, fisheries, water and ecosystems—is estimated at $206 billion by 2030
- Adaptation actions across infrastructure (energy, transport, roads, buildings, bridges) and health are likely to be significantly higher.
- For every $1 trillion of new infrastructure investments, adaptation costs are likely to range from $30-100 billion.
- For existing infrastructure, adaptation costs could be from 15-20%. Therefore, the adaptation gap for India by 2030 could be around $1 trillion.
Conclusion
Author concludes by stating that developing countries cannot keep on waiting till the last minute for financial assistance from developed countries under UNFCCC. They need to continue to press for their climate financing needs on global forums while simultaneously chart their own path towards addressing their needs by developing alternative and innovative financial methods.
Read more: Green climate fund, UNFCCC
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