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GS: 2


International relations:

Willing to talk to Kim, says Trump (The Hindu)

Context

U.S President Donald Trump said talks between North Korea and South Korea scheduled for next week was an outcome of his “firm stance” and he could talk to North Korean leader Kim Jong Un on the phone. “Absolutely I would do that. No problem with that at all,” he said, when asked whether he was “willing to engage in phone talks” with Mr. Kim. Mr. Trump was interacting with reporters at the Camp David Presidential retreat on Saturday.

Talks b/w North and South

The North and the South are scheduled to talk next week, which is likely to pave the way for the North’s participation in the Winter Olympics in the South next month

The first formal diplomatic talks between the two Koreas in two years is taking place against the backdrop of furious public exchange of insults between Mr. Trump and Mr. Kim over Pyongyang’s nuclear capability that now threatens mainland America

Changing position

Mr. Trump’s position on talking to the North has changed many times

He had once said his negotiating skills could lead to a resolution of the conflict with North Korea, but in recent times, he dismissed Secretary of State Rex Tillerson’s diplomatic efforts as a “waste of time.

Result of my Efforts: Trump

  • On Saturday, he said it was his efforts that led the North to the negotiating table.
  • “Look, right now they’re talking Olympics. It’s a start, it’s big start. If I weren’t involved they wouldn’t be talking at all right now,” Mr. Trump said
  • Mr. Kim has got the message that he was “no messing around,” and this could lead to a peaceful solution. “..if we can come up with a very peaceful and very good solution …that would be a great thing for all of humanity,” he said, adding that Mr. Tillerson and others were working on it.

US couldntforsee North Koreas strides

At the start of Donald Trump’s presidency, U.S. intelligence agencies told the new administration that while North Korea had built the bomb, there was still ample time — upward of four years — to slow or stop its development of a missile capable of hitting a U.S. city with a nuclear warhead.

Its intelligence underestimated Pyongyang’s access to technology and expertise

The North’s young leader, Kim Jong-un, faced a range of troubles, they assured the new administration, giving Mr. Trump time to explore negotiations or pursue countermeasures.

One official who participated in the early policy reviews said estimates suggested Mr. Kim would be unable to strike the continental U.S. until 2020, perhaps even 2022.

North Korea mocking US intelligence

  • Within months, those comforting assessments looked wildly out of date.
  • At a speed that caught U.S. intelligence officials off guard, Mr. Kim rolled out new missile technology and in quick succession demonstrated ranges that could reach Guam, then the West Coast, then Washington.

Intelligence Failure of the US

The U.S.’s inability to see the North’s rapid strides over the past several months now ranks among its most significant intelligence failures, current and former officials said in recent interviews.

Wrong Assumptions

Senior intelligence officials acknowledged that they made two key assumptions that proved to be wrong.

  • They assumed that North Korea would need about as much time to solve the rocket science as other nations did during the Cold War, underestimating its access to both advanced computer modelling and foreign expertise
  • They also misjudged Mr. Kim, 33, who took control of the regime in late 2011 and made the weapons programme more of a priority than his father did.

Unclear Path ahead

The shakiness of intelligence on North Korea casts a shadow over Mr. Trump’s options going forward

  • If Mr. Trump attempted to destroy the arsenal, or if the North Korean government collapsed, the challenge would be to neutralise the weapons without any launch taking place or any warhead falling into the wrong hands
  • The more there are, the more difficult that task becomes.

Still Time

  • Siegfried S. Hecker, a former director at the Los Alamos National Laboratory, recently argued that North Korea needs “at least two more years and several more missile and nuclear tests” to perfect a weapon that can threaten U.S. cities.
  • There is still time “to start a dialogue,” he said, “in an effort to reduce current tensions and head off misunderstandings that could lead to war.”NY Times

Sushma urges NRIs to come back

Context

Setting the tone for the government’s outreach to the Indian diaspora, External Affairs Minister Sushma Swaraj on Sunday urged people of Indian origin to take advantage of India’s projects for connectivity to Southeast Asian countries.

Asks people of Indian origin to take advantage of connectivity projects

Speaking in Hindi at the ASEAN-India Pravasi Bharatiya Divas in Singapore, she said her Ministry prioritised the welfare of Indian citizens living abroad, and urged them to return home to take advantage of the economic opportunities.

Various connectivity projects

16 Indian cities are connected to Singapore, a trilateral highway project from India to Thailand is making progress, and we plan to extend this further to connect India with other ASEAN countries

Challenges

Referring to the challenges such as piracy in the high seas and the armed conflicts that Indians living abroad often encountered, she said her Ministry was committed to helping the crisis-struck Indians at a “supersonic speed”.

ASEAN summit

  • Her comments came days before India hosts the heads of states of the Southeast Asian countries in Delhi on January 25 for the ASEAN-India Commemorative Summit, a high-profile display of its “Act East policy”.
  • The push for ASEAN ties will be on display on January 9 when India hosts the first global meeting of parliamentarians of Indian origin.

Indian Constitution and Polity:

Re-examine the Bill(The Hindu)

Context

The winter session of Parliament saw more political positioning than appraisal of a legislation to make instant triple talaq a criminal offence. With the Muslim Women (Protection of Rights on Marriage) Bill pending in the Rajya Sabha, the best option would be to refer it to a select committee to help bring about a consensus on how to address the problem of talaq-e-biddat, as there is no serious opposition to the principle that it is morally abhorrent and legally impermissible.

Concerns about the triple talaq Bill must not be dismissed as an attempt to sabotage it

The Question

  • The core question is whether resorting to an illegal and arbitrary form of divorce should necessarily lead to a prison term for the offending husband?
  • A three-year prison term, besides a fine, also raises the issue of proportionality

Concerns

The Opposition has raised three concerns:

A Civil wrong treated as a crime

Whether a civil wrong, mainly a breach of a marriage contract in an arbitrary manner, ought to be treated as a crime

To go to Jail and pay subsistence also

Whether it is not a contradiction of sorts for the law to jail a husband for pronouncing instant talaq and also mandate that he pay a subsistence allowance to the wife

Misuse against Muslim men

Whether making it a cognizable and non-bailable offence would lead to it being misused against Muslim men

An internal contradiction

Further, some see an internal contradiction in the way the law is sought to be framed

On the one hand it says instant triple talaq in any form is void, thereby declaring that the marriage continues to subsist; but it also talks of issues such as the custody of children and maintenance, which would arise only after a divorce

Current standing of the bill

The Bill is now in the Rajya Sabha, where the BJP and its allies do not have a majority

Some of its key allies, such as the AIADMK, the Telugu Desam Party and the Biju Janata Dal, are against the penal provision

Congress

  • The Congress, the main Opposition party, let the Bill sail through in the Lok Sabha, but has taken the position that referring it to a parliamentary committee may help remove some lacunae
  • Initially the party appeared to questioned the prescription of a jail term, but it has raised a new question
  • It wants to know whether the government would take care of the sustenance of the woman concerned if her husband is jailed for uttering triple Talaq
  • The dilemma before the Congress is that it cannot be seen as reprising the role it had played over 30 years ago in the Shah Bano episode, when it brought in legislation to scupper a Supreme Court verdict in favour of a Muslim woman’s claim for maintenance

Conclusion

However, hasty legislation passed in the commotion of a divided House may not help the cause. A sound legal framework to deal with all issues arising from instant talaq ought to be crafted after deeper consideration.

Standing up for human rights

In his new year message, UN Secretary-General AntónioGuterres referred to the pervasive and large-scale infraction of human rights across the world as a global challenge that defies our vision of a humane and just world order. The message is particularly relevant for us.

India must hasten to bring in an anti-torture law

This is because the torture of individuals in state custody remains a brazen human rights abuse that mocks our governance even as we claim human dignity as the end objective of the Indian state, with the Supreme Court affirming it as “an intrinsic value, constitutionally protected in itself” (Puttaswamy, 2017, M. Nagaraj, 2006).

Cause for concern

As we move into the new year with hope in the future, we must pause to reflect on whether in our approach towards eliminating torture as an affront to human dignity, we have been caught between legislative lassitude (a state of physical or mental weariness; lack of energy) and judicial abdication

India unable to ratify Convention Against Torture

The necessity to move the highest court arose because even years after India became a signatory to the Convention Against Torture in 1997, we have not been able to ratify it or have in place a domestic legislation to effectuate the right to life with dignity read into Article 21 of the Constitution

No effort from the SC

In a departure from judicial precedents established in Vishakha (1997), D.K. Basu (1997), VineetNarain (1997), Association for Democratic Reforms (2002), Swami AchyutanandTirth (2016) and the Triple Talaq (2017) case, the Supreme Court refrained from exercising even its limited nudge function to prompt the government into bringing the necessary anti-torture law

Mocking SC

Acts of custodial torture continue to defy constitutional diktat and mock the Supreme Court’s declaration of torture as “…synonymous with the darker side of human civilization, is a naked violation of human dignity…” (D.K. Basu, 1997)

Baffling stand

  • The court’s disinclination to exercise its expansive review jurisdiction for enforcing the non-negotiable right to dignity in the face of legislative and government inaction is inexplicable given the court’s activism as sentinel on the qui vive qua enforcement of constitutional rights
  • The court remained impervious to its own jurisprudence expounded in Puttaswamy and NALSA (2014), among others, that unless there is a manifest intent expressed to the contrary, domestic laws should be aligned with the international legal regime on the subject

Recommendations from various fronts

And this despite the 2010 recommendation of the Select Committee of the Rajya Sabha supported by the National Human Rights Commission, the Law Commission of India and repeated assurances given on behalf of the Indian government at the UN Universal Periodic Review.

Difficulty in extradition

Those facing criminal trials and extradition proceedings abroad including Abu Salem, Kim Davy, Jagtar Singh Johal and others have questioned the country’s investigative and criminal justice system in the absence of an effective and enforceable law against custodial torture

India’s judiciary questioned

  • The damning slur on the nation’s trial process and commitment to the rule of law itself was also not enough to move the court to exercise its “suggestive” jurisdiction
  • It seemed legitimate to expect the highest constitutional court to inspire legislation that would vindicate the ethic of human rights as it has done so often in the past
  • Its decision, to the contrary, in a petition seeking a comprehensive legal framework against torture betrays, with respect, judicial inconsistency and an irrational flexibility destructive of legal certitude necessary for law to serve a stabilising function in our polity

Walk the talk

The Prime Minister must surely know that when the dignity of a large section of its citizens is denuded, a diminished nation in default of its international commitments cannot expect to have its voice heard with respect in the chanceries of the world

Recommendation of Select Committee not implemented

A 2010 unanimous recommendation of the Rajya Sabha’s Select Committee proposing an anti-torture law remains unimplemented

Moral Responsibility of the Attorney general

  • The Attorney General likewise owes a moral responsibility to the nation in supporting the proposed dignitarian legislation against torture which is unburdened by a partisan political agenda
  • After all, it was his assurance to the court that the government was seriously considering the October 2017 recommendation of the Law Commission in support of a standalone anti-torture law which persuaded it to dispose of the petition without suggestive observations that would have strengthened a compelling constitutional cause with the court’s moral authority.

What now?

Parliamentarians who are privileged to represent the concerns of the people must keep faith and ensure the passage of a humanitarian law.

Whether or not the court was right in abdicating jurisdiction to enforce a dignitarian constitutional value in the premises aforesaid is best left to be determined at a later date, considering that the court itself has repeatedly disavowed any claim to infallibility

Higher standards of accountability

In the meanwhile, we must strive to set higher standards of accountability for our constitutional functionaries in 2018

Conclusion

This year should be the year of a fulsome affirmation of our right to question, lest our silence be seen as acquiescence in constitutional aberration. Let us keep digging in for the values that define our nation.

Dont divest AI, give it 5 years to revive: panel

Context

This is not the appropriate time to divest government stake in Air India (AI), which should be given at least five years to revive and its debt written off, a Parliamentary panel is likely to tell the government

‘Must not be evaluated solely from business point of view’

The panel is also understood to have concluded that the equity infusion in the national carrier, as part of the turnaround plan (TAP), was made on a “piecemeal basis,” adversely affecting its financial and operational performance and “forcing” the airline to take loans “at a higher interest rate to meet the shortfall”

Explore alternatives

The Parliamentary Standing Committee on Transport, Tourism and Culture concluded that the government should review its decision to privatise or disinvest AI and explore the possibility of “an alternative to disinvestment of our national carrier which is our national pride.”


GS: 3


Security and Defense:

INS Arihant left criopled after accident 10 months ago (The Hindu)

Context

Indigenous nuclear submarine INS Arihant suffered major damage because of possible human error and has not sailed now for months, according to Navy sources

Arihant is the most important platform within India’s nuclear triad covering land-air-sea modes.

Nuclear submarine was damaged when water entered its propulsion chamber

  • Arihant’s propulsion compartment suffered damage after water entered the area more than 10 months ago
  • One naval source said water rushed in because a hatch on the rear side was left open by mistake

The accident

The indigenous nuclear submarine, built under the Advanced Technology Vessel project (ATV), suffered damage while it was at harbour. Since the accident, the submarine has been undergoing repairs and clean up, and has not sailed, sources said.

INS Chakra damaged too

  • Arihant’s issue has arisen soon after INS Chakra, the nuclear submarine leased from Russia, was reported to have suffered damage to its sonar domes while entering the harbour in Visakhapatnam in early October
  • However, INS Chakra’s only a peripheral role in the nuclear triad, for both training and escorting, since it is INS Arihant that would carry nuclear missiles.

Issue came to light during Doklamstandoff

The absence of Arihant from operations came to the political leadership’s attention during the India-China military stand-off at Doklam

Whenever such a stand-off takes place, countries carry out precautionary advance deployment of submarine assets

INS Arihant

  • INS Arihant (Code name S2) came into the limelight on July 26, 2009
  • After that, the submarine was towed to an enclosed pier for extensive harbour trials from the dry docks at Ship Building Centre, away from public view
  • INS Arihant was quietly commissioned into service in August 2016 and its induction is still not officially acknowledged
  • It is powered by an 83 MW pressurised light-water reactor with enriched uranium.
  • Equipped with nuclear-tipped ballistic missiles, Arihant is India’s only operational Ship Submersible Ballistic Nuclear (SSBN) asset. It can stay undetected deep underwater for long periods, range far and wide, and launch nuclear missiles when required.

Various issues

  • Senior naval sources maintain that INS Arihant has not left the harbour for the last ten months or so, and has faced problems from the start
  • Initial delays could be just teething trouble, glitches at various stages of getting the reactor to go critical and during harbour trials; major differences between the Russian-supplied design and indigenous fabrication are said to have left many issues unaddressed satisfactorily.

Arihant: top gun for second-strike

  • INS Arihant, India’s only operational ship submersible ballistic nuclear (SSBN) asset, is its most dependable platform for a second-strike, given the country “no first use” on nuclear weapons. The other options, land-based and air-launched, are easier to detect.
  • The submarine is manned by a staff of 100 with extensive training from the School for Advanced Underwater Warfare in Visakhapatnam and further hands-on training on INS Chakra, a Nerpa-class nuclear ship.
  • Arihant has been immobilised even as the second ballistic missile submarine, Arighat, was launched on November 19 for sea trials. The launch was kept a low-profile event attended by Defence Minister Nirmala Sitharaman and senior Navy officers.
  • A high-profile launch, to be attended by the Prime Minister, was put off

Key to nuclear triad

  • INS Arihant and other nuclear launch platforms — land-based missiles and designated aircraft — are operationally handled by the Strategic Forces Command, and report to the Nuclear Command Authority chaired by the Prime Minister.
  • However, the over 100 nuclear warheads are not mated with missiles or bombs and remain in civilian custody of the Atomic Energy Department and the Defence Research and Development Organisation

Ambitious plan

  • India has an ambitious plan to build a SSBN fleet, comprising five Arihant-class vessels.
  • Naval sources say the plan hinges on Arihant’s success
  • It has taken 30 years to build it, at a high cost. “It was initially estimated to cost about ₹3000 crore for three boats — now the cost of Arihant itself seems to have gone over ₹14,000 crore,” a former high-ranking naval officer said.

The Eastern Naval Command plans to operate its nuclear sub fleet from an independent Naval Operational Alternative Base (NOAB) being constructed on 5,000 acres of land at Rambilli, for direct access to the sea. The base is located about 50 km from Visakhapatnam, and jetties are under construction

Economy:

UIDAI under fire for FIR against scribe (The Hindu)

The Unique Identification Authority of India (UIDAI), which has filed an FIR against a journalist who exposed a breach in its Aadhaar database, denied that it was trying to gag the media or whistleblowers.

Reporter exposed breach in Aadhaar database; no gag on media: Authority

Facing widespread criticism for filing a criminal complaint naming a journalist of The Tribune among others, the Authority said on Sunday that it was “duty bound” to place all facts before the police and criminal proceedings have been initiated for the act of unauthorised access as it takes “criminal violations seriously.”

The backdrop

In a statement on Sunday, the UIDAI, said “An FIR… has been registered in Cyber Cell of Delhi Police against Anil Kumar, Sunil Kumar, Raj, RachnaKhaira, The Tribune and other unknown persons for violations of Sections 36 and 37 of the Aadhaar Act, 2016, Sections 419 [punishment for cheating under impersonation], 420 [cheating], 468 [forgery] and 471 [using a forged document] of the IPC and Section 66 of the IT Act, 2000/8.”

Editors Guild condemns

The Editors Guild of India, opposition parties and the local press clubs have condemned the action.

  • Expressing serious concern over the FIR, the Editors Guild of India said, “It is clearly meant to browbeat (intimidate (someone), typically into doing something, with stern or abusive words) a journalist whose investigation on the matter was of great public interest
  • It is unfair, unjustified and a direct attack on the freedom of the press.
  • Instead of penalising the reporter, UIDAI should have ordered a thorough internal investigation into the alleged breach and made its findings public

Demand of the Editors’ guild

Mr. Raj Chengappa, President, Editors Guild of India, said, “The Guild demands that the concerned Union Ministry intervene and have the cases against the reporter withdrawn, apart from conducting an impartial investigation into the matter.”

Selling of Aadhar Data

  • According to the police, on January 4, 2018, a complaint was received from Deputy Director UIDAI B.M. Patnaik stating that an input had been received through The Tribune newspaperdated January 3, 2018, mentioning that they had purchased a service being offered for ₹500 by anonymous sellers over ‘WhatsApp’
  • The service provided unrestricted access to details for any of more than one billion Aadhaar numbers.

Jaitley bats for electoral bond scheme (The Hindu)

Context

Stressing that the electoral bond scheme is a “substantial improvement” in transparency over the present political funding system, Union Finance Minister ArunJaitley on Sunday said the government is open to suggestions to further cleanse the process

The electoral bonds are being pitched as an alternative to cash donations made to political parties.

Mr. Jaitley said in a Facebook post that India had not been able to evolve a transparent political funding system, despite being the largest democracy and strengthening institutions for the last seven decades.

Present system

  • The conventional practice of funding the political system was to take donations in cash and undertake these expenditures in cash
  • The sources are anonymous or pseudonymous
  • The quantum of money was never disclosed
  • The present system ensures unclean money coming from unidentifiable sources
  • It is a wholly non-transparent system

Online methods not popular

  • I do believe that donations made online or through cheques remain an ideal method of donating to political parties.
  • However, these have not become very popular in India since they involve disclosure of donor’s identity

Electoral bond scheme to the rescue?

  • The electoral bond scheme, Mr. Jaitley said, envisages total clean money.
  • A donor can purchase electoral bonds from a specified bank only by a banking instrument
  • He would have to disclose in his accounts the amount of political bonds that he has purchased.
  • The life of the bond would be only 15 days and it can be encashed only in a pre-declared account of a political party.
  • Every party in its returns will have to disclose the amount of donations it has received through electoral bonds to the Election Commission.
  • As against total non-transparency in the present system of cash donations, some element of transparency would be introduced.

Food poisoning, a common outbreak in 2017 (The Hindu)

Context

Recent data put out by the Union Health Ministry’s Integrated Disease Surveillance Programme (IDSP) has indicated that food poisoning is one of the commonest outbreaks reported in 2017. This is apart from acute diarrhoeal disease (ADD).

Incidence high in areas where food is cooked in bulk

  • According to the data, 312 of the 1,649 outbreaks reported till the third week of December 2017 were due to ADD and 242 were due to food poisoning.
  • The IDSP has interpreted that the incidence of ADD and food poisoning is high in places where food is cooked in bulk, such as canteens, hostels and wedding venues.

Same trend

A.C. Dhariwal, Director of the National Centre for Disease Control (NCDC), the nodal agency under the Union Health Ministry that documents outbreaks and brings out data under its disease surveillance programme, told The Hindu that the trend had been the same over many years.

Caused by bacteria, virus and parasites

  • “It is not just this year. Acute diarrhoeal disease and food poisoning have been common outbreaks since 2008. This is followed by chickenpox and measles,” Dr. Dhariwal said.
  • Food poisoning, also called food-borne illness, is caused by eating contaminated food. Infectious organisms including bacteria, viruses and parasites or their toxins are the most common causes.

Maintain hygeine

Dr. Dhariwal said it was important to follow safety measures and maintain hygiene while handling food

Increase in cases

“It is a matter of concern for all as food poisoning outbreaks have increased from 50 in 2008 to 242 in 2017. Similarly, ADD cases have increased from 228 in 2008 to 312 in 2017,” he said, quoting the IDSP data.

Overall mortality

Pointing out that the increase in the number of cases was due to better and increased reporting of cases, he said the good thing was that the overall mortality was not alarming.

Contaminated Fresh fruits and vegetables

“Contamination can also occur at home if food is incorrectly handled or cooked,” he said.

“While it is known that raw meat, poultry and eggs can also harbour diseases, in recent years most outbreaks of food-borne illnesses have been due to contaminated fresh fruits and vegetables,” he said.

Mankidia denied habitat in Simlipal (The Hindu)

Context

Mankidia, one of the 13 Particularly Vulnerable Tribal Groups (PVTG) in Odisha, were denied habitat rights inside the Similipal Tiger Reserve (STR) under the historic Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, as the State Forest Department has objected on grounds that  tribals  could be attacked by wild animals, especially tigers.

Vulnerable Odisha tribe would have been first to benefit from Forest Rights Act

But tribal rights activists said the Forest Department continued to play the role of an obstructionist by denying tribals their rights

Habitat

‘Habitat’ as defined under Section 2(h) of the FRA (Forest Rights Act) includes the area comprising the customary habitat and such other habitats in reserved forests and protected forests of primitive tribal groups and pre-agricultural communities and other forest dwelling Scheduled Tribes,” ChittaranjanPani, a researcher on tribal rights and livelihoods, said.

Mankidia now deprived of Siali

Mankidia, a marginalised group that critically depends on making rope with siali fibre that’s richly available in Similipal, would now be deprived of the non-timber forest produce.

Habitat an obstruction in the free movement of the animals

According to the District Level Committee (DLC) meeting’s proceedings, J. D. Pati, deputy director of STR, had raised objections, saying habitat rights would create barriers for free movement of tigers and other animals.

Risk to life

There is also apprehension of the risk to life of the PVTG,” Mr. Pati said

Confined to the buffer zone

While advocating that habitat rights to PVTG should be confined to STR’s buffer zone.

No threat to life

But, Hemant Kumar Sahu, a researcher with NGO Vasundhara, said, “There is no empirical evidence that Mankidias face tiger threat in their villages.

For decades, they have been residing inside the core area of the tiger reserve with animals

The first to have habitat rights

  • The process of recognising habitat rights for Mankidia had made substantial progress before being denied by the DLC. Had it been approved, the Mankidia would have been the first PVTG to have habitat rights
  • In Odisha, processes have been initiated for according habitat rights to PVTGs such as Bondas, Didai, Hill Khadia and PaudiBhuyan

Evidence of fragility

Context

Underwhelming growth estimates come amid worrying data on agriculture

Underwhelming growth estimates come amid worrying data on agriculture

Five months after Chief Economic Adviser Arvind Subramanian predicted that economic growth was likely to be closer to 6.5% in the current fiscal year, the Central Statistics Office has forecast that the gross domestic product (GDP) would expand at precisely that pace in the 12 months ending in March

The headwinds

The headwinds that had been flagged by Mr. Subramanian at that time are proving to be the crucial factors dampening momentum

Slowdown in GVA

For one, gross value added, or GVA — which excludes taxes that feature in the GDP number — is projected to grow by 6.1%, slowing from a provisional 6.6% in 2016-17, as manufacturing and the agriculture, forestry and fishing components of GVA decelerate

Shrinking GFCF

Second, the key investment metric of gross fixed capital formation, though estimated to show faster growth, is expected to shrink in terms of proportion to GDP: to 29%, from 29.5% in the provisional estimates for 2016-17 and 30.9% in 2015-16

Sharp slowdown in IIP too

With the Index of Industrial Production (IIP) data released in mid-December also reflecting a sharp slowdown over the seven-month period from April to October, there are signs that the rebound seen in the second quarter may be far more vulnerable to unravelling than previously considered.

No growth in agri

  • With agriculture struggling for traction, despite a ‘normal’ monsoon, the prospect of private final consumption expenditure regaining vigour in a hurry seems remote, especially since rural households make a sizeable contribution to aggregate demand
  • The forecast for consumption spending posit both a slowdown in growth to 6.3% in 2017-18, from 8.7% a year earlier, and a marginal contraction in share of GDP.

Fiscal Deficit increasing

That softer growth estimates have come at a time when the government’s fiscal deficit has already crossed the budget estimate for the full year, and GST collections are underwhelming, is a particular cause for concern.

Oil prices gain

With Brent crude hovering around $67 a barrel, oil prices are now well above the $60-65 range that the Economic Survey had flagged as having the potential to undermine both consumption and public and private investment

Drop in output of Kharif grain production

Data on kharif foodgrain production used by the CSO in computing GVA in agriculture, while provisional, project an almost 3% drop in output in 2017-18

Effect on food inflation

  • This raises the possibility of stronger inflationary pressures on food prices in the coming months
  • With consumer price inflation having accelerated in November to 4.88%, the fastest pace in 15 months, monetary authorities at the Reserve Bank of India will have little to no leeway to mull interest rate reductions to support growth

Unclogging the credit pipelines

  • On their part, policymakers must bank on building on the measures taken to unclog the credit pipelines, including the recent steps to recapitalise state-owned lenders.
  • Other initiatives must include moves to re-energise the export sector: there may be no better time to make the most of the ‘fair winds’ of a strong global economic rebound that are blowing.

The problem of land hoarding(The Hindu)

Context

The government owns more land than it admits, large swathes of which are unused or underutilized

The government owns more land than it admits, large swathes of which are unused or underutilised

The Centre, by its own admission, does not know exactly how much property it owns. Imagine what would happen if a citizen or a private entity made such a claim before the taxman — they would be fined and very likely end up in jail

Incomplete GLIS information

  • The actual size and value of government-owned land resources is thus a matter of speculation
  • The information provided by the Government Land Information System (GLIS) is both incomplete and patchy
  • While various Central Ministries admit to owning only about 13,50,500 hectares of land, disparate official sources suggest that the correct figure is several times more than what is disclosed.

The problem of unused land

What is worse is that a large proportion of government land lies unused

Vast unused land with Railways and Defence

The Ministries of Railways and Defence, respectively, have 43,000 hectares and 32,780 hectares of land lying vacant, without even any proposed use

Port Trusts

According to reports of the Comptroller and Auditor General of India (CAG), the 13 major port trusts have 14,728 hectares of land lying idle.

Excess land holding by states also

These numbers are staggering, but they are only the tip of the iceberg. They exclude several departments of the Centre and, more importantly, don’t take into account excess land holding by the States

High value property in prime locations lying unused

What is really unfortunate is that a large part of the unused land is high-value property in prime areas in major cities.

Effects of land hoarding by the government agencies

  • Land hoarding by government agencies has created artificial scarcity and is one of the main drivers of skyrocketing urban real estate prices
  • Even after the recent correction in property prices, middle- and lower-income households find adequate housing unaffordable
  • High land prices also reduce competitiveness by increasing the cost of industrial and development projects.

Cause of Corruption

  • Moreover, the allocation of unused land is rife with corruption. Scams involving the Adarsh Cooperative Housing Society, the Srinagar airfield project, and the Kandla Port Trust are a few of the many examples of alleged complicity between private developers and local officials to misuse government land
  • At the State level too, instances abound of public land being resold to private entities in dubious deals.

No records maintained by the government

  • The CAG also reports that none of the government agencies maintains adequate ownership records
  • For instance, the 13 major ports have failed to produce title deeds for as much as 45% of their land holdings. This makes squatters difficult to evict, and so they gravitate to these areas.

Land use patterns

While stock of land is fixed, its supply as an input in production is not — it crucially depends on land use patterns

Floor space index (FSI)

  • A useful measure of this is the floor space index (FSI), which is the total floor area built per square metre of land. For example, if a single-storey building occupies 50% of a plot, the FSI would be 1/2. If the building is expanded vertically to have four stories, the FSI will go up to two (4 times 1/2), as the effective floor area has quadrupled.
  • The demand for land increases with both population density and economic growth
  • Therefore, to maintain efficiency, the FSI should also increase
  • By this token, the FSI should be the highest in major city centres, where the demand for space is highest, and it should taper off gradually towards the periphery
  • Apart from supplying space for economic activities, such an arrangement would also help maximise the gains from transport infrastructure.

Defying urban planning basics

However, most Indian cities defy these basic tenets of urban planning

Cause: Government land with low FSI

The main reason is the large areas of unused or underutilised government land with an irresponsibly low FSI

Examples

Residential zones in Lutyens’ Delhi and Nungambakkam in Chennai are examples of this gross underutilisation of land

Other cities don’t fare much better

Government residences and office locales most affected

The problem is most acute in government residences and office locales

Indian metros have lowest FSI

  • Indian metros thus have the lowest FSI compared to those in other developing countries with similar population densities
  • The FSI in Shanghai is four times of that of Delhi and Mumbai

Investment per square metre gradient of Indian cities is very low

Moreover, the investment per square metre gradient of Indian cities is very low and haphazard.

Could generate employment

This is a pity as solving the problem of wastage could generate employment and pull masses out of poverty, thereby aiding the economy to grow fast.

Right of the people

People have the right to know the size and use of land holding by government agencies, since most of the official land has been acquired from them by paying pittance by way of compensation

Result of the subsidy

It is because of this subsidy that government agencies, and in many cases private companies, have been able to amass large stocks of unused land

CAG on SEZ

For instance, another report by the CAG on Special Economic Zones shows that as much as 31,886 hectares, or 53% of the total land acquired by the government for these zones, remains unused — land which would have been put to more productive use by its original owners.

Agencies not cooperating

In a welcome initiative, the Centre has asked departments to identify surplus land. Unfortunately, agencies seem to be loathe to cooperate.

Need of the hour

  • The need of the hour is a comprehensive inventory of land resources and usage patterns for all government branches
  • It should include information on the location of each property, its dimensions, the legal title, current and planned use, and any applicable land use restrictions
  • This will enable effective identification of suboptimal land use, as well as of the land that is surplus.

The use of surplus land

  • Surplus land should be utilised to meet the ever-growing demands for services, such as water and waste disposal, as well for government-sponsored housing and transportation projects
  • It is crucial to avoid the temptation to sell surplus land as excessive acquisition of land may become the norm and unwilling sellers are typically under-compensated
  • Land intended for future use can be rented out till such time it is needed, through a transparent auctioning process. This will not only buoy the public exchequer but prevent plots of land lying waste for years.

A Complicated problem

The problem of inefficient land use by government departments and public sector units is complicated and endemic.

A public-government partnership

  • A public-government partnership seems to be the way out. We could take a cue from Britain. There, the government has pledged to provide details of ownership, location, and intended use for all properties
  • Citizens are invited to contest official land use and suggest alternatives.

Conclusion

Therefore, as a first step, the government should agree to disclose its land use and release of excess land, the use of which it cannot justify.

Environment:

A sum of contributions (TheHindu)

Context

The Emissions Gap Report 2017, released last year ahead of the UN Climate Change Conference, underlined that fulfilment of national pledges related to carbon emission reductions under the Paris Agreement would be inadequate to keep global warming below 2°C. Thus, a renewed focus on climate governance is imperative.

Routine engagement of the States is crucial to India’s climate action commitments

The Talanoa Dialogue of the UN Framework Convention on Climate Change, beginning this month, will facilitate the parties to take stock of progress post-Paris. As a key player in international climate governance, India could set the precedent in deepening the dialogue process through an action-oriented, inclusive, bottom-up approach, involving extensive participation and collaboration of its States.

States play a vital part

  • In a federal democracy like India, subnationals or States are a vital part of the grand coalition between the Centre, civil society, businesses, and key climate stakeholders
  • India’s State Action Plan on Climate Change supports the integration of national climate change goals into subnational policies
  • India has committed to meet its current target of 33% reduction in emission intensity of the 2005 level by 2030, by generating 40% of its energy from renewables. States are important for the realisation of this goal.
  • Enhancing climate actions is expected to involve routine engagement of the States in the international process.

Under2 Coalition

The Under2 Coalition, a Memorandum of Understanding by subnational governments to reduce their greenhouse gas (GHG) emissions towards net-zero by 2050, is generating a unique precedent for bold climate leadership, with its member states and regions surpassing 200 in number

Telangana and Chhattisgarh signed the pact

Currently, Telangana and Chhattisgarh are signatories to this pact from India, as compared to representations from the other top emitters: 26 subnational governments in China and 24 in the U.S. Greater representation of Indian States is crucial.

Subnational Actions

  • It is equally imperative to examine the progress of subnational actions in meeting national climate targets
  • Towards this end, both national and State plans would need to be periodically reassessed and reviewed
  • A transparent framework for review, audit and monitoring of GHG emissions is needed
  • As State capacities vary significantly, the principle of common but differentiated responsibilities should be applied to allocate mitigation targets in different States, based on the principle of equity.

States have enormous potential

States have enormous mitigation potential, but the evidence pertaining to its effectiveness is still scarce

Knowledge Action networks

  • Therefore, India must look towards creating knowledge action networks and partnerships under both national and State action plan frameworks
  • Kerala has taken the lead to build such a knowledge network funded by the National Mission on Strategic Knowledge for Climate Change.

On way to insolvency, firms scout for fronts(The Hindu)

Context

A number of insolvency-bound companies, reeling under huge unserved loans, are scouting for front entities to buy them out in a distress sale under an ’asset reconstruction’ model with the help of ‘friendly’ IRPs, but have landed themselves under the regulatory scanner

‘ARC start-ups’

According to top regulatory officials, some of these firms are approaching senior NBFC executives, with a good reputation in the market, with a novel idea of setting up their own ‘asset reconstruction (ARC) start-ups’ and then bidding for the assets being sold under the insolvency process.

Friendly IRPs

They are also trying to rope in some ‘friendly’ IRPs (Insolvency Resolution Professionals) to help achieve their motive of a ‘front entity’ acquiring the assets on sale, but the regulators and the government agencies have got a whiff of the whole design, including with the help of some whistle-blowers, a senior official said.

Steel, power, textile sectors under scanner

The companies which are currently under the scanner include those from the steel, power and textile sectors, the official said, but refused to divulge the names as an investigation is currently underway

FRDI: depositer trust is the key to banking(The Hindu)

Context

The banking system of any country is built on an edifice of trust that depositors have in their banks. The confidence that money is safe, keeps depositors away from withdrawing their funds unless they really need it. Meanwhile, it allows banks to lend out the money to borrowers which generates interest income for the depositor, profit for the bank and larger economic growth

Bail-in clause creates confusion

The ‘bail-in’ clause in the government’s Financial Resolution and Deposit Insurance (FRDI) Bill has created confusion

Section 52: allows to cancel the liability owed by a failed bank

  • Section 52 of the Bill allows the proposed Resolution Corporation to cancel the liability owed by a failed bank
  • Since the main liability of a bank is the ordinary depositor’s money, it naturally causes concern whether depositors stand to lose their money beyond what is insured in the event of a bank failure

Panic Reaction

Unless nipped in the bud, a panic reaction could destabilise the banking system.

Why should depositor liability be cancelled at all? When a failed bank does not have any assets left to pay its creditors, it is natural that depositors will not get back all or part of their money.

‘Guard against signals’

Government can’t cover all the risk

The government can never commit to pay out all depositors in such an event.

Why?

Such a commitment would signal to banks that it is acceptable to take more risks because, in case they go belly-up, the government will pay out depositors

The level of risk in the banking system would simply explode

So, depositors have to take the hit?

Hence, depositors have to take some hit if a bank fails.

This is formalised in the Bill’s bail-in clause.

Good Intentions

“The intentions are good,” said Dr. K. Cherian Varghese, former CMD of Union Bank of India and Corporation Bank.

Deal with NPAs currently

“The new provision of ‘bail-in’ is welcome. However, when the banking system is struggling with the larger issue of non-performing assets, it is better to concentrate on recovery and also encourage bankers grant fresh loans for that the economy grows at faster pace.

Proposed law can be discussed later

The proposed law may be taken up later when there are no apprehensions in the minds of depositors,” he said.

Depositor’s trust: need for a bail-in will never arise

Yet, it is important for the depositor to believe that the need for a bail-in will never arise

Here lies the role of trust in the banking system.

Convincing depositors about safety of their money. How?

How can banks convince depositors that their money is safe?

  • One way is through prudential regulations such as capital requirements and supervision.
  • The other way is to guarantee through an insurance scheme that the insured part of deposits will be paid out to depositors by an insurance company.

Comparison with income

In India, up to ₹1 lakh of a depositor’s money is protected by insurance provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India.

Insurance limit not revised

However, this insurance limit has not been changed since 1993 even while income and deposit levels have grown substantially.

Globally it has been revised after 2008

  • Many countries revised their deposit insurance limits after the global financial crisis of 2008 but India did not do so
  • Deposits up to $250,000 are protected by insurance in the U.S. while the figure is $1,15,000 in the U.K

Taking into account average income in a country

But the accurate comparison should take into account the average income in a country

  • In US and UK:Deposit insurance limit is 3-4 times the average income levels in the U.K. and the U.S.
  • In Brazil and China:In the case of emerging countries like Brazil and China, the insurance limit is 9 times the per capita income.
  • In India:Compare that with India where the insurance limit is actually a little less than its per capita income.

Need to increase the insurance limit

The government should increase the deposit insurance limit under the Bill, considering that at about $1,600, it is at a much lower level than some of the other developing or larger economies.

Provision for periodic review

Further, there should be provision for a periodic review to raise the quantum of deposits covered by insurance.

Banking supervision

  • The current elevated level of non-performing assets and mounting losses of banks indicate that the RBI could have been more proactive in its supervision
  • More frequent audits with public disclosure of audit findings would improve transparency… Further, depositors should also evaluate performance of banks at least on a yearly basis and take informed decisions.

Taken by surprise

People were taken by surprise at the explicit recognition of a bail-in process which was thus far implicitly present

Problems with the clarifications of the government

The government tried to soothe nerves by talking about implicit guarantees for deposits in PSU banks. There are two problems with this clarification

  • First, the implicit guarantee cannot be emphasised beyond a point lest it creates a moral hazard in the form of risky behaviour by banks and lazy monitoring of banks by depositors
  • Second, what about private banks who hold 25% share of total deposits in the country? Are their customers not deserving of the same protection from the government?

Going forward

One optionwas to make riskier banks pay a higher insurance premium

But the aim must be to ensure that the relatively less affluent have 100% insurance coverage and the affluent investors diversify across asset classes

Disagreement with the above option

However, Mr. Gupta disagree with this suggestion. “It’s not [the point] about affluent or less affluent which needs to drive the deposit protection; rather it’s the faith which needs to be built in the system about the safety of the deposits. Else, the financialisation of our savings will be impacted and the savings will get channelised to less productive assets like gold, real estate etc and as a country we will remain starved of capital for investment.”

Word Power:

  1. Browbeat: (intimidate (someone), typically into doing something, with stern or abusive words
  2. Lassitude:a state of physical or mental weariness; lack of energy
  3. Edifice:
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