The right to be left alone: (Indian Express, Editorial)
A right gets a wrong conception
- In the modern day context, a majority of the Indian population does not always understand what privacy means.
The misconception of right to privacy:
- Privacy is not about hiding something or keeping it secret.
- It also doesn’t mean that one is withdrawing from society.
- It is an expectation that society will not interfere in the choices made by the person so long as they do not cause harm to others.
- Privacy means that one’s right to eat whatever one chooses, the right to drink what one chooses, the right to love and marry whom one chooses, to wear what one chooses, among others, are rights which the state cannot interfere with.
- Privacy has many more underpinnings than just data protection or surveillance by the state.
- A fundamental right to privacy enshrined and protected in the Constitution, would mean that all persons have the right to be left alone by the state unless such intrusion is necessitated by a just, reasonable, and fair law.
- Patriarchy being the catalyst of the Indian society, adults does not necessarily exercise choices of their own free will.
- And thus, it is natural that the very concept of privacy seems incomprehensible.
Right to privacy as per law:
- The Union government has argued that it does not think that the right to privacy is a fundamental right protected under the Constitution.
- While the right to privacy may be protected as a common law right or some element of it part of another fundamental right, by itself, it could not per se be guaranteed as a fundamental right.
- With due course of time, millions of men and women have pushed themselves back daily against the oppressive hold of their families and communities, and fought for the freedom to make their own choices.
- They may not have the right word for it, but they are creating space for themselves to exercise the right to privacy.
- The Public Accounts Committee (PAC) of Parliament has asked the Defence Ministry to trace all missing files related to the Bofors scandal and share them with it.
The focus of the committee
- The six-member sub-committee on defence, headed by BJD MP Bhartruhari Mahtab, is eyeing into the long-pending non-compliance of certain aspects of the Comptroller and Auditor- General (CAG) report on the Bofors guns deal.
- The PAC sturdily objected to the Ministry’s proposition that certain paragraphs of the CAG report may be dropped as some files related to it are missing.
- There was a stress on the need for top Ministry officials to trace and share missing files and notings related to the deal.
- According to the minutes of the meeting, top Defence Ministry officials agreed that the Ministry will share all the required details with the PAC.
- The Bofors scandal relating to alleged payment of kickbacks in procurement of howitzer artillery guns had triggered a massive political storm and led to the fall of the Rajiv Gandhi government in 1989.
- The Supreme Court used its extraordinary constitutional powers to allow two companies to withdraw from insolvency proceedings and settle their loan dispute, despite the case being admitted to the National Company Law Tribunal (NCLT).
The turn of events
- If the NCLT acknowledges a case for initiating corporate insolvency resolution process under the Insolvency and Bankruptcy Code of 2016, it cannot be withdrawn even if the parties decide to settle the dispute between them.
- In sudden turn of events, a Bench of Justices used the Supreme Court’s powers to do “complete justice” under Article 142 of the Constitution to bring quietus to the financial dispute between Lokhandwala Kataria Construction Pvt. Ltd. and Nisus Finance and Investment Manager LLP.
- The court took on record the consent terms entered into by the companies and their undertaking to abide by them in settling the amounts due.
India is facing increased pressure to reduce North Korea’s diplomatic presence in the country as Pyongyang flexes its military muscles.
- During talks with Indian officials last week, a U.S. State Department delegation took up the presence of a large number of North Korean diplomats in India, and urged New Delhi to “shrink” North Korea’s diplomatic footprint in South Asia
- India has criticized recent North Korean missile launches and nuclear tests. However, bilateral political and diplomatic ties, though minimal, have remained on track
- India’s relationship with North Korea is a remnant of its non-aligned past. But in recent years, India has highlighted the proliferation problem from North Korea
- India and the U.S. have held talks on the North Korean actions most recently during Prime Minister Narendra Modi’s visit to Washington last month when both sides “condemned” Pyongyang’s actions.
- Both sides also indicated that they would work together to counter the DPRK’s weapons of mass destruction programmes.
- India has maintained ties with North Korea since the birth of the nation following the Korean War in the 1950s, and North Korea had been an active member of the Non-Alignment movement during the Cold War.
- However, bilateral ties cooled in the 1990s when Pakistan extended support to the country’s nuclear programme.
- The ties between Pakistan and North Korea were significant in the past, but it was no longer on the same platform.
- The recent reports from Sri Lanka and Pakistan have indicated that North Korea has exploited export rules to earn much-needed foreign remittances.
- Another issue is the North Korean ability to attack political or diplomatic opponents across the world
- The US wanted India to help to look for North Korean activity in the Indian subcontinent.
- Responding to UN resolutions, the Indian government banned all trade (except food and medicines) with North Korea.
- India is the third largest trading partner for North Korea.
- At the G20 Summit in Hamburg which took under the shadow of Pyongyang’s ICBM test of July 4, 18 out of 20 countries issued strong statements condemning the test.
For a greater global role, take SDGs seriously: (Live Mint, Editorial)
- India presented its first voluntary national report on the implementation of Sustainable Development Goals (SDGs) at the UN on July 19th.
The implementation of SDG
- Along with India there were other 42 countries to implement SDG.
- There is broad consensus that the success or failure of the hard-negotiated 17 SDGs will largely depend on whether India is able to achieve them or not.
The difficult part
- The target of Goal 1 to “End poverty in all its forms everywhere” looks unlikely to be achieved unless India attains it.
- India alone is home to more than 30% of the global estimate of over one billion people who live in extreme poverty.
- According to another estimate, India has more poor than 26 of the poorest countries in Africa.
- According to World Bank president Jim Yong Kim, a single Indian state, Uttar Pradesh (UP), accounts for 8% of the world’s population living in extreme poverty.
- Thus, if UP were to succeed, the world would be well on its way to achieving SDG Goal 1.
- India’s voluntary reporting at the High Level Political Forum (HLPF) on sustainable development was the perfect opportunity to not only present India’s commendable achievements since the SDGs were adopted in 201.
- It also enhances India’s global standing and leadership credentials at the UN.
- In contrast, the role of state governments, many of whom have adopted the SDGs, partly to leverage greater largesse from the Central government, has been justifiably highlighted.
- The efforts of many of the states, including Bihar, have been stressed though UP is a crucial omission.
- Apart from the missing grand strategy, the report also makes little effort to connect how India’s success in the SDGs would benefit not only India but also other developing countries.
- It also fails to make the case that India’s achievement of the SDGs will enable it take on more global governance responsibilities.
- The report makes a cursory reference to “South-South” cooperation, fails to mention South-North-South triangular cooperation entirely.
- It still pleads for more overseas development assistance from the leading Organization for Economic Co-operation and Development (OECD) donors.
- In doing so, it dents India’s case for taking on more global responsibility and also its burgeoning role as a donor.
- While India might overcome the various challenges in implementing the SDGs, including developing reliable indicators to measure implementation, the efforts will have limited impact unless India also successfully leverages the SDGs to play a greater global role.
Indian Economy. Planning, Growth and Employment
Air works has expressed an interest in acquiring a stake in AIESL which has the largest MRO business in the country with a facility for component and engine overhaul.
- Informal talks have begun to find potential buyers for Air India’s subsidiaries, including its maintenance, repair and overhaul (MRO) business.
- An expression of interest from India’s oldest private sector MRO service provider, Air Works, has come as a short in the arm for the Centre that is considering an option to split Air India’s different businesses and hive them off separately.
- National carrier has India’s largest MRO unit for engines, components overhaul
- MRO is a capital-intensive industry with a highly competitive environment, with low returns and there is a long payback or cost absorption period in view of the fixed overheads on infrastructure facilities and high wage costs due to licensed manpower, according to AIESL annual report 2014-15.
- The Centre has already received a formal expression of interest from the country’s largest private carrier Indigo for Air India’s airline operations.
- The government may also hold talks with foreign MRO players such as Jordon Aircraft Maintenance Limited (JorAMCO), Hong Kong Aircraft Engineering Company (HAECO) and Ethihad Airways Engineering which are keen to invest in the MRO business in India to ascertain their interest in acquiring Air India’s subsidiary
- On June 28, the Cabinet Committee on Economic Affairs, chaired by the Prime Minister, gave an in-principle nod for strategic divestment of Air India.
- The committee also approved strategic disinvestment in Air India’s subsidiaries, including AIESL, ground handling arm Air India Transport Services Ltd, Air India Charters Limited which operates Air India Express and Airline Allied Services Ltd, which operates Alliance Air.
- A group of Ministers under Finance Minister Arun Jaitley has been formed to decide on the modalities of Air India’s stake sale.
- AIESL has facilities at New Delhi, Mumbai, Hyderabad, Nagpur, Thiruvananthapuram and Kolkata for carrying out maintenance, repair and overhaul on various types of Airbus and Boeing aircraft
- AIESL has been incurring losses since its inception in 2013 when it was carved out of Air India as a separate business unit.
- In 2016-17, AIESL’s losses rose 17% to Rs 653 crore as per provisional estimates.
Amidst softening of inflation data over the last two months, the global finance financial service firm Morgan Stanley is expecting a 25 basis point reduction in policy rates during the upcoming meeting of the Reserve Bank of India’s (RBI) monetary policy committee next week.
- The Reserve Bank of India (RBI) is expected to reduce the key policy rate or the repo rate by 25 basis points (bps) to 6% in its monetary policy review meeting scheduled for August 2 while maintaining neutral stance on interest rates.
- According to Morgan Stanley, there will be limited scope for the RBI to go for more rates cuts in the backdrop of global central banks planning to further tighten their balance sheets.
- Expectation is mainly due to fall in retail inflation, which eased to 1.54% in June
- If the RBI does cut the repo rate, this could only be the second such instance by the monetary policy committee (MPC) since it was established in October 2016.
- The Inflation for June was lower than the RBI’s target band of 2-6%.
- During the last policy review in June, the RBI revised its inflation projection downwards to 2-3.5% in the first half of the year and 3.5-4.5% in the second half-opening up the possibility of a rate reduction.
- The earlier projection for retail inflation in the first half of the fiscal was 4.5% and 5% in the second half.
- The Asian Development Bank’s latest estimate puts India’s average inflation in fiscal year 2018 at 4%, some 70 basis points lower than its estimate at the beginning of the year.
- Inflation based on the wholesale price index, or WPI, slipped to an 11-month low of 0.9% in June, with food inflation remaining negative and prices of manufactured items rising at a weak pace. Wholesale inflation has been on a downward trend since February
- The Wholesale Price Index also eased to 0.9 per cent from 2.17 %.
It is now time for an RBI rate cut: (LiveMint, Editorial)
The caution displayed by the Reserve Bank of India’s (RBI’s) monetary policy committee regarding inflation has come under a lot of criticism
- There is a compelling case for the monetary policy committee to cut interest rates.
- Monetary policy has had to be asymmetrical to quell the persistent inflationary fire.
What could possibly thwart RBI from cutting the policy rate?
- RBI’s arguments that a lack of transmission in the banking sector due to the stockpile of bad loans makes it futile to cut rates.
- Real interest rates have surged because of the inflation fall and HSBC estimates that present real interest rates give RBI room to cut by as much as 75 basis points.
- Even towards the June meeting, inflation had decelerated sharply; private investment was showing no signs of pick-up and oil prices also seemed at structurally low levels.
- The recent decline inflation appears to be structural in nature, as is evident from the trend in headline inflation, core inflation and inflation expectations.
- According to HSBC economists the inflation differential between India and the rest of the world has narrowed on a sustainable basis.
- Disinflation is the result of a combination of factors like prudent monetary policy, modest increase in minimum support prices and the downturn in the global commodities cycle.
The caution displayed by the Reserve Bank of India (RBI) in recent months has come under a lot of criticisms
- It is worth bringing an important principle in monetary policy into the public debate at this juncture.
- The Indian central bank would have erred in rushing into a hasty rate cut when faced with multiple uncertainties and multiple exogenous shocks over the last few quarters.
- The transition to the new goods and services (GST) seems to be a smooth affair.
- The US Federal Reserve may go slower than expected when it comes to whittling down its bloated balance sheet.
- The monetary policy agreement explicitly says the Indian central bank would have failed to meet its target only if inflation stays outside the accepted range for three quarters in a row, rather than any single month.
- Most private sector forecasts over the next 12 months seem to suggest that inflation will be a little above 4% a year down the line, or very close to the central point of the inflation target.
- These inflation forecasts serve as the intermediate target of Indian monetary policy, given that changes in interest rates affect the real economy with a lag of around three quarters.
- Long gap between the inflation expectations of Indian citizens and the inflation target of the RBI. This indicates that the credibility of the Indian central bank suffered because of years of high inflation.
India has entered a welcome stage of macroeconomic stability because of prudent policies over the past few years. Sustainable economic growth comes against the backdrop of such stability and economic reforms.
Pluralism in monetary policy framework: (LiveMint, Editorial)
In spite of having sophisticated model at its disposal, the RBI’s performance on accurate inflation forecasting leaves much to be desired.
- India formally adopted “flexible-inflation targeting” (FIT) in June last year. A key feature of FIT is that monetary policy has an explicit inflation target in the long-term but medium-term inflation “projections” become the intermediate target. The success of FIT depends on the accuracy of medium-term inflation forecasts.
- The Reserve Bank of India (RBI) introduced models called the forecasting and policy analysis system (FPAS).
- Central to the FPAS is the quarterly projection model (QPM), a forward-looking model to assess the medium term path of the economy.
- The model consists of four equations related to the key endogenous variable like the IS curve (output gap), the Phillips curve (inflation), smoothed Taylor rule (short-term interest rate), and uncovered interest rate parity (exchange rate).
- In December 2016, RBI’s monetary policy committee (MPC) forecast that headline inflation in India in January-March would average 5% with an upside bias.
- The actual inflation turned out to be 3.6%, a massive 140 basis points lower than the forecast and the highest percentage forecasting error in RBI’s history.
- CPI (Consumer Price Index) inflation in June eased to 1.54%, a record low, while the RBI continues to forecast an average of 2.75% for the first half of FY18.
The model has been criticized for relying on rational expectations, assuming complete markets, ignoring the financial sector and for creating models which are “money-neutral’.
- Improve the DSGE framework by relaxing unrealistic assumptions and incorporating more features of the Indian economy, such as a large informal sector and an all-pervading shadow economy.
- Explore alternative approaches which make realistic assumptions and incorporate the complexity of the real world.
- The Economic Complexity Index developed using this approach is a more accurate predictor of GDP per capita than many competing growth theories.
- RBIs highly capable economists can develop parallel models by applying alternative approaches to the Indian context.
Pluralism is critical for all social sciences and economics is no exception. Exploring multiple schools of thought can only improve the framework’s accuracy and effectiveness of India’s monetary policy framework.