The SC striking down provisions denying bail to those accused under the Prevention of Money Laundering Act (PMLA), 2002 marks a major change
What has happened?
On November 23rd, the Supreme Court struck down a stringent provision of the Prevention of Money Laundering Act (PMLA), 2002 that denied bail to an accused unless the court was convinced that he was not guilty. The apex court also ordered a fresh trial in all cases where bail under such provisions had been denied to the accused
Impact of the decision
The ruling could have widespread ramifications for those accused under the Act — and for cases under investigation by the Enforcement Directorate (ED), the agency responsible for probing money laundering offences
- It is being viewed as a setback in fight against black money, by the government
How the PMLA came about?
In many ways, the PMLA was a result of the opening of the Indian economy in the early 1990s.
- Creation of FERA: As the economy opened to foreign investment and forex reserves began to rise, the government felt a need for an easing of forex regulations in the country. A Bill was thus brought to remove the draconian provisions of the Foreign Exchange Regulation Act (FERA), which made even spending freely abroad difficult for an Indian. Thus, the Foreign Exchange Management Act (FEMA) was born in 2002
- Most important change: The most important change was that a forex violation was turned into a civil offence from a criminal one, allowing for compounding of the offence by way of a fine. This did not require the arrest of an offender
- Creation of FEMA: But, as FEMA was being drafted, agencies enforcing forex regulations pressed for a new law, FEMA turning the anti-money laundering apparatus in the country almost toothless. This was also when internationally, there was a thrust on choking terror financing and the free movement of illicit money across borders
- Creation of FATF: The Financial Action Task Force (FATF) was created in 1989 to coordinate anti-money laundering efforts across the world — as a member, India was under pressure to do its bit
- Creation of PMLA:The PMLA was also created as a response to the political declaration adopted by the special session of the United Nations General Assembly (UNGA) held on June 8 and 10, 1998, calling on member states to adopt anti-money laundering legislations. The Prevention of Money Laundering Act was finally passed in 2002. It, however, came into force only on July 1, 2005. The Act was further amended in 2009 and 2013, increasing its ambit
Issues with PMLA
Over the years, there have been debates over its provisions dealing with bail. The issue has also been debated in courts while arguing for accused parties.
The PMLA’s Section 45 (1) required that the public prosecutor must be given an opportunity to oppose any application for release on bail. Where the public prosecutor opposes bail, the court must be satisfied that there were reasonable grounds to believe that the accused was not guilty and was unlikely to commit an offence if granted bail
Section applied to?
Originally, the Section applied to those charged for money laundering as well as scheduled offences under part A of the Act which covered cases involving waging war against the Government of India and offences under the Narcotic Drugs and Psychotropic Substances (NDPS) Act
- Amendment in 2013
Through the 2013 amendment to the Act, the government brought Part B of the Act also under the Section’s ambit. This further enhanced the section’s scope, making bail difficult for those accused under comparatively minor offences
- The tough bail condition now applied to offences under the Wildlife (Protection) Act, the Immoral Traffic (Prevention) Act, the Prevention of Corruption Act, 1988, the Antiquities and Arts Treasures Act, the Transplantation of Human Organs Act 1994, the Passports Act, the, Information Technology Act and other laws
- Getting bail made very difficult: The result was that those accused under the PMLA rarely got bail before an incarceration that could last anywhere between two to three years. Given that money laundering offences attract between three to seven years of punishment in jail, this was considered practically like serving the sentence. Almost no one got bail until a chargesheet in the case was filed.
PMLA: A very strict act
PMLA in totality is a very stringent Act. Apart from bail, the Act has very tough provisions on the attachment of property, the recording of statements and arrest and prosecution
- Statement of the officer is admissible as evidence: The PMLA is among very few Acts in the country wherein a statement recorded by an authorised agency officer is admissible as evidence in court. Such powers are not available to the police under the Criminal Procedure Code (CrPC)
- Attachment of property:The Director, ED, can pass orders to provisionally attach a property belonging to an accused if she/he is convinced that this has been purchased with the proceeds of a crime under a scheduled offence
- The PMLA also puts the burden of proof on the accused as it presumes intent
- Section 24 states:
- “a) in the case of a person charged with the offence of money laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money laundering; and
- b) in the case of any other person the Authority or Court may presume that such proceeds of crime are involved in money laundering”
- Section 22 states that where any property or records are seized from any person under this Act, it shall be presumed that such a person is the owner of such property or records
- Section 24 states:
The Supreme Court has now said that the Section stood in violation of Article 21 (the right to life, liberty and security of a person) and Article 14 (the right to equality)
As per a report by IISD, Christopher Greenwood, the British judge who withdrew as Britain’s nominee for the International Court of Justice, paving the way for Justice Dalveer Bhandari’s election, moonlighted as an arbitrator in nine investment-state dispute settlements as well as two other cases during his time as an ICJ judge
Who has prepared this report?
Report has been prepared by International Institute for Sustainable Development (IISD)
- The work risked causing reputational damage to the court which as the world’s most important and respected court had to be held to the highest standards of independence
- If ICJ judges supplement their income by serving as arbitrators, they have an incentive to work less time for the court where their salary is fixed,” the report warned, adding that it could also potentially impact perceived and actual impartiality
Article 16 of the ICJ’s statute states that no member of the court may exercise any political or administrative function, or engage in any other occupation of a professional nature
- According to the IISD, while the annual salary of an ICJ judge was roughly $1,73,000 a year (in 2016) plus a living allowance and pension, arbitrators could earn as much as $3,000 a day
- IISD found that in two resolved cases involving Slovakia and the Czech Republic, Mr. Greenwood, who has been an ICJ judge since 2009, earned $291,600
SC’s order on a petition challenging CBI’s new appointment
What has happened?
The Supreme Court has dismissed a petition challenging the appointment of senior Gujarat cadre IPS officer Rakesh Asthana as a special director of the CBI
The Centre opposed the plea, saying Mr. Asthana had had an outstanding career and supervised over 40 high profile cases, including the coal and AgustaWestland scams, black money and money laundering
The petitioner, Common Cause, an NGO, opposed Asthana’s appointment, saying it was illegal as his name had surfaced in a diary recovered during a raid conducted by the Income Tax Department at the offices and other premises of Sterling Biotech Ltd.
The Supreme Court’s order allowing Hadiya freedom of movement was long overdue
What has happened?
The Supreme Court has recorded the consent given by Hadiya alias Akhila to return to her college at Salem in Tamil Nadu and directed the college to allot her a hostel room where she can stay and complete her 11-month internship to become a homeopath
Author states that by doing so the Supreme Court has protected her freedom to choose her religion and her freedom of movement
- Hadiya, whose original name was Akhila, had been practising Islam for nearly two years, and had to face judicial proceedings twice at the instance of her father, who alleged that her conversion was involuntary and part of a ploy by communal groups to radicalise her and send her abroad to join the Islamic State
- The High Court had been all set to pass orders to enable her to go to Salem for the same purpose, when on December 21, 2016, she disclosed that a couple of days earlier she had married a man called Shafin Jahan. The High Court then annulled her marriage, calling it a sham and a diversion to wreck the proceedings
Reservations against HC order
There were serious reservations about the High Court’s observations to the effect that a woman’s marriage requires the involvement of her parents and that even if she had attained the age of majority she was still at a “vulnerable age”. It is doubtful if similar remarks would have been made if the convert was a man. From this perspective, the Supreme Court’s order is to be welcomed as it gives primacy to a woman’s freedom to choose her manner of living
Investigation can continue
The Supreme Court has also made it clear that the National Investigation Agency can continue its ongoing probe. This preserves the scope for a lawful investigation into the suspicion that there is an organised campaign to recruit young people for overseas operations
Any probe into this phenomenon need not be at the cost of individual liberty. The possibility of indoctrination (the process of teaching a person or group to accept a set of beliefs uncritically) cannot be a reason for undermining personal autonomy.
What has happened?
A Supreme Court Bench, headed by Chief Justice Dipak Misra, dismissed a fresh petition seeking an order to restrain the producers of movie Padmavati from releasing it abroad
- Petitioner, argued that Grave damage would be done to social harmony if the movie is allowed to be released outside India
- Petitioner further sought a direction to the CBI to register a case against film director Sanjay LeelaBhansali and others for various ‘offences’, including defamation and violation of the Cinematography Act
Supreme Court took strong exception to the statements made by persons holding high offices against Padmavati, saying the remarks were tantamount to pre-judging the movie, which is yet to be certified by the Central Board of Film Certification (CBFC)
Ahead of International Day of Solidarity with the Palestinian People, the PM says India will continue to support nation-building activities by the Palestinians
What has happened?
In a statement on the International Day of Solidarity with the Palestinian People, Prime Minister of India presented his government’s position and said that India will continue to support nation building activities by the Palestinians, and urged for the creation of a Palestinian State that will co-exist ‘peacefully’ with Israel. PM further said that,
- India is an active development partner of Palestine, engaged in extending technical and financial assistance to improve the lives of the Palestinian people. We will continue to support the development and nation-building efforts of Palestine
Two state solution
- The special day marks Resolution 181 of the United Nations which called for creation of independent Israeli and Palestinian states and was adopted on this day in 1947
- The two-state solution of the Israeli-Palestinian dispute is based on this resolution
New development wrt Chabahar port
What has happened?
Iran has conveyed to India that it has completed the first phase of work on Chabahar port. Tehran plans to inaugurate it on Sunday, with the country’s President Hassan Rouhani and officials from India, Afghanistan and other countries
- India operationalized Chabahar port on October 29th 2017, and sent the first consignment of wheat to Afghanistan, bypassing Pakistan
- New Delhi recently started an air freight corridor to Afghanistan, and has sent 981 tonnes of fruit since mid-June this year. But the air corridor has limitations in terms of capacity, and the sea route has economic advantages
- Work on Chabahar port picked up pace after the trilateral agreement on Establishment of International Transport and Transit Corridor was signed during Modi’s visit to Iran in May 2016
Why this new development assumes significance?
The development assumes significance since India’s outreach through Iran is taking place at a time the Donald Trump administration is planning to corner Tehran through diplomatic and economic means.
Relevance of Chabahar port
- Eliminating the need for Pakistan: Pakistan having blocked the land transit to Afghanistan was at the forefront in blocking SAARC motor vehicles transit agreement in November 2014, which forced India to expedite alternative ways to reach Afghanistan
- New opportunities for trade: The Chabahar port is expected to open up new opportunities for trade and transit from and to Afghanistan and enhance trade and commerce between the three countries and the wider region, which includes Central Asia
Why is Chabahar important to India?
- The first and foremost significance of the Chabahar port is the fact that India can bypass Pakistan in transporting goods to Afghanistan. Chabahar port will boost India’s access to Iran, the key gateway to the International North-South Transport Corridor that has sea, rail and road routes between India, Russia, Iran, Europe and Central Asia.
- Chabahar port will be beneficial to India in countering Chinese presence in the Arabian Sea which China is trying to ensure by helping Pakistan develop the Gwadar port. Gwadar port is less than 400 km from Chabahar by road and 100 km by sea.
- With Chabahar port being developed and operated by India, Iran also becomes a military ally to India. Chabahar could be used in case China decides to flex its navy muscles by stationing ships in Gwadar port to reckon its upper hand in the Indian Ocean, Persian Gulf and Middle East.
- With Chabahar port becoming functional, there will be a significant boost in the import of iron ore, sugar and rice to India. The import cost of oil to India will also see a considerable decline. India has already increased its crude purchase from Iran since the West imposed ban on Iran was lifted.
- Chabahar port will ensure in the establishment of a politically sustainable connectivity between India and Afghanistan. This is will, in turn, lead to better economic ties between the two countries.
- From a diplomatic perspective, Chabahar port could be used as a point from where humanitarian operations could be coordinated.
- The Zaranj-Delaram road constructed by India in 2009 can give access to Afghanistan’s Garland Highway, setting up road access to four major cities in Afghanistan – Herat, Kandahar, Kabul and Mazar-e-Sharif.
Chabahar & Gwadar ports
Chabahar port, located in Sistan-Balochistan province in the energy-rich Persian Gulf nation’s southern coast, lies outside the Persian Gulf and is easily accessed from India’s western coast, bypassing Pakistan
Home Minister Rajnath Singh’s 3 day visit to Russia
What has happened?
India and Russia concluded a comprehensive agreement on security and reviewed the implementation of the Agreement on Information Security signed in October 2016 during the just-concluded visit of Home Minister Rajnath Singh
Agreement on Cooperation on Security
An updated and more comprehensive agreement on Cooperation on Security between Ministry of Home Affairs of India and the Ministry of Interior of the Russian Federation was signed.
- What does the agreement provides for?
This agreement provides a comprehensive approach for cooperation in security related issues, including Information Technology Crimes, Counterfeiting currency, Illicit Trafficking in Narcotic Drugs and Psychotropic Substances, Trafficking in Human Beings, Economic Crimes, Crimes related to Intellectual Property, Cultural Property amongst others,
Other things agreed upon
- Establishment of Indian National Crisis Management Centre: Both sides also agreed that EMERCOM of Russia and India would cooperate in the establishment of an Indian National Crisis Management Centre
- Cooperation on disaster management: Both sides also agreed on a plan of training of specialists and sharing best practices in the field of disaster management
- Joint implementation Plan: A Joint Implementation Plan was also signed for the years 2018-19 for cooperation in disaster management, continuing with the bilateral cooperation on the front of disaster management
- Joint Action Plan: A Joint Action Plan was also signed between the Narcotics Control Bureau, Ministry of Home Affairs of India and the Ministry of Interior of the Russian Federation for the period 2018-20 during the visit
EMERCOM (Emergency Ministry of Russia)
The Ministry of the Russian Federation for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters carries out management, coordination, control and response in the matters of the civil defence, protection of the population against emergency situations, provision of fire protection and safety of people on water bodies
A sustainable way forward is to minimize consumption of single use plastic items, create awareness about the use of appropriate grade of plastic, and emphasise the importance of recycling and reuse.
- Plastic is a synthetic polymer, deriving its name from the Greek word plastikos, which means “fit for moulding”
- It was invented in 1869 by John W. Hyatt, responding to a New York firm’s offer of $10,000 for anyone who could provide a substitute for ivory
Problem with plastic
The problem is that plastic does not decay. It sticks around in the environment as deadweight. Recycling of plastic is, therefore, extremely important, and waste management systems and product design explicitly need to facilitate plastic recycling
Worldwide, only 14 per cent of plastic is collected for recycling, while the rest stays in the environment causing pollution both on land and in the ocean
Which type of plastics are safe?
Among the many choices available, while PET (Polyethylene Terephthalate) and HDPE (High Density Polyethylene) are generally considered safe in not leaching any chemicals, there are concerns with regard to PVC (Polyvinyl Chloride) which need to be addressed
The Plastic Waste Management Rules 2016 Sec 4(b) explicitly state that only virgin plastic is to be used for storing, carrying, dispensing or packaging food stuff which is ready to eat or drink. However, enforcement remains a challenge
- Section 9(3) of the Plastics Waste Management Rules 2016 requires the phase out of non- recyclable multi-layered plastic by March 2018
- Section 17 requires manufacturers, producers and users of non-recyclable packaging to either pay municipalities for the cost of managing such waste, or arrange to take it back and manage its disposal themselves.
What about the plastics which are not easy to recycle?
- In such cases where plastics are not easy to recycle, like roofing sheets, bonded rubberised coir mattresses, etc, the solution lies in instituting extended producer responsibility laws under which their take-back and disposal by manufacturers should be mandatory
Non-recyclable Plastic sachets
- Plastic sachets used for packaging of snack-foods like potato chips can also not be recycled. These sachets are composed of three to seven thin layers of different plastics glued together to keep air and water vapour out and retain odours and freshness. They become non-recyclable because of an inner layer of thermoset plastic (nylon or polyester) which does not soften on heating but chars instead, blocking the filter screens and requiring the shutdown of heating equipment every few minutes. Even plastic-coated paper cups and/or stationery pose problems for recycling
- Solution: Appeals to snack-food packagers to use recyclable multi-films are often countered by the argument that the new (non-recyclable) material extends the shelf-life for snack-foods from six months to one year
- Shredding snack sachets: Under section 17, municipal corporations can ask all major snack-food brands to provide the city with equipment for shredding snack sachets into 2-4 mm tea-powder-like flakes and for transport of the shredded flakes to hot-mix plants
- Strengthening of roads: Plastic waste can be used for strengthening roads by adding such flakes to hot stones to form a baked-on polymer primer coat. The excellent bonding with added bitumen gives 2-3 times longer life to tar roads.
High recycle value of PET bottles
PET bottles have enjoyed high recycling value for making into flakes and then fibre, after removing bottle caps, rings and labels, and sorting by colour. Here too purity of the collection stream is the key.
- Crash in the price of PET bottles: At one time, almost all PET bottle-waste from around the world ended up in China. Some years ago, US anti-dumping duty on Chinese T-shirts and knitwear made from recycled PET-based fibre caused a crash in the price of PET bottles for waste-pickers in India. It remains to be seen what will happen with the recent cutback on PET bottle imports by China
PVC was one of the earliest plastics to be invented, but is now banned in many cities, states and even countries
- Uses: It is used in water pipes, wiring cables and also beverage bottle labels, flexes, etc
- Release of toxins on burning:It contains 57 per cent chlorine by weight, which like other chlorine-like (halogenated) plastics, releases deadly dioxins and furans when burnt
- Phase out of short-life PVC: The National Green Tribunal has now asked the Ministry of Environment to consider and pass rules phasing out short-life PVC.Major short-life PVC items like PVC hoardings and banners, flex and posters are almost invariably burnt in the open in Indian cities and contribute heavily to air toxicity. These items are largely imported from China which has banned their use in China but allows the same to be produced and exported to countries with lax environmental rules
Expanded polystyrene (Thermocol)
Another troublesome waste is expanded polystyrene, known more generally as thermocol which is a brand name
- Uses: This is widely used by packaging industry for packing large items like TVs and tiny ones like cell-phones
- Recyclable but unfeasible to recycle:Though theoretically recyclable as polystyrene, here too its light weight makes collection and transport for recycling and even take-back uneconomical
- How other countries solved this problem?
The West and Far East have solved this problem by switching to wonderfully creative and recyclable alternatives: Moulded papier-mâché, folded cardboard, expanded paper, bubble-wrap, air bags, compostable “peanuts” for loose-fill packaging and much more
- Improvement of solid waste management & drainage system: The plastic menace for Indian cities is compounded because of their generally poor state of solid waste management and the poor infrastructure for sewerage and stormwater drainage
- Developing eco-friendly consumption habits such as avoiding disposable catering items and using washable cups and plates instead, will make a difference
- Minimize consumption: A sustainable way forward is to minimise consumption of disposable/single use plastic items
- Creating awareness about the use of appropriate grade of plastic for different purposes, and
- Emphasizing the importance of recycling and reusing plastic
Local African voices need to be heard in the debate on trophy hunting
In July 2015, when Cecil, a 13-year-old black-maned male lion, strolled out of Hwange National Park in Zimbabwe (some say he was baited and lured out), and fell prey to an American trophy hunter, a furore ensued. The unfortunate lion happened to be a study animal collared and tracked by Oxford University, and beloved of tourists on account of his readiness to provide easy photo-ops. While the conservation community was divided in its support, local African voices were hardly heard
Impact of the incident
- Due to this incident Trophy Hunting has received much needed attention
- Oxford’s Wildlife Conservation Research Unit (WildCRU) received widespread financial support
- Subspecies of lions at risk from different population pressures were placed on the U.S. Endangered Species Act, making it difficult for American citizens to trophy hunt
What is Trophy hunting?
Trophy hunting is the selective hunting of wild animals for human recreation. The trophy is the animal or part of the animal kept, and usually displayed, to represent the success of the hunt
- Is trophy hunting good for conservation or does it contribute to population declines?
- Is hunting ethical, and by whose standards?
- Should hunting be banned, and who decides?
Trophy hunting: Not a major threat
- Trophy hunting has been favourably implicated in the recovery of individual species such as the black rhino and the straight-horned markhor, a species of wild goat found in Pakistan
- In the specific case of lions, WildCRU’s own report states the following,
- Habitat loss and degradation as well as the loss of prey-base and conflict with local communities over livestock losses are primary threats
- Trophy hunting may be beneficial: The most fundamental benefit of trophy hunting to lion conservation is that it provides a financial incentive to maintain lion habitat that might otherwise be converted to non-wildlife land uses
Trophy hunting vs ecotourism
Hunting is carried out in about 1.4 million sq km in Africa, more than 22% of area covered by national parks in Africa
- Ecotourism is unviable at this scale: To increase the scope of ecotourism (the most frequently proposed revenue generation alternative) to this level seems unviable given that many of these landscapes are not conducive to tourism. Moreover, some experts claim that compared to ecotourism, high-value trophy hunting has a lower ecological footprint
- Mix results with Trophy hunting: The caution, however, is that like other market-based mechanisms such as payments for ecosystem services or ecotourism, trophy hunting is also riddled by problems such as lack of local regulation, rent-seeking and corruption, which can derail such projects. Trophy hunting therefore has mixed results, with a variety of factors determining its success or failure
Ban on hunting: Not a solution
- Generic hunting bans do not automatically lead to increases in wildlife. For example, in countries such as Kenya and India, where hunting bans came into force in the 1970s, wildlife populations do not seem to fare better than in countries where hunting is ongoing
- No ban is working out well for wildlife: On the contrary, in both South Africa and Namibia where wildlife has been commoditized (trophy hunting, wildlife tourism, commercial meat production as well as local consumption) and managed for the benefit of local communities, populations seem to be doing better
An undue focus on issues such as trophy hunting can take away from real problems such as conflict as well as widespread habitat loss and degradation
Article talks about the latest UNEP report titled ‘Towards a pollution-free planet
- Highest share of India in South & SE Asia: India had the highest share of welfare costs (or a loss of income from labour), of about $220 billion (about ₹1.4 trillion), in South and South-East Asia — of a combined total of $380 billion from mortality due to air pollution
- Global mortality costsprojection: The global mortality costs from outdoor air pollution are projected to rise to about $25 trillion by 2060 in the absence of more stringent measures
- Highest share of China at regional & national scale: At regional and national scale, China’s welfare costs from mortality were the highest at nearly $1 trillion followed by the Organisation for Economic Corporation and Development (OECD) countries with a combined total of $730 billion, the report added quoting a 2016 projection by the OECD
- Large number of Premature deaths: Approximately 19 million premature deaths are estimated to occur annually as a result of the way societies use natural resources and impact the environment to support production and consumption
- If consumption and production patterns continue as they are, it will seriously burden an already-polluted planet, affecting current and future generations
UNEP called for strong high-level political commitment and engagement of the local government, civil society and other stakeholders. Report stated that,
- The responsibility is on governments, businesses, cities and local authorities, civil society and individuals around the world to commit to act to beat pollution in all its forms
What should be done to achieve a high level of political commitment?
To achieve high level political commitment in key economic sectors, there is a need to go beyond the environmental ministries and include other relevant ministries such as finance, agriculture, industry, urban, transport, energy and health
Towards a pollution free planet
Report was launched during the first Conference of Parties for the Minamata Convention, which addresses mercury issues, and ahead of the annual U.N. Environment Assembly, to be held in early December.
Mumbai-Ahmedabad High-Speed Rail (MAHSR) project
What is High Speed Rail (HSR)?
It has speeds above 250 Kmph
Impact of HSR
- It will propel India to the elite league of nations that run high-speed trains and is, therefore, also a project that would symbolise and instil national pride
- At over 300 kmph, it would also mark a paradigm shift for the Indian Railways (IR), which still has average speeds in the range of 50 and 23 kmph for passenger and goods trains respectively
- It would indeed dramatically change the way people in India look at travel as hitherto overnight distances between major cities would get compressed to 2-3 hours, often lower than the total time while travelling by air
- Presently, only 15 countries have HSR
- Shift away from air travel & automobiles: In all these countries, it has brought about profound development over corridors in terms of economic opportunities, employment and environment-friendly transport. In all cases, a massive shift away from air travel and automobiles has also been noticed
Addressing the concerns
- MAHSR has been shrouded with unfounded misgivings resulting in sharp criticism over its viability or whether it will be available for only the elite. Author tries to dispel them
- Author states that, MAHSR is a futuristic project. Can we remain satisfied with average speeds of 50 kmph for passenger trains forever? Should IR not look at a leap of technology?
- A necessity for the future: The way our country’s economy is growing, 10-15 years later our GDP levels would be much higher and that would necessitate extending the HSR network over the high-density golden quadrilateral (almost 10,000 km). It would also drive economies of scale and make HSRs uniquely Indian and frugal in construction cost and affordability
- Aimed at the masses: The project aims at moving the masses. The traffic projection for the project has been arrived at by using normal econometric models and it is often true that once trains start running and people get used to the easy availability of fast travel, the ridership will exceed the projections
- The existing railway network would also benefit immensely from the learnings that would emerge from the technology of HSR
- Japanese Shinkansen is the safest: The safety record of the existing railway system is affected by a number of factors such as surface crossings, habitations close to tracks and the low margin for maintenance. All these factors are fully addressed in the HSR. In fact one of the reasons for choosing Shinkansen is that since its inception in 1964 there has been no fatal accidents
- Economic benefits: Covering 500 km in 2-3 hours will obviously give an enormous boost to economic activities along the corridor. Closer economic linkages will convert the entire corridor into an economic cluster
- Employment:Other benefits that would come with the project are generation of employment of about 40,000 persons during the construction phase, skill upgradation of local residents who will engage with the project and that of railway personnel who would be trained at the state-or-the-art High-speed Training Centre at Vadodara and the transformation of station terminals
- Generation of demand:The project would require about two million tonnes of cement and five lakh tonnes of steel per year during the construction phase. This would itself generate demand for transport and warehousing
- Improved quality of air:The modal shift from air and automobiles to HSR will improve also air quality
- Decongestion: Shift away from automobiles & air travel will decongest our highways and airports
- Transparency: Projects under the MAHSR would be given out after competitive bidding process only. Nomination has been eliminated as a way to hand out contract packages under the HSR project
Studies show business processing in Indian ports has improved, but not by enough
Improvement in Ease of Doing Business rankings
India’s position in the World Bank’s Ease of Doing Business ranking has jumped from 130 to 100
Trading across borders
Trading across borders is one of the areas that is taken into account in assessing the ease of doing business
- Average release time: India’s performance in this respect can also be quantified by measuring the average “release time” of cargo at customs ports. This performance can be effectively gauged by conducting a time release study carried out as per the guidelines of the World Customs Organisation (WCO)
What is ‘release time’?
Release time” refers to the time taken from the arrival of the cargo at a port to its final clearance by the customs authorities. It is an aggregate of the time taken in the processes required to be completed by all stakeholders including port terminals, customs, other government departments such as FFSAI, textiles committee, besides the importers or their agents
Time release study
Jawaharlal Nehru Custom House (JNCH) at NhavaSheva, which is the largest container port in the country, has recently completely a time release study for January and July, 2017
What did it try to assess and its findings?
- It tried to assess and identify practices that will enable JNCH to achieve the average release time of three days or 72 hours, which is India’s national commitment as per the Trade Facilitation Agreement signed under the aegis of the World Trade Organisation
- The study assessed the effectiveness of legislative changes made to the Customs Act, 1962. It provides for filing of import documents up to 30 days before the arrival of the goods. The timing of the filing of documents is critical for the initiation of its scrutiny by customs and other government agencies
- Findings wrt changes made in Customs Act: The study found that in July, only about 37 per cent of the bills of entry were filed in advance. In such cases, the release time is 40 per cent less than the time taken in cases where normal bills of entry are filed after the cargo’s arrival
- Other Changes made: In order to impress upon the need to file the documents expeditiously, the government inserted a provision in the Customs Act that requires importers to file the bill of entry within 24 hours of the arrival of the cargo
- Fine:The law also provides for imposing a fine in case the importer does not file the bill within this deadline, without valid reasons
- Finding:The study shows that while the legal requirement has increased the share of importers filing the documents promptly, 43 per cent importers filed normal bills of entry after 48 hours of the arrival of the good
- Reduction of interest-free period: The second statutory change in the Customs Act relates to the reduction of the interest-free period for payment of duty from two working days to one day
- Finding: The study finds that though the average time taken in payment of duties has come down, 47 per cent of the importers paid duty 48 hours after assessment, attracting a possible interest liability as well as adversely impacting the release time.
- It also evaluated the administrative measures introduced at the port to facilitate legitimate trade
- The introduction of the Direct Port Delivery system (DPD) at JNCH: Under the DPD scheme, eligible importers can take their cargo directly from the port premises, significantly reducing the release time
Findings wrt DPD scheme: The study shows that in July, the release time for DPD cargo was 110 hours, which is 33 per cent faster than other consignments, which entailed about 165 hours of release time. If the benefits of DPD were combined with the facility of advance bills of entry, the release time was about 75 hours. That is in line with the TFA commitment of three days
Impact of GST
No disruption due to GST: The study also showed that the release time for bills filed in the first week of July, immediately after the roll out of GST, does not show any evidence of disruption due to the change in the tax regime.
Further reduction in release time is essential for improving India’s ranking in trading across borders. The task of achieving the three days release time calls for a concerted action from all stakeholders. This effort is best led and coordinated by the customs department
ADB’s country head’s views on manufacturing sector in India
Mr Yokoyama, ADB’s country head for India expressed his views
- The manufacturing sector’s share in India’s GDP has remained stagnant despite the government’s efforts to increase it, adding that India must do more to integrate with the global value chain in which it currently only plays a small part
- He highlighted problems with the inequality between Indian states, the inadequate investment in the infrastructure sector and the poor planning behind urban development
- In the absence of a proactive urbanisation strategy, what is likely is ribbon development along the highways and haphazard development around the industrial areas
What is ribbon development?
The Ribbon development is road centric. This is characterized by peoples’ tendency to build as near to the main road as they can.
The December 10-13 (WTO’s) Ministerial Conference in Buenos Aires, Argentina
What has happened?
At next month’s meeting of the World Trade Organisation’s (WTO) highest decision-making body, India will not compromise on its interests including ensuring food security as well as protecting its resource-poor and low-income farmers and fisher-folk, according to commerce minister Suresh Prabhu
- Against inclusion of new issues: India will hold firm on its positionagainst the inclusion of new issues such as ‘e-commerce’ and ‘investment facilitation’ into the ongoing round of multilateral trade negotiations, without first resolving the outstanding ones including food security
- Doha Development Agenda (DDA): India will make sure that the ‘development agenda’ (to improve the developing countries’ trading prospects) of the talks, which began in Doha in 2001, is not subverted
- Permanent solution to public stockholding issue: The highest priority for India was to ensure that a ‘permanent solution’, much better than a peace clause, on the issue of public stockholding for food security purposes is a part of the Buenos Aires meeting outcomes
Why India wants a permanent solution when peace clause already exists?
Since a country that wants to invoke the Peace Clause has to comply with several stringent conditions (on notification and transparency and commitment on prohibition of exports from public stockholding), India is keen that a ‘permanent solution’ does not have onerous riders
- Protection to fisherfolk: On talks to eliminate ‘harmful’ fisheries subsidies, the minister said “India will protect its small and subsistence fisherfolk, and we want sustainable fishing. We want subsidies for small fisherfolk to continue
- Trade Facilitation in Services: India will also “very aggressively” push its proposal for Trade Facilitation in Services (which, among other things, aims to ease norms on movement of skilled workers/professionals across borders for short-term work)
What is public stockholding?
- Public stockholding is a policy tool used by governments to procure, stockpile and distribute food when needed. Ex: MSP scheme
- Governments purchasing at prices higher than market prices are considered to be subsidising their farmers, under WTO rules. This subsidy is not without limits.
- ‘The limit’ has been setupat 10% of the value of production of the particular grain being procured. The methodology for subsidy calculation is based on a price index of 1986-88, and that does not account for inflation
What is considered as trade-distorting under WTO rules and how Peace clause will give immunity?
- If food grains for the public stocks are procured through an administered price/minimum support price and if this minimum support price is higher than the archaic fixed reference price (calculated on base period 1986-88), then it is considered as trade-distorting agriculture support
- Such trade-distorting support should be within ‘the limit’, which is 10% of the value of production of the particular grain being procured. This is also called as Peace clause.
- One of the first things that this government did in 2014 was to intensely engage with the WTO to obtain a ‘peace clause’ so that even if we did breach ‘the limit’, no one shall challenge our programme till such a time a permanent solution is found, agreed on, and adopted by the WTO membership
Issue of subsidy is covered under AoA
Agreement on Agriculture (AoA)
The Agreement on Agriculture (AoA) was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995
- It aims at reforming trade in agriculture, envisaging a fair and market-oriented system, which improves predictability and stability for both importing and exporting countries
- The Agreement allows governments to support their rural economies, but preferably through policies that cause less trade “distortions”.
- The Agreement on Agriculture applies not only basic agricultural products (such as wheat and live animals), but also the products derived from them (such as flour and meat), as well as most processed agricultural products (e.g. chocolate and sausages). The coverage of the Agreement also includes wines, spirits and tobacco products, as well as fibres (such as cotton)
- 3 pillars of AoA
- Market Access
- Domestic support (Subsidies)
- Export competition
Types of subsidies under AoA
There are 3 types of subsidies under AoA, Green, Blue and Amber box subsidies, which are discussed below:
- Green Box Subsidies: Green box subsidies are those subsidies which cause no, or at most minimal, trade distorting effects or effects on production. These include the amounts spent on Government services such as research, disease control, and infrastructure and food security
- This also includes the subsidies given to the farmers that directly don’t affect international trade badly
- Since they are permitted in WTO regime, the most developed countries have kept providing subsidies to their farmers
- The Green Box contains fixed payments to producers for environmental programs, so long as the payments are “decoupled” from current production levels.
Blue Box Subsidies
Blue Box contains direct payment subsidies which can be increased without limit, so long as payments are linked to production-limiting programs
Amber Box Subsidies
All domestic support measures considered to distort production and trade (with some exceptions) fall into the amber box
- Limits: The provisions accept 5% of agricultural production for developed countries, 10% for developing countries
- De–Minimus level: Amber box subsidies are intended to be limited at De-Minimus level. De Minimus is the Minimal amounts of Amber box subsides permitted by WTO, even though they distort trade. De-Minimus limits are calculated on the agriculture production of the given member state in 1986-88ie they do not consider inflation. So, if India is to limit its food subsidy to 1986 production levels it would not be able to procure at MSP or feed its poor
- Amber box subsidies in the Blue box: The Amber box subsidies with conditions designed to reduce distortion are placed in Blue Box. They include the direct payment to the farmers to reduce production. Apart from the above, there are Article 6.2 subsidies for Development Programmes
What is Doha Development Agenda (DDA)?
At the Fourth Ministerial Conference in Doha, Qatar, in November 2001 WTO member governments agreed to launch new negotiations. They also agreed to work on other issues, in particular the implementation of the present agreements. The entire package is called the Doha Development Agenda (DDA)
Prime Minister Narendra Modi has said his government understood that an environment of transparent policies and the rule of law providing a level playing field were necessary for entrepreneurship to flourish
Inaugurating the Global Entrepreneurship Summit (GES) here, in the presence of U.S. President’s Adviser Ivanka Trump, a couple of Union Ministers and Telangana Chief Minister K. Chandrasekhar Rao, Mr. Modi called upon entrepreneurs from across the globe to come, make in India, invest in India, for India and for the world
Instruments of India’s transformation
Describing young entrepreneurs from India as vehicles of change and instruments of the country’s transformation, he said each of them had something valuable to contribute towards creating a new India by 2022
What is GES?
GES is the preeminent annual entrepreneurship gathering that convenes emerging entrepreneurs, investors and supporters from around the world. GES serves as a vital link between governments and the private sector, and convenes global participants to showcase projects, exchange ideas, and champion new opportunities for investment
- GES 2017: The three-day GES, co-hosted by the U.S. and Indian governments, is the first in the annual series to be held in South Asia, has ‘Women First, Prosperity for All’ as the theme. More than 50% of the delegates are women
The Telecom Regulatory Authority of India (TRAI) on Tuesday came out in strong support of Net neutrality in a series of recommendations following a long process of consultations on the issue
- The licensing terms should be amplified to provide explicit restrictions on any sort of discrimination in Internet access based on the content being accessed, the protocols being used or the user equipment being deployed
What does the word ‘content’ include?
The content mentioned includes all content, applications, services and any other data, including its end-point information that can be accessed or transmitted over the Internet
- Preventing discriminatory treatment: Warning against any “discriminatory treatment” including blocking, degrading, slowing down or granting preferential speeds to any content, TRAI stated, “The scope of the proposed principles on non-discriminatory treatment apply specifically to ‘Internet Access Services’, which are generally available to the public
- Restriction on any discriminatory agreements: The service providers should be restricted from entering into any arrangement, agreement or contract, by whatever name called, with any person, natural or legal, that has the effect of discriminatory treatment based on content, sender or receiver, protocols or user equipment
- Creation of a multi-stakeholder body: To monitor violations, TRAI has recommended the establishment of a collaborative mechanism in the form of a multi-stakeholder body which would be responsible for developing technical standards for monitoring and enforcement of the principles
- In February 2016, TRAI had barred telecom providers from charging differential rates for data services in its Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016, effectively blocking such attempts by Facebook and Airtel
- Facebook had earlier rolled out its Free Basics service in partnership with Reliance Communications as a “differential service” and lobbied hard for it on social media
- Present recommendations have been arrived at based on the pre-consultation paper issued in May 2016 to identify key issues and a detailed consultation paper in January 2017 which focussed on identifying the requirements, design, scope and implementation of Net neutrality framework in India. Based on the responses received, open house discussions were held in three cities
There were mixed reactions to TRAI’s recommendations on Net neutrality
The Cellular Operators Association of India (COAI) observed that the recommendations were “principally” in agreement with the industry submissions regarding the narrow issue of Net neutrality but were disappointed that the authority did not adopt the industry recommendation to have a wider approach
- Committee, unnecessary: A committee to review and decide on network management violations is unnecessarily bureaucratic, and not in keeping with light touch regulation or the ease of doing business
The Internet & Mobile Association of India (IAMAI) called the recommendations “progressive and in line with the debates” in the industry and user groups