The urgent need for electoral reforms in India

Source: By Ajit Ranade: Mint

So, the ball is set rolling for India’s 17th Lok Sabha elections. The Election Commission (EC) has urged voters to vote freely, fearlessly, and make an informed and ethical choice. The numbers are staggering: 900 million eligible voters, a million voting booths, 10 million election officials (not counting security personnel), an expected 10,000 candidates for 545 seats, and more than 500 political parties in the fray.

No wonder it’s called a festival

But as we go into campaign season, the atmosphere is less festive and more feisty, even nasty and fractious. The first-past-the-post (FPTP) electoral system seems to encourage polarization, since in a multi-corner contest, even a low vote share is enough to get you elected and this often involves an extreme ideological focus on a core voter base.

One consequence of FPTP is the trend of constituents being micro-targeted with customized messages. Another result is the non-linear relationship between vote share and seat share. Even a 1% vote swing can increase a party’s seat share by 10-15%. The particularly stark case was that of the Bahujan Samaj Party (BSP), which in 2014 got 20% of Uttar Pradesh’s vote but no single Lok Sabha seat. Electoral reforms are overdue. A comprehensive agenda was laid out by the EC itself in a letter to the prime minister back in July 2004.

Most of it lies unfulfilled, since parliament has not found time in the past 15 years to deliberate on such reforms. The gist of them is to make the process more transparent, disqualify criminal elements, mandate greater disclosure of money power, forge inner-party democracy and raise voter participation. Elections are now vulnerable to the adverse influence of three ‘M’s: money, muscle and media (including the social kind). The EC’s job is to minimize this influence and ensure voting free from fear and coercion, plus a level playing field.

As we look at electoral outcomes, we need to introspect: Just how representative of Indians are our Members of Parliament? The trend over past several Lok Sabhas has been of a widening gap between the people and their representatives. This is a matter of grave concern. Of course, it is nobody’s case that only a poor candidate can represent the poor. Or only a highly educated person can understand the challenge of education in India. Be it MPs or MLAs, elected representatives are agents of the people. In economics lingo, this is a principal-agent problem, where people are the “principal". Whoever they appoint (i.e. elect) has to do their bidding, or at least act in their best interest. In the absence of any other signal of “credibility" or “trustworthiness" from candidates, voters often make choices based on caste, muscle power (to “get things done") or charisma.

To assess representativeness, consider the gaps between electors and the elected on such parameters as age, gender, wealth, criminality, education, dynasty and size of constituency. The average age of the 13th Lok Sabha was 55.5 years, which went down to 52.7 in the 14th, but then went up again to 53 in the 15th, and 56 in the outgoing one. It was only 46.5 years in 1952.India’s median age, however, is just 26. Two-thirds of the population is below 35. Yet our MPs are getting older. In contrast, the so-called ageing countries like the UK, Italy, France and Canada are electing much younger leaders.

On gender, women account for only 12% of the Lok Sabha. At least three states have zero female MPs. Less than 10% of candidates are women. Not so long ago, more than two-thirds of constituencies had no single female candidate. The Women’s Reservation Bill, meanwhile, has been pending in Parliament for over four decades.

On wealth, 82% of all Lok Sabha members are crorepatis, i.e. have declared wealth of more than ₹1 crore. Their numbers have gone up from 156 to 315 to 449 in the last three Lok Sabhas. Their average wealth (declared via self-sworn affidavits) is around ₹14 crore. (In the Rajya Sabha, the average is ₹55 crore). The average income is around ₹31 lakh, which is 20 times India’s present per capita income.

On criminality, the proportion of MPs with criminal cases has been going up steadily, from 12% to 15% to 21%, since 2004. These are cases for which if they were convicted, they would not have been allowed to contest. Many cases are for heinous crimes like rape, murder, kidnapping and extortion. But the law does not bar them from contesting elections, even from prison. Surely, voters cannot accept lawmakers who are themselves lawbreakers. But, only parliament can pass a law to disqualify those with serious criminal charges against them.

On dynasty, it is well known (and documented by Patrick French) that an increasing number of elected representatives have a close relative (parent, spouse, sibling or cousin) who was an incumbent or a senior politician. There are also other measures of representativeness based on identity markers like religion, caste and community that we won’t dwell on here.

Finally, since the size of India’s parliament is frozen, we have a curious anomaly of constituency sizes ranging from a few thousand to over 3 million. As discussed in this column a year ago, India will soon have to grapple the issue of delimitation of constituencies and increase the number of MPs if it wants to retain the representativeness of parliament that’s essential to democracy.

Why is India refusing to join WTO e-commerce talks?

Source: By Amitendu Palit: The Financial Express

More than seventy-five countries agreed to commence informal talks on fixing global e-commerce rules on the sidelines of the World Economic Forum meet at Davos in January 2019. The talks—as reflected in the joint statement issued by the proposing WTO members—would be in conformity with existing WTO rules and would pay special attention to the interests and circumstances of LDCs and SMEs while aiming for high-standard outcomes. The talks would take place outside the WTO with a negotiating agenda likely to take shape during the course of the year. However, with nearly half of WTO members agreeing to join the talks, the negotiations might formally shift to the global trade body in the foreseeable future. At this point in time, however, several WTO members, including India, remain outside the ambit of the talks.

The last WTO Ministerial at Buenos Aires held during December 10-13, 2017, had decided to ‘reinvigorate’ work under the WTO’s e-commerce work programme launched in 1998. Notwithstanding the Ministerial decision, several countries simultaneously agreed to initiate work on identifying the directions of a tentative negotiating framework on e-commerce. It was evident that these WTO members were not willing to wait for the WTO to formally launch e-commerce talks within its fold. The all-too-familiar history of slow progress at WTO on various issues and the difficulties of proceeding on new generation trade subjects would have influenced these members in taking precipitate action. Since the Ministerial, the WTO has received a large number of proposals from various members but has not yet been able to formalise a centralised negotiating agenda. The Davos meeting provided the occasion for members demanding talks to move forward in signalling their intent to begin them soon outside the WTO.

China’s presence in the group of members moving on informal talks significantly enhances the global pressure in proceeding on them. By joining the US, EU and Japan in the chorus for global e-commerce rules, China signals its intent of ‘playing’ by the rules of global digital trade. This could be a game-changer for digital trade talks. It is also important to note that Russia is a party to the demand, as much as Brazil. The presence of these three countries, which have, on various global trade issues in the past, either jointly or individually, been opposed to the traditional ‘north’, makes the credibility and global reach of the group of countries looking to launch the talks sufficiently high.

Many countries are still unwilling to endorse global e-commerce talks. Foremost amongst these is India. India remains opposed to the opening of e-commerce talks at WTO on the larger ground that such talks can obliterate progress on many pending issues on the Doha Development Agenda (DDA) and on the more specific ground of e-commerce talks, if taking place, to be embedded in the WTO’s original digital trade agenda of 1998. It is not known whether similar views are shared by other countries from South Asia. But, along with India, the rest of the South Asian countries—Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka—have also stayed away from demands for informal talks, displaying rare solidarity in a region fraught with differences. Amongst other large Asian economies, Indonesia, Philippines and Vietnam are also absent, as are most countries from Africa, with the exception of Nigeria.

The division amongst WTO members over their willingness to join talks on global digital trade rules reflects the hesitations prominent amongst many till now. As the world rapidly transitions to embrace digital trade and commerce, many countries are suffering from a lack of preparedness in accepting the change. A country like India, in addition, is grappling with the intimidating prospect of letting its enormous domestic market be dominated by foreign e-commerce and digital service providers. India’s new e-commerce investment rules, as well as its emphasis on data localisation, underscore this fear. While the fears might be justified, India and those other large economies those are yet to support global e-commerce talks face two major problems that might complicate their future prospects in global trade.

There is little doubt that more and more countries will join the demand for global e-commerce talks. As major world powers and large economies push for these talks, the scope for alternative, politically non-aligned views is likely to shrink fast in a world where digitalisation of cross-border transactions are no longer an option, but rather the fait accompli. Views like those of India’s, therefore, would find it increasingly hard to gather support. The other major problem for countries like India is the fact that several influential stakeholders at the WTO, including the EU and China, find global e-commerce talks a precious lifeline for revitalisation of the WTO in a world where the global trade body’s relevance is being increasingly threatened by unilateral trade actions. There is no denying that the push for talks is coming largely from countries that have global comparative advantages in providing e-commerce services. But this is unavoidable and inevitable. Waiting for a level-playing field to emerge in e-commerce capacities across the world, and then commencing talks on global rules, is an irrational expectation.

The WTO is desperately seeking a new lease of life and the e-commerce talks might just be what it is looking for. For that it might well be willing to work with most, if not all—a point to be noted by India and the unwilling others.

SDGs and grim global realities

Source: By Bharat Dogra: The Statesman

In recent times the development discourse all over the world has been heavily influenced by the Sustainable Development Goals (SDGs) set up by the United Nations in 2015 for the year 2030. These goals are in the form of specific targets set up for key areas of development, protection of environment and various forms of life etc.

If these goals are achieved, then these 15 years will be the most successful years of human history in terms of reducing distress. Hunger is sought to be almost eliminated while poverty will be reduced greatly. If SDGs help to establish the right priorities in terms of such objectives, then this is a very good initiative.

However we cannot ignore some disturbing aspects. The most ambitious goals of reducing distress have been set for a time period (2015-2030) about which other available evidence indicates that this may be a period of some very adverse trends. For example, if we look at the previous 15 to 30 years, then it is clear that the world has been passing through times of very high and perhaps unprecedented inequalities. The SDGs also talk about reducing inequalities, but not specifically about how exactly these trends will be checked and how actually the forces which are responsible for these trends will be checked.

Similarly it is clear that these are times of very heavy spending on arms and ammunition, as well as increasing overall military budgets. The world is not only over-loaded with destructive weapons (including weapons of mass destruction) but in addition this high risk load is spreading and increasing rapidly. The statistics of high arms spending are generally presented mainly in the context of the spending of various governments but in addition there is also the heavy spending on arms and ammunition, legal and illegal, by individuals, criminals and private militias. All this has been increasing.

The sum total of government and private expenditure on arms and ammunition is truly massive. This is also very expensive in terms of snatching away resources from meeting the needs of people. There are deeply entrenched reasons why weapons go on proliferating despite everyone knowing how destructive and expensive these are. There are also very powerful forces which want this to continue. But SDG documents do not tell us exactly how this trend can be checked or resolved, or what big, new and different initiatives will be taken on this important issue.

Thirdly, the period of SDGs is also a highly sensitive one when lives threatening environmental changes like climate change are likely to increase and cause a lot of destruction and distress. This has been well recognised for about three decades, yet the world has badly lagged behind in terms of the steps necessary for checking this. There are powerful forces which are responsible for this and there are also important weaknesses in the efforts. The SDG documents do not tell us how these forces will be challenged, and how these weaknesses will be removed.

As there are no details of any specific initiatives which are significantly different from the earlier efforts that failed, there is no assurance at all that the inequalities (and the huge wasteful consumption which inevitably accompanies big inequalities) will be curbed, and there is even less assurance that the destructive arms proliferation will be checked. Again there is no assurance that climate change will be checked before it is too late and tipping points are reached.

In such a situation it is not at all clear how highly ambitious goals of meeting basic needs of all human beings and particularly all other forms of life as will be achieved. Thus while the SDGs are laudable objectives and can be helpful in improving priorities to some extent, several questions arise when these are examined with reference to the grim realities of several important existing trends.

What are the structural problems due to which the performance of the earlier few decades has been so disappointing? What are the weaknesses at the level of global governance due to which the most serious global problems (WMDs, climate change, ocean pollution, currency and trade reforms etc.) could not be tackled effectively so far?

We need to find frank and truthful answers to these tough questions and we need to take the necessary remedial action on the basis of these truthful answers for correcting structural problems and injustices as well as for significantly improving global governance and its capacity to solve the most pressing problems. It is not adequate merely to set up good targets for priority areas, we should face the grim reality of the very tough conditions within which these targets have to be reached and take adequate steps to improve the overall conditions.

Agreeable Hunger

Source: By Jaydev Jana: The Statesman

My religion teaches me that, whenever there is distress which one cannot remove, one must fast and pray ~ Mahatma Gandhi, Young India, 25 September 1924.

To go on fast is a very old system of protest, practised for a variety of purposes at different stages of civilization. In its traditional sense, fasting crucifies the flesh and to that extent sets the soul free. Indeed, what is bread to a hungry stomach, fasting is to a soul struggling for self-realization. The logical outcome should be the control of impulses, passions and temptations. It is a prayer to clean the body, mind and soul.

Hindus believe that by going on fast a person will go to the heaven of that God in whose name the fast is observed. The Hebrews associated fasting with divine revelation. A fast is not a hunger strikebut a method to abide by God’s commands. A hunger-strike makes God concede our demands. Buddha, Jesus and Mohammed went on fast to see God face to face. In the words of Mahatma Gandhi, ‘Fasting, unless it is the result of God’s grace, is useless starvation, if not much worse.’

Gandhi’s experiment with fasts was integral to his search for truth. He took over the traditional Hindu practice of fasting as a protest, combined with it the Judaic concept of representative leadership and the Christian concepts of vicarious atonement and suffering love, interpreted and reinterpreted each in the light of the others, and developed the amazing notion of a ‘voluntary crucifixion of the flesh.’

It involved fasts undertaken by an acknowledged leader of the community to atone for the evil deeds of his followers. Gandhi was on fast because he believed that there is some goodness in every human being and every human being is capable of showing qualities such as compassion, brotherhood, tolerance, generosity and love. No matter how cruel or inhumane a person might appear to be, deep down he too has a heart. He didn’t decide to go on fast in haste. Nor was he unaware of its consequences in terms of his health.

Mahatma Gandhi went on fast on several occasions between 1913 and 1948. He first undertook penitential fast at Phoenix (South Africa) on 13 July 1913 and on 13 January 1948, he was on fast at the age of 78 for restoring communal harmony at Birla House. This was the last fast of his life. His fasts stretched from three days to three weeks. He fasted in different places: in South Africa, in cities across India, in prisons and at home. His fasts were never devoid of spiritual significance. A variety of factors influenced him to go on fast ~ against violent protest during the freedom struggle, in support of the ‘untouchables’ and in opposition to the British constitutional proposal based on separate castes, for Hindu-Muslim unity, and against communal riots.

In the words of his grandson Gopalkrishna Gandhi: ‘Gandhi resorted to some 30 fasts, of which one-third were directed at himself for ‘atonement’, of self-purification, one-third were directed against the Raj and one-third at India’s social mores. A more honest trinity cannot be imagined. The latter two fasts were meant to make an impact on the ‘other side’; they were part-fasts and part-hunger strikes, part anashan and part bhukh-hartal, though he derived from each a sense of spiritual self-renewal.’

John Connolly, an Irish writer, once commented, ‘for in every adult there dwells the child that was, and in every child there lies the adult that will be.’ While Mahatma Gandhi had many influences in his life, none was greater in his spiritual development than his mother, Putlibai. He wrote in his Autobiography, ‘She was deeply religious. She would not think of taking her meal without her daily prayers… Two or three consecutive fasts were nothing to her. Living on one meal a day during Chatumas was a habit.” Gandhi’s fasts achieved mixed results. At times, he was able to secure concrete action, such as the withdrawal of the British proposal on separation of castes. On occasion, he had to end his fasts without any immediate, tangible achievement. In his reckoning, fasting was an act of standing for Truth, the truth of the cause of self-rule. It was a potent means of communication.

A fast is a non-violent form of action, an overarching philosophy of ascetic discipline by which one becomes a master of oneself. Fasting, through the imposition of suffering upon the self, is essentially a ‘soul-force’, a spiritual practice of self-sacrifice, a patient education of the ‘other’ away from error and also to convert others by love. Gandhi prescribed two models of fasting based on the objective and the target.

There was a tone of challenge, but not of threat. Gopalkrishna Gandhi has written, “The purity of the motive, the lack of animosity towards the targets of his fasts and, above all, the readiness during the fast to engage with the other side raised his fast to moral heights.” Gandhi also added a unique dimension to his fast ~ elevating it to a powerful, though peaceful, means of shaming into submission the oppressive violent and sectarian forces that tattered the social fabric. His fast added an edge to his efforts towards redemption, even if his ultimate aim was political.

Gandhi went on fast for the people, and never with an intention to turn it into a political weapon. Nor for that matter did this agitprop seek to destabilise the British government or challenge its policies. The only exception was Prime Minister Ramsay MacDonald’s communal award, against which Gandhi sat on a ‘fast unto death’ in 1932 in his cell at Yeravada Jail in Poona. Gandhi achieved extraordinary outcomes with ordinary tools ~ he fought stubbornness with shrewdness, hate with love, fear with courage and lust with the moral weapon. It would be useful to quote his word of caution ~ “The weapon of fasting, I know, cannot be lightly wielded, it can easily degenerate to violence unless it is used by one skilled in the art. I claim to be such an artist in this subject.’

Secular, democratic India

Source: By J K Arora: Deccan Herald

The recent Supreme Court judgement on allowing women of all age groups into the Sabarimala temple has brought out extremely sharp reactions from the two opposite camps, the modern liberal groups and the orthodox Hindu traditionalists.

The judgement has raised the question whether a religious belief that does not violate the provisions of Article 25 can be adjudicated by the courts. Justice Indu Malhotra, who wrote the dissenting judgement in the Sabarimala case, said that “the notions of rationality cannot be brought into matters of religion.” She added that the shrine and deity are protected under Article 25 of the Constitution and that it was not up to the court to decide which religious practices should be struck down, except in issues of social evil like ‘Sati’.

India is a ‘Sovereign, Socialist, Secular, Democratic Republic’ as mentioned in the preamble to its Constitution. But are we actually a secular and democratic republic? During the Constituent Assembly debates on the question of including the word ‘secular’ in the preamble to the Constitution, B R Ambedkar said, “what should be the policy of the State, how the society should be organised in its social and economic side are matters which must be decided by the people themselves according to time and circumstances. It cannot be laid down in the Constitution itself because that is destroying democracy altogether.”

“It is an ideal to be aimed at and every one of us whether we are Hindus or Muslims, Sikhs or Christians, whatever we are, none of us can say in his heart of hearts that he has no prejudice and no taint of communalism in his mind or heart,” said Nehru. Yet, when it came to including the word ‘secular’ in the preamble, both were wary of its usage. The term ‘secular’ was incorporated in the preamble by the 42nd Amendment in 1976, without any debate in parliament as most opposition leaders were in jail during the Emergency.

How have we been practising secularism in India? Political parties are registered by the Election Commission as per rules laid down in the Representation of Peoples Act. The rules do not prescribe that no political party can be registered if it carries a name which can be easily associated with a particular caste, community or religion. How have we omitted such an important condition? When seeking votes in the name of religion, caste or community amounts to corrupt practice and election of a candidate who indulged in it can be set aside, how can political parties that identify themselves with a particular caste, community or religion be allowed to participate in the electoral process? Yet, we have quite a few such parties.

The other issue currently being debated is whether the State should regulate and legislate on aspects that lie in the domain of religious practices and beliefs. The State can, of course, legislate and regulate the other aspects of places of worship as provided in Article 25.Article 26 of the Constitution gives the right to every religious denomination or any section thereof to establish and maintain institutions for religious and charitable purposes and to manage its own affairs in matters of religion.

The Supreme Court has also laid down, in the case of the famous Nataraja temple in Chidambaram, Tamil Nadu, that the temple will be managed by the priests and not the state government. It further observed that “even if the management of the temple is taken over to remedy the evil, the management must be handed over to the person concerned immediately after the evil stands remedied. Continuation thereafter would tantamount to usurpation of their proprietary rights or fundamental rights guaranteed by the Constitution in favour of the persons deprived.” How is any State justified in running the affairs of almost all important Hindu temples on a perpetual basis? Should a secular State not treat all religions equally and refrain from interfering with matters of religion as guaranteed by Article 26?

How are we practising democracy in our country? Indian democracy is being practised through political parties. The main question then is whether the political parties themselves are being run on democratic basis or not. Barring a few, most parties in India is being run as private entities wholly controlled by a particular family or an individual? The control of the party is also handed over to successive generations as if it is private property. Besides, the government and the Election Commission seem totally helpless in regulating the functioning of political parties.

The Central Information Commission has held that national parties are public authorities as they get substantial State funding by way of getting land at highly subsidised rates, tax benefits and free primetime on State-owned TV channels during elections, etc. Yet, the functioning of these parties is not regulated. The same government imposes numerous conditions on various other institutions, like the autonomous sports bodies or other charitable institutions and NGOs, while granting them any benefits. And look at the damage these political parties are doing to national integration, communal harmony and decency in public life, particularly during election campaigns!

Has the time not come to regulate the internal functioning of political parties, like conducting their internal elections by an independent Election Commission-like body? Should their office-bearers be not subject to a maximum tenure? Should there not be provision to deregister parties that violate such conditions? How can they be trusted to run the affairs of the State on democratic principles when they don’t run their own affairs so?

It is time that some public-spirited persons sought judicial intervention through a PIL or otherwise and saw to it that these political parties first start running their own affairs democratically before they are allowed to contest elections. The SC could even suggest the composition of a regulator, perhaps a constitutional body, for political parties. Until then, we must wonder if we are truly a secular and democratic State.

A human-centric approach to unlock growth

Source: By Debjani Ghosh: Mint

Industry 4.0 is a double-edged sword. On one side, we have an artificial intelligence (AI)-driven $15.7 trillion game-changer that is unfolding. Of this, India can claim a $957 billion boost to its gross domestic product in the next 12-15 years. On the other side, it’s this (cutting-edge technologies such as AI) that will disrupt 70% of market leaders across industries in the next 10 years.

The availability of relevant talent (or the lack of it) will decide which way industries (and nations) will go. Re-skilling/upskilling is the only way out and will have to be undertaken by every stakeholder. Even from a mid-term standpoint, the opportunities are simply massive—the global digital transformation market is expected to grow from $ 445.4 billion in 2017 to $ 2,279.4 billion by 2025. The cost of not changing is frightening. By 2022, about 54% employees will need significant re-skilling/ upskilling.

The race for talent acquisition is intense. Countries have started to put in place national digital skills strategies, including in Asia. The magnitude of the challenge is massive and, in our case, nothing short of a collaborative Indian effort will suffice. Moreover, it’s about time we put to rest the fear-mongering narrative of job losses and underpinned the real issue—the global skill crisis. Smart machines will replace millions of jobs worldwide, but, newer jobs will be created in greater numbers.

The World Economic Forum estimates 75 million jobs may be displaced, but 133 million new roles may emerge globally in a few years. These new jobs will be different and will require higher application of cognitive skills alongside working with deep technologies. McKinsey says pretty much the same thing with more alarming statistics over a broader time horizon. Globally, 400 to 800 million jobs may be displaced by 2030, requiring as many as 375 million people to switch job categories entirely. Numerous studies have been carried out (including by Nasscom) and it’s clear why re-skilling is an imperative. Most of these figures are futuristic, but even now the skill gap is being acutely felt across industries. It’s a significant gap.

Is Indian IT doing enough towards re-skilling? Many companies have their own learning platforms that are being used extensively. Others are tapping into their partner networks and massive open online courses. Workforce participants realise that re-skilling is a hygiene factor. Historically, learning has happened in silos where learners have been pitted against one other. This has to morph into a collaborative mindset to create an environment of shared learning. Also, as an industry, we need to have deeper engagements with academia, CoEs and research labs to reach our optimum potential. Indian IT is taking convincing strides to sustain its position as the preferred transformational partner for global clients. Towards this, investments of about 10,000 crore of have been earmarked for re-skilling.

Besides our traditional geographies (the US & the UK) even other nations, such as Singapore, China, France, Canada, and Egypt, have begun to invest significantly towards creating digital talent. As many as 20 countries across the globe have adopted AI National Strategy. Governments worldwide recognise the inevitable shift and are adopting AI, analytics, and allied technologies to deliver citizen-centric services, including real-time response.

The government doubled its Digital India budget to $480 million in 2018-19, which will be used for research and training in deep tech. In the interim budget this year, the announcement of the National AI Centre, AI portal, and the identification of nine areas to be driven by technology are positive steps towards evangelisation. On this, I’d like to also add that the Karnataka government along with Nasscom has launched a CoE for data science and AI.

Universities will have to re-train to ensure students are employable in the digital era. We produce 2.6 million STEM graduates annually, but their employability is considerably low. We have to bear in mind that deep tech is evolving rapidly, so Standards & Quality Packs are still in the WIP stage, putting additional strain on quality. Investment in research is another area where we lag. Sponsored research in our top institutions is between $120-140 million annually, while comparable estimates in the American colleges are between $1-1.5 billion. Increasingly, universities will require great access to patient capital.

This industry has never been constrained by demand. We have to ensure that we get the supply side of the equation right in real quick time, and policies and strategies must translate into immediate action. The choice is no more about being the bigger fish —but being the faster one.

SC, decide as per law

Source: By Sudhanshu Ranjan: Deccan Herald

A five-judge Constitution Bench of the Supreme Court, in its first major order, referred the Ayodhya matter to a mediation committee of three members headed by former SC judge Justice FMI Kalifulla, spiritual guru Sri Sri Ravishankar and senior advocate and mediation expert Sriram Panchu. Mediation is always commendable and, as far as possible, litigation should be avoided. But the recourse to mediation is taken at the initial stage, not at the last stage when it has already caused bloodbaths in the past. Besides, the apex court has done a somersault. Former Chief Justice of India Dipak Misra had said the court would deal with it only a case of land dispute, nothing else. But now, the court is of the view that it is much more than that; it is an issue of faith. The volte face is inscrutable. Views change with the change of judge!

There have been attempts at mediation in the past, but they came a cropper. Further, the committee is lopsided, with all the three members being from South India; in fact, all three were born in one state, Tamil Nadu. It may not inspire confidence. Some Muslim leaders have already taken exception to the inclusion of Ravishankar, who had asked Muslims to forgo their claims on the mosque as a “goodwill gesture”, in the committee. He has reportedly also questioned the Supreme Court’s competence to adjudicate on the issue.

Many Hindu organisations have opposed the mediation in unequivocal words. They referred to the judgement of the apex court in Afcons Infrastructure and Others vs Cherian Verkay Construction and Others, in which it held that there would be no reference to mediation in representative suits under Order 1 Rule 8 of the CPC which involve public interest of numerous persons who are not parties before the court. Mediation is possible if both sides are ready for give and take. But most of the stakeholders in this case have taken recalcitrant positions.

It is very clear that the Supreme Court does not want to adjudicate this sensitive issue. It was clear when, in 1994, it returned the reference sent by the President under Article 143 of the Constitution with respect to the Ram Janmabhoomi-Babri Masjid dispute as to whether a temple had once existed at the site in Ayodhya where the Babri Masjid stood later on.

A majority of three judges held that the reference could not be taken as an effective ‘alternate dispute settlement mechanism’. So, it could not be permitted to substitute for the pending suits and legal proceedings. The court felt that the reference had become ‘superfluous and unnecessary’. The two judges (in minority) opined that the court was entitled to decline to answer a reference but then it must give reasons for doing so.

The grounds given by the court for declining to answer the reference were that (a) it favoured one religious community over another, (b) the Union government did not propose to resolve the dispute according to the court’s opinion, rather it just wanted to use it as a springboard for negotiations, (c) the main protagonists on both sides of the dispute had not appeared before the court to lead evidence or for cross-examination, and finally, (d) the process would invite criticism from either or both sides.

The reasoning adduced by the court for returning the reference is baffling as it did so after obtaining an undertaking from the Centre that it would abide by the opinion of the court though the opinion given under Presidential reference is not binding per se. Furthermore, why should the apex court fight shy of giving an opinion just because it may favour one religious community or may be subject to criticism? The same argument has been bandied about now.

An analysis of the litigation over whether or not it was a Ram Mandir or the Babri Masjid that had existed anterior in time at the disputed site in Ayodhya conclusively demonstrates that some suits do remain inconclusive, perhaps forever. In 1949, some primitive images of Hindu gods and goddesses mysteriously appeared in one section of the unused mosque. It triggered a huge controversy, leading to communal frenzy.

The issue went to the district court for the first time on January 13, 1950, when Gopal Singh Visharad filed a suit in the Faizabad court. Many other cases were filed subsequently. All suits were clubbed together and called before the Lucknow Bench of the Allahabad High Court in the representative capacity. The litigation kept hanging and after spawning many political convulsions, the disputed structure was pulled down by obscurantist Hindu activists on December 6, 1992, triggering large-scale communal riots and making a huge impact on the politics of the country.

Ultimately, after a long wait, a three-judge bench of the Allahabad High Court pronounced its verdict on September 30, 2010. It ruled that the 2.77 acres of land be divided into three parts, with one-third going to Ram Lalla (infant Lord Ram) represented by the Hindu Mahasabha for the construction of the Ram temple, one-third going to the Islamic Sunni Waqf Board and the remaining one-third going to the Hindu religious denomination, Nirmohi Akhara.

While the bench was sharply divided over the issue whether the disputed structure had been erected after demolishing a temple, it was unanimous that a temple or a temple structure predated the mosque at the same site. The court relied upon reports of the Archaeological Survey of India (ASI), which carried out excavations, that the predating structure was a massive Hindu religious building.

The question is, what will the apex court do if the mediation fails? The court must show courage and close this chapter forever. There is a possibility that its judgement may not be obeyed, as happened in Sabarimala, but then it will be the responsibility of the government to enforce it.

A True cost of Alcohol prohibition

Source: By Shagun Khurana: The Financial Express

According to a 2018 report by the World Health Organisation (WHO), the per capita alcohol consumption in India has increased from 2.4 litres in 2005, to 4.3 litres in 2010, and to 5.7 litres in 2016, mainly driven by changes in demographics and spending patterns. The demand for alcoholic beverages has been rising and it has become an important parameter for tourists as well. The tourist-friendly liquor ban policy prevalent in Gujarat clearly shows that the government takes cognisance of the relationship between the availability of alcoholic beverages and tourist influx.

The state of Gujarat continues to practice complete prohibition of production, sale and consumption of alcoholic beverages since the 1950s. In early 2000s, with the changing business environment in the state and increased acceptance of alcohol around the country, prohibition policies started proving detrimental to the tourism industry. The state tourism department had to intervene to persuade the government to relax prohibition norms for tourists. In the contemporary setting, the tourism sector has multiple interlinkages with other industries such as food services, hospitality, retail and real estate. Therefore, to prevent spillovers on other sectors, over the years Gujarat has evolved its prohibition policy to allow consumption of alcohol under certain circumstances, with the provision of health permits, tourist permits and group permits for holding business meetings.

Gujarat introduced tourist permits on arrival at airports and hotels and individual and group permits through its online portal in 2014. According to the Bombay Prohibition (Gujarat Amendment) Act, 1963, a hotel that has “ordinarily a sufficient number of boarders eligible to hold permits” can obtain a hotel licence for selling alcoholic beverages to tourists on premises. In 2012, there were 29 such hotels, and by 2016, the state government granted licences to 23 more.

The state also has authorised retail shops that are allowed to sell liquor to permit holders directly; in 2014-15, the total number of retail outlets were 26, which has more than doubled to 58 in 2018-19. The effect of this favourable approach towards the tourism sector is reflected in the high inflow of tourists, both domestic and international, despite it being a prohibition state. Gujarat serves as a classic example, where the government has been successful in bringing forth policies to contain the adverse effect of liquor prohibition on the allied sectors.

Taking cues from the Gujarat prohibition story, the Kerala government also introduced a near-complete ban on alcohol. In 2014, the per capita consumption of alcohol in Kerala was 8.3 litres per year, well above the national per capita average of 5.7 litres per year, which compelled the state government to take such an extreme measure. Nevertheless, the move led to a decline in the growth rate of tourism in Kerala, from 8.1% in 2013 to 7.6% in 2014 and 5.9% in 2015.

The total estimated loss of revenue from tourism was to the tune of `700 billion. The total revenue generated from MICE (meetings, incentives, conferences and exhibitions) tourism alone, which grew at 9.1% in 2013, and 4.8% in 2014, actually plummeted by 0.6% in 2015. Due to such a substantial impact on the economy and employment, the Kerala government had to repeal its decision of alcohol ban in June 2017.

Prohibition has its pros and cons and its implementation has proved to be a challenging task, to the point of becoming impractical. Despite heavy monitoring and regulation, the illegal manufacture, sale and consumption of liquor continues to cripple the prohibition efforts of the Gujarat government. Data from various sources indicate that the number of deaths caused by the consumption of illicit alcohol is one of the highest in Gujarat. Between 2012 and 2016, spurious liquor claimed 177 lives in Gujarat.

A more recent example is from Bihar, where bootlegging, illegal trade and consumption of alcohol are rampant since the government brought in prohibition in 2016. The unrecorded consumption of alcohol in India is around 50%, as shown by another WHO report in 2014. Prohibition tends to push the regulated market underground as well; the result is a parallel economy for alcohol in Bihar. There was a steep increase in substance abuse and bootlegging activities in Kerala as well during the year following the liquor ban.

The immediate effect of prohibition is a dent on states’ revenues. Post the introduction of GST, revenue from excise has become one of the major taxes collected by states on their own. When the Bihar government announced the liquor ban in September 2016, it cost the state heavily, as the receipts from state excise fell sharply from `3,141 crore for 2015-16 to `29 crore for 2016-17. Because of fiscal constraints, the government has been forced to withdraw all capital incentives including subsidy for industries investing in Bihar, as per its new industrial policy. Moreover, there has been an adverse impact on economic activity as well. MICE tourism in the state has taken a huge blow; with most big events, conferences, product launches, etc, been shifted to other states, occupancy rates in hotels have come down to 40-45%.

State governments need to reflect on their perspective about prohibition of alcohol, especially because it is a significant loss to the interlinked industries, and is a complete wasteful exercise if the ban is repealed later (like in Kerala). One policy does not fit all. In 2016-17, the per capita income of Bihar was `28,485 at 2011-12 prices, while Gujarat’s was 4.5 times. A state like Bihar cannot afford a loss of revenue and a blow to the economic activity of that magnitude. In turn, enforcement of prohibition laws poses a big challenge for state governments and is a financial burden. The question remains: Is it worth it to “ban” alcohol, rather than focusing on encouraging responsible practices in production and consumption?


Persuade, do not direct

Source: By Y V Reddy: Deccan Herald

During the reform period till 2013, the government took several steps to strengthen the balance sheet of the Reserve Bank of India and added to the reserves. For instance, the excessive cost of sterilisation, which normally is borne by the central bank, was shared by the government to keep the central bank strong to be able to serve it better in times of difficulties. In recent years, the government has reviewed this approach.

Further, by taking recourse to the unprecedented practice of interim dividend, the spirit of limit on the Ways and Means arrangement under the fiscal management legislation has been compromised. Immediate fiscal needs seem to take precedence over a renewed assessment of the capital needs of RBI. In 2018, the government took the stand that the RBI has excessive reserves, and the excess could be legitimately claimed by the government. It was laying claim to stock and not merely flow.   

There is no doubt that in the ultimate analysis, the government as the owner has a claim over the reserves, but the way it exercises this claim gives signals to the market and influences public opinion. In law, the RBI Board will have to decide on this, and the Board members are nominated by the government. There are two substantive issues. One is the determination of excess reserves and whether this should only be confined to realised gains or can apply to revaluation gains as well; the second issue is the immediate use of excess reserves, as determined.

There are different approaches to the level of capital of a central bank. One view is that government will provide support to it when needed and hence the issue of adequacy does not arise. All income over expenditure every year could get transferred to the government. Alternatively, the government may like to assure the markets that its central bank has the capital to meet contingencies that may arise without depending on governments. There is merit in keeping at least the central bank’s balance sheet strong if the government’s fiscal balance sheet is weak. But substantively, it is the judgement of the government that prevails on the adequacy issues, though procedurally it is that of the Board.

Use of reserves accumulated in the past will have to consider four factors: one, the macroeconomic implications of such transfers, in particular, the monetary implications, which are likely to be expansive; two, the issues of inter-generational equity, since the reserves have been accumulated as an insurance for the future;  three, the constitutional propriety of using the reserves directly to fund capital of the banks, instead of crediting it to the Consolidated Fund of India and then using it as considered necessary by the government; and four, the incongruity of the banking regulator being asked to use its resources to fund banks that are in need of capital. A committee has been appointed to advise the RBI on the capital framework and related matters.

Second, the government demands that the RBI should relax the norms of Prompt Corrective Action. The government’s contention is that growth is affected by such stringent measures. This is certainly an operational matter and a matter on which government-owned institutions could make representations to the RBI for consideration. There can be genuine concerns of the government, but governments generally persuade, not direct, the regulator in such matters.  Obviously, the government is tilting in favour of its own regulated entities that failed to convince the regulator in the matter, though RBI is the agent of the government and fully equipped to take a view on the matter. In a manner, this dilutes both the autonomy and accountability of the RBI.

Third, the government is also seeking the dilution of the Basel III norms for India on the ground that these are more stringent than the global standards. In general, the Basel III norms assume a particular level of realisable value of the assets in case it becomes non-performing. In India, the transactions cost and the liquidity in relevant markets, in particular in real estate, make the realisable value generally far less than the declared value. There is, thus, a case for the Indian norms to be more stringent than global ones. But the scope, coverage and deviation from global standards are a regulatory and operational matter. 

Fourth, the extent of the RBI’s response to the liquidity conditions being faced by non-banking financial companies is another point of friction between the government and RBI. If IL&FS faced a liquidity problem, it would have been the responsibility of RBI. Obviously, it is an insolvency issue since the government intervened. Perhaps the government intervened since both LIC and SBI, owned by it, are large stakeholders in IL&FS, and also because many infrastructure projects are involved. In any case, RBI should be concerned at the risk assessment capabilities of public sector giants like LIC and SBI that allowed this to happen while having a large stake in IL&FS.

Fifth, the government seeks a policy and a procedure from RBI to facilitate lending liberally, primarily to small and medium industries. The SMEs’ problem is not new, nor is it unique to India. However, any extraordinary push will jeopardise depositors’ interest or induce systemic instability. This is a matter again in which the government and industry could raise the issue and convince RBI but should ideally respect its judgement. To implement any support beyond what RBI considers prudent, government should ideally draw upon its budgetary resources, as is being done to waive farm loans.

Finally, the issue of governance and the role of the RBI Board have been raised.  This certainly is a matter that requires consideration keeping in view both global practices and changing domestic circumstances. In any case, if the role of the Board is being reviewed, it should encompass its composition, its relations with the government and with the RBI Governor. The current composition of the Board in India is unique and appropriate to a full-service central bank. Currently, the Board focuses on house-keeping and renders advice and guidance on policy and is active in committees of the Board, constituted on the advice of the Governor and which provide fora for detailed scrutiny and guidance by the Board members. The issues relating to the regulatory relaxations, capital framework and the role and composition of the Board will have a lasting impact on RBI.

Open the diplomatic window

Source: By Anurag Viswanath: The Financial Express

Recently, both ends of Asia were on fire—India-Pakistan (South Asia) and North Korea-America (Northeast Asia). Given the historical reality of partition and attendant problems, Indians may empathise with the intractable complexities arising from the partition of Korea. Winding the clock back on peninsular partition is, no doubt, complicated. This constituted the backdrop to the second summit between North Korea and America in Hanoi, Vietnam, eight months after the first summit in Singapore in June 2018, which came to a standstill sans agreement, news conference or even a cursory handshake.

The Korean partition north of the 38th parallel along the Military Demarcation Line (MDL) into North Korea (Democratic People’s Republic of Korea) and South Korea (Republic of Korea) can be traced back; it is said, to a line drawn up by two young American officers, who fell back on a National Geographic map. Despite the fact that the Korean War (1950-53) ended in an armistice agreement (technically, the two Koreas are still at war), the Koreas not only share a notion of minjok (one race), hope of reconciliation that echoes in the (unofficial) moving anthem Arirang, so also Hangul (script) that North Korea adopted much earlier but South Korea adopted fully in the last two decades (historical texts in the Koreas are in Chinese, Hanja).

Whilst the situation at both ends of Asia has lacked neither theatrics nor updates via social media, and neither grandiose statement by political leadership nor voluminous newsprint, peace has been elusive. The solution in the Northeast Asian peninsula hasn’t been forthcoming because North Korea and the US are not on the same page.

North Korea and the US literally occupy two ends of the spectrum in their interpretation of what ‘denuclearisation’ means. The American interpretation of denuclearisation is ‘complete, verifiable, irreversible, denuclearisation’ (CVID), which entails North Korea to place all its cards on the table—a comprehensive list of missiles and test sites, inspections and the possibility of North Korea’s entry into the Treaty on the Non-Proliferation of Nuclear Weapons, commonly known as the Non-Proliferation Treaty (NPT 1970) and the Comprehensive Nuclear-Test-Ban Treaty (CTBT, opened for signature in 1996). The American logic of denuclearisation stands for denuclearisation of North Korea.

On its part, North Korea seems committed to denuclearisation. Speaking off-the-cuff to the foreign press in Hanoi, Chairman Kim Jong-un clarified that North Korea would not have been at the summit if not committed to denuclearisation.

But just how North Korea interprets denuclearisation has not seen the light of day, at least in the Anglo-Saxon press. North Korea articulated its standpoint in the ‘Joint Declaration on the Denuclearization of the Korean Peninsula’ back in 1992. To North Korea, denuclearisation means denuclearisation of the peninsula (not denuclearisation of North Korea per se), implying American removal of nuclear umbrella in the peninsula—in effect, asking for America’s retreat in the critical geostrategic hotspot. The US has deployed the Terminal High Altitude Area Defense (THAAD) system in South Korea, and views China as a strategic competitor in Asia.

On its part, North Korea has refrained from nuclear and missile testing (the last nuclear and ballistic missile test took place in 2017). It has closed down Punggye-ri nuclear site and dismantled Sohae (also called Dongchang-ri) satellite launch site, but this was a clever move considering that both had clearly outlived their utility.

Satellite pictures have shown (vehicular) traffic outside Yongbyon (prominent nuclear site), but little is known of what is happening inside. At the summit, North Korea offered to disable Yongbyon in exchange for sanction relief, but did not broach disabling other (undeclared) facilities including a suspected uranium enrichment complex that the US has cognisance of.

However, North Korea pressing for sanction relief in lieu of (dismantling) Yongbyon should be seen in the context of its continued economic downslide. Chest-thumping nationalism juche (self-reliance) and byungjin (simultaneous development of economy and military) aside, North Korea’s economic downslide is somewhat held in abeyance by its only ally, China. North Korean diplomat-turned-defector Thae Yong-ho (who defected in 2016 to South Korea) has said as much that nuclear weapons ‘justify current (economic) problems’. It also helps that nuclear weapons provide a shield for ‘regime stability’ and prevent North Korea from being recast by the US as the Libya of Northeast Asia.

The North Korean conundrum also stems from the fact that the bonhomie, good press and diplomatic cheer following the inter-Korean meets have not translated into economic moolah. Despite three successful inter-Korean meets, the first of which concluded in April 2018 in Panmunjom with the ‘Panmunjom Declaration for Peace, Prosperity and Unification of the Korean Peninsula’, the second inter-Korean meet in May 2018 and the third meet in Pyongyang with the Pyongyang Joint Declaration of September 2018, little has come out of it.

North Korea has validated family reunions, supported demilitarisation of the Korean Demilitarized Zone (DMZ) with guard posts being shut down, a full-time liaison office between North and South Korea, and given the assurance of participation in the 2020 Summer Olympics. But North Korea’s ‘give’ appears more than the ‘take’ (the ‘take’ includes the US ‘reorganising’ military drills with South Korea as low key)—economic sanctions have left it high and dry.

The repatriation of North Korean workers, blockade on North Korean exports of iron-ore, seafood and textiles (even by China, which partly explains North Korea’s export of fake American money and narcotics), and the closure of inter-Korean projects such as the Kaesong Industrial Complex and Mount Kumgang (tourism) tours that brought in tourists from China and South Korea have not helped either.

For South Korea, sanctions on North Korea do not augur well either. In September 2018, unemployment in South Korea rose to a record eight-year high with a rise in mandatory minimum wages. President Moon Jae-in’s approval rating crashed below 50% (since the time he took office in 2017). Under such circumstances, President Moon sees the opportunities of North Korea’s cheap labour, untapped tourism potential, natural resources and opportunities to engage South Korean workers, companies, technology in rebuilding and reconstructing North Korean infrastructure and economy.

South Korea has dovetailed detailed plans to resurrect the inter-Korean rail network (built by the Japanese), calling for an East Asian Railway Community. The railway connection envisages a west-coast line (connecting the capitals, Seoul and Pyongyang) and an east-coast line that would connect Busan, South Korea, through to Mount Kumgang in North Korea (tourism hotspot), Hamhung (industrial city) and end at Rason junction (seaport at Russia’s door, near Vladivostok). This would enable the Korean peninsula access to Russia and Europe.

With the abrupt end to the summit, neither has North Korea/South Korea gotten what they hoped for, nor, for that matter, the US. Beyond ‘failure’, ‘collapse’ and ‘no deal is better than a bad deal’, the American strategy of moving forward without pre-conditions (almost a sheaf out of the Helsinki Accords of the 1970s that engaged America and Soviet Union), keeping North Korea engaged and nuclear test/missile test free, deserves some credit, as does Chairman Kim, poised between the devil of sanctions and the deep sea of denuclearisation.

An unexpected winner is China, whose strategic interest has been well-served—the fact that Chairman Kim has met China’s President Xi Jinping four times, and also took the train through the length of China to reach Hanoi, Vietnam (and back), has not escaped notice, which says a lot about North Korea, economic health included.

In perspective, the summit highlighted the reality of the complexity of the slow process, the dramatic asymmetry of power and that the American, not North Korean goalposts, are hogging the limelight—obscuring the ‘take’ that economic underdog North Korea wants. Realistically, too, in the power asymmetry, the US has the proverbial wild card—the promise of economic boom that may open a diplomatic window and shape future negotiations.


A slim chance

Source: By Faizan Mustafa: The Indian Express

A five-judge bench of the Supreme Court (SC), led by the Chief Justice of India (CJI), has passed the first major order in the sensitive matter of the ownership of the disputed site of the Babri mosque. It has referred the matter to a three-member mediation panel led by former SC judge F M I Kalifulla. The other members are controversial Art of Living founder and spiritual guru, Sri Sri Ravi Shankar and Madras High Court senior lawyer, Sriram Panchu.

All the three members are Tamil-speakers. Faizabad, which is in the Hindi heartland and can be easily polarised in election season, will be the venue of mediation but its proceedings will be kept secret. The CJI and other judges wanted to make yet another sincere effort in finding an amicable and inclusive solution to the historical dispute. Therefore, in their order, they have said that “notwithstanding lack of consensus between the parties, we are of the view that an attempt be made to settle the dispute by mediation”. A constitutional court in our legal system has to play a counter-majoritarian role. It is duty bound to protect the rights of even one individual. Public sentiments are thus irrelevant.

Unlike adjudication, mediation is not an adversarial process. While in judicial adjudication one party wins and another loses, at the end of mediation both the parties must feel fully satisfied with the compromise. Mediation should never be an alternative because one party refuses to accept a court verdict. Even the moderate Atal Bihari Vajpayee had said two years prior to the demolition of the mosque in 1992 that “no court can give a clear verdict on the issue and even if verdict was forthcoming, no government can implement it”.

While it is true that the legal issue is nothing more than a property dispute, the SC is right in saying that the case involves the sentiments of millions of Indians. If it is a question of “faith” for Hindus in terms of the site being the birthplace of Lord Ram, for Muslims, the central issue is about their “faith” in the Constitution and a fair and impartial judicial adjudication by the highest court of the land. Those who demolished not just a mosque but the only surviving piece of Sharqi architecture have not been punished in 27 years. The SC has not even stayed the recent ordinance giving the disputed land to one of the parties even though the ordinance is in violation of its own orders.

There are six major concerns with respect to the mediation order: First, mediation has been imposed by the Court on the parties which opposed it during arguments and have made similar statements after the order was passed. Second, the choice of mediators, particularly Sri Sri Ravi Shankar who is on record asking Muslims to give up their claim as a “goodwill gesture” and had even doubted the highest court’s competence in adjudicating this matter. In fact, he said in explicit terms that if the SC decided this matter, the losing party will have no option but to turn to extremism. Since the Court preferred to term the dispute a religious matter potentially impacting our politics, ideally a religious figure should have been kept away from the mediation process. Similarly, the mediation panel should not have been headed by a Muslim. It would have been better if an atheist, naturalist or follower of a third religion led the mediation process.

Third, though the Court has said that there is no legal impediment in referring this matter to mediation, it left the matter open. The parties opposing mediation did argue that as per the Supreme Court’s judgment in Afcons Infrastructure Ltd (2010), mediation cannot be done in a representative suit which involves public interest or the interest of large number of persons who are not represented in the court. Fourth, whether mediation can be done on behalf of deity is a grey area. The SC in the Afcons judgment said that matters involving rights of deities, minors and the mentally challenged should not be referred to mediation.

Fifth, some parties have outright rejected any compromise. The Akhil Bharatiya Hindu Mahasabha in their written arguments said so in as many words: “…the land in question [has been] a place of worship for Hindus for lakhs of years… It is a question of do or die for Hindus for the sake protection of the Deity’s property.” It went on to assert that “the Hindus have religious faith, deep religious faith [associated] with the birthplace of Lord Ram and they are not ready for any compromise.”

Sixth, the timeframe given for the mediation process is too short. The Court has asked mediators to start their work within a week and give it a progress report within four weeks and complete the work within eight weeks. Though as a general rule it is not necessary that all documents in the Court be sent to the mediation panel but in a matter of this magnitude, it will be too much to expect from the mediators to start their work without examining the huge volumes of documents.

Though many would like to see one party simply giving up their claim, mediators cannot and should not do suggest giving up the title claim without first satisfying themselves that their suggestion will not cause any injustice to the rightful owner/s under law. It would be more appropriate for the mediators to first acknowledge, on the basis of documentary evidence, the rightful legal owner of the site where once Babri Masjid stood and then convince this party to give up its claim.

Generally, mediation proceedings start with an opening statement by the mediators and opening statements by the parties to the dispute. This is followed by mediators having separate sessions with the individual parties to understand their perspective on the dispute and possible solutions. Subsequently, joint sessions are held with all the parties so that a consensus is reached on the contentious issues. Mediation is an informal process and the rules of evidence are not used. Finally, a compromise is drafted. In this case, the compromise will eventually be recorded by the Supreme Court in its order.

Miracles do happen and bitter enemies do become friends. That’s why the CJI preferred mediation even though chances of its success are slim. Let us welcome this initiative of the Court and hope that mediation panel and parties will be able to demonstrate spirit of accommodation and large-hearted tolerance.

An ignored issue

Source: By Chaitra V: Deccan Herald

Menstrual leave is a critical as well as neglected subject in India. Bihar is the only state in India which has been providing two days of special leave every month to its female employees since 1992. The issue of menstrual leave recently gained attention when Ninong Ering, a member of Lok Sabha from Arunachal Pradesh, moved a Private Member’s Bill, ‘The Menstruation Benefit Bill, 2017’, which laid down a proposal for two days of paid menstrual leave to every women working in the public and private sectors.

Countries like Japan, South Korea, Indonesia and Taiwan provides menstrual leave to their female employees every month. Most women suffer from pain, cramps, nausea, heavy bleeding etc during their menstruation. The pain and serious fatigue conditions suffered by women during menstruation negatively affects their quality of life. Plethora of studies indicates that pre-menstrual syndrome (PMS) significantly reduces the occupational productivity in women.

Doctors across the globe acknowledge that dysmenorrhoea or menstrual cramps can be as painful as heart attacks. However, some women do experience very little or no pain during their menstruation and it is inappropriate for such women who go through not so painful periods to generalise their experience of menstruation for the rest of the women.   

Women are biologically different from men and menstrual leave is unquestionably an equitable approach. But, menstrual leave is contended to be discriminatory which permits the women employees to avail more leave than their male counterparts. It is further argued that the concept of menstrual leave goes against the constitutional right to equality. Article 15(1) of the Constitution of India prohibits the state from discriminating any citizen on the grounds of religion, race, caste, sex, Place of birth or any of them.

However, Article 15(3) empowers the state to make special provisions for women and children which is an exception to the general rule laid down in the Article 15(1). This protective discrimination is a necessity to maintain social equality where there has been a history of discrimination against women.

It has been held by the Supreme Court in Government of Andhra Pradesh versus P B Vijayakumar (1995) that “special provision for women” in Article 15(3) means the provisions which the state may make to improve women’s participation in all activities under the supervision and control of the state, can be in the form of either affirmative action or reservation’.

Thus menstrual leave policies like the other women’s rights legislations such as the Maternity Benefit Act (1961), The Hindu Succession (Amendment) Act (2005) etc, will not infringe the Article 15(1) of the Constitution of India. Article 42 of the Constitution envisages that the state shall make provision for securing just and humane conditions of work and maternity relief.

Although the government has provided protective measures especially to women workers under various labour laws like the Factories Act, 1948, Maternity Benefit Act, 1961 etc, wherein the aspects of health, leave and working hours are provided, the idea of menstrual leave finds no mention. Even today, the menstruating women experience lack of a private place at workplace to change the menstrual materials used, resting areas, the fear of staining and smelling, lack of hygiene in toilets etc.

Working in cities is also characterised by jam-packed work and travel spaces thus hindering the privacy and hygiene for changing and disposing menstrual materials. Several studies indicate that the efficiency levels of women are low during menstruation. Therefore, availing a leave during the menstrual cycle would not affect the productivity of the organisation and the economy.

Emphasis must be on labour productivity and quality of output rather than long hours of work. At the outset, ‘menstrual flexibility’ proposed by Australian menstruation researcher Lara Owen (2016) appears to be an economically viable alternative. ‘Menstrual flexibility’ enables women to take time off during their period and make up the time on other days.

Gender equality

Furthermore, when the women’s rights legislations like the Maternity Benefit Act have further advanced the idea of gender equality, gender inclusiveness and gender sensitisation, why not another biological process called menstruation? It is also pertinent to note that maternity is a choice while menstruation is an inescapable monthly biological process that is painful. Menstrual leave policies are also prone to misuse by some women who are capable of working at full capacity during their menstruation. In such cases, measures can be taken to avoid its misuse. The inevitable question which follows is, ‘does menstruating women need separate menstrual leaves in addition to their existing policy for sick leave?’

It is inequitable to merge menstrual leaves with sickness leaves because menstruation is not an illness but an inevitable biological process that is painful for most women. The subject of menstruation is unaddressed and under-researched in India. Workplace facilities, practices and policies are largely designed for men than women. It is the need of the hour to make the workplaces more gender inclusive to enable the women to achieve their full potential.


The role of FC in sustainable development

Source: By Pradeep S. Mehta: Mint

Irrespective of controversies around the remit of 15th Finance Commission (FC), it is evident from its terms of reference that the government wants it to play a key role in fostering sustainable development in India. Indeed, constitutional status and the ability to suggest far-reaching reforms on financing, allocation and use of funds by three tiers of governance makes the central (and state) FCs completely capable to discharge this role. However, effective implementation will be the responsibility of the three tiers, which is an issue of good governance.

Education and health expenditure by states play a key role in improving developmental outcomes. Additional financing requirements of ₹12.1 trillion and ₹53.6 trillion have been estimated for health and education, respectively, to meet the sustainable development goal, or SDG targets, by 2030. Aware of the importance of social sector expenditure, over the years, poor states including Rajasthan, Bihar, Jharkhand, Uttar Pradesh and Madhya Pradesh, have increased their expenditures in social services, education and health as a percentage of gross state domestic product (GSDP).

Despite such increase in education and health spending, experts indicate that efficiency of education spending has deteriorated in Rajasthan, Uttar Pradesh, Madhya Pradesh and Odisha between 2002 and 2015. Similarly, it has been suggested that there was no evidence of poorer states “catching up" with richer states in quality of human capital formation and health-related expenditure. A recent report by Crisil also highlights that while Rajasthan, Jharkhand, Uttar Pradesh and Telangana spent most out of their budget on capital expenditure, health and education sectors remained impoverished. Good governance, coupled with growth, is key in achieving spending efficiency in education, health and social sectors.

Alas, these states may no more be left with sizeable funds to consistently invest in human development. Punjab, Rajasthan and Kerala already have their debt ratios over 30%, which are not only highest across states, but deteriorating. In recent years, some of these states have experienced declines in grants-in-aid and their own revenues as a percentage of GSDP, consistently reporting revenue deficits and fiscal deficits of over 3% of GSDP. Takeover of debt of distribution companies under the UDAY scheme and farm loan waiver announcements were key reasons for several state governments experiencing high deficits. Achieving long-run sustainability of debt and deficits continue to be a major challenge for such states.

Consequently, states such as Rajasthan were faced with a double whammy. Not only did they not have adequate funds to spend on sustainable development, their existing expenditure has not been delivering desired outcomes. This calls for a radical course correction.

The role of local governments has often been ignored in human development, despite them being closest to ground and having the ability to make investment choices based on evidence and consistently monitors outcomes. In the spirit of fiscal federalism, while the Constitution envisages a bottom up approach in determining resource allocations among the three tiers of governance by mandating state FCs to take into account requirements of local governments and inform the central FC, it rarely happens. Local government expenditure as a percentage of total public sector expenditure is only around 7% compared with 24% in Europe, 27% in North America and 55% in Denmark.

The term of several states FCs has been repeatedly extended and there is no coordination between central and state FCs to understand a consolidated account of the reality at the sub-state level. FCs will need to look within and improve internal processes for better coordination, making realistic assessment of ground realities and improving outcomes.

Over the years, several suggestions have been made on mechanisms, which FCs can adopt to empower local governments. For instance, Swaminathan A. Aiyar recommended that central FCs propose substantial rewards for states that are serious about decentralisation, and penalties for those that are not.

Noted econocrat Vijay Kelkar recently suggested some radical changes in our fiscal federalism framework. He recommended creating a consolidated fund for municipalities and panchayats to ensure that revenue allocated by central and state FCs flow directly to it. He also advocated that states and the Centre should share an equal percentage of their respective goods and services tax collection with the third tier. This will lead to creation of better public goods resulting in growth of economic activities, resident citizens’ incomes and consumption which, in turn, will provide high fiscal resources to the local governments.

Suggestions have also been made to create market-based mechanisms for financing government expenditures and fixing accountability. At present, states are neither rewarded nor penalised for their debt management. An index of debt sustainability and fiscal prudence performance indicators for measuring performance can be created, wherein fiscally strong governments can get themselves rated to get better rates in auction of bonds. Cash surplus state governments can be allowed to lend to those in deficit at a market-linked rate.

Similar market-based mechanisms allowing inter-municipality borrowing and lending, and performance measurement on predefined indicators could be designed to incentivise productivity and fix accountability of local governments. FCs need to become agents of change. To this end, they must examine these suggestions, and make appropriate recommendations to empower local governments, enable good governance and play their part in fostering sustainable development.


Startups can ease India’s job crisis

Source: By Sunil Goyal: Mint

The year 2018 has been a watershed for Indian startups and the venture capital industry. With landmark deals led by the Walmart-Flipkart acquisition, increased investments by the likes of SoftBank and Alibaba and a surge in young professionals wanting to become entrepreneurs, India continues to consolidate its position as the world’s third-largest startup ecosystem. Now there is no looking back. We should now strive to become the worlds largest and the best startup ecosystem. These are not just lofty, feel-good goals but ones that can transform our country at multiple levels.

Consider the conventional role and responsibilities of a venture capitalist (VC). At present, the VC sits at the centre of a universe that has investors at one end and founders at another, managing the funds of the former and guiding the latter to scale so that there are handsome returns for everyone who has skin in the game. While this remains the primary reason for a VC’s existence, there are two more stakeholders in this domain—the government and the average citizen.

As a VC originating from and based in India, I believe we also have a responsibility towards those who govern us and my fellow Indians. As part of a larger ecosystem, VCs have a significant responsibility to facilitate dialogue and cooperation with the government so that policymaking is realistic, enabling, and also creates a conducive framework to encourage the spirit of entrepreneurship in India. We need to ensure that progress is not derailed by sudden jolts such as the “angel tax" and the new e-commerce policy. We need continuity and stability at both the planning and execution stages at the policy level, combined with a robust involvement of the stakeholders in the entire decision-making process.

At another level, VCs owe it to every Indian to show her (or him) a solution to both job creation and wealth generation. Jobs (or the lack of them) are at the top of the minds of our youth. The public sector is a major employer of youth, but its share as a job provider has been shrinking despite government jobs being the preferred option for 80% of rural and urban youth. Several reports indicate that unemployment is almost becoming endemic in this country at 6.1%, as per the officially unannounced National Sample Survey Office (NSSO) data.

The Centre for Monitoring Indian Economy (CMIE), a private think tank, has calculated India’s unemployment rate at 7.38%. Both the NSSO and CMIE have found the jobless rate among the youth is significantly higher. So, with inadequate government jobs and a slow uptick in private sector jobs, it is time entrepreneurship is seen as a serious alternative.

More recently, universal basic income is being flaunted as the panacea to almost all our problems. In an election year, there are bound to be debates on both sides, but every right-thinking person knows that sustainable job creation can happen only when governments do not need to intervene in the funding of entrepreneurship, be it at the microfinance level, a Mudra level, small and medium enterprises (SME) or at the highest end of our tech-enabled businesses. At all levels, the innovation of entrepreneurship thrives only when capital is available widely and in a sustainable manner.

To do this, the capital has to be self-generated. If a worker is earning 10,000 a month, someone has to educate that person how saving 500 for pension in the provident fund or putting it into mutual funds is not going to create jobs for anyone. Mutual funds do not invest in initial public offerings (IPOs). They participate in listed stocks and go towards secondary purchase of existing shares rather than in IPOs that would make them primary capital providers to entrepreneurs. When savings go into a provident fund, most of it finds its way into government securities and enables it to run expenses and budgets.

My view is that if part of that ₹500, even 5-10%, is allocated towards entrepreneurship or venture capital, it will facilitate the creation of the largest pool of capital for VCs in the next decade. Consider the cascading effect. Today, with only 100-150 VCs in the country, there are local fund managers everyone is targeting and all are going after those startups in tech-enabled businesses or consumer-facing enterprises. With pension funds and provident funds sitting on patient capital, even a smaller allocation towards venture capital can trigger a fresh new wave of entrepreneurship and job creation.

Contrary to popular perception, we are a nation of risk-takers. Even the man who sets up a roadside stall is an entrepreneur at the core. A farmer literally puts in sweat equity with zero funding to take a risk and start cultivating a patch of land. If we become a nation of “micro-funders", there will be no dearth of opportunities. A whole new chain of startups will develop, from manufacturing to agriculture to agri-tech and many more. Domain experts will find it easier to get funded and India will see thousands of startup enterprises across sectors funded by millions of citizens.

Nothing will boost employment more than this one move. Every household will contribute to job creation and wealth generation and India will become a benchmark for other economies to emulate. We will be a nation that sources funds from within, for deployment to our own startups of which many will, in time, grow to a global scale. If every journey begins with a single step, isn’t it time for the VC industry and our policymakers to step up and reset our goals?

Human rights at risk

Source: By N Veeresha: Deccan Herald

December 2018 marked the 70th anniversary of the adoption of the Universal Declaration of Human Rights (UDHR) by the UN General Assembly. It’s an important document in the history of mankind, with the preamble: “recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world”.

This year’s theme is “#StandUp4HumanRights”. India is celebrating 25 years of the National Human Rights Commission (NHRC). UN Secretary General Antonio Guterres in his message said, “Human rights are under siege around the world. Universal values are being eroded. The rule of law is being undermined”. Set in this backdrop, it is pertinent to explore the status of human rights around the globe, and for us, especially in India.

The World Report 2018 is Human Rights Watch’s 28th annual review of human rights practices around the globe which summarises key issues in more than 90 countries and territories worldwide. In his keynote essay, “The Pushback Against the Populist Challenge,” Human Rights Watch Executive Director Kenneth Roth says that the “surge of authoritarian populists…with a series of politicians around the globe who claimed to speak for “the people” but built followings by demonising unpopular minorities, attacking human rights principles, and fuelling distrust of democratic institutions”.

But even as these authoritarian regimes rise, the US and UK are missing in action as human rights defenders. Battling with racism, refugee crisis and domestic political unrest, France, Germany and European Union nations are unwilling to take up the cause of defending human rights in the present situation. This vacuum has been ably exploited by China and Russia, forming alliances with repressive governments. Witness the mass atrocities in Burma, Syria, South Sudan and Yemen, challenging the international standards for the prevention of human rights abuses, the International Criminal Court and the International Court of Justice

With the result that there has been a frontal attack on the democratic values of social inclusion, respect for socio-cultural and religious diversity and a sense of solidarity that is at the heart of the universality of human rights.

Globally, most nations, in particular the populist governments, including India headed by Prime Minister Narendra Modi have broken the rule of law in order to promote the desires of majoritarian groups, resulting in massive violations of the rights of minorities, backward sections and indigenous peoples. This has given rise to authoritarianism and the breakdown of democratic rule and governance.

The core human rights issues are the denial of economic freedom, right to decent work and equal pay, societal divisions between dominant elites and minorities (both cultural and religious) “who feel that their lives have become more precarious”. The rise of social violence, terrorist attacks and religious extremism has worsened the human rights condition in many parts of the globe.

The intrusion of governments into the domain of freedom of speech and expression, suppression of the media and even the right to food has become a common pattern, disturbing the peace among the people and leading to socio-political instability. The situation in India is not much different from the above, rather it is depressing and disheartening when it comes to human rights.

Indian citizens gave a majority electoral mandate to the BJP in 2014. One would have expected peaceful and stable governance. Instead, the country has witnessed frequent mob violence, political murders, extra-judicial killings, and social violence aimed at religious minorities, marginalised sections of the people, especially adivasis and Dalits, children and women. Democratic dissent is labelled and perceived as anti-national, and civil rights activists, journalists, researchers and academicians are arrested and implicated in false cases by adopting inhuman and undemocratic means.

Rules on the regulation of foreign funding are being used to target civil society organisations that are critical of the government’s policies. The lack of accountability and institutional mechanisms for human rights violations and abuses, sexual violence against women in general, particularly adivasi women, by the security forces in the regions of the North-East, Chhattisgarh and Jammu and Kashmir. Mob and lynching attacks by extremist Hindu religious groups against minority communities, especially Muslims, have increased at an alarming rate since 2014.

Supreme Court rulings

In this fragile environment, the Supreme Court rulings in 2017-18 strengthened fundamental rights, rights for women, and accountability of the security forces for violations and killings. Four judicial pronouncements are critical from the perspective of human rights in India: the abolition of triple talaq; the striking down of IPC Section 377 to end discrimination against LGBTs; the entry of women into the Sabarimala temple; and the declaration of individual privacy as part and parcel of fundamental rights.

The question is how to respond to the challenge of these populist and authoritarian regimes, which are a threat not only to human rights but also to human civilisation. Civil society organisations, the media and the people at large must exert pressure to reaffirm the criticality of human rights principles. The effective participation of the citizen in the affairs of governance is the instrument to hold government accountable for its actions and violations of human rights.

There is a need for large-scale mobilisation of people on the issue of the risk and threat of denial of human rights by governments. The interaction between citizens and institutions of governance is fundamental to the preservation and protection of human rights and is critical to realise the spirit of Article 1 of the UDHR which states that “All human beings are born free and equal.”

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