Daily News Mail - News of 11/06/2015

Rs. 6,000-crore loan to help sugar mills

• The Union government on June 10 approved a Rs. 6,000-crore interest-free loan to the sugar industry to enable it to clear cane arrears to farmers that stand at Rs. 21,000 crore.
• The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, agreed to provide a one-year moratorium on loan repayment. It also decided to bear the cost of interest subvention, to the extent of Rs. 600 crore, for the period.

List prepared

• Sugar mills will prepare a list of farmers whose dues they have to clear and banks will transfer the amount to the Jan Dhan accounts of cane growers, Union Minister for Road Transport and Highways Nitin Gardkari told journalists after the Cabinet meeting. Earlier, millers were asked to pay off the dues to farmers. “We have taken the decision in the interests of farmers,” the Minister said.
• The CCEA also decided that the loans be given to units that cleared at least 50 per cent of their arrears before June 30. This is the second time that the Centre has given an interest-free loan to millers to clear arrears. In December 2013, the government gave an interest-free loan of Rs. 6,600 crore.
• The move, however, did not go down well with the industry body — Indian Sugar Mills Association — which said this did not address the basic problem of surplus sugar and depressed prices.
• “To expect the industry to repay the loan after a year is expecting it to make profits to the tune of Rs. 6,000 crore within a year, which does not seem possible with a surplus stock of over 10 million tonnes and depressed sugar price,” ISMA director-general Abinash Verma said in a statement.

Action on Indian side: Myanmar

• Myanmar on June 10 maintained that Indian forces had carried out an attack on insurgents inside India and that it would not tolerate rebel groups using its soil to attack neighbours.
• In a Facebook post, Zaw Htay, director of Myanmar’s presidential office, said, “According to the information sent by Tatmadaw (Myanmar army) battalions on the ground, we have learned that the military operation was performed on the Indian side at the India-Myanmar border.”
• “Myanmar will not accept any foreigner who attacks neighbouring countries in the back and creates problems by using our own territory,” he added.
• The official’s remarks came in the wake of statements by ministers in India that special forces of the Army had carried out a surgical strike inside Myanmar to destroy two camps of insurgents hiding there.

Railways to stagger Tatkal booking

• To ease pressure during peak hours, the Railways has decided to stagger booking of Tatkal tickets by allowing reservations in AC class from 10 a.m. to 11 a.m. and non-AC class from 11 a.m.
• The new Tatkal booking schedule will come into effect in the next couple of days, a senior railway official said.
• It is also toying with the idea of giving refund on cancellation of Tatkal tickets, the percentage of which would be calculated based on a time frame.
• The public transporter has decided to rechristen premium trains as “Suvidha” trains with an overhaul in the fare structure, cancellations and bookings, Railway Member (Traffic) Ajay Shukla said.
• Refunds will also be available on cancellations of tickets of premier trains and such refunds would go “up to 50 per cent, ” he said.

Bills that don’t match promises

Article by Arun Kumar, Sukhamoy Chakravarty Chair Professor at the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University

• In the recently concluded session of Parliament, while some important Bills got passed, others had to be sent to parliamentary committees for further scrutiny. Some of the delayed Bills were termed as ‘game changers’ and the stock market indices reacted negatively. The Bills were passed in the Lok Sabha but were stalled in the Rajya Sabha since the government did not have the numbers. Politics played an important role in all this but there are genuine reasons why a reconsideration of the stalled Bills may be beneficial for the country.

A paper tiger

• Let us start with the so-called “Black Money Bill” passed with ease in both Houses of Parliament. No party wanted to be seen opposing it given the prevalent anti-corruption climate in the country. Since the Bill seeks to bring back illegally stashed wealth from abroad, opposing it would have appeared to be anti-national. It also passed easily because most realise that it will do little to bring back the ‘treasure’! The views of the high-profile activists from within the ranks of the Bharatiya Janata Party (BJP), Ram Jethmalani and Subramanian Swamy, make it clear that the Bill is a paper tiger.
• It provides for stringent punishment of those Indians who hold undisclosed wealth and/or earn undisclosed incomes abroad. Excluded from its purview are Non-Resident Indians (NRI) who are genuine holders of wealth abroad and can earn incomes there. They are not obliged to declare their assets or incomes to Indian authorities. So, Indians who are moneyed, work out an arrangement with NRIs to hold their wealth and show their incomes through legal arrangements.
• Further, the provisions of the Bill will be applicable only if the government is able to detect incomes and wealth held abroad. The Bill has no mechanism for doing so. Hence, the draconian punishment — a jail term and 300 per cent fine — can hardly be implemented. An amnesty scheme is being offered to come clean. There will be no punishment if one discloses the assets and incomes abroad in the specified period and pays the taxes within six months. Thus, the inexperienced ones who had held illegal wealth abroad in their own names and earned incomes on them would have a chance to come clean. The HSBC list revealed that some Indians who did take out funds in their own names have now got caught. The ‘experienced’ ones would not have made the mistake of holding funds in their own names.
• The process of “layering” has been available for a long time. It hides a person’s identity by using shell companies in tax havens to transfer funds. It is no surprise then that the Swiss government revealed that Indians hold only Rs.14,000 crore in Swiss banks. This is mostly legitimate money, of Indians, and in their own names. The black wealth of most ‘experienced’ Indians would be parked there via shell companies in tax havens and hence not be counted as Indian money. The largest amount of money in Swiss banks belongs to the British since they own the largest number of tax havens.

The loophole of amnesty

• The Bill contains no mechanism to identify funds going out or being held abroad. The government argues repeatedly that it will get information via the Double Taxation Avoidance Agreement (DTAA) or Tax Information Exchange (TIE) agreement with a number of governments. However, these agreements have been in place for more than two decades; it is ironic that under them, there has been no information on black wealth holders. Further, these agreements are about the declared incomes of individuals and not about their undisclosed wealth or incomes. Hence, this argument does not hold water.
• The Bill does hold out a threat that if anyone is caught, the penalties will be harsher than for those with black wealth detected in India. There may be a deterrent effect but since the brief of clever lawyers, chartered accountants and bankers is to devise ways to hide incomes, it can only be a losing battle. Thus, the most significant aspect of the Bill is the amnesty to those to come clean who may have made the mistake in the past of putting money in their own names. It is no wonder then that the Bill was passed in Parliament.

A blow against corruption

• Then, there is the Whistleblowers Bill, crucial in exposing rampant corruption in the country. While it is difficult for people outside to unearth corruption in institutions, insiders are often in the know and can reveal its extent provided they have protection under the act. But the amendments proposed will make action on complaints by whistle-blowers more difficult, and they can face prosecution. Together, both these will dissuade people with information from coming forward to expose wrongdoing. Is this the intention of the government? Corruption works to the disadvantage of the vast majority of Indians and if the amendments to the Whistleblowers Bill are passed, they will be the sufferers.

Affecting the small sector

• The introduction of Goods and Services Tax (GST) in the country is being promoted as the biggest tax reform in India and a game changer. It is supposed to provide a seamless unified market for business, raise GDP growth by 1 per cent, tax-GDP ratio by 2 per cent, reduce the cost of indigenous goods by around 10 per cent and lead to the consolidation of manufacturing to reap economies of scale. However, the Bill proposing the constitution amendment to enable the implementation of this reform has been sent to a parliamentary committee, thus delaying its implementation. The United Progressive Alliance, which introduced this idea, has now backtracked since it does not wish to give the BJP-led National Democratic Alliance (NDA) an advantage. Opposing it on genuine grounds are the manufacturing States that are worried about loss of revenue.
• However, the real problem with GST in India is not being addressed by any of the political parties. India has a large, unorganised sector employing 93 per cent of the workforce. The small and tiny units under it produce locally and sell locally. The unified market sought to be created is of little help to them. Actually, they will lose as large-scale production gains. This will slow down employment generation and aggravate underemployment and distress in the farm sector. Excess labour in farming typically gets absorbed in the unorganised sector; if that sector declines, rural distress can only increase.
• The small-scale sector that would be outside the GST net would not be able to sell to the large-scale sector because it would not have receipts for payment of Value Added Tax. Further, the unorganised sector cannot afford computerisation of accounts to calculate the value addition and pay tax on it. That is why it is kept outside the GST, but that would now be to its disadvantage.
• Finally, there are contradictions in the argument being made for GST. The tax-GDP ratio can only rise if more tax is collected but then prices will rise leading to a slowdown in demand so that GDP growth rate cannot rise as claimed. Further, if the GST tax rate is not raised to the revenue neutral rate (RNR), then tax collection will fall and the tax-GDP ratio cannot rise. Thus, the macro-level story shows that either way, there is a contradiction in the government’s argument. It is for this reason that the States are right to worry about a potential loss of revenue. Clearly, GST is being introduced for the benefit of large businesses and would work against the interest of the small-scale sector and the majority in the country.

Marginalising the farmer

• The Land Acquisition Bill is also to further the interests of big businesses and a part of creating the “ease of doing business”. In the process, the land owning-farming community is being sought to be marginalised. Farming is not just work but also a way of life and when the village community — with all its drawbacks — is broken up, then people are forced to give up a way of life. Many migrate to urban areas with few assets, to an alien and polluted slum environment and suffer a deterioration in their living conditions. Should these people not have the right to be consulted? In the past, excess land has been acquired cheap and has become an investment for big business.
• In Gurgaon, land was acquired by big developers in the 1980s and developed for commercial and residential purposes rather than for essential purposes. The developers got advance information and acquired large parcels of land at a cheap rate in connivance with politicians. In fact, a Chief Minister got over a lakh acres of land notified for acquisition. But for the fall of the government this would have gone through at the expense of the farmers.
• In brief, the Land Bill and the introduction of GST will further marginalise the already marginalised. The Black Money Bill and the proposed amendment to the Whistleblowers Bill will together make the task of unearthing black incomes in India or abroad more difficult, in turn adding to the difficulties of the common man. When the NDA came to power, the Finance Minister had argued that being pro-business is not being anti-poor, but the government’s actions seem to contradict that.

INS Vikrant undocked at Cochin shipyard

• The maiden indigenous aircraft carrier INS Vikrant was undocked recently at the State-owned Cochin shipyard. The undocking is part of the second phase of work on the carrier, which is expected to be over by 2017.

INS Vikrant

• INS Vikrant is the first aircraft carrier built in India and the first Vikrant-class aircraft carrier built by Cochin Shipyard Limited for the Indian Navy.
• Vikrant is the first aircraft carrier to be designed by the Directorate of Naval Design of the Indian Navy and the first warship to be built by Cochin Shipyard.
• The basic design of the indigenous aircraft carrier was done by the Indian Navy’s Directorate of Naval Design, which was developed into detailed design by the design team of CSL.
• It will be India’s largest aircraft carrier after induction.
• The successful completion of the aircraft carrier puts India in the elite group of four nations – the US, Russia, the UK and France – in the world capable of designing and constructing aircraft carriers.

INS Vikrant

Sanctioning cruelty in the name of faith?

• In the land of the cobra and the snake-charmer, the cobra finds itself in the middle of an unlikely controversy. Cloaked under the privilege of “religion and culture”, the new draft National Wildlife Policy, framed by the Ministry of Environment, Forests and Climate Change, suggests amending existing laws to allow hunting of animals like cobras. Union Environment Minister Prakash Javadekar has repeatedly made statements saying wildlife protection laws can be amended to accommodate “religious and cultural practices”. A high-level committee set up to review India’s environment laws, led by former Cabinet Secretary T.S.R. Subramanian, first suggested these amendments, stating they would be harmless to both man and beast.
• The question is whether endangered and protected species, already illegally poached, should be subjected to further commodification through vague terms like “culture” and “religion”. More problematically, the question is whether decisions that impact ecology and non-human species should be taken on lines that will likely favour one dominant community, or custom, over another. Both problems represent the way certain animals are constructed as familiar to us, even as friendly; even if the animals are, in fact, dangerous, endangered, or hard to procure. At its centre is a person’s perception of the wild animal, however removed from reality.

The wild as familiar

• Hunting of most animals, except notified vermin(meaning of vemin - wild mammals and birds that are believed to be harmful to crops, farm animals, or game, or that carry disease, e.g., foxes, rodents, and insect pests) (like rats), is prohibited in India. This stems from strong conservation and preservation laws in independent India. However, the draft of the new National Wildlife Policy suggests that if cruelty in hunting can be removed, hunting should be allowed. It states: “Traditional practices involving wild animals are prevalent and in almost all cases, there are confrontations between the enforcement authorities and communities on these aspects, [thus] it is desirable to distinguish between “hunting” and specified religious/cultural practices of communities involving wild/ scheduled animals. The regulations for appropriate safeguards and prevention of cruelty can be provided in the Act.”
• The predecessor of this is the T.S.R. Subramanian Report, which recommends: “India has a varied and glorious cultural tradition; while there are many national festivals, there are also localised festivals which are of great local importance in different States. Nature and animal worship has been part of the national culture. Thus, for example, Nag Panchami in many States is celebrated and snakes worshipped during five days in the Shravan month, as a thousand-year-old tradition. It is to be noted that the snakes are never harmed — indeed they are worshipped during this period. A dispensation in the various Schedules should be permitted to take into account such local practices, and reflect them in their approved schedules, through gazette notification.”
• Both high-level documents suggest that removing cruelty in the capture or procurement of these animals can not only give the animal respect but also fulfil cultural traditions. For a species like the cobra (or any wild snake), this could not be further from the truth. For Nag Panchami each year, tens of thousands of snakes are captured. Cobras, like many wild snakes, do not take well to capture. They are almost always defanged using stones or hot metallic instruments and their mouths are stitched up. They die deaths that are always painful, and sometimes delayed.
• The interpretation of certain traditions, however, construe that the captured, livid, hissing cobra wants to be captured or is being adequately respected. In reality, the hunting of snakes (cobras, rat snakes), birds (like owls, parakeets) and other animals always masks the death of many more. For each bird or snake in illegal captivity, there are thousands that died during the capture or transportation. Several animals will not and cannot breed in captivity. To procure them for any cultural custom, their capture from the wild will always be necessary. The Ministry’s moves try to cast an accommodative sheen on custom and culture, but the reality is invariably gruesome.

Sacred becoming profane

• In India, several animals are deemed “holy”. This has led in a major part to unsustainable practices. Wild elephants are captured, beaten and broken, to carry people or stand immobilised for hours on end, adorned with heavy and blinding ornaments. Snakes and conch shells are illegally “harvested” for sale at scandalously greedy rates. For several wild species, their being sacred has actually led to physical profanity. Should the Environment Ministry broaden the cruelty of hunting in the name of faith? And further, is it the job of the Environment Ministry to be the gatekeeper of which customs, religions, and practices to uphold or privilege over another?
• It was reported recently that eight tribals from Jharkhand’s Khunti district have been languishing in jail for months now, for sacrificing an ox, deemed holy by Hindus. The tribals were unaware of the furore their actions would cause, and their actions were probably inadvertent. However, amending the law as per the above suggestions would mean knowingly allowing sacrifice, harvest and hunting of some animals; and privileging one belief over another. Apart from having social ramifications, it will also strengthen the hands of poachers by becoming, effectively, a smokescreen for poaching itself. Till about 50 years ago, it was considered ‘cultured’ for people to hunt tigers. British and Indian royals and nobles hunted. As with other social evils, hunting too was deemed an anachronism and banned. We will be taking several steps back if we re-allow hunting, whether for ‘religious use’ or otherwise.
• Ultimately, one hopes culture is something that evolves. The Nyishi tribals of Arunachal Pradesh have learned to embrace artificial fibreglass casques instead of hunting the endangered hornbills for headgear — that is evolution. Similar solutions should be found, instead of targeting the already dwindling wild animal populations.
• The Environment Ministry needs to show leadership in protecting biodiversity. Towards this end, it should uphold hunting restrictions, instead of considering changes which will be cruel, regressive, and fetishise species. The only right answer is in creating new and evolved cultures.