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Reacting strongly to Sri Lanka’s request to delay the visit of a tracking vessel that was due to arrive on August 11 and had aroused India’s concerns, China described India’s opposition to the visit as “unjustified” and “morally irresponsible”, and “urged” New Delhi to “not disturb normal exchanges” between the two countries.
The Yuan Wang 5 tracking and survey vessel had last month been given clearance by Sri Lanka to stop in the port of Hambantota from August 11 to 17 to carry out replenishment.
The visit of a space and satellite tracking vessel for close to a week had, however, aroused concerns in New Delhi, and last week, Sri Lanka’s government conveyed to China that it wanted the visit deferred “until further consultations” were made.
Chinese Ambassador Qi Zhenhong sought a meeting with President Ranil Wickremesinghe, after receiving the note verbale from the Sri Lankan Foreign Ministry requesting a delay in the visit.
In a statement late on Monday, Sri Lanka’s Ministry of Foreign Affairs confirmed the request, saying that on July 12 it had given “diplomatic clearance” for the Chinese vessel to make a port call.
Subsequently in light of the need for further consultations, the Ministry has communicated to the Embassy of the People’s Republic of China in Colombo to defer the visit of the said vessel to the Hambantota port,” the Ministry said, in its first official statement on the controversial vessel visit, without commenting on the outcome of its request.
In a strongly worded response at a press briefing on Monday, Chinese Foreign Ministry spokesperson Wang Wenbin said, “I have noted relevant reports and would like to stress two points.
First, Sri Lanka is a transportation hub in the Indian Ocean. Scientific research vessels from various countries including China have made port calls in Sri Lanka for replenishment.
China always exercises freedom of the high seas in accordance with law and fully respects coastal countries’ jurisdiction over scientific research activities in waters under their jurisdiction.
Second, Sri Lanka is a sovereign country. It has the right to develop relations with other countries based on its development interests.
To have normal cooperation is the independent choice made by our two countries. It serves the shared interests of both sides and does not target any third party.
Editorial
Macro Variable projections in uncertain times (Page no 6)
(GS Paper 3, Economy)
The Fed has raised its benchmark interest rate again by a whopping 0.75%. The Reserve Bank of India has also been forced to raise interest rates further but also take other steps.
These decisions in the Monetary Policy Committee (MPC) meeting are based on what the members of the MPC see as the likely course of the economy in the months ahead.
But, the trajectory of the world economy, and its likely impact on the Indian economy, is imponderable. So, Indian policymakers would face two crucial problems.
First, the main uncertainty is due to Russia’s war on Ukraine and the resultant economic sanctions on Russia, as well as the zero-COVID-19 policy in China that repeatedly implements lockdowns leading to global supply bottlenecks.
Second, policy has to base itself on data. If it is deficient, it introduces additional uncertainty, making projections for the future difficult and causing policies to fail. This will compound the problem that results from the global uncertainty.
Since early 2020, the SARS-COV-2 virus has caused global uncertainty. Waves of COVID-19 have curtailed human activity with a consequent loss of production.
Different countries have implemented lockdowns of varying severity leading to supply bottlenecks. In a globalised interdependent world, production was hit resulting in price rise (inflation) and loss of real incomes.
This has resulted in decline in demand and, in a vicious cycle, a further slowing down of the economy. Predicting these declines has been difficult because forecasting when another wave would strike and how much disruption would occur has been difficult. As prices have risen globally and economies slowed down, many countries have faced stagflation.
The uncertainty due to the novel coronavirus has declined in spite of waves of attack persisting because the impact of new virus mutants of the virus is milder and there is also immunity due to vaccination. Countries are not implementing lockdowns so vigorously now, in turn reducing adverse economic impact.
However, China is an exception with its zero-COVID policy. It has been implementing strict lockdowns in the last six months, even when only a few cases of the disease have been detected.
Since China is now the manufacturing hub of the world, any disruption impacts supplies globally and causes bottlenecks to persist.
There is another issue now. Monkeypox virus has suddenly emerged and spread rapidly in the last few months to more than 80 countries where it is not endemic.
The World Health Organization seems to be confident that this threat can be dealt with more easily than COVID-19. Yet, there is heightened concern and uncertainty.
PMLA verdict — due process will be bulldozed (Page no 6)
(GS Paper 3, Internal Security)
Outcomes in matters of constitutional law disputes depend on the values that the constitutional court choose to emphasise over those it chooses to discount.
The recent decision of the Supreme Court of India in Vijay Madanlal Choudhary vs Union Of India, where it found all the provisions of the Prevention of Money Laundering Act, 2002 as amended from time to time (“PMLA”) as constitutional, is a case where the Supreme Court repeatedly relies on the legislative intent behind the PMLA to fight the menace of money laundering to trump all other considerations — in particular due process.
The PMLA is an Act that is meant to deal with prosecution and punishment for the offence of “money laundering”, which an accused commits when he has relation with any process or activity with the “proceeds of crime” and has projected or claimed such proceeds as untainted property.
Thus, for the PMLA to come into action, there must have been another crime — independent of the PMLA — from which monies were derived. This other crime, which is a necessary precondition for an offence under the PMLA is described as the predicate offence.
The substratum of the challenge before the Court was that when the predicate offences (these can be various offences under regular penal law such as the Indian Penal Code 1860, the Prevention of Corruption Act, etc.) are governed by the regular criminal process, the major deviations from this procedure in the PMLA, which is only a consequential act, are manifestly arbitrary and in any event violative of various fundamental rights, inter alia Articles 14, 20 and 21.
The major deviations in the PMLA scheme, all of which operate to the detriment of the accused that were challenged were: non-supply of the Enforcement Case Information Report (ECIR) to the accused/arrested person; power to make any person (including existing or future accused) state the truth on oath even though it may amount to self-incrimination (Section 50); if the Public Prosecutor opposes bail, then the court can grant anticipatory/regular bail, only if the court has reason to believe that the accused is not guilty (Section 45); once a person is accused of committing the offence of money laundering, the burden of proving that proceeds of the crime are untainted property shall be on the accused (Section 24); blanket common and non-graded punishment for anyone associated with money laundering (Section 4).
It is not too difficult to imagine that these deviations from regular criminal law are capable of great mischief, and strike at the very core of what the Constitution envisages: a fair legal process to determine the criminal culpability of a person.
A person under arrest, without knowing what is the primary case against him, being made to give self-incriminating statements under oath and then required to prove his own innocence at trial is hardly a criminal procedure that appears either just or fair.
All this, when the Act which brings taint to the money, i.e. the original crime, continues to be governed by regular criminal law, where none of these draconian provisions applies.
OPED
Launch a national tribal health mission (Page no 7)
(GS Paper 1, Society)
For the first time since independence, a tribal President has become a reality in India. This is a very positive signal given to the tribal people by the Narendra Modi government.
On this International Day of the World’s Indigenous Peoples, let us explore how this symbolic gesture can be turned into a health revolution for the tribal people of India.
Few people are aware that nearly 11 crore tribal people (enumerated as Scheduled Tribes (ST) in the Census of India (2011) live in India.
They constitute 8.6% of India’s population, the second largest number of tribal people in any country in the world. The Prime Minister and the national leadership of the Bharatiya Janata Party are aware of this fact, which is one of the reasons why they have chosen a tribal woman for the highest position in the country.
A study published in The Lancet, titled ‘Indigenous and Tribal Peoples’ Health’ (2016), found that India held the inglorious distinction of having the second highest infant mortality rate for the tribal people, next only to Pakistan. This is not an honourable position.
On this day, in 2018, the first national report on the state of India’s tribal people’s health was submitted to the Government of India by the Expert Committee on Tribal Health.
The 13-member committee was jointly appointed by the Ministry of Health and Family Welfare and the Ministry of Tribal Affairs, Government of India.
I was the Chairman of this committee, with the Additional Secretary and Mission Director of the National Health Mission as the Member Secretary.
It took five years of enormous work for the committee to dig out evidence and construct a national picture. The picture was both pathetic and promising. These were some of the few major findings.
Firstly, tribal people are concentrated in 809 blocks in India. Such areas are designated as the Scheduled Areas. However, the more unexpected finding was that half of India’s tribal population, nearly five and a half crore, live outside the Scheduled Areas, as a scattered and marginalised minority. They are the most powerless.
Second, the health status of tribal people has certainly improved during the last 25 years as seen in the decline in the under-five child mortality rate from 135 in 1988 in the National Family Health Survey (NFHS)-1 to 57 in 2014 (NFHS-4). However, the percentage of excess of under-five morality among STs compared to others has widened.
The fight for fiscal autonomy (Page no 7)
(GS Paper 2, Polity and Governance)
In a recent debate between Union Finance Minister Nirmala Sitharaman and Opposition MPs on price rise, Ms. Sitharaman said the States should do more, ignoring the fact that the reduced fiscal autonomy of the States gives them little leeway to do much.
Similarly, the increasing reliance of the Union government on indirect taxes such as the GST has directly contributed to price rise and inequality.
But despite reduced fiscal autonomy, States such as Tamil Nadu and Kerala have contained price rise and inflation through targeted interventions.
Adam Smith had argued that taxation per se is not bad, but should follow the principles of fairness. Fairness, in taxation, should be compatible with taxpayers’ conditions, including their ability to pay in line with their personal and family needs.
However, the Union government’s increasing dependence on indirect taxes has removed any ‘fairness’ in taxation. The share of indirect taxes of the gross tax revenue in FY2019 increased by up to 50% compared to 43% in FY2011.
Compare this with the OECD countries, where indirect taxes on average do not contribute to more than 33% of their tax revenue. Indirect taxes are regressive because they tax both the rich and the poor equally.
The poor get taxed a higher proportion of their income compared to the rich. For example, Indians on average spend 22% of their income on fuel, the highest in the world. Also, Union tax on diesel has increased by 800% since 2014, which, after recent reductions, stands at 300%.
While indirect taxes have increased, direct taxes such as corporate tax have been reduced from 35% to 22%, leading to a loss of about ₹2 lakh crore to the exchequer.
This over-reliance on indirect taxes not only hinders growth by thwarting demand, but can also lead to high inflation and high inequality, which again inhibit growth.
The reason for high inflation in India lies in the extremely high CPI index for food (over 15% in the recent past). Instead of making efforts to lower food prices, the Union government, via GST, increased taxation on basic food items such as rice and milk.
It is not a mere coincidence that India’s increasing reliance on indirect taxes has coincided with rising inequality and lower growth.
News
Bill to set up carbon markets passed in LS (Page no 11)
(GS Paper 2, Polity and Governance)
The Lok Sabha on Monday passed the Energy Conservation (Amendment) Bill, 2022, which provides for the establishment of carbon credit markets and brings large residential buildings under the energy conservation regime.
The Bill mandates the use of non-fossil sources, including green hydrogen, green ammonia, biomass and ethanol, for energy and feedstock, according to the statement of objects and reasons. The Bill amended the Energy Conservation Act, 2001, to establish carbon markets, enhance the scope of the Energy Conservation Building Code, amend penalty provisions and increase number of members in the governing council of the Bureau of Energy Efficiency.
While replying to the discussion on the Bill, Power and New and Renewable Energy Minister R.K. Singh clarified that the carbon credit would not be exported and would have to be used domestically.
He said till India met the commitments made at COP21 and COP26, it would not allow export of credits. Responding to concerns of some MPs, Mr. Singh said India had not missed targets for reduction of emissions and increase in share of non-fossil energy sources. “We are ahead of the target,” he said.
Speaking on the Bill, Congress member Adhir Ranjan Chowdhury said States, and not just Central agencies, should also be allowed to issue certificates of carbon credit in the “spirit of federalism”.
He said he was not against the Bill, but expressed concerns that the carbon markets would lead to a “revolving door” between the government, businesses and NGOs.
The government had failed to strengthen its capacity to produce domestic solar panels,” he said, adding that cheaper panels from China were flooding the market.
Nationalist Congress Party member Supriya Sule supported the Bill, but asked what the government’s policy regarding coal versus renewable sources was, given that the Coal Ministry had informed Parliament of increased mining and generation.
National Conference member Hasnain Masoodi said while he supported the Bill, it was “depressing that the government has not taken adequate steps to encourage use of renewable energy”. He said carbon trading should work along with a regulatory framework to cap emissions.
House rocked over new Electricity Bill (Page no 11)
(GS Paper 2, Polity and Governance)
Amid vociferous protests by Opposition members, the Electricity (Amendment) Bill, 2022 that seeks to give multiple players open access to distribution networks of power suppliers and allow consumers to choose any service provider, was introduced in the Lok Sabha.
While the Opposition MPs called the Bill “anti-farmer” and a violation of the promise the Centre had made to the Samyukta Kisan Morcha (SKM) that had led the farmers’ agitation against the now repealed farm laws, Power Minister R K Singh argued that the Bill is “pro-people” and “pro-farmer”.
Soon after its introduction, Mr. Singh urged Lok Sabha Speaker Om Birla to refer the Bill, which seeks to amend the Electricity Act, 2003, to a Parliamentary Standing Committee for wider consultations and address the concerns raised by the Opposition.
The Bill is aimed at allowing private players in the field of electricity distribution on the lines of telecom service providers; consumers will then have the option to choose their own electricity supplier.
Opposing the introduction of the Bill, Congress’ Manish Tewari and Adhir Ranjan Chowdhury, RSP MP N K Premachandran, Trinamool member Saugata Roy, DMK leader T R Baalu and CPI(M)‘s M A Arif said the proposed legislation is against the federal structure of the Constitution.
While Mr. Premachandran said electricity was on the Concurrent List and it was the “bounden duty” of the Centre to have “effective consultations” with State governments, Mr. Tewari said the Bill envisages allowing multiple private companies to provide electricity in the same area, a provision that could lead to “privatisation of profits and nationalisation of losses”.
Mr. Roy and Mr. Arif said the Bill was contrary to the assurances given by the Narendra Modi government to the SKM, which had then demanded the shelving of proposed amendments to the Electricity Act.
Mr. Baalu said the Tamil Nadu government has been giving free electricity to farmers for the past several years and the proposed amendments could affect “poor farmers” who receive free power.
Govt. plans system to scour dailies for public grievances (Page no 12)
(GS Paper 2, Polity and Governance)
The Ministry of Personnel, Public Grievance and Pensions has informed a Parliamentary Standing Committee that the government is working on to develop a “technology solution”, where grievances published in newspapers and on social media platforms can be suo motu registered on the Centralised Public Grievance Redress and Monitoring System (CPGRAMS) for action by the authorities concerned.
CPGRAMS is an online platform available to the citizens 24x7 to lodge their grievances to the public authorities on any subject related to service delivery.
The Department of Administrative Reforms and Public Grievances (DARPG) informed the parliamentary panel that in 2016, all Ministries, organisations and departments were requested to regularly examine the grievances column of newspapers to pick up the cases coming under their purview and take expeditious action to redress them in a time bound manner.
The information was mentioned in the 119 th Action Taken Report of the Committee on “Strengthening of Grievance Redressal Mechanism of Government of India.
Ministries, Departments do take cognisance of complains published in newspapers/ social media etc, however a structured mechanism for the same is yet to be developed. DARPG is working with IIT Kanpur team to develop a technology solution for the same.
The panel recommended that time and again it has underlined the role of newspapers as a source of public grievances. At times, newspapers bring to light unheard grievances of the underprivileged sections and the vulnerable groups. Accordingly, the Committee strongly feels that there should be an effective mechanism in each Ministry and Department for picking and processing newspaper grievances.
It said that till the technological solution is formalised, the DARPG should issue guidelines to all ministries, departments and organizations for regularly examining the grievances emanating from the daily newspapers.
‘80% decline in value of fake currency notes’ (Page no 12)
(GS Paper 3, Economy)
The value of the counterfeit currency in the banking system reduced from ₹43.47 crore in 2016-17 to about ₹8.26 crore in 2021-22, amounting to a sharp decline of more than 80%, according to a Finance Ministry reply in the Lok Sabha.
In response to Member Sanjeev Kumar Singari’s query, Minister of State in the Finance Ministry Pankaj Chaudhary said: “The number of counterfeit banknotes has come down from 7.62 lakh pieces in 2016-17 to 2.09 lakh pieces in 2020-21 post-decision of the Government of India to cancel the legal tender status of ₹1,000 and ₹500 denomination currency notes on November 8, 2016.
The decision of demonetisation had several objectives including curbing of circulation of Fake Indian Currency Notes (FICN).
As per the National Crime Records Bureau (NCRB) data, the value of fake currency seized by various enforcement agencies in 2017 was ₹28 crore. However, it shot up to ₹92.18 crore in 2020.
According to the report of the agencies, “there have been instances where it has been found that the fake currency has been smuggled from the neighbouring countries.
While notes seized by different law enforcement agencies have gone up, there is a discernible trend of reduction in the number of counterfeit notes detected in the banking system,” he said in the written reply.
A Terror Funding and Fake Currency Cell in the National Investigation Agency (NIA) has been constituted to conduct a focused investigation of terror funding and fake currency cases.
The government has also set up an FICN Coordination Group to share intelligence and information with the security agencies in the States and the Centre.
Further, a Joint Task Force is functioning between India and Bangladesh for building trust and cooperation for exchange of information and analysis of smugglers of FICN.
A Memorandum of Understanding (MoU) has been signed between India and Bangladesh to prevent and counter smuggling and circulation of fake currency notes.