EPW August

KIIW EPW August

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Notes by vineetpunnoose on www.kiwipaper.com

Content

Budget Transparency and Participation 1

Agriculture: Intentions and Actions 2

Reinventing Governors 4

Which Way for Public Libraries in India? 5

Case for Including Immovable Property in the GST 5

Tilting at the Windmills (Again) 8

Financial Sector, Monetary Policy and Budget 2014 9

Rangarajan's Measure of Poverty 10

No Cure for the Malaise 12

National Judicial Appointments Commission 12

Off With Its Head 15

Crimean Declaration of Independence 16

Banking with a Difference 18

Saving Sharmila 19

An Iron Fist in a Velvet Glove 20

Juvenile Public Rage 21

Protecting the Future 22

Union Budget and the 'Digital Divide' 22

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Notes by vineetpunnoose on www.kiwipaper.com

Content

When Will They Ever Learn 24

Trans-Pacific Partnership 25

India and Israel: An Embrace in Arms 28

Sex Ratio, Khaps and Marriage Reform 28

Health Service System in India 30

Masters of War 31

Fatwas and Muslim Women 32

Rejection of an Imbalance 33

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Notes by vineetpunnoose on www.kiwipaper.com Page 1

Budget Transparency and Participation Sat, Aug 23, 2014budget, EPW, economics,

The hallmark of a vibrant democracy is the strength and quality of participation by itscitizens. Electing representatives to Parliament and state legislatures every five years isnot enough. The real measure of participation is the extent to which citizens are activelyengaged in the political process during those five years. In particular, citizens should questionrepresentatives continuously and hold them to account. Effective engagement in turn,whether at the national or sub-national levels, depends on the citizens' access to timelyand relevant information as well as the establishment of formal spaces for participationin the budget process. Further, instruments such as citizens' charters, right to information,e-governance, report cards, and social audits have helped strengthen transparency in thefunctioning of the government and empowered citizens with information required for ameaningful citizen-government engagement. Yet, given the critical role of transparency,accountability, and participation in ensuring good governance, more can and should bedone. To move towards the goals of strengthening transparency, accountability, and participation,particularly with respect to budgets, there are a few realistic actions that India should takenow. First, the government should increase public participation in the budget formulationprocess and publish a pre-budget statement to facilitate this. Second, the government shouldstrengthen sub-national budget transparency. Third, the government should mandate civilsociety participation in the planning and budgeting of programmes that directly benefitcitizens through service delivery. The Fourteenth Finance Commission (FFC) representsa significant opportunity to lay the foundation for achieving these objectives. The restof this note describes these recommendations in greater detail in the hope of encouragingthe FFC to pave the way for greater budget transparency, accountability, and participationin India. In this context, if the budget is to be representative of the needs and demandsof citizens, the pre-budget process must include extensive engagement of civil societyas well as legislative members. Further, much of the information commonly included inpre-budget statements - the government's fiscal objectives over the medium-term, broadsectoral allocations, and expectations for broad categories of taxes and revenues is alreadyreflected in other budget documents disseminated to the public later in the year. Providingsuch information earlier in the year in the form of a pre-budget statement would facilitategreater debate around the government's budget policies and priorities and help ensurethat the outcomes of such discussions might be reflected in the draft budget. Finally, asa convention/practice the government has already established a process for budget consultations,which takes place in January every year; however, as the Ministry of Finance effectivelyfinalises the budget in December, the opportunity to influence the budget at this stage islimited. Shifting these consultations to October would allow for these discussions to trulyhave an impact on the budget. Moreover, formal mechanisms for public participation inthe national budget process build on the participatory planning and budgeting spaces includedin flagship programmes such as the National Rural Health Mission (NRHM) and MahatmaGandhi National Rural Employment Guarantee Scheme (MGNREGS). n India, the limited

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civil society engagement with budgets happens mostly during the implementation stageand are confined to expenditure tracking, monitoring and social audit of programme implementationat the micro level, and as a critical analysis/assessment of budget allocations and expendituresat the macro level. At the state and sub-state levels this is constrained because of inadequateand/or poor quality budget information accessible in public domain: often civil societyorganisations (CSOs) have to struggle to get even the very minimal budget and expendituredata to facilitate budget/expenditure tracking and monitoring. In the last two decades, especiallypost the Right to Information Act as well as significant efforts of the Twelfth and ThirteenthFinance Commissions, substantial progress has been made to increase budget transparencyat all levels. One would certainly agree on the fact that an important aspect of budget transparencyis the timely availability of locally relevant budgetary information. Disaggregated budgetaryinformation at the district and sub-district levels is often not shared in the public domain.This actually restricts citizens' engagement in the wider debates and discussions on budgetsand its priorities. Further, the devolution of governance has also created participatoryspaces for citizen and CSO engagement, especially at the district and sub-district levels.The peoples planning initiative in Kerala, wherein planning and budgeting for about 40%of the development budget is done directly by gram sabhas and other citizen committeesis one good example. In Nagaland, the village development committees (VDCs) engagedirectly with local development and budget allocations. But, these are exceptions. A fewsuggested recommendations for the FFC to consider and suggest appropriate grants tostrengthen budget transparency, accountability and participation: * Recommending thepublication and dissemination of a pre-budget statement and related budget informationthat will increase civil society and legislative participation in formulation of budgets; *Further, to strengthen the quality of budget information in line with Sundaramurti Committeerecommendations, grants would be required for upgrading institutions, particularly thetreasury management system in the country; * Developing a rational basis for increasedand effective allocation of resources to the social sectors so that the objectives of the programmesare effectively achieved. * Grants for institutionalised mechanisms with respect to betteraccess to and dissemination of quality budget information at the sub-national level, especiallydistrict and sub-district levels. * Making mandatory civil society participation for planningand budgeting (like PIPs, untied funds, etc) for programmes which directly benefit citizensthrough service delivery and benefits.

Agriculture: Intentions and Actions Sat, Aug 2, 2014EPW, agriculture, economics,

For agriculture the period since 2004-05 has been different from previous periods in severalrespects. The sector recorded 3.8% annual growth in value added in the decade since 2004-05which is the highest in any decade since 1950-51 (Chand 2014). The decade also witnesseda reversal of the slowdown in annual growth of agriculture, a slowdown which startedafter the mid-1990s and breached the 2% mark between 1996-97 and 2004-05 Based onthe elasticity of gross domestic product (GDP) agriculture to terms of trade, it is estimated

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that about one-third of the growth in farm output resulted from an increase in real agriculturalprices. Some increase in real prices was justified to correct the decline witnessed during1998-99 to 2004-05, but the ratio of the Wholesale Price Index (WPI) agriculture to WPI(non-agriculture) has risen steeply after 2005-06 at an unprecedented pace. Beside a highlevel of food inflation, seasonal and short-term price spikes of some commodities likeonions, tomatoes and potatoes are becoming more frequent, more severe and more lasting,hurting consumers and causing economic instability. Another significant change witnessedin agriculture is the decline in the workforce engaged in agriculture. It is for the first timein the history of Indian agriculture that the absolute number of cultivators and agriculturallabour has started falling. It is important to put in place a development strategy to absorbworkforce leaving agriculture. It is more than 12 years since the formulation of the modelAgricultural Produce Market Committee (APMC) Act, but few states have implementedit. In the absence of required institutional mechanisms and modernisation of agriculturalmarketing, the price spread between farm and end users of agricultural products has beenwidening, depriving producers of the ability to benefit from consumers' willingness topay for food commodities and depriving consumers of the benefit from a competitive marketmodel. Prices are quite important for incentivising production, but in India the price effectdominates other factors like technology. The empirical relationship between prices andagricultural growth implies that if agri-food prices do not increase in real terms (i e, theyincrease at the same rate as non-agricultural prices), then agricultural growth collapsesto 2.6%. 1 The main causes of high food inflation in recent years have been the rising averagecost of food production, substantial hikes in minimum support prices, a widening pricespread between producers and consumers, and changes in dietary preferences. Controllingcost push inflation in agriculture requires a paradigm shift from growth per se to efficientgrowth, i e, growth accompanied with a decline in the real average cost of production.The short-term option is to harness the potential of low productivity areas. The yield gapdata shows that there are plenty of opportunities to raise productivity of almost all thecrops through adoption of available technologies in low productivity states (Chand 2008).The absence of an effective extension mechanism is the weakest link in taking alreadydeveloped and well-tested technologies to the farm level. This component has weakenedconsiderably in the National Agricultural Research System (NARS) comprising the IndianCouncil of Agricultural Research (ICAR) institutes and agricultural universities. The focusof NARS over a period of time has shifted to applied research and problem-solving research.This has been yielding incremental gains but not breakthroughs. Thus, to have a breakthroughin agricultural R&D and technology and to have science-driven growth, we need to createa new set of research institutions for agricultural research on the pattern of Indian Institutesof Technology (IITs), I Storage India has a good track record of being able to cope withsevere droughts without there being a serious disruption of its food economy. This couldbe possible due to public stockholding of foodgrains. Over time, the country's productionbase and requirement have risen sharply. India produces about 600 million tonnes (mt)of food of vegetative origin, comprising 264 mt foodgrains, 268 mt fruits and vegetables,34 mt edible oilseeds, and 30 mt sugar. More than three-fourths of this production, i e,

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450 mt, enters the market. Assuming that a month's supply is in transit and does not requirestorage, the remaining 412 mt food produced in the country has to be put in some storage.

Reinventing Governors Sat, Aug 2, 2014governors, EPW, polity,

The utility of the post of governor has been a matter of public debate for some time. TheConstituent Assembly debated whether appointments being vested in the President amountedto the governor being a representative of the centre at the provincial level. In 1967, a studyteam of the administrative reforms commissions on centre-state relations expressed misgivingsabout the way the post had been treated as a sinecure. Other committees questioned theemphasis on the governor being merely an appointee of the central government and thefrequent removals and transfers made by various union governments. In 1979, a constitutionbench of the Supreme Court ruled that governors are not "subordinate or subservient tothe Government of India" and that the post is an independent constitutional office, "whichis not subject to the control of the Government of India". The governor is "constitutionallythe head of the state in whom is vested the executive power of the State". Twenty yearsago, the Justice Rajinder Singh Sarkaria Commission recommended clear guidelines forthe appointment and removal of the governor. These included recommendations that thegovernor should be eminent in some walk of life, should not be a person belonging to thesaid state, should be a person who has been relatively apolitical (at least recently beforeappointment) and that the state government should have a say in the appointment. Onlya few of these recommendations - such as the governor not being from the same state -have been put into practice. It is also difficult to deny that the governor holds a politicalposition and it makes sense to appoint someone who is not an active politician but surelysomeone who has political experience and awareness; in other words a "political person".Similarly, a substantial "cooling off" period should be made mandatory for politiciansbefore they are appointed. Yet, it must be remembered that some of the most "partisan"governors have been bureaucrats and generals - the establishment definition of eminentpersons - who have been seeking post-retirement sinecures. An abolition of the governor'sposition may well turn out to be a cure worse than the disease. Some of the more egregiousmisuses of the governor's position have reduced over time. Thus Article 356 is not used;there is not even a threat of its use in normal circumstances. With the increasing regionalisationof the polity and the dependence of "national" parties on regional allies (even if the presentgovernment by the BJP is technically a majority government), there has been a definitereduction in the arbitrariness often associated with the actions by this central governmentappointee. What is certainly needed is a review of the governor's powers, the process ofappointment and removal. Some of the conventions which have been neglected by thecentral government may need to be given the force of law while new rules and conventionsmay need to be put in place so that the ability of the central government to misuse thisoffice is curtailed, while the governor's ability to fulfil his or her constitutional mandateis strengthened.

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Which Way for Public Libraries in India? Sat, Aug 2, 2014libraries, social, EPW,

In what was perhaps a first time mention by the head of government, former Prime MinisterManmohan Singh, in his inaugural speech for the National Knowledge Commission (NKC)in August 2005, acknowledged that public libraries are an "extremely important elementof the foundation of a knowledge economy". In pursuance of the NKC's recommendations,the centre had in fact set up a high powered committee called the National Mission onLibraries (NML) to take its agenda forward. The NML has taken some decisive steps towardsimprovement in the so far badly neglected library sector, including a national census oflibraries, content creation and setting up of community information centres, upgradationof existing public libraries, school and college libraries, use of school libraries as communitylibraries, improvement in library and information science, education training and researchfacilities, and so on. Most significant, the centre has now decided to digitally link nearly9,000 libraries across the country under the NML. A proposal to spend nearly Rs 1,000crore on this project is pending before the Planning Commission for its approval. 1 Envisagedas a national institution, the public library was originally created to serve the masses, tobuild capacities for and contribute to both formal education, and lifelong learning. Universalisationof elementary education and eradication of illiteracy (the literacy rate in 1941 was 16%)were the primary aims of the education policy of a newborn nation, and public librarieswere seen as integral to realisation of these aims. Is all of this germane, 65 years later,to India's (arguably) thriving "knowledge economy"? A careful distinction between whatis possible, and what is important is perhaps still pertinent in a "knowledge economy"where roughly 30% of the population still lives below an officially mandated "povertyline" (membership criteria to be included in which are so frugal, it could well be termedthe hunger line). For instance it may be legitimate to ask, how does spending Rs 1,000crore on digitising and connecting public libraries make sense in a context where a thirdof the country's population does not have access to electricity? Power connectivity andsupply, as is well known, is much worse in our rural interiors - regions where public librariesare in the most dire need. 4

Case for Including Immovable Property in the GST Sat, Aug 9, 2014EPW, economics, GST,

Including immovable property transactions in the tax base of the proposed Goods andServices Tax will curb the generation of black money while improving tax buoyancy. AThe Goods and Services Tax (GST) offers a unique opportunity to address this problemby integrating a prime generator of black money - the real estate sector - into the GSTbase. At present, adequate opportunity to review the GST's structure exists. Over the pastfive years, during the discussions between the centre and the Empowered Committee ofState Finance Ministers on the design of the GST, both parties have studiously been ignoring

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the elephant in the room - the treatment of real estate transactions. The Thirteenth FinanceCommission recommended that this be done. This recommendation did not find favourwith either the centre or the states. Transactions in immovable property originate fromboth the construction and real estate sectors that have emerged as two key drivers of growthin India today. The growth of the real estate sector has been spurred by increasing urbanisation,higher incomes, and a favourable demographic profile. The size of the real estate marketcan independently be culled from an examination of the income received from sale of immovableproperty by all the states in the country and the average stamp duty applied. The total all-staterevenue from transactions in immovable property during 2011-12 was Rs 64,379.5 crore.3 Assuming that only 70% of this income emanates from stamp duty, the revenue fromstamp duty is estimated at Rs 45,000 crore. Applying a "national" rate of 5% for stampduty, the volume of transactions for 2011-12 works out to Rs 9,00,000 crore, which was10.02% of the GDP in 2011-12 at current market prices (Rs 89,74,947 crore). The sizeof the transfer of the property market determined in this fashion appears significantly largerthan the earlier estimates of 5%-6%. Clearly the size of the market indicates that it is "toobig to ignore" and should be integrated into the GST base. Two features which arise froma state-wise analysis are: (a) The aggregate revenue from transactions in immovable propertyforms 11.55% of the overall own tax revenues of all states. (b) Immovable property taxcollection in the top-10 states aggregates to Rs 54, 504.50 crore, which forms almost 85%of the aggregate collection in all the states during 2011-12. In Maharashtra, it is as muchas 16.45%. Apprehensions of these 10 states regarding revenue loss may have to be addressedif this tax has to be successfully merged into the GST base. The White Paper on BlackMoney (Ministry of Finance 2012b) recognises the need to control this scourge and fosterthe growth of the legitimate economy. It identifies the real estate sector as one of the eightsectors vulnerable to the generation of black money noting that "investment in propertyis a common means of parking unaccounted money and a large number of transactionsin real estate are unreported or underreported". Both these reports do not appear to haverecognised the beneficial impact the inclusion of real estate transactions in the GST basewill have on controlling the generation of black money. Due to the escalating cost of landin urban areas, there is an increasing incentive for both buyers and sellers to suppress thesale price while registering the sale document. The seller avoids wealth tax and capitalgains tax and the buyer avoids stamp duty, registration charges and transfer fees. If inputtax credit paid on steel, cement, architectural services and other construction-related inputsis allowed to be deducted from the final stamp duty payable on transfer of immovableproperty, construction contractors and real estate dealers will be incentivised to recordall their purchases in their accounts. At present, all three tiers of government; centre, statesand local governments impose taxes on immovable property. These taxes are levied onthe stock of immovable property, i e, on persons holding it as well as on its flow on transactionsin immovable property. (a) The Indian Stamp Act, 1899, provides for levy of stamp dutyin respect of notified instruments which include deeds of sale of immovable property. Asper item 63 of the state list, the power to determine rates of stamp duty in respect of immovableproperty is vested with the state governments. (b) As per Section 78 of the Registration

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Act, 1908, the state government determines the registration fees for documents which areregistered under the Act in lieu of services provided including prior sales search, makingcopies, maintaining records. (c) The Panchayat Raj Acts and Municipal Acts enacted bystate governments provide for levy of a transfer duty in the form of a surcharge on certainspecified instruments including deeds of sale, gift, exchange, mortgage and lease. Stategovernments levy and collect this duty on behalf of the local bodies at the time the stampduty and registration charge are collected. It then transfers the proceeds to the concernedlocal government. Transfer of immovable property must be included in the GST tax basefor the following reasons: (a) Levy of stamp duty, transfer duty and registration fee intheir present form without any input tax set-off leads to cascading of a consumption taxwith distortionary consequences. Inclusion of immovable property in the GST tax basewill provide significant relief even if the revenue neutral rate (RNR) is relatively higherthan the present effective rate because of the set-off available. (b) Though the JawaharlalNehru National Urban Renewal Mission (JNNURM) reform initiative has largely succeededin bringing down stamp duties to about 5%, the addition of transfer duty and registrationduty effectively raises this to between 6% and 9%. This also excludes other costs associatedwith property purchases including legal fees, broker's commission, and bank charges.Assuming this forms another 1%, the aggregate tax and other charges levied on transactionsin immovable property is as much as 10% of the sale value. This significant charge withoutany set-off for tax paid earlier in the value chain or the promise of a downstream creditat the time of the subsequent sale, deters registration of such transactions leading to bothrevenue losses as well as generation of black money. GST with its provision of input taxcredit will be an acceptable proposition for both buyers and sellers in the real estate market.(c) The generation of black money can be effectively curbed by inclusion of real estatein the GST tax base. Under this regime, all the buyers in the value added chain from thecontractor through the real estate agent to the final buyer will be strongly incentivisedto record their transactions and insist on invoices for their respective purchases. Presently,while income tax clearances are obtained at the time of registration of immovable property,no verification occurs relating to payment of sales tax on the construction and service inputsto the property. This leads to significant amounts being not accounted for in sales priceand moving backwards, into consumption of cement, steel, paints, services, etc. SinceGST will provide input tax credit to the seller of the property, s/he will be incentivisedto insist on invoices for all purchases made. Gradually, all the components of real estateand construction industry can be brought into the direct and indirect tax net. (d) The constructionand real estate sectors contribute significantly to GDP. They also have critical spillovereffects in other sectors of the economy. However, transfer transactions in this sector arepresently not being fully taxed. It is therefore necessary that this sector bears an equitableburden of the GST and the tax distortions affecting the growth of other productive sectorsof the economy including manufacturing are removed. Tax Rate: The design of the GSTand the determination of the RNR are critical. If the RNR is below 12%, the merger ofreal estate into GST will not meet significant opposition. This is because with the presentaverage rate of about 8% on property transfer, there may not be significant impact on purchasers

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given the input tax benefit provided. Tax Base: All real estate transactions - sale as wellas lease will be brought into the GST base with prospective effect from a notified date.Tax will be levied on transactions relating to both old and new property. In respect of newproperty, set off against input tax credit paid on construction materials and services willbe available against the GST payable. In respect of old property, GST will be levied onthe capital gain, being the difference between the purchase price and the resale price withthe purchase price being suitably indexed. Taxes To Be Subsumed: Both stamp duty andregistration fee would be subsumed into the GST. Exemptions: To ensure that small houseowners do not come under the ambit of the GST with concomitant registration and record-keepingrequirements, exemptions could be granted up to a threshold for both property value andrental. This could be fixed at say Rs 50 lakh for value of property and Rs 2 lakh for annualrental. Concomitant Charges: The government's obligation to continue to register documentsattesting the sale of immovable property and to maintain a database of such property mustsubsist. Legal Implications: The application of GST on immovable property transactionswill mark a paradigm shift in immovable property legislation in India. It will require anumber of amendments to existing constitutional, central and state legislation.

Tilting at the Windmills (Again) Sat, Aug 23, 2014living will, EPW, polity, suicide,

the Supreme Court has once again been called upon to legislate in another fraught andcomplex area - legalising living wills. 5 Common Cause, a non-governmental organisation,has in a writ petition filed under Article 32, asked the Court to declare that the "right todie with dignity" be recognised as an aspect of the "right to life with dignity" 6 and infurtherance of this, pass orders to allow for the execution of "living wills". In the alternative,the writ petition seeks the setting up of an expert committee consisting of "doctors, socialscientists and lawyers" to study the aspects of the issue of "living wills" and frame guidelinesin this respect. 7 Broadly, two reasons have been indicated by the three-judge bench forreferring the matter for hearing by the Constitution Bench; the conflicting judgments ofthe Supreme Court in Gian Kaur vs State of Punjab 9 (Gian Kaur), and Aruna RamchandraShanbaug vs Union of India 10 (Aruna Shanbaug), and the "important question of law"which requires to be decided in the case. 11 The three-judge bench has not, however,thought it fit to frame any questions of law or terms of reference for the Constitution Bench,leaving it open to examine any and all issues within the scope of the writ petition. TheConstitution Bench recently issued notice to all the state governments and appointed amicuscuriae to assist it in this matter. 12 Undoubtedly the writ petition raises a substantial questionof law relating to the interpretation of the Constitution, viz, whether the right to live withdignity guaranteed under Article 21 includes the right to die with dignity. However, a ConstitutionBench of the Supreme Court in Gian Kaur has already held that the right to live withdignity includes the right to die with dignity. In Gian Kaur, the Supreme Court was onlyconsidering the criminalisation of suicide and not with euthanasia or living wills per se.The proposition laid down in Gian Kaur , with respect to the right to die with dignity,

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must be treated therefore as obiter dicta - binding on lower courts. 15 In Aruna Shanbaughowever, a two-judge bench of the Court was in fact concerned with a case where activeeuthanasia was sought. A "living will" or an "advance directive" as it is also known insome countries, is a legal document executed in advance by a person relating to the provisionof healthcare to such person when she is incapacitated and no longer capable of makingdecisions for herself. It enjoins the executor and the medical practitioner to follow thewishes of the executor of such a "living will" while providing medical treatment in casesof such incapacitation including and up to the withdrawal of treatment. A living will isthe recognition of the common law principle that medical treatment, contrary to the intentionsof the person being treated, is an invasion of the right to bodily integrity of such person.A person who is no longer capable of making such decisions about treatment does notnecessarily lose the right to be treated according to her wishes, if she has indicated sucha preference earlier. A living will is therefore the expression of such a wish, and in thecommon law, capable of being recognised and enforced as a valid legal document. 18five key questions that the Court will have to grapple with are: (1) Who will be competentto execute a living will? (2) In what form will a living will have to be issued in order tobe valid? (3) Who is to ensure that a living will is properly obeyed? (4) What legal consequencesfollow from the non-obedience to a living will? (5) Can a doctor, for reasons of conscienceor faith, refuse to execute a living will?

Financial Sector, Monetary Policy and Budget 2014 Sat, Aug 9, 2014budget, Monetary Policy, EPW, international,

There is, however, a more generous take on the budget. It is believed in some quartersthat the hype and hoopla associated with the budget is an Indian phenomenon and thatthe budget needs to be stripped off its frivolities and it should not be seen as much morethan the annual income-expenditure of the union government. In terms of allocating increasedfunds the following deserve special mention: * Corpus of Rural Infrastructure DevelopmentFund (RIDF) was raised by an additional Rs 5,000 crore. * Allocation of Rs 5,000 crorewas provided for the Warehouse Infrastructure Fund . * A Long Term Rural Credit Fundwas proposed to be set up for the purpose of providing refinance support to CooperativeBanks and Regional Rural Banks with an initial corpus of Rs 5,000 crore. * Amount ofRs 50,000 crore allocated for Short Term Cooperative Rural Credit. * Rs 200 crore wasprovided for "NABARD's Producers Development and Upliftment Corpus" for building2,000 producers organisations over the next two years. Two comments are in order. First,as the budget has been presented in July 2014, slightly more than one quarter of the yearhas already passed. Considering that these allocations are to be spent within a period oflittle less than nine months, these amounts could be decent. Second, in terms of continuitywith the previous budget, the Interest Subvention Scheme for short-term crop loans hasbeen extended. Budget 2014 announced a decision to infuse Rs 2,40,000 crore as equityby 2018 in Indian public sector banks so that they are in line with Basel-III norms. Whatwould be the source of such additional capital? The budget went on to say, "Capital of

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banks to be raised by increasing the shareholding of the people in a phased manner". viewpointof the RBI that, "While the ownership structure and recapitalisation of public sector banksare contingent upon government policy and the fiscal situation, there is a strong case forsubjecting them to the requirements of market discipline" Given the asset-liability mismatchof banks, how are they going to fund it? Banks have been permitted to raise long-termfunds for lending to the infrastructure sector with minimum regulatory pre-emption suchas the cash reserve ratio (CRR), statutory liquidity ratio (SLR) and priority sector lending.The details in this context have been provided by the RBI in its circular of 15 July on "Issueof Long Term Bonds by Banks - Financing of Infrastructure and Affordable Housing".Insurance Sector: The budget has proposed to increase the foreign direct investment (FDI)limit of the insurance sector to 49% from the current level of 26%, subject to a rider thatmanagement and control of the company will remain with the Indian partner. This is goingto bring some additional capital to the insurance sector while diluting their Indian ownership.Capital Market: In terms of continuity, the budget has drawn the way forward for the capitalmarket in terms of completing the consultation process of the Financial Sector LegislativeReforms Commission (FSLRC). Illustratively, Budget 2014 mentioned categorically therecommendation relating to the enactment of the Indian Financial Code is expected toensure better governance and accountability. The budget has proposed International settlementof Indian debt securities and revamping of the Indian Depository Receipt scheme to allowissuance of depository receipts on all permissible securities. Besides, the budget proposedextending a liberalised facility of 5% withholding tax to all bonds issued by Indian corporateabroad and extending the validity of the scheme to June 2017. Two comments are in order.First, an emerging capital market cannot be an end in itself of any government policy likebudget. It has to be linked with the general trends of household savings behaviour andwith provision of risk capital to the corporate sector without jeopardising investors' interest.Thus, a fillip to equity at the cost of bank deposits may not be justified as a means to enhancingsavings. Second, after the global financial crisis, the conventional wisdom in many casesof financial/capital markets has changed. To be oblivious to the new realities of financialmarket is like suffering from ostrich-like behaviour.

Rangarajan's Measure of Poverty Sat, Aug 2, 2014poverty, Rangarajan poverty estimates, EPW, economics,

The main criticism of the Tendulkar methodology was that its poverty lines had no explicitnormative content and were based on the level of urban poverty as obtained from the earlierLakdawala methodology. In fact, while maintaining continuity with Lakdawala, Tendulkarhad explicitly delinked consumption poverty from calorie norms and focused on propertreatment of price differentials over space and time. This led to significant upward revisionof estimates of rural poverty that were attributed to faulty price adjustments in the pastand corrected many cases where the Lakdawala method unrealistically measured a stateto have much less rural poverty than urban. But, discontinuing the calorie anchor wentagainst an established view. And, more significantly, there was general anger that too many

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who deserve public support would still remain excluded, especially in urban areas, if thePlanning Commission used Tendulkar estimates to continue its caps on the numbers ofpeople entitled to various government benefits. Rangarajan has addressed these concernsby not only suggesting a calorie-plus norm that increases poverty numbers beyond Tendulkarbut by also endorsing the view that poverty estimates should not be used to cap entitlementto government benefits. The resulting new calorie intake requirements are reported at 2,155and 2,090 calories per capita per day in rural and urban areas, respectively. These implya large reduction from the rural norm of 2,400 calories per capita per day implicit in Lakdawala,but the urban requirement remains almost unchanged at the earlier 2,100 calories per capitaper day Marking a return to Lakdawala from Tendulkar, these calorie norms constitutethe main normative basis of the new Rangarajan methodology. Supplemented by similarlycalculated intake norms for proteins and fats, the food component of the poverty line basketis taken to be the actual food basket of those in the lowest fractile group that met all threenutrient intake norms simultaneously. Based on the 2011-12 NSS data using modifiedmixed reference period (MMRP), about 27% of rural and 17% of urban population withmonthly per capita expenditure (MPCE) below Rs 933 and Rs 1,181 were found unableto afford the Rangarajan nutrition norms after allowing for their consumption of all otheritems. What is striking about this, but left unmentioned in the Rangarajan Report, is thatall this effort at deriving norms based on nutrient intake actually yields numbers that differvery little from Tendulkar poverty estimates, which were 25.7% rural and 13.7% urbanfor 2011-12. Had Rangarajan stopped here, he would have delivered a resounding vindicationof the Tendulkar methodology from the normative point of view and offered too little anincrease in estimated poverty numbers to assuage those who had criticised Tendulkar forunderestimating them. This takes Rangarajan's final 2011-12 poverty line from Rs 933to Rs 972 per capita per month in rural areas and from Rs 1,181 to Rs 1,407 per capitaper month in urban areas. The corresponding final Rangarajan poverty estimates are 30.9%rural and 26.4% urban which, although only modestly more than Tendulkar in rural areas,nearly doubles measured urban poverty. It is still to be seen whether this is enough to satisfythe vocal urban critics, but at least Rangarajan has attempted to extend the normative concernbeyond food to some basic non-food essentials. However, this add-on treatment of non-foodessentials is problematic conceptually. It causes norm poverty line consumption bundlesto differ from the actual and also vitiates a welfare proposition central to the Tendulkarmethodology: that poverty lines in different places should allow the same poverty linebasket to be affordable everywhere. This matters because Rangarajan has otherwise acceptedthe main Tendulkar innovations on spatial and temporal price indices to derive state-specificpoverty lines. On the whole it would have been more consistent if, like Tendulkar, Rangarajanhad fixed a normative all-India urban poverty line and from this derived state and sector-specificlines based on Fisher price indices using actual consumption weights. This would haveavoided the main infirmity of the Rangarajan method which is that like Lakdawala before,and unlike Tendulkar, his new method implies rather unrealistically that urban povertyis higher than rural in a clear majority of Indian states.

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No Cure for the Malaise Sat, Aug 23, 2014EPW, national judicial appointments commission, polity, judiciary, NJAC,

Parliament's approval of the Constitution (121st Amendment) Bill, 2014 and the NationalJudicial Appointments Commission (NJAC) Bill, 2014 raises more questions than answersabout the process of appointments to the higher judiciary. The combined effect of the twobills is to establish a NJAC which will be responsible for appointment of judges to theSupreme Court and high courts as well as transfer of judges between high courts. The establishmentof the NJAC marks the end of the judicial collegium, a committee comprising the ChiefJustice of India (CJI) and senior Supreme Court judges. In principle, there is a strongclaim that not having a preponderance of judges in a commission to appoint judges is inviolation of the independence of the judiciary. That judicial preponderance is essentialin a judicial appointments mechanism was held by the Supreme Court itself in The SecondJudges Case which established the collegium system. This is especially so in appointmentsto the office of the CJI. For such appointments, the two senior-most judges on the NJAChave to recuse themselves, since they will be in consideration for appointment as CJI. Thiswill mean the CJI is the only judicial member for this particular selection. This is symptomaticof a larger concern with the bills - an inadequate safeguarding of transparency, particularlyin the details of the process. This is surprising, since the most egregious failing of the collegiumsystem was the secrecy of its functioning and the lack of reasons for its decisions. Onewould have expected rectification of this deficiency to be the raison d'etre of these reforms.On the contrary, the shortlisting of candidates, their final selection, and the exercise ofa veto in respect of certain candidatures can all be done by theNJAC in secret withoutany reasons being provided. Safeguards to ensure that persons are appointed on the basisof their ability rather than their connections are thus largely absent. There is no guaranteethat the spectre of nepotism and trade-offs that characterised several collegium appointmentswill not be replicated in the NJAC. But as far as the separation of powers in India's constitutionalframework is concerned, we live in testing times. The Narendra Modi government is thefirst in over two decades to command an absolute majority in the Lok Sabha. The judiciary,having cited governance deficits to justify expansive and activist interpretations of theConstitution in this time, might need to closely introspect about its interpretive approachand wider public role.

National Judicial Appointments Commission Sat, Aug 30, 2014EPW, polity, judiciary, National Judicial Appointments Commission, article 124,

An assessment of the new law introduced to appoint judges argues that it will make thejudiciary subservient to the executive and thus throws a fundamental challenge to the Constitutionand Indian democracy. The petition filed by the Supreme Court Advocates-on-RecordAssociation states that Parliament does not have the power to change the basic structureof the Constitution which it has done and hence the government should be restrained from

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sending the amendment bill to the states for ratification. The NJAC Bill is also challengedon the ground that when it was introduced, Article 1241 and Article 217 were in full forceand effect and no legislation can go contrary to the Constitution. The two bills are thereforea stillborn law, null and void. There was a similar challenge to the bill creating Telanganabefore it became a law and the Supreme Court rejected the challenge on the ground thatonly a law could be challenged and not a bill. Ironically, during the United ProgressiveAlliance (UPA) regime, it was Arun Jaitley who made the point that no law could be madealtering Article 124 of the Constitution without a constitutional amendment first beingmade but in its haste to set up a commission, the NDA seems to have forgotten this basicproposition. The petition challenging the constitutional amendment states that the twobills destroy the separation of powers and undermine the independence of the judiciary.In plain language, this means that the executive can determine the composition of the judiciary,making it an institution appointed by the executive. Given that in our system, laws madeby the executive can be challenged in front of the judiciary, it is imperative that judgesare not dependent on the executive for their appointment. It is obvious that under the newdispensation, the government can veto the appointment of judges they consider unfriendlyto them. It is in these circumstances that the challenge is not only important but fundamentalto our democracy. Since 1950, judges have been appointed by the government in "consultation"with the Chief Justice of India (CJI). For the first two decades, there was a near consensusbetween the government of the day and the CJI. In 1981 the question arose whether "Consultation"referred to in Articles 124(2) and 217(1) with the CJI meant "concurrence" in which casethe recommendations of the judiciary would be binding on the government. In the S PGupta case decided in 1981, the Court held by a majority that the recommendations ofthe CJI were not binding on the government. Once this decision was rendered the governmentobtained a licence to disregard the recommendations of the judiciary. While this was aliteral interpretation of the word "consultation", it had devastating political consequences.It appears the recommendation made by the CJI were not accepted as an invariable rule;change was on the cards. Judges of these courts are invariably sons of former judges orsons of lawyers practising at the bar. The debate on who should appoint judges has neverreally being thrown open to the public and we as a country do not have an articulated positionon this issue. In Court we are confronted with a binary position, either independence ofthe judiciary or executive control. This process of reasoning is inherent to the legal methodand no nuances are allowed to emerge nor options considered. In 1993, once again, theissue was taken to the Supreme Court and the judgment in the S P Gupta case was overruled.2This time a bench of nine judges held that a collegiate opinion of a collective of judgesis binding on the government. The majority gave the following conclusions regarding appointments:(1) All the constitutional functionaries must perform this duty collectively with a viewto reach an agreed decision so that the occasion of primacy does not arise. (2) In case ofSupreme Court the proposal is to be initiated by the CJI and in the case of a high courtby the chief justice of that high court. (3) In the event of conflict of opinion the view ofthe CJI has primacy. (4) No appointment of any judge to the Supreme Court or any highcourt can be made unless it is in conformity with the opinion of the CJI. (5) In exceptional

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cases, for stated strong and cogent reasons, disclosed to the CJI, indicating that the recommendationis not suitable for appointment, the appointment recommended by the CJI may not be made.But in case the CJI reiterates his recommendation then, the appointment should be madein accordance with his recommendation. (6) The senior-most judge of the Supreme Courtshould be appointed as CJI, if considered fit to hold the office. The nine judges benchopined; (1) The opinion of the CJI, having primacy in the consultative process and reflectingthe opinion of judiciary, has to be formed on the basis of consultation with the collegium,comprising of the CJI and the four senior most Supreme Court judges. The judge, whois to succeed the CJI should also be included, if he is not one of the four senior most judges.Their views should be in writing. (2) Views of the senior most judges of the SupremeCourt, who hail from the high courts where the person to be recommended are functioningas judges, if not part of the collegium, must be obtained in writing. (3) The recommendationof the collegium along with the views of its members and that of the senior most judgesof the Supreme Court who hail from the high court where the persons to be recommendedare functioning as judges should be conveyed by the CJI to the Government of India. (4)The substance of the views of the others consulted by the Chief Justice of India or on hisbehalf, particularly those of non-judges (members of the Bar). Should be stated in the memorandumand be conveyed to the Government of India. (5) Normally, the collegium should makeits recommendation on the basis of consensus but in case of difference of opinion no oneshould be appointed, if the CJI dissents. (6) If two or more members of the collegium dissent,the CJI should not persist with the recommendation. (7) In case of a non-appointment ofthe person recommended, the materials and information conveyed by the Governmentof India, must be placed before the original collegium or the reconstituted one, if so, toconsider whether the recommendation should be withdrawn or reiterated. It is only if itunanimously reiterated that the appointment must be made. (8) The CJI may, in his discretion,bring to the knowledge of the person recommended the reasons disclosed by the Governmentof India for his non-appointment and ask for his response thereto, which, if made, be consideredby the collegium before withdrawing or reiterating the recommendation. Women, scheduledcastes, scheduled tribes and religious minorities continued to be, by and large, excludedfrom the judiciary. The long-standing demand has been for transparency and public participation,greater representation for women, minorities, scheduled castes and scheduled tribes. Thebills introduced in Parliament do not address any of these. The Commission is composedof the CJI, two senior-most judges of the Supreme Court, the law minister and two eminentpersons, to be selected by a selection committee consisting of the prime minister, the CJI,leader of the opposition in the Lok Sabha or where no leader of opposition, the leaderof the largest single opposition party. There is no definition of who is an eminent person.If past experience is anything to go by, these could be lawyers or former judges. It is thefunction of this commission to recommend judges for appointment to the Supreme Courtand the high courts. Seeds of Authoritarianism The judiciary which is supposed to be independentof the executive is the only institution to which we can turn to question anti-people laws.To give just one example, the move to amend labour laws to take factories with less than40 workers out of the ambit of the Factories Act will deprive workers there of health and

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safety benefits and is bound to be challenged. What was needed was public participationin the matter of appointment of judges and equal opportunity to become a judge. The systemof nominations by the executive or the judiciary must be put an end to, instead, those whoconsider themselves eligible must be permitted to send an expression of interest makingit possible for that person's antecedents to be evaluated. What happens in the SupremeCourt will change the course of the history of the nation. 1 Article 124 . Establishmentand constitution of Supreme Court: (1) There shall be a Supreme Court of India consistingof a Chief Justice of India and, until Parliament by law prescribes a larger number, of notmore than seven other judges. (2) Every Judge of the Supreme Court shall be appointedby the President by warrant under the hand and seal after consultation with such of theJudges of the Supreme Court and of the High Courts in the States as the President maydeem necessary for the purposes and shall hold office until he attains the age of 65 years: Provided that in the case of appointment of a Judge other than the Chief Justice, the ChiefJustice of India shall always be consulted: Provided further that - (a) a Judge may,by writing under his hand addressed to the President, resign his office; a Judge may beremoved from his office in the manner provided in clause (4).

Off With Its Head Sat, Aug 23, 2014planning commission, EPW, polity, finance commission,

The Planning Commission, as the agent of "state planning", has been, in the eyes of freemarketers, the biggest culprit of all that apparently went wrong in the economy in the firstfour decades after Independence. Those without a sense of history do of course have theluxury of projecting self-serving opinions. The planners themselves in hindsight did acceptthat many errors were made during the heyday of planning in the late 1950s and early 1960s,especially in their neglect of the wage goods (food, clothing and such consumer goods)and export sectors. Yet, the critics forget that India's diversified industrial base is a creationof the planning era and that many of the stars of today like the first-generation of IndianInstitutes of Technology were "planned" institutions. The roots of India's strength in softwaretoo can be traced to the pool of skilled scientific and engineering talent that was createdas part of the planning process. The unfortunate aspect is that in spite of the decline inthe importance of planning, Yojana Bhawan increased its power elsewhere - as an agencythat channelled as much resources to the states as flowed through the statutory transfersof the once-in-five-years Finance Commission. In the name of addressing regional disparitiesor special needs, the monster of centrally-sponsored schemes grew, so too other formsof Planning Commission-directed transfers, such as additional central assistance and specialassistance. All this made the states supplicants of what all through remained a non-statutorybody. Central assistance to state plans left the states with little freedom to pursue theirown priorities and chief ministers had to make an annual pilgrimage to Yojana Bhawanto seek additional funds.

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Crimean Declaration of Independence Sat, Aug 30, 2014crimea, russia, ukraine, EPW, international,

The right to self-determination was initially thought to be applicable in the colonial contexts.However, in the neocolonial situations the right often collides with the territorial integrityof the sovereign states. On 11 March 2014, the Supreme Council of Crimea and the SevastopolCity Council adopted a joint resolution unilaterally declaring independence from Ukraine.The declaration cited the precedent of Kosovo to justify the move to secede, and at theoutset, expressed desire to become a part of Russia following a referendum slated for 16March 2014. Most western governments were quick to reject it as a violation of internationallaw as well as a derogation of sovereignty and territorial integrity of Ukraine. The Crimeanmove for secession is not an aberration. It resembles similar unilateral declaration of independenceby Rhodesia from the United Kingdom (UK) in 1965 and the tailor-made declaration ofindependence by Kosovo from Serbia. In a remarkable advisory opinion on 22 July 2010,the International Court of Justice (ICJ) expressed the view that Kosovo's declarationof independence did not constitute a violation of international law.1 Even if the ICJ wasseen as resorting to tight between legal and political aspects of such secession from establishedstates, the opinion came to be construed as providing legitimacy to secessionist movementsaround the globe. In fact, the Declaration of Independence of the Autonomous Republicof Crimea and Sevastopol has explicitly referred to the Kosovo advisory opinion. In turn,it raises larger question for international law to grapple with this coming challenge in thiscentury. It raises a vital question as regards international law rising to the occasion tograpple the with twin challenges of the balance between the right to self-determinationand the preserving of territorial integrity and sovereignty of established states. It has however,been, argued that "secession is neither legal nor illegal in international law, but a legallyneutral act the consequences of which are regulated internationally" (Crawford 2006: 390).It appears that the decision to recognise a state is based upon the political expediency ratherthan legal one. In the first post-cold war assertion of power, Russia has justified its tacitendorsement of secession of Crimea to protect its nationals and military forces insideUkraine, threats posed to ethnic Russians living there, and generally, to the Crimean population.The concept of "Responsibility to Protect" (R2P) emphasises the responsibility for collectiveaction where a state fails to protect its own citizens. Interestingly, the United States(US) and European Union (EU) claimed that the referendum violates Ukraine's constitutionand international law. Is Crimea's case set to become a precedent of "remedial secession"outside the classical colonial and neocolonial context? Due to the strategic Black Seacoast, Crimean region became a symbol of the power of the Russian empire. The tug ofwar began with the election of the Kurultaj, the Parliament of the Crimean Tatars, alongwith it the Russian hold in the region getting strong. It witnessed a large wave of Russianmigration in the peninsula that pushed Tatars into the corner and diminished their demographyas well as political influence. When Stalin came into power, repressions on Crimea startedwhich were especially directed against the Tatars, as they were accused of collaboration

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with the German troops during the first world war. This resulted in mass deportations ofthe Crimean Tatars in May 1944. Crimea lost its autonomy and became an oblast withinthe Russian Soviet Federative Socialistic Republic (RSFSR). In 1949, Sevastopol receivedspecial financial rights and was directly subordinated to Moscow. To mark the 300thanniversary of Treaty of Perejaslav , in 1954, the Crimean peninsula was made a partof Ukraine. At that time almost 90% of the Crimean population was Russian. For the Russians,independence and "loss" of Crimea were hard to accept. In early 1990s, the AutonomousRepublic of Crimea (ARC) was established. In April 1993 the Crimean Parliament againdealt with a proposal of the Russian Parliament, which stated that Russia could possiblysupport a referendum on Crimea. It was also ready to integrate Crimea as an independentmember in the Commonwealth of Independent States (CIS). In May 1994, the CrimeanConstitution of 1992 was reinstalled. On 23 August 1994, Sevastopol was declared a Russiancity and subordinate to the Russian legislation. In November 1995, the Crimean Parliamentadopted a new constitution according to which Crimea was to be a part of Ukraine andSevastopol part of Crimea. The 1996 Constitution of Ukraine was important for the relationsbetween Kiev and its capital Simferopol. It reiterated emphatically the territorial integrityof Ukraine with Crimea as an inseparable part. In 21 October 1998, the Supreme Councilof the ARC adopted the constitution that was then approved by the Verkhovna Rada (Parliament)of Ukraine on 23 December 1998. It was signed almost immediately by the presidentof Ukraine, and entered into force on 12 January 1999. The Crimean Tatars were disenchantedwith the new law and did contribute in the general deterioration of the interethnic situationin the peninsula. Thereafter, the Crimean Russians were campaigning for Crimea's separationfrom Ukraine and reunification with Russia. On the other side, the Crimean Tatars werecampaigning for political recognition as the indigenous peoples of Crimea and for integrationinto Ukrainian society and economy following their forced (1944) deportation to centralAsia. In practice, the autonomy of Crimea does not provide more rights to the peninsulathan to any other "oblast" of Ukraine. At the heart of Crimean crisis lay a paradox thatthe Russian minority in Ukraine is the majority of Crimean region. This has brought Russiainto the picture as a natural claimant to protect the ethnic Russian minority. In the post-decolonisationperiod, evolution of international law for exercise of right to self-determination appearsto be oblivious to the demands of ethnic groups as well as national, religious, cultural orlinguistic minorities. Thus, it has been legitimately contended that "indiscriminately grantingthe right to self- determination to all ethnic groups and minorities would pose a seriousthreat to peace and bring about the fragmentation of states into a myriad of entities unableto survive" (Cassese 2005: 63). How to strike a balance still remains a quagmire. In thecase of Crimea, there are two important factors that would affect widespread support: first,it is the hovering Russian presence unlike Kosovo, where the North Atlantic Treaty Organisationforces had managed to trumpet for more widespread international support; and second,western countries have not only adopted selectivity in Crimean quest for secession, butalso offered support to Ukraine to help counter any possible Russian role in Ukraine.If behind the scene negotiations and diplomatic blitzkrieg does not yield to an acceptablesolution, it will lead to a stand-off with heavy cost to both the sides notwithstanding noisy

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western efforts that are based upon policy of convenience. International law cannot beseen to be a tool for the purpose. Conclusions The unfolding of the Crimea drama couldbe attributed to a variety of reasons. Ostensibly propelled by the effort to protect ethnicRussian people, it seems to underscore far-reaching consequences in the rapidly changingglobal order. Though Crimea was always a "loss" felt deeply within Russian society, itwas only after Kiev tried to tilt towards the EU that Moscow encouraged redemption ofCrimea. Notwithstanding this ground reality, international law has been invoked by thepowerful states to justify their actions. As per the famous S S Lotus3 case dictum, whateveris not prohibited under international law could be said to be permissible. Secession couldbe one such quagmire. Still, issues surrounding the Crimean declaration have proved againthat international law is indispensible in all vital issues of international relations. Evenas the UNSC has convened an emergency session on 13 April 2014, it seems, one doesnot expect any dramatic change in the Crimean decision to join the Russian Federation.The proposed UNSC "consultation" could merely chalk out a plan at best to persuade Russianot to make further push in eastern Ukraine beyond mutually acceptable lines.

Banking with a Difference Sat, Aug 9, 2014EPW, international, banking, brics,

The world has one more multilateral development bank, the New Development Bank (NDB)that was established on 15 July 2014. With authorised capital of $100 billion and initialsubscribed capital of $50 billion, the bank's founding partners are the countries in theBRICS grouping (Brazil, Russia, India, China and South Africa). These five countries,which share equally the paid-up capital in the form of actual equity ($10 billion) and guarantees($40 billion), will remain dominant in perpetuity with their aggregate shareholding neverfalling below 55%. Organisationally too the BRICS bank seeks to be even-handed: Indiagets the first chair of a rotating presidentship, China gets to host the bank's headquartersin Shanghai, South Africa gets to host the first regional office, the first chair of the boardof governors is from Russia and the first chair of the board of directors from Brazil. Consistingof large countries, considered by some to be characterised by substantial potential for rapidgrowth, they are seen to be among the possible future giants that would challenge the currentlydominant economies in the Organisation for Economic Co-operation and Development(OECD). With two-fifths of the world's population and a fifth of the world's gross domesticproduct (GDP), the BRICS are indeed a formidable grouping. That makes the NDB differentbecause most existing development banks are in terms of shareholding, voting rights andmanagement dominated by one or the other developed country, especially from amonga set defined by the United States (US), Germany, France and Japan. . The creation ofthe NDB is seen as being a response to the intransigence of countries that dominate theexisting multilateral development banking infrastructure, especially the US, and a declarationof the exasperation of emerging nations with the current global financial architecture. Itsfounding membership also gives it a much greater chance of success than past attemptslike that with the Banco del Sur (Bank of the South) in establishing a successful competitor

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to the currently dominant multilateral development banks. It could, for three reasons. First,in a world characterised by substantially enhanced possibilities of mobilising private resourcesin debt and equity markets, poorer developing countries are discriminated against andkept out of such markets. Since the NDB is owned and backed by governments in a setof "emerging economies", it is likely to be able to mobilise substantial resources at reasonablecost from private markets and channel them to needy countries. Second, inasmuch as theallocation of these resources would be determined by the representatives of governmentsfrom the five BRICS countries, it could direct resources to projects that are more in keepingwith the requirements of the Southern countries. Third, with control in the hands of theBRICS governments that are subject to the influence of local democratic forces, the termson which the institution lends could in time reflect "Southern" requirements and sensitivities.For example, there has been developing country recognition that the kind of policy conditionalitiesattached to lending by the North-dominated Bretton Woods institutions limits nationalpolicy space in ways that favour the dominant nations and discriminates against the developmentinterests of poorer countries and that of the disadvantaged sections of the populations inthem. If, therefore, NDB lending occurs on terms that are more sensitive to the requirementsof developing countries the impact can only be positive. In fact, conditionalities couldbe so set as to distribute a part of the benefits to the poor among developing country populations.

Saving Sharmila Sat, Aug 30, 2014AFSPA, EPW, polity, Irom Sharmila,

For resorting to a form of protest that is used not just in India but also in many other partsof the world, Sharmila was arrested, charged under Section 309 of the Indian Penal Code( IPC ) for attempting to commit suicide, and force-fed through a nasal tube The law hasbeen in force in Manipur since 1958 when it was enacted. It is operative in the entire state,barring seven assembly constituencies around Imphal, from where it was withdrawn in2012. Currently the Supreme Court is hearing a petition filed by Extra Judicial ExecutionVictim Families Association ( EEVFAM ) that has recorded 1,590 cases of disappearancesand encounter killings since the 1980 s . Filed in 2012, the petition asked the Court fora special investigation team ( SIT ) to look into these cases. In 2005, the Justice B P JeevanReddy Commission appointed by the United Progressive Alliance ( UPA ) governmenthad also made a strong case for the withdrawal of the law from Manipur. It termed AFSPA"a symbol of oppression, an object of hate and an instrument of discrimination and highhandedness" and recommended a progressive withdrawal of the law. But neither of thesejudicial commissions nor their considered recommendations appear to have made a denton the thinking of governments at the centre and the state or the army.

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An Iron Fist in a Velvet Glove Sat, Aug 2, 2014Juvenile Justice Act, EPW, polity,

Laudable amendments regarding adoption and the state of children's homes sit uncomfortablyalongside an alarming proposal permitting juveniles to be tried by regular courts for seriousoffences in the proposed re-enactment of the Juvenile Justice (Care and Protection of Children)Act, 2000. The bill proposes a comprehensive re-enactment of the existing Act - it setsout guiding principles for authorities and agencies, strengthens inspection mechanismsfor the various rehabilitation institutions and takes important steps towards implementingthe 1993 Hague Convention on Protection of Children and Co-operation in Respect ofInter-country Adoption. However, it also proposes to introduce provisions that will permitjuveniles (now replaced by "children") between the ages of 16 and 18 years to be triedby regular criminal courts for certain serious offences. This is a change that threatens todestroy in one fell swoop the reformative fabric of the Act and sits incongruously alongsidethe bill's other progressive provisions. This article will therefore focus on this provision,explaining the substance of the change that it seeks to effect and examining whether thechange complies with the Constitution as well as India's international obligations. Thearticle concludes by pointing out that this provision is incompatible with the "Fundamentalprinciples for care, protection, rehabilitation and justice for children" that the bill introduces.Children below the age of 18 years who are charged with offences must be produced beforea Juvenile Justice Board (henceforth the board) which then proceeds to conduct an inquiry.The board may order counselling, community service, payment of a fine or release onprobation of good conduct if it concludes that a child has committed an offence. The strictestorder that the Act permits is directing a child to be placed in a special home for rehabilitationfor a maximum period of three years. if the juvenile has attained the age of 16 and theboard is convinced that the offence committed is so serious in nature that it would notbe in his interest or that of other juveniles to send him to a special home, the board mayorder the juvenile to be kept in a "place of safety" which is specifically not a jail or lock-up.The board retains its power to pass any of the orders set out in the previous section. However,in addition to this, Clause 14 of the bill imposes a mandatory duty on the board in the caseof specific offences - murder, grievous hurt by acid and rape, including gang rape - allegedto be committed by a child who has completed 16 years on the date of commission of theoffence. In such cases, it must conduct an inquiry within one month from the date of productionof the child before the board "regarding the premeditated nature of such offence, the mitigatingcircumstances in which such offence was committed, the culpability of the child in committingsuch offence and the child's ability to understand the consequences of the offence". Onthe completion of such inquiry, under Clause 17 of the bill, the board might pass an orderfor the continued adjudication of the case under the Act or might transfer the case to thecourt having jurisdiction over such offence, usually, the session's court. When the offencesare attempted murder, the use of criminal force with intent to disrobe a woman, variouscategories of kidnapping offences, selling and buying minors for prostitution, and robbery,

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the board, in addition to taking into account the factors mentioned in the previous paragraph,must also have regard to the previous history of commission of such offences by the child.It may transfer the case to a regular court only if the child is found to be a repeat offenderof such offences. These changes mean that if the child is so transferred, he/she will betried by ordinary criminal courts, will be liable to face sentences ordinarily prescribedfor these offences under the Indian Penal Code (IPC) (except for the death penalty andimprisonment for life without release) 4 and will be required to undergo imprisonmentin jails that are ordinarily created for adult offenders. Apart from turning the reformativephilosophy underlying the Act on its head, this provision also suffers from the followinglegal defects. (i) Dangerous Rationale for Differentiation: (ii) Presumption of Innocence:(iii) Pending Cases: The bill does not mention how cases pending against children abovethe age of 16 alleged to have committed serious offences will be treated. Presumably, theguarantee under Article 20(1) of the Constitution 8 will prevent such cases from beingtransferred to ordinary courts; nevertheless, the bill ought to have contained a saving provisionto this effect. International Obligations India's international obligations towards childrenin its jurisdiction (defined as human beings below the age of 18) are governed by the UnitedNations Convention on the Rights of the Child (henceforth the Convention). 9 The Conventiondoes not absolutely prohibit States from arresting, detaining or imprisoning children belowthe age of 18 years. It only requires that these measures be used as a "last resort and forthe shortest appropriate period of time". 10 Nor does it prohibit States from using judicialproceedings against children alleged to have infringed the penal law. 11 Nevertheless,there is an obligation on States to seek to establish measures, "whenever appropriate anddesirable...for dealing with such children without resorting to judicial proceedings. " 12The phrase "appropriate and desirable" appears to allow State parties the discretion toexclude certain categories of children or offences from the alternate, non-judicial measuresrecommended in the Convention.

Juvenile Public Rage Sat, Aug 2, 2014Juvenile Justice Act, EPW, polity, juvenile,

Maneka Gandhi, has incorporated this demand in the final draft of the bill to amend theJuvenile Justice (Care and Protection of Children) Act, 2000. While there are some otherwelcome proposals in the draft bill, the one to empower the Juvenile Justice Board to decideon whether juveniles involved in serious crimes should be sent to an observation homeor tried in a regular court smacks more of retribution than reformation or rehabilitation.This proposal pertains to children between 16 and 18 years accused of crimes under IndianPenal Code Sections 302 (murder), 326A (acid attack), 376 (rape and sexual assault), 376A(rape resulting in death or vegetative state) and 376D (intercourse by management or staffof an institution). Activists and organisations working with children in conflict with thelaw point out that in the last three years, going by the National Crime Records Bureau,crimes by juveniles range between 1% and 1.2% of the total number of crimes, with morethan 60% of juvenile crime linked to theft. In fact, a number of studies after the United

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States began "getting tough" on juvenile offenders from the 1980s onwards show thatjuveniles incarcerated with adult criminals often get more hardened and inured to a deviantway of life. Among the many urgent aspects of juvenile justice reform is the need to focuson the abysmal state of our remand homes in terms of their physical condition as wellas the attitude of the staff. The second is the attitude of the police towards juvenile offenderswhich necessarily affects investigation.

Protecting the Future Sat, Aug 16, 2014tuberculosis, EPW, science & tech, health,

Even as India grapples with the highest incidence of tuberculosis (TB) in the world andthe challenge of dealing with rising incidence of drug-resistant TB, we are confrontedwith the unsurprising but equally horrifying discovery that the country has the highestnumber of children infected with the disease. Diagnosing TB in children is difficult sincethey do not produce enough sputum for the tests and even when they do, the most affordabletests can diagnose properly only in approximately 30% of cases. Children are also muchmore susceptible to contracting extra-pulmonary and tubercular meningitis or TB meningitis,which makes diagnosis tougher. The fixed-dose combinations which are considered tobe the accepted treatment for children are not easily available and the development of appropriatefixed-dose combination products has been slow, as WHO has noted. The Revised NationalTuberculosis Control Programme (RNTCP) along with the Indian Academy of Paediatrics(IAP) has drawn up detailed measures for diagnosis and treatment of children with TB.Under the RNTCP, the household contacts of sputum smear-positive pulmonary tuberculosispatients are also screened for TB. Children under six years who are among such a householdbut do not show signs of active TB disease are given Isoniazid preventive therapy, commensuratewith their body weight. More important, however, is drawing up a strategy that will battlemalnutrition along with the treatment of TB in children because this condition also leadsto mal-absorption of the drugs. The same socio-economic factors that form an obstacleto adult TB patients complying with the treatment regimen are likely to affect the childpatients. The single-most important step would be to acknowledge that children with TBconstitute a priority segment so that measures on a war footing can be put in place. Todo that, as the leader of the research that led to discovery of the higher global burden pointsout, quantifying the number of affected children is important. Without such quantification,setting targets and monitoring of trends would be impossible.

Union Budget and the 'Digital Divide' Sat, Aug 2, 2014Digital divide, Digital India, EPW, economics,

The emphasis on use of digital technologies to bridge the "rural-urban gap" in the unionbudget is limited to high talk and minimal allocations. The need for a more comprehensiveand peoples' participation-oriented rural action plan should have been the focus while settingsectoral allocations, but that is not to be in this mid-year budget. government's commitment

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to bridge the rural-urban divide through communications, broadband connectivity andother technology-driven interventions like virtual classrooms in rural schools and buildingof information technology (IT) skills of rural youth. A good governance programme hasbeen announced titled "Digital India" and a National Rural Internet and Technology Missionfor services in villages. Jaitley wants to use IT for transparency and better service deliveryof government schemes. Among the most notable of UPA II programmes was the NationalOptical Fibre Network (NOFN) which was announced in 2011 and was supposed to bridgethe digital divide by connecting 2.5 lakh village panchayats in two years and is nowhereclose. The budget provides a sum of Rs 500 crore to bridge the digital divide and Rs 100crore for good governance. The finance minister talks about the imminent need to furtherbridge the divide between digital "haves" and "have-nots" through a countrywide programmetitled "Digital India". Jaitley promises broadband connectivity at the village level, improvedaccess to services through IT-enabled platforms, and greater transparency in governmentprocesses. He also proposes "E-Kranti" for governance and service delivery and a NationalRural Internet and Technology Mission for services in villages and schools, and trainingin IT skills. However, under the same allocation he proposes increased indigenous productionof IT hardware and software for exports and improved domestic availability with specialfocus on supporting software product startups. The two parts of the mission are so distinctand disparate that it is difficult to visualise them under the same head. It is also difficultto figure out if the component of hardware and software production will not take a lion'sshare of the allocation meant to bridge the digital divide for the benefit of the rural poor.Jaitley may have packaged rural broadband connectivity as part of "Digital India" butit is in essence a continuation of the UPA government's floundering NOFN project whichproposed linking 2.5 lakh gram panchayats in two years through a network of optical fibreand has overshot several deadlines since 2011. The latest deadline for the project is March2016 at an estimated cost of Rs 20,000 crore to be met from the Universal Service Obligation(USO) Fund. T The USO is part of the new telecommunications policy and is raised througha levy as a percentage of the revenue earned by the telecom operators under various licences.The total length of the fibre optics network is estimated to be more than 5 lakh kilometresand when completed it would link rural and urban India with a 100 mega bits per second(mbps) information superhighway. Jaitley's "Digital India" aims to do pretty much thesame at a paltry allocation of Rs 500 crore. It is noteworthy that the government is sittingon a huge cache of funds collected through USO and the NOFN proposes to utilise onlya fraction of the collections so far. The finance minister has set aside Rs 100 crore eachfor the expansion of community radio (CR) stations and for setting up a Kisan TV to disseminatereal time information regarding farming techniques, water conservation, and organic farmingamong other things. While the allocation of Rs 100 crore for supporting 600 new and existingcommunity radio stations is a welcome step, it is nowhere close to covering the entirecountry with a network of community-owned and managed radio stations. With each CRstation covering 15 to 20 square kilometres, there is scope for setting up tens of thousandsof CR stations in this vast country. Participatory communication through CR democratisesand decentralises media systems as key agents of empowerment and goes a long way in

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promoting gender equality (Pavarala and Malik 2007). It has been proved globally, andbeyond doubt, that precious lives and property worth hundreds of crores can be saved bythe use of CR in disaster management. Kisan TV too could have been modelled on a communitymanaged format where farmers would be able to share progressive techniques and bestfarming practices in their own language, though that would require more than a token allocation.The issues of rural broadband connectivity, community media, virtual classrooms or hospitals,IT-enabled MIS services, tracking of foodgrain delivery systems, and rural media penetrationare intertwined and platform agnostic. It is immaterial whether connectivity comes throughfibre optics, satellite telephony, GSM/CDMA-based mobile phone networks, or a combinationof all, but what matters is the efficacy of the end use. The ultimate policy push has to comenot from token budgetary allocations but from pursuing a policy of spectrum commonswhere resources like spectrum and cable networks are seen through the lens of their socialrather than market value. Sale of spectrum to the highest bidder might be an improvementover opaque allocations of the past but it ignores the social value aspect of communitymedia altogether. The moot question remains if the government is willing to look at spectrum,broadband and rural media penetration as issues of growth and poverty mitigation.

When Will They Ever Learn Sat, Aug 16, 2014disaster management, environment, malin, EPW,

In the case of Malin, the preliminary report of the Geological Survey of India suggestedthat the use of heavy machinery to level the ground above Malin could have been one causefor the 300-foot landslide. Only a detailed investigation will establish the precise reasons.The report of the Western Ghats Ecology Expert Panel (WGEEP) led by Madhav Gadgilhas outlined in considerable detail how and why the biodiversity in the Western Ghatshas declined precipitously and the urgent need to address this. It has described the regionas the "water tower of peninsular India" that supplies water to 245 million people. It hasnoted that much of the area that falls under the Western Ghats is threatened by humanactivities and is further stressed due to climate change and the variability in the weather,including sudden and heavy spurts of rain during the monsoon. And it has underlined theunfortunate and stark reality that only 7% of the primary vegetation survives in the WesternGhats. A multiplication of projects like Lavasa in this ecologically fragile area is a recipefor disaster as it will necessarily mean a further denudation of forests, the use of heavymachinery to flatten land, and road building that causes further stress. These artificial "hillstations" also require waterways to be diverted or artificial water bodies to be created.All this is contraindicated for the health of a region already under assault from ecologicallyinsensitive developmental activities. The problem we continue to face in India is that ofshort-sighted developmental planning that will not factor in the long-term detrimentalenvironmental costs. After every so-called "natural" disaster, the same ground is covered,with environmentalists on the one side talking about developing environmentally sustainableparameters for development projects and governments on the other arguing that "progress"should not be held hostage to the concerns of a handful of activists. The people caught

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in the middle of this argument are ordinary people, like the hapless residents of Malin.There can and will be no ecologically sustainable or equitable progress in India if thosewith the power to decide continue to ignore the hard, scientific facts laid out in reportslike that of the WGEEP.

Trans-Pacific Partnership Sat, Aug 16, 2014Trans Pacific Partnership agreement, EPW, international,

Negotiations towards concluding the Trans-Pacific Partnership agreement have reportedlyreached an endgame phase. The participating countries are now negotiating market accessfor sensitive agricultural products, even as a wide gulf in positions exists on several rulesand regulatory framework issues. Negotiations have been under way for more than fouryears to conclude a "high standard" Trans-Pacific Partnership (TPP) agreement. Whatbegan as an attempt to forge a comprehensive free trade and investment initiative amongeight countries led by the US in Melbourne in March 2010 has now expanded to 12 countriesthat account for a quarter of international trade and 40% of the world's gross domesticproduct (GDP). 1 Claims have been made that the negotiations have reached the finalstages with some assessing it as 80% done even as there are reports about still unresolvedissues and a continuing gulf in positions on several sensitive and critical areas. The chiefnegotiators and the trade ministers of TPP countries are now meeting every other month.These are being supplemented by bilateral meetings and frequent gatherings of subjectmatter specialists. What distinguishes the TPP from the more than 400 free trade agreements(FTAs) globally under implementation or under negotiation is its size, scope, and depthof proposed concessions. 2 It is seeking to take a more comprehensive approach towardsmarket access by eliminating tariffs and non-tariff barriers on goods, and by adopting anegative listing approach to services commitments. Before proceeding further, however,it must be stated that the TPP negotiations are being held most secretively and textual proposalsare not being revealed except to those intimately involved in the negotiations. Of the threebroad areas - market access, trade rules, and domestic regulations - that will cover the29 chapters of the proposed agreement, it is market access in certain sensitive productsthat appears politically most challenging since the potential impact of a concession givenor gained is immediately obvious. Trade rules of a World Trade Organisation (WTO) pluscharacter such as a higher level of protection for patents and copyrights than the Trade-RelatedAspects of Intellectual Property Rights (TRIPS) agreement or disciplines in newer areassuch as SOEs, environment and labour standards, and the scope for dispute settlementare also proving difficult, particularly for developing countries such as Malaysia and Vietnam.The US and Japan, the two largest TPP economies, are currently discussing what Japan'smost sensitive agriculture products (beef and pork, sugar, dairy products, rice, wheat, andbarley) are and the auto sector. 4 The US has made it known that it will take up marketaccess issues with Canada, in particular for dairy and poultry, soon after. On the otherhand, both Australia and New Zealand, who are major agricultural exporters, are verykeen to secure additional market access for their products to the US, Canada, and Japan,

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and it has to be seen if they will take kindly to the US cutting a separate deal with Japanif its benefits are not extended to them. 6 The US has, however, been taking the line thatit will not enter into further market access negotiations with Australia and other TPP countrieswith which it already has FTAs. What is interesting to note in the TPP is that market accessnegotiations are not likely to arrive at one tariff reduction/elimination schedule for eachmember that will apply to all the other participants. The final tariff reduction/eliminationschedule for each country may be a hybrid, where certain tariff lines may see a commontreatment extended to other members, whereas in other cases, particularly for sensitiveitems, it may vary for each country. It has also to be seen how the US reconciles its positionof seeking high standards from others while its own agricultural lobbies are not keen atall to open up their market any further. The TPP endgame will also be politically driven.For the US to secure the passage of the TPP through both houses of Congress, it will requirepassing a Trade Promotion Authority (TPA) bill to prevent Congress from suggestingamendments to individual TPP provisions rather than confining itself to a yes or no vote.A successful conclusion of the TPP could generate pressure for introducing similar "highstandard" disciplines in the WTO. Such a move will get a boost if the TTIP is finalisedwith similar features. There is already a renewed push to conclude an Information TechnologyAgreement-II (ITA-II), which is intended to cover far more products than ITA-I on whichduties will be eliminated by participating countries. Attempts are also being made to concludea similar zero duty agreement on environmental products. Twenty-three countries haveseparately begun drawing up a plurilateral Trade in Services Agreement (TiSA) outsidethe WTO. Developing countries, including India, will need to carefully consider the variousoptions and work out room for manoeuvre and not get forced into a situation where theyhave to make sub-optimal choices. Striving to revive the Doha agenda should be activelypursued. At the same time, conducive international trade and investment liberalisationmodels should be developed without (a) the intrusive elements of the TPP that will limitdevelopment policy options; (b) the WTO-plus levels of IPR protection that will comeat the cost of public interest; and (c) the linkages between what are non-trade issues suchas labour and environment standards with market access, simply because trade sanctionas a tool is available for the enforcement of such standards. The proposed Regional ComprehensiveEconomic Partnership agreement among the Association of Southeast Asian Nations 10plus six partners could provide a good forum for developing such a model since the guidelinesappear to have taken the above considerations into account. As for India, to shore up itsposition, fresh efforts should be made to conclude the India-EU FTA. If the Indian economyshows revival and takes to an accelerated growth path, the large and growing market willbe a draw and could persuade the EU. India would also need to actively follow the developmentof global best practices in forums such as the OECD and APEC. Notes 1 The TPP tracesits origin to the much smaller Trans-Pacific Strategic Economic Partnership (P4) amongfour small countries, Brunei, Chile, New Zealand, and Singapore, that came into forcein 2006. The US showed interest in joining the initiative during October 2008. Followingthis, the Barack Obama administration pitched for making it more comprehensive and"high standard". Australia, Peru, and Vietnam followed, joined by Malaysia in October

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2010, Canada and Mexico in October 2012, and Japan in March 2013. Korea has expressedan interest to join. It is unlikely, however, that any new member will be admitted beforethe TPP is concluded. 2 Negotiations also began in June 2013 between the European Union(EU) and the US on concluding a similar ambitious Transatlantic Trade and InvestmentPartnership (TTIP) between these two large economic entities, which account for closeto 30% of world trade and 45% of global economic output. Five rounds of negotiationshad been held till May 2014 and some preliminary offers exchanged. But discussions arestill largely at a conceptual phase. Among the many FTAs are also 23 bilateral FTAs betweendifferent TPP member countries. In addition, there are five regional FTAs (ASEAN FTA,NAFTA, ASEAN-Australia-New Zealand FTA, ASEAN-Japan FTA and the P4 Agreementin which more than two TPP countries are members). 3 The chapter on regulatory coherenceis expected to require TPP members to set up a mechanism such as the US Office of Informationand Regulatory Affairs to conduct a cost-benefit analysis of new rules. The proposed disciplinesmay also require prior notification to a regulatory coherence committee of the TPP aboutproposed new domestic regulations. The SPS chapter is also expected to be based on ascience-based determination for food safety and not on the precautionary principles ofthe European Union (EU). 4 The US and Japan had exchanged letters before Japan's entryto the TPP that had already set out the terms of reference for bilateral resolution in theauto sector. The US was keen to address non-tariff barriers in the Japanese automobilemarket, which it has long felt is preventing greater access. It had also been agreed by boththat the US will bring down its tariffs in this sector for Japan (2.5% for cars and 25% fortrucks) over a very long staging period that is also backloaded to the maximum extent.5 A bipartisan group of 63 members of US Congress pushed for a strong market accessdeal with Japan in the TPP on the eve of President Obama's visit. On the other hand, theJapanese Diet passed a resolution last year asking the government to exclude the five categoriesof products - pork and beef, diary, sugar, rice, and wheat - from liberalisation in the TPP.6 Australia and Japan announced conclusion of a bilateral FTA on 7 April 2014, duringPrime Minister Tony Abbott's visit to Japan. It was a good package for Australia in theJapanese market, including beef, horticulture, and seafood items, but did not significantlyimprove access in dairy, sugar, grains, pork, and rice. 7 US exports of yarn and fabricstotalled $13.56 billion in 2012, much of it going to Central America Free Trade Agreement(CAFTA) and North American Free Trade Agreement (NAFTA) partners. 8 Provisionson government procurement already figure in bilateral FTAs between US and certain TPPpartners (Australia, Chile, Peru, Canada, Mexico and Singapore). Singapore, Japan andCanada are also members of the limited GPA under the WTO that has recently been expandedin scope. The four-member Trans-Pacific Strategic Economic Partnership Agreement betweenBrunei, Chile, New Zealand, and Singapore also had government procurement provisions.9 In a joint press conference with President Barack Obama, during his visit to Malaysiaon 27 April 2014, Prime Minister Najib Razak said,"He (Obama) fully understands oursensitivities", and that the two sides will try to work out a deal in the near future. 10 Aleaked version of the IPR chapter revealed a counter-proposal by New Zealand, Canada,Singapore, Chile, and Malaysia that did not contain many WTO-plus elements such as

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data exclusivity, patent term extension, and patent linkage. 11 Some business sources inNew Zealand, for example, have speculated that New Zealand could accept some US demandson national drug pricing and reimbursement programmes of the Pharmaceutical ManagementAgency (PHARMA) in return for an offer on dairy market access. Australia has indicatedthat it would accept the ISDS if it gets a strong outcome in market access. Malaysia, onthe other hand, could show flexibilities if the exception for Bumiputras could be providedon government procurement.

India and Israel: An Embrace in Arms Sat, Aug 9, 2014arms trade, EPW, international, israel,

The Narendra Modi-led Indian government refused to allow Parliament to pass a resolutioncondemning Israel for its military attack on Gaza that began on 7 July and which has left"literally no safe place for civilians" Given India's close ties with Israel since 1992, withthe latter now New Delhi's second largest armaments supplier, and the deep links betweenthe two countries' military and intelligence apparatuses in the fight against "Islamic terrorism",New Delhi's policy of running with the hare and hunting with the hounds is certainly notnew. Indeed, in 1975, India even voted in favour of a UN resolution equating Zionismwith racism, and later, in 1988, invited the Palestine Liberation Organisation to open aPalestinian embassy in New Delhi. But upon the victory of the United States in the protractedcold war and the collapse of the Soviet Union, in 1992 the Indian government establishedfull diplomatic relations with Israel. Earlier, in 1991, India voted for the repudiation ofthe UN resolution that equated Zionism with racism which it had supported in the mid-1970s.In 2001, a deal for the purchase of the Israeli Phalcon Airborne Early Warning and ControlSystems was cleared Certainly, post-9/11, counterterrorism and intelligence sharing havegained in importance - Mossad and the Research and Analysis Wing (RAW) are now inclose collaboration with each other. Moreover, the Indian Space Research Organisation(ISRO) launched Israel's TecSAR military spy satellite in 2008, followed by an updatedversion, RISAT-2, in 2009.

Sex Ratio, Khaps and Marriage Reform Sat, Aug 2, 2014social, EPW, gender, Khap Panchayats, women,

The recent move by the Satrol khap of Haryana to relax restrictive marriage norms andinduct women into khaps appears like a revolutionary move for these hidebound and regressivebodies. The head of the khap, Inder Singh Mor, has stated that members can now marryamong its 42 bhaichara (brotherhood) villages, decreasing somewhat the difficulties offinding brides in this state that suffers from a skewed sex ratio and bride shortage. Perhapsan even more revolutionary step has been the creation of a woman's wing of the khap;traditionally khaps have been all-male institutions dominated by older males that enforcesocial control over their communities in keeping with rigid patriarchal, kinship, age andgender norms. With Haryana's current sex ratio standing at 877 women for 1,000 men

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and an even more abysmal child sex ratio of 830 girls, the number of bachelors has beenpiling up over the decades, driving many to look for brides in other states. . Accordingto the local media, around 50 men in each of Haryana's 7,000 villages have no prospectsof finding a bride locally. Some villages are known to have upwards of 200 bachelors lookingfor brides. Recognising the relationship between bride shortages and sex selective abortionsof girls, these groups have demanded that the phenomenon be addressed seriously. Thechild sex ratio in Haryana improved from 819 to 830 between 2001 and 2011. It is possiblethat that the enforcement of the PCPNDT Act (Pre-Conception and Pre-Natal DiagnosticTechniques Act 1994) and awareness campaigns conducted by government and non-governmentalorganisations (NGOs) have played some role in this turnaround. The major contributionsthough is likely to be that of declining fertility (the sex ratio at birth improves when fertilitytransits from an average of three to two children (Bhalla et al 2013) and changing expectationsfrom educated and working daughters. Furthermore, this slight improvement will be reflectedin the marriageable age cohorts only after two decades and will not make much of a dentgiven the past backlog of bachelors. It is therefore not surprising that Haryanvis have beenimporting brides wholesale from the eastern states of West Bengal and Assam. Bridesfrom several other eastern and southern states can be found in almost every village of Haryana.However, not to rock the boat all at once, the Satrol khap has decided to retain certainother marriage norms. Mor states that the rule of village exogamy - prohibition of marriagewithin the village - would still be maintained and as far as possible, people should tryand avoid marriage even within neighbouring villages. Another norm that has been retainedis the ban on swagotra marriage (marriage within one's own gotra). As more familiesturn middle class, matchmaking criteria have shifted from mere landownership to education,employment, and urban residence, and parents are willing to accept self-choice marriageswhich meet appropriate caste and class criteria and even seek to arrange such matchesthemselves. Class transformations rather than conscious social reform might thus be thecause of current shifts occurring in marriage norms. Many Other Backward Classes (OBC)communities are now the beneficiaries of reservations and in a tight job market this isbecoming a plus point in the marriage market. Of course, the recent inclusion of Jats inthe OBC list might dent this particular advantage of the other OBC communities. Indeed,it is the influx of non-local brides, allowed to ease the marriage squeeze that is most likelythe reason for the Satrol khap's relaxation of the prohibition against inter-caste marriage.Many community leaders in Haryana have pointed out that these brides have to be acceptedout of necessity. While Mor's pronouncements may provide legitimacy to cross-regioninter-caste marriages, they do not make clear whether marriages between any of the localcastes would be accepted or only those between the savarna (twice born) castes, whichexclude dalits. A significant number of marriages that have drawn the ire of khaps haveinvolved elopement of Jat girls with dalit boys. There have been some earlier attemptsby khaps to bring about a change in their public perception. In January 2014, leaders of50 khaps who gathered in Meham in Rohtak district, decided to form committees to curbhonour killings while discouraging same gotra marriages (Siwach 2014). They were tryingto respond to the criticism that they were inciting and encouraging parents and relatives

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of eloping couples to punish the latter by death.

Health Service System in India Sat, Aug 30, 2014Rashtriya Swasthya Bima Yojna, social, EPW, health,

The Rashtriya Swasthya Bima Yojana was rolled out in 2008 for households below thepoverty line, enabling them to access health services in the public and private sectors. However,experience from different countries shows tax-funded insurance systems work well onlyin settings where public provisioning of healthcare services prevails. State-funded targetedinsurance schemes do not seriously mitigate inequitable access to health services in a fundamentallyprivate healthcare delivery market. Attainment of universal healthcareaccess is the presentgoal of the Indian health service system. An insurance-based method of facilitating accessto health services has been chosen as the method for attaining this goal. The governmentin 2008 launched the Rashtriya Swasthya Bima Yojana (RSBY), or the national healthinsurance scheme, covering all households falling below the state-mandated poverty line.It enlisted the services of the private and public sectors to cater for enrolled households.There further exists a commitment of expanding insurance to cover India's vast unorganisedsector. 1 Insurance-Based Methods India has one of the most privatised health sectorsin the world. Decades of underinvestment and political indifference to the public healthservice system have led to a burgeoning of the private healthcare market in the country.The increased proliferation of the largely unregulated private sector in the past coupleof decades has coincided with declining investments in the public health service deliverysystem in the country, as mandated by the structural adjustment policies of the early 1990sThe private sector received further impetus to expand in the new millennium when thepublic-private partnership (PPP) model received official endorsement in the Tenth Five-YearPlan (2002-2007) to improve healthcare accessibility among the people (Raman and Bjorkman2008). In 2008, it received even bigger encouragement with the launch of the RSBY. Thisgovernment-funded insurance scheme for below the poverty line (BPL) families includedprivate providers in the list of empanelled hospitals where enrolled households could availthemselves of treatment. Thus, though the scheme was financed by public money, bothpublic and private hospitals could be approached for treatment. A strong base of primarycare services even in rural areas was the key to improving health outcomes in both thesecountries. Such a system mandated a higher level of public investment for it to be evenmoderately successful, and in both these instances the governments showed a strong politicalcommitment to achieving their goal. Thailand spent 14.2% and Sri Lanka 7.9% of theirtotal public expenditure on health in 2011, the report noted. The figure for India was 4.4%in 2011 (GoI 2011: 191). The Indian scenario could not be any more different. As mentioned,it is one of the most privatised markets in the world. Government spending on health at1.2% of gross domestic product (GDP) is amongst the lowest in the world. Public healthservice provisioning is weak and has been marred by declining investments over the years.The RSBY was launched by the Ministry of Labour and Employment in 2008 for all BPLfamilies. It provided them coverage for hospitalisation costs up to Rs 30,000 for five members

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of a family. 1 The primary objective was to provide financial security to enrolled householdsto prevent them from going into debt while accessing healthcare services. Reducing theirOOP expenditure on healthcare was an obvious corollary, and by doing so it aimed to increasetheir access to health services, resulting in improved health outcomes among those enrolled(Selvaraj and Karan 2012). By bringing private health service providers under its purview,it also aimed to better the availability of services among beneficiaries, who may have previouslysuffered from its absence in their vicinity. Despite its good intentions, numerous studiesconducted on its functioning have highlighted discrepancies in its implementation. Beginningwith enrolment, which has been irregular and is still some way off from being universalboth across and within states Another troublesome aspect of the scheme has been thelow claims ratio among enrolled families, which has ranged from 0-15% in most districts,pointing to low utilisation. Its problems seem to have taken over its functioning despiteit not even being a decade old, and it has begun to suffer from dwindling participation(Bajpai and Saraya 2012). We take a look at the contrasting healthcare delivery modelsof the US and Cuba. While the former is the prime exponent of an insurance-based systemof access in a healthcare market, the latter has a strong public health delivery infrastructureproviding universal coverage. The comparison, it is hoped, will help highlight the dangersinherent in an insurance-based model of access in a largely privatised set-up. The UShas the highest rate of healthcare expenditure in the world - in 2011, it spent 17.6% ofits GDP on health. Yet its health outcomes lacked parity with the investment made (WHO2012) and are marked by unequal utilisation rates across different class groups. In comparison,a middle-income country like Cuba is able to attain similar health outcomes at the aggregatelevel with a substantially lower level of investment in its health sector. The US healthcaremarket is made up of a large number of private medical healthcare providers, where accessis facilitated by an individual's insurance package. Though public insurance is providedto certain sections of the people, including the elderly and low-income groups, the targetednature of these governmental programmes has resulted in the exclusion of a large numberof genuine beneficiaries. Those without insurance have to either defer utilisation or avoidthe system altogether despite their need (Oberlander 2002). In contrast, the Cuban publichealth service system spent a mere 5% per capita of what the US did on healthcare in 2011,yet performed more effectively compared to its profligate counterpart.

Masters of War Sat, Aug 23, 2014defence, EPW, international, pivot to asia, india us defence agreement,

India and the US disagreed over the former's refusal to endorse the World Trade Organisation'sTrade Facilitation Agreement without a favourable agreement related to the aggregatemeasures of support for the agricultural commodities of developing countries. But thisshould not detract from the fact that both sides seemed determined to further strengthenmilitary and strategic ties. For Washington, the India-US strategic partnership is mainlyabout incorporating New Delhi as a crucial part of its "pivot to Asia" strategy of underminingthe rise of China, and New Delhi too seeks to take advantage of this opportunity to enhance

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its position vis-a-vis China. The joint statement emphasises the need for India, the USand Japan to come together and build transport and trade connectivity, including economiccorridors, between South Asia andASEAN, via Myanmar. Indeed, just last month, forthe first time in the last five years, India, Japan and the US conducted trilateral naval exercisesin the Malabar Straits. With Washington's more recent deterioration of relations with Moscow,it is now trying to gain at Russia's expense; the latter India's foremost armaments supplier.India is the world's largest armaments importer. It imports 70% of its total requirementsof weapons; around 75% from Russia, while only 7% come from the US. This is becauseRussia makes provisions for co-production and technology transfer. But the US now seemsto want to capture this segment of the armaments market.

Fatwas and Muslim Women Sat, Aug 2, 2014EPW, gender, polity, women, muslim women, fatwa, Supreme Court,

The Supreme Court's ruling that clarifi es that though it is not unconstitutional to issuefatwas, they are merely opinions of the issuer and not binding on anyone must be welcomed.The Court has, however, taken a balanced view in not declaring the functioning of anyreligious institution as illegal or against public interest. The Court could not have preventedany individual or a body from expressing her/his/their religious views as Article 25 ofthe Constitution guarantees freedom of conscience and right to freely profess, practiseand propagate the religion of her/his choice to every person. Those views however cannotbe enforced on a third person through any means. Article 26 guarantees every religiousdenomination or any section thereof the right to establish and maintain institutions forreligious and charitable purposes, and to manage its own affairs in matters of religion.There are two issues here - one concerns fatwas, which we will examine shortly and theother is about the process of mediation, conciliation and arbitration in disputes betweentwo individuals, whether relating to matrimony or anything else. In the opinion of the apexcourt, dar-ul-qazas are also an "informal justice delivery system with an objective of bringingabout amicable settlement between the parties". Arbitration/mediation/conciliation isdone through retired judges; individuals or institutions in which the disputants have faithand subject themselves to - commercial and professional bodies; various socio-religiousand cultural institutions based on traditions, caste and biradaries (community brotherhood),etc. Women's organisations too run counselling and mediation centres for matrimonialdisputes. Such institutions cannot be declared illegal or banned by the courts merely becausethey decide disputes on the basis of religio-patriarchal traditions. The decisions of the khappanchayats and dar-ul-qazas definitely need to be contested as they widen gender disparity,weaken the status of women and strengthen patriarchal values and norms. However, banningsuch bodies is not the solution as they reinvent themselves under other names and forms.We need to strengthen secular and constitutional institutions for delivery of justice, makeit more accessible to the poor and weaker sections by reducing the costs involved, simplifyand demystify procedures and drastically reduce the time consumed in delivery of justice.Fatwa" in Arabic literally means opinion. It is an opinion of the issuer normally on some

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point of the sharia. As there is no clergy in Islam, the opinion is not binding, howsoeverlearned and qualified the issuer of the fatwa may be. A fatwa issued by the Dar-ul Iftanormally ends with the words "but Allah knows better" after the opinion is expressed.These words not only demonstrate the humility of the issuer of the fatwa but also indicateits non-binding character. Similarly there have been numerous fatwas to oppose terrorismthat targets innocents, issued by ulema in India as well as others in Islamic world. Suchfatwas merit little attention in the media - both, due to lack of knowledge, and becausethey go against the conventional view that Islam is a backward, violent and aggressivereligion. The media also thrives on negative news since coverage of conflicts rather thanevents that are conducive to harmony and peace increase the TRPs. the fatwas issued bythe Darul Ifta established by the Darul Uloom have been drawing from the wahabi conservativeIslam and Hanafi school of jurisprudence. Muslim women have been the worst sufferersas the conservative fatwas restrict their freedom and liberties. Women in the fatwas areconceived as duty bearers towards their husbands and as having few rights. The fatwasenable men to exercise considerable control over the bodies and movements of their wivesreducing them to objects for sexual gratification of their husbands, bearing children andcarrying out domestic chores. Needless to say this does not necessarily reflect the truespirit of Islam. What Is to Be Done? Easy accessibility to constitutional and secular courtsis highly desirable for all citizens. The poor and marginalised sections, particularly thewomen of a minority community fall prey to feudal-patriarchal religious institutions andbelief in divine curse. The Supreme Court's judgment which clarifies that though it isnot unconstitutional to issue fatwas, they are merely opinions of the issuer and not bindingon anybody is welcome. A fatwa is not enforceable against any citizen and an aggrievedcitizen has remedies against its enforcement. T The courts functioning under the constitutionalframework have done a lot for Muslim women's rights and entitlements and within theIslamic framework - be it granting fair and reasonable maintenance for their lifetime todivorced Muslim women, holding oral pronouncement of divorce in one sitting illegal,on the custody of children, right of inheritance, protection of Muslim women facing domesticviolence, etc. Muslim women must utilise all spaces wherein they get better rights.

Rejection of an Imbalance Sat, Aug 9, 2014WTO, bali package, EPW, economics, trade facilitation,

India's timely decision at the World Trade Organisation (WTO) to link the adoption ofa protocol on a new Trade Facilitation (TF) agreement to finding a permanent agreementon developing countries being able to maintain public stockholding programmes for foodsecurity has caused an unusual storm. Adoption of the TF protocol would have clearedthe decks for launching a new work programme at the WTO that would have ignored theprevious decisions taken in the DDA negotiations since 2001 and would have been basedlargely on Washington's main interests in obtaining greater market access for agricultureand industrial goods, and services. The developmental issues in the DDA were all set fora formal burial. Their angry criticism of India is that the country went back on the December

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2013 Bali Ministerial Declaration where it had surrendered its position on TF agreementand agreed to an interim "peace clause" (WTO parlance for countries agreeing not to challengeviolations of any trade agreement) for public stockholding programmes for food securitytill 2017. If India had intended to make a connection between the two, i e, the TF agreementand a permanent solution for food security, it should have made it explicit at the Bali meeting,they have argued. Members agreed to a binding TF agreement and nine other non-bindingdecisions in agriculture and development based on political commitment and good faith.It is also a fact that the developing and poorest countries accepted the TF decision grudginglyas a payment to the US, European Union (EU) and other major exporting countries sothat their own unresolved Bali concerns would be addressed on a "prioritised" fast track.(The nine issues where legally binding outcomes could not be finalised in the Bali packageinclude five in agriculture and four relating to the development dossier in the poorest countries.)Against this backdrop, if India had agreed to the TF protocol, then, it would not have hadanything to look forward to, except some window dressing on other issues on the Dohaagenda. The US would have succeeded in burying the Doha Round and converting thetrade body into a house for only plurilateral - not multilateral - agreements on services,information and technology products, environmental goods, and investment. There wouldnot have been any need to address the distortions from the Uruguay Round in agricultureand other areas. That plan is now on hold because of India. Hence the US anger and hencethe orchestrated global media campaign against India, a campaign which many Indianmedia outlets and "reformist" commentators have swallowed.

EPW August

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Transcript of EPW August