Keep up the fair exchange

Amid(between,के बीच) tensions between the two countries, it has been suggested that India should impose a trade embargo(restriction,प्रतिबन्ध) on Pakistan by suspending its most-favoured nation (MFN) commitment towards Pakistan in the World Trade Organisation (WTO). The MFN provision, given in Article I of the General Agreement on Tariffs and Trade (GATT), 1994, puts every WTO member (including India) under an obligation to extend any benefit (say, lowering tariff rates) accorded to one member (say, the U.S.) to all other WTO members (including Pakistan). This core non-discrimination(unfair treatment,भेदभाव) principle is the cornerstone of the world trading system. Arguing for India suspending its MFN commitment towards Pakistan would mean India restricting imports from Pakistan without restricting imports of like goods from other countries, or/and India restricting exports to Pakistan without restricting the export of like goods to other countries. This can be achieved by imposing trade quotas, higher tariffs, taxes, or even totally banning some or all traded products. But is this economically and legally feasible(possible,संभव)?

Economic and legal feasibility 

Although bilateral trade between India and Pakistan has increased from $345 million in 2003-04 to $2.61 billion in 2015-16, it is abysmal(bad,निराशाजनक) compared to India’s total merchandise trade of $641 billion in 2015-16 and Pakistan’s total trade of around $75 billion, which includes exports worth $28.3 billion. India’s exports to Pakistan amount to $2.1 billion whereas imports from Pakistan are just $441 million, resulting in a trade surplus of $1.7 billion in favour of India. Given these numbers, assuming India were to suspend MFN status by stopping all imports from Pakistan, it would only result in a very marginal decline of Pakistan’s total exports and that too assuming that Pakistan is unable to find alternative markets. Even prohibiting all Indian exports to Pakistan, such as textiles, chemicals and agricultural products, will also not have any noticeable impact on Pakistan because Pakistan can always source these goods from other countries. On the contrary(against,विपरीत), restricting India’s exports, which have contracted considerably in the last 18 months, might hurt India more than Pakistan.

Would India be able to justify its MFN violation if Pakistan were to challenge this in the WTO’s dispute settlement body (DSB)? First, India cannot justify this on the pretext that Pakistan does not honour MFN obligations towards India. The correct recourse to Pakistan’s action is to mount a legal challenge in the WTO and not indulge in tit-for-tat.

However, India can justify its MFN violation if it is able to make a case under any of the GATT exceptions such as the national security exception, most important in the current scenario. In the pre-WTO era, the U.S. in 1985 relied on this exception to defend its MFN violation when it imposed a trade embargo on Nicaragua to oppose the Sandinista government. However, given the weak and diplomacy-based method of resolving trade disputes then, the U.S. defence was never judicially tested. In the post-WTO era, in 1996, when the European Communities (EC) challenged the Helms-Burton Act of the U.S., enacted to strengthen the American embargo on Cuba, the U.S. again justified it as a national security exception. Even here, before the adjudicatory process could start, the U.S. and the EC reached a settlement.

Article XXI (b) of GATT provides the most important national security exception. It states that nothing in GATT shall be construed(understand,अर्थ करना) to prevent any country from taking any action that “it considers necessary” for the protection of its essential security interests. Three questions are pertinent(appropriate,उचित). First, do the words “it considers necessary” give full authority to India to enact any measure it likes without any scrutiny by WTO’s DSB? Although Article XXI (b) gives a country very wide discretion(judgement,निर्णय) to unilaterally(one sidedly,एकतरफा) decide its national security measures, a certain degree of “judicial review” is still possible. Thus, at a minimum, India will have to provide a reasonable explanation to the DSB as to why restricting export of cotton and tomatoes to Pakistan or/and restricting imports of dates, light oil and portland cement (these commodities constitute almost 50 per cent of India’s imports from Pakistan) is necessary to protect India’s essential security interests.

Second, is Article XXI (b) a general national security exception? No. This exception can be invoked only if the measure adopted relates to fissionable material, to traffic in arms or other related material, or is taken in time of war or other emergency in international relations (EIR). India will most likely try to make a case in the EIR category. Even here, though India will enjoy a wide discretion to define EIR, this cannot be unilaterally determined to ensure that Article XXI is not used for political or punitive purpose.

Third, does the current situation fall under an EIR? This is difficult to answer. Notwithstanding recent escalations(increase,बढ़ोतरी), both countries continue to have diplomatic relations, cultural and social ties have not been snapped, transport links continue to exist. Also, both countries have seen far worse days in the past and yet trade and economic ties deepened.

Free trade and peace

Therefore, given the negligible economic impact and potential legal problems, suspending MFN to impose trade sanctions on Pakistan will only escalate tensions without much benefit. Instead of weakening trade ties, India and Pakistan should pay heed to this famous claim that ‘when goods don’t cross borders, soldiers will’. Free trade connects countries, and thus incentivizes(encourage,प्रोत्साहन) peace. Empirically(experimentally,अनुभव से), it has been shown that higher levels of free trade reduce military conflicts(battle,विवाद). India and Pakistan should boost free trade amongst themselves, Pakistan should honour its MFN commitment to India in the WTO, and India should use the SAARC platform to push for deeper trade ties.

courtesy:the hindu
click here for official link


download monthly pdf of september

Read more »

Fools rush in

Deadlines help. Hard ones help even more. After all, years of false starts have turned the goods and services tax (GST) into the boy who cried wolf. Let alone some corporates and auditors, even part of the general government machinery does not seem fully convinced that April 1, 2017 is a realistic start date. For the tens of millions of people who need to prepare for this transformational change, there is nothing like a hard deadline, akin(similar,के समान) to a hanging sword, to focus attention. And that will be needed, for if passing the GST constitutional amendment bill was tough, the steps going forward to get the GST started are likely to be much tougher. We highlight the four major ones here.

The first step: Should we have one standard rate or ten? A large number of rates can distort supply chains and complicate administration as well as compliance, introducing undesirable discretion(sense,विवेक) in the system. At the same time, just one standard rate may be inappropriate because currently each of excise (a central levy) and (state) sales tax schedules has a low band (4-6 per cent) and a standard one (12-14 per cent).

This is to offset the regressive nature of indirect tax: For instance, when buying shampoo, the factory worker and the CEO pay the same sales tax. Items presumed to be consumed by the poor fall in the “low” category, and those by the rich in the “standard” category. So biscuits below Rs 100/kg have zero tax, those priced higher have a low tax rate and cream biscuits get the standard rate. Half of India’s consumption basket currently has zero tax, a third is taxed at a “low” rate, and only 15 per cent is taxed at a “standard” rate. Applying one rate would mean this nuance is lost, and inflation could rise for the poor.

Thus one needs a “low” rate and a “standard” rate. Then what explains the four-rate structure (8 per cent, 10 per cent, 18 per cent, 26 per cent) being proposed to the GST Council as reported in this paper? It could be an attempt to replicate the current tax structure to address the states’ primary concern about losing revenue.

That brings us to the next and what could be the most critical step for the GST: Mapping the hundreds of product and services categories to the few GST rate slabs. It could be a trivial(small.तुच्छ) exercise accomplished in a few weeks, but it should not be. Despite much simplification since 1991, the schedule of taxes remains highly complex and distorts supply chains. Some rates also embody efforts to incentivize(encourage,प्रोत्साहन) “Make in India”: A hurried mapping effort could hurt. A senior OECD economist recently asked: “What is the commerce ministry’s assessment of the impact of GST on India’s trade competitiveness?” I had to tell her with much disappointment that such an exercise in all likelihood had not been undertaken.

The costs of commencing(start,शुरुवात) a major simplification of rates are the time it may take, the one-time disruption, and getting all states to agree to a completely new rate schedule. That said, getting states to agree will be challenging anyway, as sales tax rates already differ meaningfully across states (for instance, biscuits in Gujarat attract 8 per cent sales tax but 14.5 per cent in Karnataka).

The third step would be the GST law itself. Enormous(large,बड़ा) effort has gone into the draft bill put up for public comments as state and Central bureaucrats hammered out a consensus(agree,सहमति). But now that it has started to see public scrutiny(examine,जाँच), the list of necessary changes is growing rapidly.
This is not surprising, given the massive number of new use cases thrown up, particularly as services are to be taxed at the state level (for instance, who should get the service tax on an ad campaign designed in Mumbai but run in UP, Karnataka and Telangana?). A draft of the IGST law, which will deal with contentious inter-state transfers, has not been made public yet. A hurried passage may be inappropriate.

one of the most important expected gains of the GST is improved compliance.

But without a simplification of the compliance process, this improvement could prove illusory: One senses this design intent has been lost. As Bharat Goenka of Tally Solutions pointed out, small enterprises are concerned about the complexity of compliance more than the cost of the tax itself — that is, dealing with the day-to-day maintenance of registers and sometimes with corrupt officials. Easier and possibly automatic filing of returns is likely as important as the invoice matching that is expected to widen the GST tax net.

The fourth step is the software and its rollout. One assumes this is well advanced. However, development can only stop and implementation and training can only start once the rules of the GST are finalised, that is, encoded and passed in every state and the Centre. Vendors of enterprise software like SAP also need to roll out their GST modules, and they cannot do so till the GST software is finalised. All this as the organisational structure in the government(s) itself would be changing.

It is clear the choice is between time and perfection. There is very little time left: Clarity on rates must emerge in the next few months for the next year’s budgets. Moreover, the rollout cannot be too close to the 2019 elections: Economic disruption due to the GST can be minimised, but not obviated(escape,बचना). Further, prices of some items may rise, and for others, may fall: The items that see increases could become poll issues.

It is tempting to think of the process as an incremental one: Get the economy into the GST mode first, and later simplify the tax rates and ease the compliance burden. However, the best time to make structural changes is when a new system is starting; making them later risks creating a patchwork that can never be as efficient. As the GST Council’s internal politics evolves, it may become tougher, not easier, to build consensus on structural changes. As Pratap Bhanu Mehta has said in these columns, the GST is a “constitutional adventure”: Who really owns the GST schedule? The Central government is not the sole driver now and must take the states along.

Perhaps a middle-path exists. A handful of taskforces working in parallel over four to six months could make the whole plan much more considered. A senior bureaucrat appointed to the GST secretariat and put in charge of the whole GST project could improve coordination. It could also help build the necessary conviction among those who need to contribute to the change — deadlines that seem implausible(impossible,असंभव) hurt that conviction.

      

courtesy:indian express

click here for official link

download monthly pdf of august

Read more »

Railway Budget, a vanishing trick

So finally, the almost century-old practice of presenting a separate Railway Budget ahead of the General Budget is to be dispensed with from the next financial year (2017-18), and the Railway Budget “merged” with the General Budget. The Union Cabinet has just cleared the proposal.

What are the reported reasons for this merger? According to earlier media reports, a separate Railway Budget is being dispensed with so that the Indian Railways need not pay the annual dividend to the Government of India on the budgetary support given each year, saving the financially stressed Railways about Rs.10,000 crore annually; over the years, the Budget has been misused by politicians as a populist platform to enhance(increase,बढ़ाना) their own image; no other Ministry has a separate budget and the practice exists in no other country today; the Bibek Debroy Committee has recommended discontinuance of a separate Rail Budget and it is part of the Prime Minister’s reform programme. Besides, it is a colonial legacy.

A point particularly stressed by the Finance Minister in the press conference announcing the Cabinet decision was that the Railways’ share in the General Budget has progressively reduced over the years, making a separate budget an anachronism.

Each of these “reasons” does not present the true or complete picture. It is necessary to separate fact from fiction.

It is a review

There have been sporadic(periodic,छिटपुट) calls in the past for doing away with a separate Railway Budget for various reasons, but the matter was never pursued seriously. One of the more publicised reasons is that it will free the Railways of the obligation of paying the annual dividend, as mentioned earlier. This is only partly true. The dividend is paid not only on the budgetary support extended during a year but also on the total “capital at charge” which includes the gross budgetary support (GBS) of previous years. By this merger, a “loan-in-perpetuity” is converted to a grant. Shorn of officialese, it is a loan waiver; and loan waivers are granted to individuals or institutions in extreme financial distress — something not to go to town about.

In popular imagination, the Railway Budget was seen as a grand spectacle, with the Railway Minister using it as a platform for populism and political grandstanding. What is not appreciated is that the Budget is not merely a statement of allotment of funds to various projects and programmes, unlike other ministries, but comprises a fairly detailed performance review, physical and financial, of the previous year and prospects for the current (Budget) year. Perhaps nowhere in the world is a political functionary called upon to present a financial report card of the country’s largest public undertaking in the full glare of publicity. A separate post-Budget discussion in Parliament on the Railways, as indicated by the Finance Minister, is no substitute, as the focus most likely will be on allotments to various projects, not on financial performance.

Talking of populism, the recent announcement by the Finance Minister of the proposal to set up a new Railway zone to placate(calm,तसल्ली) a State government as part of a “special package” is proof that it is possible to be “populist” outside a separate budget.

Why should there be a separate budget for the Railways? The fact is that the Railways is indeed unlike any other Central ministry in size and scope: It is an operational ministry; it earns as well as spends, unlike other ministries that only spend. Its gross earnings (Rs.1.68 lakh crore in 2015-16) are among the highest for any Indian organisation, public or private; it has a staff strength (13.2 lakh) that exceeds that of the Indian Army; it fully meets the pension liabilities of its retired employees (13.8 lakh) out of its own earnings unlike other ministries; it follows an accounting practice, though not up to the standards of a purely commercial establishment, that has a number of features of a commercially-run organisation. So, if the Railways is to be treated like other ministries, will the government also fund its pension liabilities which are estimated to be about Rs.45,500 crore in 2016-17? That should be some “savings” indeed!

Part of a package

Perhaps the most misquoted reason given for the merger is that the Bibek Debroy Committee has recommended it. That is being economical with the facts. The committee has recommended it not as a stand-alone step, but as part of a slew of measures such as: complete overhaul of the project financing architecture of the Railways involving ruthless weeding out of unviable/long-pending projects; comprehensive accounting reforms; separation of infrastructure and operations; and setting up of a rail regulatory authority. Pending these steps, each of which is a major project in itself (some politically sensitive), the move to give a hasty send-off to the Railway Budget is perplexing(baffling,हैरान करने वाला).

The Railway Budget is indeed a colonial legacy; but so are English, the Railways, Rashtrapati Bhavan and the sedition law. Enough said. All this is not to say that the Railway Budget is a holy cow that cannot be touched. Far from it. The question is not “why”, but “why such a hurry to bury it”?

The answer, in one word: Obfuscation(anxiety,घबराहट). By all accounts, the Railways’ financial position is precarious(uncertain,अनिश्चित) due to the triple whammy of a fall in revenues, a sudden spike in expenditure due to implementation recommendations of the Seventh Pay Commission, and an increasingly unsustainable interest burden on market borrowings. A separate Budget would have meant having to openly declare an operating ratio in excess of 1.0 (in layman’s language, that means one is living beyond one’s means): not a very good advertisement for a system that aspires to have high-speed tilting Talgo trains shortly and Bullet trains in the not-too-distant future. So why not banish and “vanish” the Railway Budget into anonymity as one of the myriad(infinite,असंख्य) annexures in the General Budget and earn a fat “bonus” of about Rs.10,000 crore in the bargain? A smart move indeed! It seems now the Budget is more valuable dead than alive. However, what should be a matter of serious concern to the aam aadmi is that the Railways’ finances are sought to be shored up, not by improving efficiency, increasing revenues and cutting costs, but through a dexterous(skillful,कुशल) bureaucratic sleight of hand, taking cover behind the smokescreen of “reforms”.

Finally, a suggestion to the government: Do not throw the baby out with the bathwater; table an annual “Indian Railways Report” in Parliament on the lines of the Economic Survey prepared by the Chief Economic Advisor under the Ministry of Finance. That will signal reforms with transparency.

courtesy:the hindu

click here for official link

download monthly pdf of august

Read more »

Citizenship without bias

On July 19, 2016, the government introduced a Bill to amend certain provisions of the Citizenship Act, 1955. The Bill has now been referred to the joint select committee of Parliament. The object of the proposed Bill is to enable Hindus, Sikhs, Buddhists, Jains, Parsis and Christians who have fled to India from Pakistan, Afghanistan and Bangladesh without valid travel documents, or those whose valid documents have expired in recent years, to acquire Indian citizenship by the process of naturalisation. Under the Bill, such persons shall not be treated as illegal immigrants for the purpose of the Citizenship Act. In another amendment, the aggregate period of residential qualification for the process of citizenship by naturalisation of such persons is proposed to be reduced from 11 years to six years. A large number of people who would otherwise be illegal immigrants can now heave a sigh of relief if the Bill goes through as they would be eligible to become citizens of the country.

Not inclusive enough

The Citizenship (Amendment) Bill, 2016, owes its genesis(origin,उतपत्ति) to the assurance given by the Prime Minister that Hindus from these three countries who have sought asylum in India would be conferred Indian citizenship. But since singling out Hindus alone could be discriminatory(unfair,भेदभावपूर्ण), the Bill has extended the right to acquire citizenship to other religious minorities living in the three countries.

Bill, when passed, would be of immense(large,अत्यधिक) benefit to the Chakmas and Hajongs of Bangladesh displaced because of the construction of the Kaptai Dam who have been refugees for nearly 65 years. The Supreme Court in Committee for C.R. of C.A.P. v. State of Arunachal Pradesh directed the Government of India and Arunachal Pradesh to grant citizenship to eligible persons from these communities and to protect their life and liberty and further prohibited discrimination against them.

Though India has not enacted a national refugee law, the three principles underlying India’s treatment of refugees was spelt out in Parliament by Jawaharlal Nehru in 1959 with reference to Tibetan refugees. They include: refugees will be accorded a humane welcome; the refugee issue is a bilateral issue; and the refugees should return to their homeland once normalcy returns there.

The proposed Bill recognises and protects the rights of refugees and represents a welcome change in India’s refugee policy. But it would have been appropriate if the Bill had used the term “persecuted(oppressed,सतायी) minorities” instead of listing out non-Muslim minorities in three countries. To give an example, the Ahmadiyyas are not considered Muslims in Pakistan and are subject to many acts of discrimination. Other groups include members of the Rohingyas, who being Muslims are subjected to discrimination in Myanmar and have fled to India. Such a gesture would also have been in conformity with the spirit of religious and linguistic rights of minorities guaranteed under our Constitution. Unfortunately the Bill does not take note of the refugees in India from among the Muslim community who have fled due to persecution and singles them out on the basis of religion, thereby being discriminatory.

The case of the Malaiha Tamils

Yet another disappointing feature of the Bill is that it does not provide citizenship to the people of Indian origin from Sri Lanka who fled to Tamil Nadu as refugees following the communal holocaust(destruction,विनाश) in July 1983. The Indian Tamils, or Malaiha (hill country) Tamils as they like to be called, are descendants(progeny,वंशज) of indentured workers who were taken by the British colonialists in the 19th and 20th centuries to provide the much-needed labour for the development of tea plantations. The British gave an assurance that the Indian workers would enjoy the same rights and privileges accorded to the Sinhalese and the Sri Lankan Tamils. But soon after independence, by a legislative enactment the Indian Tamils were discriminated and rendered(give,देना) stateless. In the protracted(long,दीर्घ) negotiations that took place between New Delhi and Colombo on the thorny issue of stateless people, Nehru maintained that except for those who voluntarily opted for Indian citizenship, the rest were the responsibility of Sri Lanka (then Ceylon). Sri Lanka, on the other hand, argued that only those who fulfilled the strict qualifications prescribed for citizenship would be conferred citizenship, and the rest were India’s responsibility.

Nehru’s principled stance was abandoned(rejected,त्यागना) by Lal Bahadur Shastri and Indira Gandhi when they entered into two agreements with Colombo in 1964 and 1974, respectively. New Delhi agreed to take back 6,00,000 people of Indian origin with their natural increase as Indian citizens, while Sri Lanka agreed to give citizenship to 3,75,000 with their natural increase. The wishes of the Indian Tamils in Sri Lanka were not ascertained(make sure,निर्धारित). To the ruling elite(specialist,विशिष्ट) in Colombo and New Delhi the people of Indian origin became an embarrassing set of statistics. Important national leaders — C. Rajagopalachari, K. Kamaraj, V.K. Krishna Menon, P. Ramamurthy and C.N. Annadurai — opposed the agreement as inhuman, but their views were brushed aside by the Central government in order to befriend the Government of Sri Lanka.

The ethnic fratricide in 1977, 1981 and 1983, which affected the plantation areas, convinced many people of Indian origin that they could not live amicably(friendly.सोहार्दपूर्ण) with the Sinhalese. They never subscribed to the demand for a separate state of Tamil Eelam; in fact, the hill country was relatively tranquil(calm,शांत) during the protracted ethnic conflict. Even then, they were subjected to vicious(cruel,निर्दयी) attacks by some lumpen sections of the Sinhalese population. They sold all their belongings, came to India as refugees, with the hope of acquiring Indian citizenship and permanently settling down here.

A point of no return

According to informed sources, there are nearly 30,000 Malaiha Tamils in the refugee camps scattered throughout Tamil Nadu. They have absolutely no moorings in Sri Lanka. Their children have intermarried with the local people and are well integrated into Tamil society. The young have availed of educational facilities, but are unable to get jobs commensurate to their qualifications because they are not Indian citizens. The refugees in Kottapattu camp, near Tiruchi, with whom we interacted, told us: “Come what may, we will not go back to Sri Lanka.”

All these refugees qualify for Indian citizenship by registration under Article 5 of the Citizenship Act of 1955. However their plea for citizenship has been negated citing(mentioning,उल्लेख) a Central government circular that Sri Lankan refugees are not entitled for Indian citizenship. In a communication dated November 21, 2007 to the Special Commissioner for Rehabilitation, the Secretary to the Government of Tamil Nadu mentioned that there are strict instructions from the Government of India “not to entertain applications of Sri Lankan refugees for the grant of Indian citizenship”. We submit, in the light of recent developments, the above-mentioned circular of the Central government must be immediately withdrawn.

The tragedy of the Malaiha Tamils, a majority of whom are Dalits, must be underlined.

Immigrants, even those who are termed illegal, are entitled to equal protection before the law and the various rights that flow from Article 21. This was stressed by the Supreme Court in National Human Rights Commission v. State of Arunachal Pradesh while addressing the rights of Chakma refugees. If such immigrants are granted citizenship, the natural progression would mean that they enjoy the benefits of rights guaranteed under Article 19 besides others such as access to the public distribution system, right to participate in the political process, right to secure employment and other rights all of which currently are inaccessible to them. The Bill recognises this in its objects and reasons by referring to the denial of opportunities and advantages to such persons. The Bill therefore should not restrict itself to minorities from Afghanistan, Pakistan and Bangladesh but should include refugees from persecuted minorities of all denominations who have made India their home.

 courtesy:the hindu

click here for official link

Read more »

Why EPW matters

In early 1966 more than 50 of India’s leading commentators, academics and senior government officials appealed for contributions of Rs.500 each to establish a trust that would publish a new journal of economics and politics.

Tomorrow (August 20) marks the 50th anniversary of the publication of the first issue of Economic and Political Weekly (EPW).

EPW has become something of a global phenomenon over the past half century. Week after week it has presented informed commentary on the important issues of the day as well as research papers on a wide range of social science disciplines. Its authors have included everyone from political activists to Nobel Laureates, from lecturers in colleges in small towns to professors in the leading universities in the world, from members of non-government organisations to government officials.

Actually 67

EPW is actually now 67, and not 50. The Economic Weekly (EW), conceived and edited by Sachin Chaudhuri (an economist from what was then Dacca who had moved to Bombay), had begun publication in 1949 in the western metropolis. It quickly made a name for itself as a much sought-after platform for publishing opinion and research about India’s development policies and the politics around it. But that weekly, financed by the Sekhsarias, a group of cotton merchants, closed at the end of 1965 after differences between the editor and the publishers. Within a few weeks some of India’s leading academics and thinkers made the appeal to launch a new journal that would be edited by Chaudhuri and build on the legacy of the very influential EW.

The new weekly, with “Political” added to its moniker in acknowledgement of its widening intellectual mandate, was published by the new Sameeksha Trust. In this new, revitalised avatar the weekly blossomed.

Within a decade EPW had grown in the range of disciplines and themes it published. EPW’s pages hosted some of the most important debates, about economic strategies, change in village societies, foreign policy, political representation and ever expanding fields such as secularism and the politics of the Left. Then and later, some of India’s best gave their best work to EPW and EPW, in turn, helped launch many a career by publishing the first works of young writers.

What explains this success of the EPW, when world over independent “little magazines” rarely, if ever, manage to survive for a few years? One reason surely is the thriving(grow,पनपना) intellectual climate in India of the first few decades after Independence when everyone put their shoulder to “nation building”. Later, the cross-disciplinary open-ended nature of the journal helped it grow and prevent being painted into a corner.

The editor has always been pivotal(crucial,निर्णायक) in making EPW what it is. Krishna Raj, who took over as editor a few years after Chaudhuri passed away (after a brief interregnum when R.K. Hazari was editor), opened the pages of the weekly to an even wider range of authors, gave it its trademark left-wing flavour without closing it to other viewpoints. He went out of his way to encourage young scholars, got activists to write academically rigorous(strict,सख्त) articles and got academics to sustain a public-political purpose to their work By the 1970s, EPW became a journal which a large number of people identified with, looked forward to reading each week and hoped to contribute to. Krishna Raj built up a team of EPW staff who worked to produce a veritable book-size publication every week, and of ever widening circles of contributors and subscribers who felt a sense of fraternal bonding with the journal. Together, these circles of committed authors, readers and employees provided the support which sustained the EPW even when conditions were hard.

Perhaps Krishna Raj’s greatest contribution lay in building up and nurturing this world of the EPW where everyone felt ownership of the journal. The legal form in which it has been published may be of a trust but it has really worked like the best of the cooperatives, with everyone a trustee.

What lies ahead?

EPW has never been shy of publishing the new,peculiar( unusual,अजीब) or offbeat argument. And, of course, its defining identity is its independent and critical stance on issues. EPW has always looked for new fields to cover. In the 1980s, EPW added gender to its pages, and later health, education, the environment and much more were included in its portfolio. (Like much of academia, EPW “rediscovered” caste in the 1970s.)

Another remarkable feature is that EPW has been produced all these years without any commercial backing, depending entirely on its income from circulation sales and whatever limited advertising comes by. It has as a policy never taken any grants from abroad. At home, other than the occasional donation to its corpus, it has received only three generous one-time grants from institutions/individuals, all in the first decade of the 21st century. Difficult as it has been, this way of functioning has helped EPW maintain its independence.

The world of publishing, the world of academia and the world of public debates have all changed dramatically over the last decade or so. EPW has ridden the waves of these changes and we feel a sense of satisfaction that at our time at the journal we managed to steer its course where today the number of article submissions and the circulation have both doubled over the past dozen years, the finances are better than they ever were in its history even when staff salaries are at their best and EPW is ready to meet the demands of digitisation and growing specialisation.

Yet, success brings forth new challenges.

EPW may be reaching the limits of its ability to cater to the needs and demands of India’s intellectual life. The widening range of commentary and research that EPW receives every week has already been testing the limits of editorial capabilities and the space available for articles. How can the massive numbers of new students, researchers and teachers who have come into the social sciences in India over the past few years be socialised into the old world charms of the EPW? How can the hundreds and thousands of commentators who are turned away from mainstream publications find a place in EPW? Can the digital world provide answers? How will EPW’s financial security be ensured when everything comes for free on the Internet?

Strengthening the EPW community

There are no set answers to these challenges, yet the only way to meet them is to strengthen the community which is the EPW. In these testing times, with the forums for debate under scourge(threat,खतरा) and intellectual activity frowned upon by the ruling elite(specialist,विशिष्ट), EPW is needed more than ever before. Fifty years after EPW started publication, today the country perhaps needs fifty more such journals publishing from all parts of the country, from all viewpoints and in all forms.

EPW has survived and grown over the last half century on the backs of successive teams of dedicated staff and a close-knit community. Its very success has created conditions where future growth and survival may well depend on the growth and spread of an entire ecosystem of independent publications hosting varied research, debates and readership.

courtesy:the hindu

click here for official article

Read more »

Investors who turned their back are coming back: Nitin Gadkari

Union Road Transport, Highways and Shipping Minister Nitin Gadkari is confident of pushing through Rs 25 lakh crore of investments in the critical transport sectors under his watch over the NDA government's tenure. While private sector developers who had abandoned[u'ban-dund(leave,छोड़ना)] highway projects in 2014 are now coming back into the fray, the minister said the biggest challenge he faces is not financing, land acquisition or environmental clearances, but slow decision making processes in the administration. Edited Excerpts from an interview with The Hindu's Somesh Jha and Vikas Dhoot:

Two years after taking charge, do you feel India's economy is out of the woods yet?

Look, when we came to power, the GDP (gross domestic product) growth stood at 4.25 per cent, now it has gone up to 7.5 per cent. There was a shortage of coal – we have a surplus coal after two years and similar is the case with the power generation. We can’t also say that everything is sailing smoothly, but the train that got derailed during UPA regime is back on track. Talking about infrastructure, road was built up at the speed of 2 km per day earlier. Now, it stands at the highest ever pace of 25 km per day. In our sector, after completion of two years, I have commissioned work worth Rs 2.5 lakh crore. For the first time in history, the profits of 12 major ports and three flagship organisations – Cochin Shipyard, Shipping Corporation of India, Dredging Corporation of India – more than Rs 6,000 crore. In the port sector, it is for the first time that our efficiency compared to the private players is better. While one of the largest private port's efficiency declined 1.6 per cent, ours rose by 2.46 per cent. There is improvement in ports, inland waterways sector has opened up and work worth Rs 4,000 crore has been initiated inGanga. There were landmark decisions in the automobile sector –Euro VI emission norms will set in by 1 April 2020. We have launched ethanol, bio-diesel, CNG and electric buses and encouraging its use. These are import-substitute, cost-effective and pollution-free. Talking about irrigation, there were around 89 projects valued at Rs 1.5 lakh crore under AIBP (Accelerated Irrigation Benefits) which were dead assets. We will spend Rs 80,000 crorein four years to complete these AIBP projects. For the first time, Rs 20,000 crore per year has been budgeted for Pradhan Mantri Krishi Sinchai Yojana which will assist states. There were 3.60 lakh bank accounts earlier and today, 21.7 lakh crore accounts have been opened. The petroleum gas subsidy savings has helped 5 crore people to get gas cylinders. The health and insurance schemes for the poor has been a success. We have had a positive approach in development programmes for all the strata -- villagers, poor, labour and farmers. There was an indecisive[in-di'sI-siv(undecided,अनिर्णायक)] government (earlier) but now we have a government with a vision for development. Our relations have improved with neighbouring countries. We are making roads connectivity to Bangladesh, Nepal, Bhutan, Mynamar andBangkok. Earlier, it used to take 18 hours to travel via road from Agartala to Kolkata but now it’s possible to travel from Agartala to Kolkata via Dhaka. In all the countries that Prime Minister Narendra Modi has visited – be it theUnited States, Russia, Australia, UK or Dubai our prestige and respect has gone up. We have tried to build good relations with Pakistan. We have been able to control Naxalite movement and due to state support, we have successfully kept a check on cross-border terrorism. I think, overall, on all the fronts there has been good work.

People have more expectations from us and it will take us some more time to fulfill those. It took 60 years for the Congress here we have only completed two years and not all expectations can be met in two years but I can confidently say that the work that has not happened in last 60 years, we will make it happen in five years.

What about road links to Pakistan?

The Prime Minister himself visited Pakistan and extended his hand for friendship. Till the time Pakistan stops sponsoring cross-border terrorism and doesn’t keep a check on terrorist and terrorist organisation coming into India, there can’t be good relations. Pakistan too is suffering from poverty and malnutrition and I feel at this point, we all should joins hands in fighting these issues and move towards development. We have good relations with Bangladesh and we will do our best to maintain good terms with Nepal. We are good with Bhutan. Everywhere we are putting our efforts to maintain good affairs.

The Atal Bihari Vajpayee-led NDA government had launched the Golden Quadrilateral project of four-laned national highways connecting all metros. At the time, it was said to be one of the most ambitious national projects embarked upon, since Sher Shah Suri's times. What's the big plan for Infrastructure in this government?

In our country, the road length is 52 lakh kilometres but out of this, only 96,000 km is the national highways network. At present, 40 per cent of the entire traffic commutes on this two per cent road. This has caused five lakh accidents, three lakh injuries and 1.5 lakh people dying on road (every year). Now, we have decided to increase the national highways network to 2 lakh km from 96,000 km. We have already declared 1.55 lakh km of roads and when the highways network will expand to 2 lakh km, 80 per cent of the country’s traffic will ply on it. Earlier, four-laning of roads was done when traffic volume was more than 25,000 PCUs (passenger car units per day) which has been decreased to 10,000 PCUs. We have taken two historic steps. One per cent of the cost of construction (of roads) will go into plantation, beautification and maintenance and one per cent on road safety. So, Rs 5,000 each will be spent on this in the next four years. We will come up with 1,300 road side amenities and the tender for 60 is already out. We have identified 300 spots for parking plaza, hotels, motels, restaurants, petrol pump, service centres, handloom stores, fruit and vegetable shops, helipad and a small hospital for treatment of the locals. It will boost employment.

We will open Logistics Park on the Easterly and Westerly bypass road so that godowns are located outside Delhi. I have also told (Delhi chief minister Arvind) Kejriwal if all the godowns can be located outside Delhi, it will reduce the traffic and pollution here. We are building 14-lane Delhi-Meerut expressway. So, we are building roadways, expressways, highways in the entire country and I think this will create huge jobs. Usually, investments worth Rs 1 crore give employment to 70 people. I will complete Rs 2.5 lakh crore investments by 26 May, and I will give you the list of the projects, you can calculate the jobs that it will create with that scale of investment. The country needs a policy that generates employment and without infrastructure, both industry and agriculture cannot prosper and the GDP will not grow. I have kept American President John Kennedy’s quote in my office which says, ‘American roads are not good because America is rich but America is rich because American roads are good.’ So, prosperity comes with roads.

But our first priority is waterways, followed by railways and roads. In China, 45 per cent of the passengers and goods travel through waterways, similarly in Japan and Korea it is 43-44 per cent, in European countries it is more than 40 per cent but here it stands at only 3.5 per cent. If you go by waterways, you spend 20 paisa (on logistics), through railways Rs 1 and by road you spend Rs 1.5. That’s why we have decided to convert 111 rivers into national waterways. We have 7,500 km coastline and we are building six new ports out of which work on three new ports will commence[ku'men(t)s(start,शुरू)] this year.

You claim that the Ministry doesn’t lack funds but private sector interest has been lukewarm[look'worm(unenthusiastic,निरुत्साह)] and the the Finance Ministry is facing burden from the Seventh Pay commission...

Please understand my economic model. The budget for the road sector is Rs 55,000 crore. Then, our income from toll collection is Rs 10,000 crore. If I securitise my toll income for 15 years, I will get Rs 130,000 crore which leaves us with around Rs 2 lakh crore. If I securitise the government’s funds that went into completion of 111 projects, I will get 1 lakh crore. This makes it Rs 3 lakh crore in total. Apart from this, the government has given us approval to raise Rs 70,000 crore tax-exempted bonds, so that becomes Rs 4 lakh crore. Then, if I build more roads from this fund, I will get more toll collection. So, out of my target of completing work worth Rs 25 lakh crore, I will spend Rs 10-12 lakh crore in roads and Rs 15-20 lakh crore in shipping.

Can you elaborate on the securitisation aspect?

The pension funds and insurance funds are ready to take my funds. I will go into tripartite agreement and tell them we will give six per cent returns. That’s not an issue. The budget provision for shipping sector has been only Rs 1,800 crore. I have made a profit of Rs 6,000 crore last year. Next year, it will go up to Rs 8,000 crore and then 10,000 crore. So in four years, I will have profit worth Rs 40,000 crore. Then, I have fixed deposits worth Rs 15,000 crore in banks. This means a total of Rs 55,000 crore add to that Rs 10,000 from creditors so it comes out to be Rs 65,000 crore. I have a turnover of Rs 4,000 crore in ports and shipping in dollar terms. Now, for eight-laning concrete road project from JNPT to Panvel, I took loans in dollar terms at the rate of 2.75 per cent, instead of the borrowing rate of 12 per cent that I took in other projects. So, I took a loan of Rs 3,000 crore at 2.75 per cent. So on this Rs 4,000 crore (forex-based) turnover, I will take loans worth Rs 50,000 crore at 2.75 per cent in dollar terms. So, I have funds worth Rs 1 lakh crore. Then, I will get returns on these projects too.

You are talking of external commercial borrowings (ECBs)?

No, it is not ECB. Recently, I took loan from banks for the eight-lane Panvel project in dollar terms instead of rupees. So, I have Rs 50,000 crore. I am not dependent on the finance ministry for budget. I am spending Rs 4 lakh crore in ports – Rs 1 lakh towards port rail connectivity, Rs 2 lakh for port road connectivity and Rs 1 lakh crore on mechanisation and modernisation of ports. I will spend Rs 8 lakh crore towards 27 industrial clusters barring the investments on inland waterways and smart cities. So, I have targeted spending Rs 25 lakh crore whereas the actual work is worth around Rs 30 lakh crore. I am not amongst those ministers who make shallow promises. I say what I mean and I mean it.

What are the kinds of problems you have faced in executing the projects?

My problem is not related to land acquisition and environment clearance. My problem is addressing the decision-making process in administration. We have taken 21 Cabinet decisions and a lot of committees have been set up. The decision in such committees takes months to complete. I want to fasten this process. That is my responsibility and I don’t blame anyone for that. You go to any contractor and they will say we have saved them. When I became the highways minister, 403 projects worth Rs 3.85 lakh crore were stalled and today, only 14-15 projects worth Rs 30,000 crore are languishing[lang-gwish(fall,गिरना)] and the problems related to the rest are solved. Had I not addressed those issues, the banks’ NPAs (non-performing assets) would have shot up to Rs 3 lakh crore. I have saved the bankers and the industrialists from this trap. I held thousands of meetings with contractors and bankers. So I called all the stakeholders and solved the big issues. So, a positive approach, transparent system, time-bound approach, team spirit and development-oriented system are the strengths of our management.

Out of the stalled projects, how many did you have to terminate?

We have terminated 43 projects out of 403 projects. We have issued fresh tenders and work on many of these has already begun. Four such projects have started on the hybrid annuity model too.

What about the expressways?

This year, we will begin work on the Vadodara-Mumbai expressway. The highway alignment on Delhi-Jaipur is almost complete and similar is the case with Delhi-Katra expressway. We have planned Delhi-Meerut, Bangalore-Chennai, Hyderabad- Bangalore and Vijaywada-Bangalore projects.

How will the land packaging work in such projects? The developers have demanded the land access along the highways in the past…

There are three successful models of land acquisition in the country – one is in Amravati, another in Surat and third is Navi Mumbai airport. The model is that we will acquire land and return 40 per cent of the land to the owner after development, 20 per cent will go into building infrastructure and the rest 40 per cent we will take. The cost of land will decrease with this model. Now, let’s say we build a logistics park on a 1,000 acre land. We will give 400 acre land to the land owner, NHAI will get 400 acre land and the rest 20 per cent land can go into building petrol pump or road side amenities so a new township will be created in the form of logistic park. This innovate model will help farmers, create employment and lead to development.

What is the response you have got on the hybrid annuity model for highways?

When I became the minister, the PPP (public-private) model was not getting any response. Already 17 projects have been commissioned on the hybrid annuity model. The response on the Build Operate Transfer (BOT) toll model was tepid[te-pid(lukewarm)] as the market situation was not good. I will tell you an instance. Larsen & Tourbo (L&T) Chairman AM Naik came to me and said his company’s board has taken a decision to not do any road projects and he decided to exit the road projects taking a penalty of 1.5 per cent. Now, L&T is doing nine projects worth Rs 15,000 crore. So, the situation has changed and investors who had exited are coming back.

Your ministry is also planning to develop roads through the Swiss Challenge model. But Dr. Vijay Kelkar panel had criticised the model recently in its report.

We have drafted a Cabinet note and if the government permits us, we will go ahead. But I feel the Swiss Challenge model is not required in the road sector. We don’t have technology and resources and land problems.

And you will acquire the land for developers?

We have made it a rule that without acquiring 80 per cent of the land, we will not give work orders or permits.

But you said decision making in the administration is an issue…

File is pending for months with various committees. That’s the biggest challenge for us. Although we have succeeded to a very large extent, but more work needs to be done.

What about the Chabahar port you were supposed to develop in Iran?

The Prime Minister is going to Iran on May 23 and I may also accompany him and finalise the agreement.

What will be the model?

We have formed a global company and Kandla port and JNPT (Jawaharlal Nehru Port) has claimed equity in it and we will build the port.

So, Iran will also have stakes in it?

We will develop the port and return it to Iran in some years.

There were NPA issues with banks. How do you plan to get their support?

The banks are not giving loans and financial closure is taking years. Banks are scared of giving loans looking at pending cases with CBI and CVC and also because of the media. I have told this to the finance minister. I plan to set up an Infrastructure Finance Corporation on the lines of the Power Trading Corporation. We have floated a Cabinet note. We plan to bring foreign funds.

What is the timeline to double the national highways?

Within three months. At present, we have completed 1.55 lakh kilometres and till the next Parliament session, we will achieve that target.

What was the response of the Delhi government on the logistics park proposed by you to ease congestion and pollution in the capital?

The Delhi government is very much receptive[ri'sep-tiv(acceptive,ग्रहणशील)]. I extend help to everyone -- all Congress chief ministers or whether it is Kejriwalji or Lalu (Prasad)ji. I don't do politics in my work.

There were a lot of issues related to the diesel cars…

In Delhi, there are 18-20,000 diesel taxis. The Supreme Court had put a ban on them. We requested the court that we respect your judgement and we will not give diesel permits going ahead and try to convert diesel vehicles into CNG.

Don’t you think diesel recently got unfairly demonised campaign?

Look, there is no denying that diesel causes pollution. That’s why ethanol, bio-diesel and bio-CNG are the future. Fifty buses in Nagpur run on ethanol provided by us. We made a royalty of Rs 18 crore from Mahrashtra government by selling toilet water and 100 buses are running from the bio-CNG produced from it. It is a import substitute, cost effective and pollution-free model. If you go for innovation, entrepreneurship, technology, research and Digital India, then sky is the limit.

Five Indian cars recently failed the Global NCAP safety test…

Along with safety, we also need to take the cost of vehicles into account. We are trying to align with the western country standards but we also need to look at the paying capacity of our citizens. We will look at the report and will take decisions through an integrated approach. But if we conform to those standards, the cost of vehicle can go up by 15 per cent and if that happens, it will hit the affordability of the people.

Even after two years of the government, industry sometimes feels that they are unable to see the progress on ground…

All I can say is that I can give you the details of whatever I am telling you right now. We don’t claim that all the sectors are a success. We are still facing issues in some sectors. For instance the sugar industry had collapsed, a few projects in the power sector were stuck, shipbuilding industry was facing tough time, steel industry also collapsed but recession is there on a global scale too. We are doing our best to bail out industry from these problems.

What is your message to the young voters? Hold on for how much time?

We are moving ahead on a positive tangent on development. Our programmes are getting positive results and going ahead, the country will go ahead. Our economy will be at par with China and there will be robust[row'búst(strong,सुदृढ़)] employment generation. Villages, poor, labour and farmers will prosper and our dream of corruption- and terrorism-free country will be fulfilled. Congress was in power for 60 years. We have done a lot in these two years and we will continue to do so and people should give us more time.

Courtesy:the hindu

Download monthly pdf of April

Read more »

Standing up to patent bullying

Access to low-cost quality medicines plays a critical role in public health systems. In the last decade, the public health challenges facing developing countries have expanded beyond infectious diseases to non-communicable diseases (“NCDs”) in large part due to changing lifestyles and environmental risks. The World Health Organisation estimates that 80 per cent of all deaths from NCDs occur in low- and middle-income countries like India.

Affordable prices for medicines are vital to ensure that governments can progressively realise the sustainable development goal of universal access to health care. In particular, low-cost, quality generic medicines have played – and continue to play – a critical role. Generic medicines are essentially identical versions of a branded medicine which can be manufactured without a licence from the innovating company and are marketed after the stipulated time under the patent laws. They are sold under non-proprietary names rather than brand names.

Generic drugs cost a fraction of the monopoly prices charged in countries like the United States, and the presence of multiple generic competitors in India has reduced the price of cancer and HIV treatment by as much as 90 to 1,000 per cent. For instance, first-line HIV treatment that costs over Rs.16 lakh annually to treat just one patient in the U.S. costs the Indian AIDS programme approximately Rs.7,000.

Access to quality generic treatment is particularly important for households that pay for medicines out-of-pocket. When poor households lack access to affordable generics, they must forego treatment, sell precious assets, or make difficult choices between paying for medicines and other basic necessities like food, clothing and children’s education.

India’s crucial role

India is at the centre of the world's generic drug production as it is one of the few countries with the technical capacity to produce raw materials, also known as Active Pharmaceutical Ingredients (API), and formulations of newer medicines as generics. Medicines produced by generics companies in India are among the most affordable in the world. When generic substitutes are not available in India --- for instance due to patent monopoly --- it leads to high pricing of medicines as only the proprietary companies can manufacture them. They become inaccessible to manufacturers at large and their high prices place them out of reach for the majority of patients who need them.

The Ministry of Commerce must be cautious of Free Trade Agreements (FTAs), such as the ones it is presently negotiating with the European Union as well as the Regional Comprehensive Economic Partnership (RCEP), that further strengthen or extend intellectual property monopolies. These will subsequently delay generic competition and the associated drop in prices, which will have a negative impact upon access to affordable medicines from domestic producers.

Parliament’s inclusion of public health safeguards in its patent law through an amendment in 2005 set a progressive precedent for the entire world. It substituted Section 3(d) of the Patents Act such that frivolous changes which did not increase the efficacy of a medicine would not make it eligible for a patent. Through this it protected generics from the deadly practice of ‘evergreening’, where pharmaceutical companies endlessly extend patents based on frivolous[fri-vu-lus(unimportant,तुच्छ)] modifications to their drugs that have little to no effect at best and are active health hazards[ha-zud(risky,जोखिम)] at worst. The use of these safeguards by patient groups, courts and the patent office has now become a target of the multinational pharmaceutical lobby which seeks to get rid of them so it can pursue its goal of profiting from higher medicine prices. This can be seen as the reason behind intensified pressure from the U.S. against affordable medicines that are ‘made in India’.

The U.S. Trade Representative operates under the office of the American President and is somewhat like India’s Ministry of Commerce and Industry, mainly responsible for foreign trade. It prepares a report known as the ‘Special 301 Report’ where it has a ‘Priority Watch List’ where it lists countries whose intellectual property laws it dislikes. This is generally used to threaten and intimidate countries and is a pressure tactic to get them to change their laws so they are to the U.S.’s liking.

This year the U.S. Trade Representative released its report on April 26 --- World Intellectual Property Day --- and put India on the ‘Priority Watch List’. This move is to create pressure on the Ministry of Commerce and Industry and force it to comply with its demands on Intellectual Property (IP) enforcement so U.S.-based pharmaceutical companies can reap super profits.

Not satisfied with this move, the U.S. Trade Representative is now coming up with an ‘action plan’ for India with concrete benchmarks to hold India ‘accountable’ for IP-related trade practices that disadvantage American companies. The Indian government should reject such blatant[bley-t(u)nt(openly,खुल्लमखुल्ला)] interference in our internal policies on intellectual property. Commerce Minister Nirmala Sitharaman has rightly pointed out that the Special 301 Report is inconsistent with the WTO’s norms which clearly state that any dispute between two countries needs to be referred to its Dispute Settlement Body and unilateral actions such as the Report are not tenable.

India must clearly reject the intellectual property laws which the United States is trying to force on us. These have led to an unprecedented[ún'pre-si,den-tid(new,अभूतपूर्व)] health crisis in the U.S. itself, with spiralling prices of medicines under lengthy and multiple IP monopolies, with American insurance companies struggling to manage the cost of reimbursing expensive new medicines, all of which threaten people’s access to treatment. Current U.S. intellectual property laws have done nothing but enable pharmaceutical companies to charge exorbitant[ig'zor-bi-t(u)nt(excessive,बहुत ज्यादा)] prices for medicines, such as over $1,00,000 annually for new cancer medicines and $1,000 a pill for new hepatitis C treatments. This has made health care simply out of reach for the vast majority of Americans and the issue of affordable health care has dominated the primaries in the ongoing American presidential elections. This failed model, which has allowed companies to profit from human misery and is even rejected in its own country, is not worthy of our consideration.

India’s laws and policies on the other hand are entirely compliant with the World Trade Organisation’s trade rules on intellectual property (TRIPS), promote generic competition and limit abusive pharmaceutical industry practices including patent evergreening. They follow a middle path between granting monopoly patent rights and public health imperatives. Far from modifying our IP policy, we should be proud of the fact that our country has a vibrant pharmaceutical sector that has become the ‘pharmacy of the developing world’ supplying affordable, life-saving medicines used to treat communicable and non-communicable diseases in many developing countries.

Courtesy:the hindu

Download monthly pdf of april

Read more »