iipa.org.iniipa.org.in/www/iipalibrary/iipa/news/OCT 24-31, 2017.docx · Web viewThe parliamentary...

LIST OF NEWSPAPERS COVERED

ASIAN AGEBUSINESS STANDARDDECCAN HERALDECONOMIC TIMESHINDUHINDUSTAN TIMESINDIAN EXPRESSPIONEERSTATESMANTELEGRAPHTIMES OF INDIATRIBUNE

CONTENTSAADHAR 3-9BACKWARD CLASSES 10-12BLACK MONEY 13CIVIL SERVICE 14-15CONSUMERS 16-17CORRUPTION 18ECONOMIC AND SOCIAL DEVELOPMENT 19-21 EDUCATION 22-29ELECTIONS 30-31FINANCIAL INSTITUTIONS 32-36HJEALTH SERVICES 37JUDICIARY 38-40POLITICAL PARTIES 41-42POLITICS AND GOVERNMENT 43-47PRISONS 48-49URBAN DEVELOPMENT 50-52WOMEN 53-55

AADHAAR

TRIBUNE, OCT 30, 2017

Aadhaar unacceptably intrusive

Gopal Krishna

The proposal of draft data protection bill is part of grossly procedural, formalistic and insincere manoeuvres of the government.

Why UK shelved its identity card project

The parliamentary committee recorded the findings of the report on UK's identity project by the London School of Economics stating that "..identity systems may create a range of new and unforeseen problemsthe risk of failure in the current proposals is therefore magnified to the point where the scheme should be regarded as a potential danger to the public interest and to the legal rights of individuals".

Taking cognisance of this report, the United Kingdom shelved its Identity Cards Project for a number of reasons, which included: (a) huge cost involved and possible cost overruns; (b) too complex; (c) untested, unreliable and unsafe technology; (d) possibility of risk to the safety and security of citizens; and (e) requirement of high standard security measures, which would result in escalating the estimated operational costs.

Gopal Krishna

AHEAD of the hearing in the Supreme Court today (October 30) amidst the push for biometric gnawing concerns about privacy, the issue of Aadhaar's realistic chances of survival and its acceptance as fait accompli after the imminent verdict in Aadhaar case has assumed huge significance in our national life. If one draws on Justice DY Chandrachud's 266-page order as part of the 547-page right to privacy verdict of the nine-judge Bench in the case related to 12-digit biometric Unique Identification (UID)/Aadhaar numbers being fed into Central Identities Data Repository (CIDR), it emerges that a right to privacy bill is pending.

But so far, no agency, including the judiciary, has bothered to ensure that it gets enacted as law. The order, authored by Justice Chandrachud with approval from Justice Jagdish Singh Khehar and Justices RK Agrawal and S Abdul Nazeer, appears to be the weakest because it puts all its faith in the proposal of a draft data protection bill committee. Justice Chandrachud concludes his order, saying, "Since the Union government has informed the Court that it has constituted a Committee chaired by Hon'ble Shri Justice BN Srikrishna, former Judge of this Court, for that purpose, the matter shall be dealt with appropriately by the Union government having due regard to what has been set out in this judgment."

The proceedings on record make it clear that the office memorandum dated July 31, 2017 was issued under the signature of Group Coordinator, Cyber Law and Unique Identification Authority of India (UIDAI), Ministry of Electronics and Information Technology (MeitY) ahead of the court's verdict as part of the government's argument underlining that right to privacy is not a fundamental right.

The order of Justice Dr Chandrachud takes cognisance of the fact that it was only during the course of the hearing of the case that the central government brought to light an office memorandum by which it constituted a committee to "suggest a draft data protection bill." He observes, "We expect that the Union government shall follow up on its decision by taking all necessary and proper steps."

He makes this observation despite recording that "the Privacy Bill, 2011 to provide for the right to privacy to citizens of India and to regulate the collection, maintenance and dissemination of their personal information and for penalisation for violation of such rights and matters connected therewith, is pending." He did not take the government to task for failing to enact the right to privacy law before enacting the Aadhaar Act and implementing the UID/Aadhaar scheme.

The proposal of "draft data protection bill" is part of grossly procedural, formalistic and insincere manoeuvres of the government. The proposal of "draft data protection bill" at this stage is akin to putting the cart before the horse. It is akin to putting a Trojan horse of the Battle of Troy mentioned in Homer's epic Odyssey before the Court. Homer alludes thrice to the Trojan horse even in Iliad towards the end. The court's order missed the opportunity of looking at the composition of the "draft data protection bill" committee, which has given birth to gnawing misgivings. Trojan horses appear harmless, but are, in fact, malicious and deeply destructive.

The ToR of this committee pertains to "study of various issues relating to data protection in India" and to make specific suggestions for consideration of the Central Government on principles to be considered for data protection in India and suggest a draft data protection bill" after personal sensitive data of the residents of India has contractually been handed over to foreign transnational companies such as Accenture, Mongo DB, Safran Group and Ernst & Young for up to seven years only as per information gained through the RTI.

It is significant that such revelations have found mention in the verdict of the Court as part of Justice SK Kaul's order saying, "Edward Snowden shocked the world with his disclosures about global surveillance." It is equally significant that the Parliamentary Standing Committee on Information Technology asked about the surveillance by the National Security Agency (NSA) of the US in its Twenty-seventh Report.

It is apparent that the government is attempting to change the goalpost now by talking about the proposal of the "draft data protection bill" to ignore the existing right to privacy bill.

It is noteworthy that government has admitted before the Parliamentary Standing Committee on Finance that examined the issue of UID/Aadhaar numbers observed, "there is no law at present on privacy, and data protection". The government told the committee that "Collection of information without a privacy law in place does not violate the right to privacy of the individual." The committee recommended that legislation on UID/Aadhaar would be appropriate "only after passing the legislation on privacy, and data protection so as to ensure that there is no conflict between these laws."

For how long can a government hide behind Trojan horses? In the light of the findings of the LSE and our parliamentary reports which are quite valid for the UID/Aadhaar project, its realistic chances of survival post the Justice Puttaswamy verdict after November 2017 is quite remote.

The writer is convener, Citizens Forum for Civil Liberties. He had appeared before the Parliamentary Standing Committee on Finance that examined the UID Bill

ECNOMIC TIMES, OCT 30, 2017

Govt, bank staff to biometrically sign off Aadhaar enrolment

The UIDAI will soon evolve a process for authorised employees of banks, post offices and the government to biometrically sign off Aadhaar enrolment and updation form collection, as the process of applying for the 12-digit identifier moves into such premises.

The move is aimed at addressing the security concerns around collection of biometric and other information, Ajay Bhushan Pandey, CEO of the Aadhaar-issuing body, the Unique Identification Authority of India (UIDAI), told .

The UIDAI had earlier asked states to ensure that enrolments, even those by private agencies, shift to government or municipal premises from external private operator run sites.

Moreover, it has directed private as well as public sector banks to set up Aadhaar enrolment facility in at least one out of 10 branches.

"The enrolment and updates will happen largely in banks, post office and government premises.

There also, during enrolment, the authorised employee of the banks, post offices or the government will have to biometrically sign the Aadhaar enrolment or updation application," Pandey said.

A process for this additional layer of security and supervision is being evolved and the proposed mechanism is likely to be in place by January, he added.

The mechanism entails a staff, authorised for the purpose, to biometrically sign off the application form after it is received.

Earlier, data collection was by a private operator and the form was verified by government-appointed verifier.

But now the biometric signature of the designated official will be taken, fortifying the collection process and making it more secure, according to the UIDAI.

"Earlier the private operator -- even though he was a certified operator -- used to sign it, now it will have to be counter signed through biometrics by a government, bank or post office employee," Pandey added.

ASIAN AGE, OCT 26, 2017

Govt extends deadline for Aadhaar link to March 31

J. VENKATESAN

Divan urged the court to stay various notifications under the Prevention of Money Laundering Act to link the Aadhaar card with bank accounts.

The attorney-general made this submission when senior counsel Shyam Divan, appearing for the petitioners, had sought an early hearing on some petitions challenging the validity of Aadhaar being made mandatory for a host of schemes.

New Delhi: The Centre on Wednesday informed the Supreme Court that it would extend the deadline for mandatory linking of the Aadhaar card to avail of banking and other social security benefits from December 31, 2017 to March 31, 2018. In August, a nine-judge bench had held the right to privacy as a fundamental right, and referred the validity of petitions for a fresh hearing to a three-judge bench and a bunch of petitions challenging the validity of the Aadhaar law is pending adjudication.

On Wednesday, attorney-general, K.K. Venugopal made a mention before a bench of Chief Justice Dipak Misra and Justices A.M. Kanwilkar and D.Y. Chandrachud that the government was prepared to extend the time limit till March 31, 2018 for the mandatory linking of Aadhaar as also to those who dont have an Aadhaar card to obtain the same.

The attorney-general made this submission when senior counsel Shyam Divan, appearing for the petitioners, had sought an early hearing on some petitions challenging the validity of Aadhaar being made mandatory for a host of schemes. Mr Divan argued that the government must give an assurance that no coercive action would be taken for non-linking of Aadhaar. He wondered how the government could compel anyone to link Aadhaar for various services.

Mr Divan urged the court to stay various notifications under the Prevention of Money Laundering Act to link the Aadhaar card with bank accounts. Pointing out that several complaints had been received about the hacking of accounts after Aadhaar was linked, he prayed for a stay of the notifications.

Senior counsel Arvind Datar and other counsel brought to the courts notice that the CBSE had issued a recent circular that unless a student possessed an Aadhaar card, he/she would not be given an admit card to take the exam in March next year. Mr Divan said: A student cannot take his exam without Aadhaar, and this is the state of affairs in the country. When counsel pressed for an urgent hearing in November, the attorney-general said he was prepared for an early hearing before a five-judge Constitution Bench.

The A-G said no services, that were otherwise available, would be denied for non-linking of Aadhaar and added that the committee headed by former Supreme Court judge B.N. Srikrishna was likely to submit its report on data protection in February 2018, and thereafter a law would be enacted.

Justice Chandrachud, who was part of the nine-judge bench, pointed out that the Centre had agreed to come out with a law on data protection, and that every country had such a law. He said: The court must protect its citizens, and for this we must have a proper law on data protection. We cannot rush through with the hearing.

The CJI observed that since the deadline was being extended upto March 31, 2018, there should not be any apprehension, but when he wanted an assurance from the A-G that no coercive steps would be taken for non-linking of Aadhaar, the A-G said he would take instructions. The bench posted the matter for further hearing on October 30.

The petitioners contended that the biometric data and iris scan being collected for issuance of the Aadhaar card violated the fundamental right to privacy of citizens as personal data was not protected, and was vulnerable to exposure and misuse. While opposing the relaxation of the order, it was argued that the Aadhaar card was an invasion of privacy and a violation of basic human rights. They challenged various notifications issued by the Centre insisting on Aadhaar card to avail of various benefits, including the noon meal scheme, scholarships, admissions, domestic air travel, mobile phone, etc.

ECONOMIC TIMES, OCT 26, 2017

Government simplifies Aadhaar re-verification of SIMs to help elderly, disabled

In a move to make Aadhaar-based verification of existing SIMs simple, the government has asked carriers to enable re-verification by going to consumers doorstep and using process of One Time Password (OTP) for authentication of existing users a move that will benefit senior citizens, those with disabilities, among others.

The telecom department in a notice on Wednesday, said that the carriers will also have to enable IRIS based authentication, as some citizens were unable to do fingerprint verification wing to poor fingerprint quality, disability or old age.

It has come to our notice that some of the residents, especially senior citizens, face difficulty in verifying their identity using fingerprint based Aadhar authentication. Further there are cases where residents due to being bed ridden, physically challenged and are not able to visit service points of telecom service providers. Such instances may result in denial of service to them, the DoT said in the notice on Wednesday, while issuing measures that telcos can now use.

Operators have been asked to put in place an online mechanism through website, and other means, for people to request for such service. Telecom service providers have been instructed to initiate a scheme to use OTP based reverification of mobile subscribers using SMS or IVRS or on their mobile app.

Nearly 50 crore mobile numbers are already registered in Aadhaar database, and the OTP can be leveraged for re verification in all of these cases. In case of agentassisted biometric authentication for SIM reverification or issuance, telcos have been asked to ensure that full eKYC details of subscribers are not made visible to the agent. Nor should data be stored on the agents device, the source added.

In the current dispensation, eKYC data of the subscriber including photograph is visible to the agent of the telecom operator. Further, the government has asked mobile operators to reverify existing prepaid and postpaid customers, with the help of the 12digit unique identity number. The reverification exercise is scheduled to be completed by early 2018.

The Indian telecom market with subscriber base of over a billion is secondlargest in the world after China


A double-edged sword

Aadhaar becoming an instrument of exclusion

AADHAAR was initially conceived by the Manmohan Singh government as an effective subsidy delivery tool to ensure that unscrupulous elements do not siphon off welfare benefits meant for the poor. At that time, the BJP did what any opposition could do best: it called Aadhaar a fraud that violated the right to privacy. Less than two months before assuming power, a senior BJP office-bearer said if his party formed the government it would scrap Aadhaar lock, stock and barrel and it would be thrown into the dustbin. But, after winning the 2014 general election, the BJP government did the opposite. It transformed a noble delivery device into another appalling bureaucratic instrument to harass the common man in the name of national security.

It is always problematic to arm bureaucrats with unbridled powers like Aadhaar in a democracy. For example, an 11-year-old child starved to death recently in the BJP-ruled Jharkhand only because the familys Aadhaar identities were not linked with their valid ration card. Aadhaar, which was initially conceived to ensure inclusive growth, has now become an instrument of exclusion. The government agencies are coercing people to link their ration cards, PAN cards, mobile numbers and bank accounts with their Aadhaar numbers. Banks and telecom companies are sending intimidating SMSes to their clients reminding them of deadlines, beyond which their accounts would be frozen and their mobile numbers inoperative.

There have been protests against such over-reach. Citizens are being made to feel an invasive and bureaucratic government. Why duplicate the identification processes? Customers credentials had already been ascertained by banks before opening accounts and telecos had issued SIM cards to mobile users after proper documentations, including verification of their photo IDs. Even the income tax department keeps constant vigil on every bank transaction through permanent account numbers (PAN) of individuals and companies. Then, why subject the citizen to another parallel authentication and scrutiny process? The zeal to unearth black money and eliminate sources of terror funding need not crowd out considerations of citizens rights and space. The promise of minimum government and maximum governance has been turned on its head.

BACKWARD CLASSES


Modi government to reframe social welfare schemes for OBCs

NIDHI SHARMA

NEW DELHI: In the run-up to the highstakes elections in Gujarat and Himachal Pradesh, the Narendra Modi-led government has moved to reframe social welfare schemes for other backward classes (OBCs). The targeted schemes promise quality residential accommodation and scholarships to OBC students.

The ministry of social justice and empowerment has rejigged schemes to include more OBC beneficiaries and ensure the benefit of targeted schemes go to the real beneficiaries.

The ministry has laid down guidelines for construction of hostels, which would be energy efficient, economical yet good quality, earth-quake resistant buildings with boundary walls, toilets, and rooms equipped with almirah, study tables, chairs and proper beds.

At present, the residential facilities for OBC boys and girls in states are very poor. The scheme was started to check school dropout rates, especially among OBC girls. However, despite the governments efforts, quality resid..

At present, the residential facilities for OBC boys and girls in states are very poor. The scheme was started to check school dropout rates, especially among OBC girls. However, despite the governments efforts, quality residential facilities have not been built for OBC students.

The new guidelines specifically lay down the construction parameters for residential facilities. For the first time, the ministry has laid down that every hostel building would have rainwater harvesting and recycling of waste water, earthquake resistant design and firefighting arrangements. It would also have disabledfriendly toilets and barrier-free access.In order to make the construction timebound, the government has laid down that the proposal of second installment of funds should be sent within a year of the project initiation.

The guidelines come right ahead of elections in Gujarat and Himachal Pradesh, which have a substantial number of OBC voters. In Gujarat, OBCs form about 40% of population and can influence the outcome in 70 of 182 seats. In Himachal Pradesh, OBCs form 15.3% of the population.

The guidelines were really work in progress for some time. Not much should be read into the timing, a senior ministry official told ET.

Besides the residential facilities scheme, guidelines for National Fellowship for OBC students and assistance for skill development for OBCs and EBCs have been rejigged.

TIMES OF INDIA, OCT 27, 2017

Rajasthan Assembly passes bill raising OBC quota to 26%HIGHLIGHTS

The Rajasthan Assembly on Thursday passed a bill which increases reservation for Other Backward Classes (OBC) in the state from 21 per cent to 26 per cent

The 5 per cent quota hike will apply to Gujjars and four other communities that were earlier grouped as the special backward classes

NEW DELHI: TheRajasthan Assemblyon Thursday passed a bill which increases reservation for Other Backward Classes (OBC) in the state from 21 per cent to 26 per cent.

TheBJPgovernment's decision grants five per cent reservation to the five "most backward" OBC communities, which includesGujjarsand four other communities that were earlier grouped as the special backward classes (SBC).

The bill proposing 5 per cent hike in the OBC quota in government jobs was tabled during the assembly's monsoon session this year in the wake of widespread agitation by the Gujjar community demanding reservation under the backward classes category.

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Last year, theRajasthanhigh court had struck down the state government's attempt to grant 5 per cent quota to Gujjars as it would have shot the overall reservation to 54 per cent. As perSupreme Courtguidelines, the total quota in government jobs and educational institutes for different reserved categories in the state cannot go beyond 50 per cent.

The OBC quota is being increased in proportion to the increase in state's OBC population, which is legally permissible, government sources had told TOI.

Under the new arrangement, there will be no SBC category as it does not have constitutional approval. Instead, there will be OBC and 'Most OBC' categories.

BLACK MONEY

DECCAN HERALD, OCT 26, 2017

BJP to observe 'anti-black money' day on Nov 8

To counter opposition, the BJP will observe the first anniversary of demonetisation on November 8 as anti-blackmoney day.

Finance Minister Arun Jaitley told reporters on Wednesday that top ministers and BJP leaders will travel throughout the country to inform people about the steps the Modi government has taken to check the flow of tainted money.

Jaitley dubbed the initiative as a priority programme for the party, which comes after the Congress-led Oppositions decision to observe the first anniversary of demonetisation as a black day to flag the cash crunch people had to face and the resultant economic slowdown.

I think the Congress has not understood the concept of demonetisation. The ownership of cash is not known, it is an anonymous owner. So when cash gets deposited in banks, what was being laundered earlier, now gets into the law books. So for entry into the lawful system, you are liable to pay tax, said the union minister.

CIVIL SERVICE


Evolve vision for development, Modi tells IAS probationers

Prime Minister Narendra Modi today addressed 369 IAS probationers at the Sampurnanand Hall of the Lal Bahadur Shastri National Academy of Administration (LBSNAA) on the last day of his two-day visit to the state. He was given a warm send-off at the Jolly Grant (Rishikesh) Airport by Governor Dr KK Paul and Chief Minister TS Rawat.

In his address, the PM focused on good governance and use of latest technology.

An official at the Academy said, The PM held discussions with IAS probationers in an informal manner. He urged them to study and research governance issues in depth and evolve national vision for development.

Earlier in the day, he performed yoga with school children, took a walk on the campus and watched a film Hum Honge Kamyab with the probationers. The PM also laid the foundation stone of a hostel building and a synthetic track.

Prime Minister Narendra Modi yesterday offered floral tributes on the statues of Sardar Vallabhbhai Patel and former PM Lal Bahadur Shastri. He also held an informal meeting with the council and faculty members of the Academy regarding training imparted to the probationers.

TELEGRAPH, OCT 27, 2017

Bengal civil service test age raised

Calcutta:The Bengal government has raised the upper age limit for civil service job applicants by four years to 36, reports our special correspondent.

Scheduled Caste and Scheduled Tribe candidates will be eligible to sit for the West Bengal Civil Service (WBCS) exam till the age of 41.

The state government had earlier raised the age limit for applicants for other state jobs, such as Group D and clerical, to 40 years.

"The decision was taken so that some degree of parity can be brought about," a Nabanna official said.


Government staff go on leave for 7th Pay Commission implementation

Several government offices today wore a deserted look here after employees affiliated to Manipur Government Services Federation went on mass casual leave, demanding implementation of the 7th Pay Commission.

General Secretary L Purujit of MGSF told reporters it was the "first phase of agitation" for implementation of the pay commission in the state.

He said employees, workers and teachers voluntarily took the step and urged the all-round cooperation from the state government to achieve the objective in a peaceful manner.

During the state's Budget Session in July this year, Deputy Chief Minister Y Joykumar had said the Manipur government would have to bear an additional burden of Rs 1,700 crore if the 7th Pay Commission was implemented.

There are at least 74,000 government employees in the state, Joykumar, who holds the portfolio of finance minister, had said.

Employees not affiliated to the MGSF, however, did not take part in the mass casual leave.

PIONEER, OCT 25, 2017

IAS OFFICER UTPAL KUMAR TO BE APPOINTED CHIEF SECY OF UTTARAKHAND

5

Senior Indian Administrative Service officer Utpal Kumar Singh is likely to be appointed as the Chief secretary of Uttarakhand.

If sources are to be believed, Chief Minister Trivendra Singh Rawat had written to the centre asking for Singh to be relieved from central deputation to work in Uttarakhand.

The Chief Ministers request was met swiftly by the centre, as a result of which the order for his appointment to the post of Chief secretary is likely to be issued within a couple of days.

An IAS officer of the 1986 batch, Utpal Kumar Singh is stated to be a non-controversial officer with a clean image. Earlier, during his tenure in the State, he had served as the principal secretary to the Chief minister, principal secretary of personnel, Public Works Department, energy, agriculture, horticulture, tourism and home among other departments.

In the past, he has also worked in Uttar Pradesh, handling the charge of Muzaffarnagar District Magistrate and other responsibilities. Presently, he was handling the charge of additional secretary in the union agriculture ministry.

If sources are to be believed, the Chief Minister opted for Singh as the chief secretary in order to meet the pressure on the Government for performing. Singh will be replacing the current Chief secretary S Ramaswamy who is expected to be made the chairman of a board.

CONSUMERS

HINDUSTAN TIMES, OCT 27, 2017

Government bringing stringent consumer protection law: ModiWe are in the process of forming a Consumer Protection Authority, which will have executive powers, for immediate redressal, the Prime Minister said.

Prime Minister Narendra Modi on Thursday said the government was in the process of enacting stringent legislation aimed at protecting consumers along with setting up a Consumer Protection Authority (CPA).

Consumers protection is this governments priority. We are in the process of bringing a new law on consumer protection keeping in mind the need of the country and business practices here, Modi said at an International Conference on Consumer Protection for East, South and South-East Asian Countries.

We are in the process of forming a Consumer Protection Authority, which will have executive powers, for immediate redressal.

The stress is being given on consumer empowerment. Strict provisions are being contemplated against misleading advertisements. - Prime Minister Narendra Modi

The rules were being streamlined to solve consumer problems in less time and at less cost, he added.

The stress is being given on consumer empowerment. Strict provisions are being contemplated against misleading advertisements, Modi said.

He said India was among the few countries which had enacted a law a year after the UN adopted guidelines on consumer protection in 1986.

The Prime Minister also said the prices of commodities were set to go down and consumer interests were to be protected effectively due to the implementation of the Goods and Services Tax (GST).

Due to the GST, the competition among companies was going to increase. So prices will go down. It will help consumers from lower middle class and poor sections, Modi said.

Earlier, transportation by trucks would take five days but it has come down to just three three days now as checkposts on borders have vanished after the GST. It means transportation cost has gone down. This is going to be transferred to consumers,

Taking a dig at those opposed to the GST, he said: Some people may be taking advantage of the lack of awareness. However, the benefits will be transferred (to consumers) in days to come.

Talking about the conference, Modi said: It shows how seriously we take the needs of our citizens and how we strive hard to solve their problems.

It is the first conference in the region, where everyone is trying in their own ways to save the interest of consumers. However, we have to keep in mind that the world is going towards a single market, Modi said.

CORRUPTION


Central Vigilance Commission to rank government departments on anti-corruption measures

The Central Vigilance Commission will rank the central government organisations on anti- corruption measures being taken by them, an official release said today.

The CVC has decided to go in for development of the integrity index-based on bench-marking of internal processes and controls within an organisation as well as the management of relationships and expectations of outside stakeholders, it said.

The integrity index will bring out annual scores and rankings of public sector undertakings, public sector banks and financial institutions, departments and ministries of the Government of India by linking the essential drivers of vigilance with long-term efficiency, profitability and sustainability of public organisations, the release said.

The index is aimed to create an internal and external ecosystem that promotes working with integrity in public organisations, it said.

"The CVC has adopted a research-based approach for creating an integrity index that various organisations can use to measure themselves and which will evolve with changing needs and with this view the IIM-Ahmedabad has been engaged to develop the integrity index," it said.

Being a new initiative, initially 25 organisations have been selected for development of the integrity index.

Subsequently, it is proposed to extend the integrity index concept to all other organisations of the Government of India, the release said.

The 25 organisations are the Indian Oil Corporation LtdBSE 2.07 %, Oil and Natural Gas CorporationBSE 0.96 % Limited, NTPC LtdBSE -0.11 %, Eastern Coalfields, Western Coalfields, Steel Authority of IndiaBSE 9.63 % Limited, Punjab National BankBSE 2.15 %, Syndicate BankBSE -3.07 %, National Highways Authority of India and Railways Ministry, among others.

The Central Board of Direct Taxes (CBDT), Bharat Heavy ElectricalsBSE 5.85 % (BHEL), Mahanagar Telephone NigamBSE 4.73 % Limited (MTNL), Delhi Development Authority (DDA), South MCD, Food Corporation of India (FCI) and National Mineral Development Corporation are also among the initially selected organisations.

ECONOMIC AND SOCIAL DEVELOPMENT


A different sum- The economics of growth: demonetization revisited

Dipankar Dasgupta

The latest data series on quarterly gross domestic product released by the ministry of statistics and programme implementation stretches across quarter one of the financial year 2011-12 through the first quarter of FY 17-18 and records quarterly GDPs for the period at constant 2011-12 prices. The quarterly GDPs for each financial year add up to the annual GDP and it is a simple exercise to calculate the approximate annual rate at which GDP had grown over the last three financial years. Given the debate surrounding the growth performance of the economy since the first quarter of FY 14 till current times, it is of interest to figure out what the average annual growth rate has been.

The diagram captures the calculation. The blue wiggling curve represents the quarterly GDPs for each quarter (in trillions of Indian rupees), starting from the first quarter of FY 14-15 till the end of the last quarter of FY 16-17. Suppose, however, that the GDPs were rising at a constant compound rate. Is there aconstantrate that closely reflects the non-constant wobbly behaviour? The answer to the question is an unqualified "yes" and economists call it the trend rate of growth. The thick red curve in the diagram shows the path followed by the quarterly GDPs rising at the trend rate of growth. The quarterly trend growth rate turns out to be 1.97 per cent, so that the underlying annual rate of growth is (1.974=) 7.88 per cent approximately. Subtracting the estimated population growth rate of 1.2 per cent for this period, the average annual growth rate of per capita GDP for the period turns out to be 6.68 per cent.

Why is it important to calculate this best average annual growth rate? The answer can be found in a simple rule of thumb worked out by the Nobel laureate, Robert Lucas, of Chicago University. According to his formula, the GDP of an economy growing at a constant average rate of g per cent doubles every 70/g years. A similar observation applies to the per capita GDP. In the case of India, if the average growth rate of 7.88 per cent is sustained, then its GDP (at 2011-12) prices should double in (70/7.88=) 8.88 years, which is marginally less than nine years. Adding up the quarterly figures for FY 16-17, the annual GDP for that year is seen to be Rs 121.9 trillion. Thus, if India's GDP continues to grow at an average rate of 7.88 per cent, the GDP will rise to Rs 243.8 trillion by FY 24-26.

Further, during 2016, India's population stood at an estimated value of 1.32 billion (or, 0.00132 trillion). Thus, its per capita GDP was roughly Rs 121.9/0.00132, or, Rs 92,348.48. With per capita GDP growing at the rate of 6.68 per cent, the Lucas formula predicts that it should double in 70/6.68, or, approximately, 10.5 years. Thus, if the annual per capita GDP growth remains stable, then around FY 25-26, the per capita GDP will stand at Rs 1,84,697 approximately. Assuming an American dollar-Indian rupee exchange rate of Rs 60 per dollar, the per capita GDP in FY 25-26 should be $3,078. If the exchange rate behaves more favourably for India, then the Indian per capita GDP, expressed in US dollars, will be higher. The per capita figures will double further in the next 10.5 years and so on. In 30 years or so, starting FY 15-16, India's per capita GDP should be of the order of $12,000 or so.

A number of caveats are in order here. First, the calculations are made at 2011-12 prices. Over time, prices might rise and make the real GDP significantly smaller than what the above calculation suggests. Second, exchange rates are known to be volatile. Hence, the quoted US dollar equivalent may not be cause for too much euphoria. Then, a high per capita real GDP indicates little about the distribution of the GDP across the population. Inequality of income distribution is a major problem for India. Also, since India is being flaunted as China's close competitor, it is worth taking note of China's per capita GDP for 2016. World Bank figures indicate that this was $6894.50 and China too is growing. Where China will stand in 2025 is anybody's guess, but it is safe to assume that India will not catch up with China in the next 10 or 20 years. Finally, the calculations are based on the assumption that the average annual rates of growth will remain stable.

It is the last mentioned issue that has been the subject of hype in recent months, especially since the demonetization exercise was carried out by the government. Common sense as well as short term economic modelling suggest that demonetization will have a contractionary impact on the economy. Expenditures are likely to be curtailed in particular, leading to shrinking sales and hence a lower GDP growth rate. However, what was in fact the impact of demonetization on the trend growth rate calculated above? To answer this question, one needs to calculate the trend growth rate as it prevailed prior to demonetization, that is, till the second quarter of FY 15-16. Following the technique utilized by the diagram above, the annual trend growth rate for GDP was 7.72 per cent till the second quarter of FY 15-16. Then, in the third quarter, when the policy was actually implemented, the rate fell to 7.4 per cent. This fall was temporary at best, since, as the diagram shows, the growth rate rose up to 7.88 per cent by the end of the year.

The MOSPI data includes the first quarter of FY 17-18 and if this quarter too is factored in, the annual trend rate falls once again to 7.4 per cent. Since the annual growth rate picked up soon after demonetization, the fall brought about by the first quarter of FY 17-18 calls for an explanation. The answer is unlikely to be found in the implementation of the goods and services tax, for the latter came into force in July 1 of FY 17-18, which is beyond the first quarter of the year. There could be a whole lot of explanations, including the performance of the export sector and there is no point hazarding a guess at this point of time.

Of course, India's annual growth rate figures cannot be brushed off either. The average annual growth rates of per capita GDP for the far eastern miracle economies (Hong Kong, Singapore, Taiwan and South Korea) hovered around 5-6 per cent during 1960 through 1997. In this 27-year period they had been able to reach per capita GDP values in the range of $10,000-18,000. India's annual growth rate of per capita GDP, as we saw, has well exceeded the miracle figures. If the population growth rate turns lower and the average annual growth rate of GDP does not falter too much, as it has not till now, India's per capita GDP too may prosper significantly in the next decade or two.

Demonetization did cause human misery in the short run, but it does not seem to portend any long-term economic damage. Having criticized the policy in the past, this columnist believes at least that there is scope yet for revisiting the issue.

The author is former Professor of Economics, Indian Statistical Institute, Calcutta

EDUCATION


Bonus protest at JNU

New Delhi:A University Grants Commission directive asking all central universities to recover the festive season bonuses paid to their non-teaching staff over the past two years has sparked an agitation.

Over 100 employees staged a dharna on the JNU campus on Thursday under the banner of the United Sangharsh Morcha, a body of Group C and Group D staff.

The staff association at Aligarh Muslim University has written to the vice-chancellor against recovering the bonuses. Delhi University staff are likely to protest next week.

The yearly bonus is given during the Vijaya Dashami-Diwali season, and only the lower-rung non-teaching staff receive it. Last year, JNU staff had received Rs 6,907 as bonus, Morcha president Basant Sharma said.

"Diwali is over but the university (JNU) is yet to give us the bonus for this year. And now the UGC has asked universities to recover the bonuses we received in 2015-16 and 2016-17. This is a denial of our rights. We will not let it happen," Sharma said.

Last week, the commission had written to all the central universities saying the government had not approved the bonus for employees of autonomous bodies for 2015-16 and 2016-17, so the sums should be recovered if paid. The reason behind the Centre's decision is not clear.

None of the 40 central universities, which together have more than 10,000 non-teaching staff, has yet acted on the directive.

At JNU, the Morcha also protested the delay in the announcement of revised pay scales for non-teaching staff in the autonomous institutions. The government had this month announced revised pay packages for university and college teachers but not for other staff.

The Morcha also demanded that JNU fill all its vacant 200 non-teaching posts. Sharma accused the main staff association at the university of failing to take the matter up with the administration.

HINDU, OCT 26, 2017

JNU to offer 720 MPhil, PhD seats

Jawaharlal Nehru University (JNU) has announced an intake of 720 students for its 2018-19 MPhil/PhD admission, which is seven-times the intake of last year when there was an 83% cut in the number of seats offered after adopting the 2016 UGC gazette notification.

Entrance exam dates

The university is gearing up to hold entrance examinations for 2018-19 to its various undergraduate, graduate, MPhil and PhD programmes between December 27 and 30. The exams have earlier been held during the summer break.

The exams are held to admit students into JNUs 10 colleges that contain 41 diverse centres of studies and five special centres of studies.

The final date of application was October 17. Around 1.05 lakh candidates will sit for the exam in 131 fields of study. Rector of the university Chintamani Mahapatra said that this year saw a 42.6% increase in the number of applicants.

He also informed that faculty is being recruited to increase the number of MPhil/PhD research seats in coming years. The university has earmarked 81 exam centres across Indian, and one in Kathmandu.

The admission branch of JNU will depute around 200 teaching and non-teaching staff to the centres for smooth and fair conduct of the exams. A flying squad will also be deployed to hold surprise checks.

The results of the JNU entrance examinations, 2018-19, will be announced in April 2018 and registration of students will begin in July 2018.


IIT pay hike dismay

Basant Kumar Mohanty

New Delhi:The pay rise for tech school faculty that the Centre announced on Friday is too meagre to attract the best talent, teachers at the Indian Institutes of Technology believe.

"The government should have offered a better pay package to attract the best talent," All India IIT Faculty Federation president M.L.N. Rao, a professor at IIT Kanpur, said.

According to Friday's human resource development ministry order, the entry-level pay for the lowest academic rung, that of assistant professor on contract, will be Rs 21,600 with a grade pay of Rs 6,000.

But the order, which announced revised salaries for teachers at all the centrally funded technical institutions like the IITs and the IIMs, was silent on allowances.

It merely said the decision would be taken after talks with the finance ministry and, till then, "all allowances will continue to be paid at (the) existing pay structure".

An IIT Bombay teacher feared that this could mean the allowances would never be revised.

The order asked the institutes to "put in place a process for discontinuation of non-performers". The teacher said this provision carried the potential for misuse by the institutes, and by the government, which can impose arbitrary rules on the institutes.

According to the order, every teacher will be entitled to a three per cent annual increment on his basic salary, rounded off to the nearest 100. Earlier, the salary after the increment was always rounded off upwards to the nearest 100; now it can go downwards if the last two digits of the salary come to less than 50.

The revised package is effective from January 1, 2016. During the last pay revision, announced in 2008 and effective from 2006, the IITs had upgraded the pensions of those who had retired before 2006, too. It's not clear whether such relief would be provided this time to those who had retired before 2016.

Rao said the teacher federation had proposed that the Cumulative Professional Development Allowance, meant to enable teachers to attend international conferences, be raised from Rs 3 lakh every three years to Rs 12 lakh every three years.

INDIAN EXPRESS, OCT 25, 2017

Delhi government allows private schools to hike fees by 15 percentA circular issued by the Directorate of Education on October 17, however, said the hike is not mandatory.

Thorny issue of nursery admissions could go all the way toSC

After asking private schools to refund extra fee charged from parents, and conducting an audit of their accounts, the Delhi government has now allowed private schools on government land to increase their fees by 15 per cent. Government officials described the move as an interim measure to comply with the seventh central pay commission (CPC) recommendations.

A circular issued by the Directorate of Education on October 17, however, said the hike is not mandatory. It asked schools to explore the possibility of utilising existing reserves to meet any shortfall in payment of salaries and allowances. Schools in Delhi have to comply with the seventh CPC recommendations, which calls for a nearly 25 per cent increase in salaries of teachers. The arrears will need to be paid with 7.5 per cent of tuition fees from students, while the new salaries will be funded by the 15 per cent fee hike, with effect from July 1, 2017, the circular said.

It added: In order to avoid any further delay in giving benefits of the seventh CPC to teachers and other employees, and to ensure that the burden of payment of arrears does not accumulate on parents an interim fee increase subject to following upper limits is permitted to schools. Hitting out at the government, Leader of Opposition in the Delhi Assembly and BJP leader, Vijender Gupta, said the move has once again opened a Pandoras box of harassment and trouble for parents.


Teachers oppose new rules forpromotions

Earlier, teachers who completed 12 years were promoted to senior grades and upon completing 24 years, they were promoted to an even senior grade termed as appointed.

Written byPriyanka SahooExam-oriented learning hurts studentsabilities

3 demands pending, teachers refuse to call off strike, govt may imposeMESMA

State govt grants aided status to 4,500 divisions of unaidedschools

Schoolteachers teaching primary and secondary classes and eligible for promotions will not be promoted unless their school is recognised as a grade A school by the state government, according to a new set of rules issued by the state education department. The department issued a government resolution (GR) Monday announcing tougher criteria for teachers promotions in a bid to improve the quality of education in schools. The new rules have beet met with resistance from teachers.

Earlier, teachers who completed 12 years were promoted to senior grades and upon completing 24 years, they were promoted to an even senior grade termed as appointed. The government has now added more rules to the eligibility criteria.

Teachers in only those schools recognised as grade A under the progressive learning scheme of the government will qualify for promotions, even though they may fulfill the experience criteria. For secondary schoolteachers, who teach students of classes IX and X, the criteria is tougher as the state expects that at least 80 percent students in the class pass their exams for the teacher to be eligible for promotion.

Nand Kumar, chief secretary for school education and sports, said, Teachers are eligible for promotions twice in their lifetime. All we are saying is that they work hard for these promotions. Merely teaching for these many years is not enough. Teachers must impart quality education. Teachers and their associations are not happy with the new rules and have opposed the GR.

Rajesh Pandya of the Teachers Democratic Front, said, The new syllabus for class IX and X students is tougher. If 80 percent students dont pass, it is unfair to make teachers bear the brunt of it. Many teachers will end up retiring without promotion. We want the government to repeal the GR.

Principals, too, have opposed the new rules. The 80 percent pass rule, in particular, is unfair. The government should consider the pass percentage in the subject which the teacher eligible for promotion teaches. If the pass percentage is lower in any other subject, it is unfair to hold that teacher back, said Prashant Redij of the Mumbai Principals Association.

Redij said that a state-wide conference of principals will be held between October 26 and 28 when the matter will be discussed. The conclusions of the conference will be presented to the education minister and the chief minister. Currently, teachers are under a lot of pressure and it is affecting their performance, said Redij.

HINDUSTAN TIMES, OCT 27, 2017

Candidates may now get only one chance to clear NET in a year as CBSE opposes two-exam normThe HRD ministry is likely to take a call on the boards request soon

Neelam Pandey

Those aspiring for a college teachers job are likely to get only one attempt in a year to clear the National Eligibility Test (NET), the eligibility criterion for getting a job of assistant professor in colleges and universities.

According to sources, the Central Board of Secondary Education (CBSE) has conveyed to the HRD ministry that it is not in favour of conducting the exam twice in a year. In case the ministry accepts the plea of the CBSE, a single exam will be conducted next year. The HRD ministry is likely to take a call on the issue soon.

The exam has traditionally been held twice a year July and December for the grant of junior research fellowship and recruitment of assistant professors in universities and colleges.

It is not the core work of the CBSE to conduct the NET exam but it has still been carrying it out for the past few years, but it is a difficult exercise and it has conveyed to the ministry that the board is not in a position to conduct it twice in a year. Class 10 board exams have been reintroduced so it (the CBSE) will be preoccupied with that too, said a senior HRD official.

Earlier this year, the University Grants Commission (UGC) had said that the CBSE will continue to conduct the exam even as the board had last year expressed its inability to do so.

The CBSE has agreed to conduct the exam till the National Testing Service is formed, which will conduct all competitive examinations. However, the CBSE has conveyed to the HRD ministry and the UGC that the exam should be conducted once a year as a lot of time and energy is spent on organising it and only a few people take the exam, said a source.

According to a senior HRD official, looking at the poor response to the test 6.5 lakh students register for the exam on an average and approximately 1.5 lakh take it, with a pass percentage of only 3.9% it was also being suggested that the exam should be conducted just once.

Qualification in NET is a must for recruitment of teachers at colleges and universities. This year, the NET exam has been delayed and is being conducted on November 5 by the CBSE.

The Students Islamic Organisation of India (SIO) had filed a petition in the Supreme Court asking the CBSE to take back its decision to suspend the tests. It had also said that the government should conduct one more session in 2017 for students who are crossing the age limit.


No leave for teachers of Classes 9-12 till next Feb:DoE

Education officers will inspect one school per day or four schools per week to see if orders are being followed

Written byShradha Chettri

Following discouraging results in the summative assessment-I and shortage of teachers in Delhi government schools, teachers of classes IX to XII will not be granted leave till February 28 next year, according to a circular issued by the Directorate of Education (DoE). Teachers, meanwhile, have demanded that the order be withdrawn. The circular, issued earlier this month, said: This is a crucial period for focusing on academic teaching and learning In the light of the already existing shortage of teachers, no teacher teaching in Classes IX to XII is to be granted leave. There are about 17,000 teacher posts lying vacant in 1,100 schools. The circular added that leave for medical emergencies will be referred to the medical board. In cases of extreme circumstances, leave has to be approved by the district education office.

Describing it as a challenging year for the DoE with Class IX students having to study the entire years syllabus and Class X students giving the board exams the circular said basic minimum discipline has to be maintained in schools. Ajay Veer Yadav of the Government School Teachers Association (GSTA) said: It is clear that failure in recruiting adequate teaching staff is the root cause of all problems. The rules show lack of confidence and good faith It is also important to note that the coming months will see a lot of festivals and weddings. Another teacher organisation, Adhyapak Shakti Manch, termed the order a situation of emergency.

Teachers have also been ordered to get to school five minutes early. If anyone is found coming late thrice, then one casual leave will be deducted, the order said. Apart from this, the circular directed teachers to assign homework daily, provide ample writing practices conduct and school-level unit tests every Wednesday. The class teacher will be held accountable for low attendance of students and attendance will also have to be taken thrice a day. If any teacher refuses to hold extra classes for weak students, action will be taken against them, the circular added. For heads of schools, the rules are even tougher they have been asked to get to school 15 minutes early.

Stating truancy of students as a big issue, the circular said any principal who is unable to check this is not fit to be an administrative leader, and appropriate disciplinary action will be initiated. The circular states, If heads of schools fail to initiate action against non-performing teachers, it will be assumed there is either collusion or dereliction of duty To check if the orders are being followed, district education officers will inspect one school per day or at least four schools per week.

ELECTIONS


EC SETS DATES FOR GUJARAT POLL BATTLE

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After facing flak over delinking the polling schedule from Himachal Pradesh a fortnight ago, the Election Commission on Wednesday announced that Assembly polls in Gujarat will be held in two phases on December 9 and 14, setting the stage for a highstakes battle between the States ruling BJP and the Congress.

The Gujarat Assembly elections were announced 13 days after the EC declared poll dates for Himachal Pradesh, prompting Congress and other Opposition parties to charge the Centre with deviations from the norms and pressurising the poll panel to allow the BJP more time to announce sops and launch big projects, a charge that both the EC and the ruling party rejected.

Votes for all 182 seats will be counted on December 18, along with those in Himachal, where polling will be held on November 9. The Model Code of Conduct, which prohibits announcements that can influence voters, comes into effect immediately.

Announcing the schedule, Chief Election Commissioner AK Joti asserted that the delay was meant to ensure that relief and rehabilitation work in the wake of devastating floods in Gujarat was not affected. Joti said the independence and impartiality of the poll panel cannot be questioned on account of the delay which was on account of the flood situation in north Gujarat. The EC has already announced that the results of the elections for the 182-member Gujarat and 68-seat Himachal Assemblies will be declared on December 18.

Joti was repeatedly asked questions about the Oppositions criticism of

the EC that it came under Government pressure to delay the announcement.

He maintained that unprecedented rain and floods delayed the announcement and said, The severity of the rain and flood could be gauged from the fact that seven north Gujarat districts, including Ahmedabad, were affected and 229 people lost their lives. It is not a small number. It shows the magnitude of the flood situation... There is no question of connivance with anyone

for the delay.

The Commission always takes decisions on the prevailing situation that is not static but is dynamic. The charge that the Commission had given up its impartiality is not acceptable, he said, adding that even for the Himachal Government there was time available till October 11 for announcement of new projects.

The election to the Gujarat Assembly is a prestige battle for the BJP. It is the home State of the partys two biggest leaders, Prime Minister Narendra Modi and party president Amit Shah, who has set a target of 150 seats for the BJP, which had won 116 seats in 2012.

The BJP has been in power in Gujarat since 1998 and the Congress is seeking to make a comeback.

To win the Gujarat elections a party needs to get a majority at least 92 seats. The Congress has a goal of 125. But the only certainty is that this will be the most hotly-contested Gujarat election in over a decade. Modi in the past one month has announced projects worth thousands of crores in the State.

The Congress hopes to gain from the fact that Modi will not be the chief ministerial candidate for the BJP this time. The party also hopes that activists Hardik Patel and Jignesh Mevani will lend their support to the Congress.

Meanwhile, Other Backward Class leader Alpesh Thakor has formally joined the Congress. Besides, the Congress is using demonetization and the anti-GST sentiments in the State to corner the BJP. The Congress leader attacked Modi over the sudden demonetisation of high-value currency in November last year, saying the decision ruined the countrys economy.

The BJP is banking on the development plank and the popularity of the Prime Minister to once again retain the State. In the 2012 polls, Modi was the Chief Minister of the State.

Joti said that the date of filing of nominations for the first phase of Gujarat polls covering 89 constituencies in 19 districts will be November 14 and the last date will be November 21. The scrutiny of nominations will take place the next day and the last day of withdrawal will be November 24. In the second phase, covering 93 seats in 14 districts, the nominations will open on November 20. The last date of nominations will be November 27. Scrutiny will be done on November 28 and the last date for withdrawal will be November 30, he said. Further, it also announced a ceiling expenditure of Rs 28 lakh per candidate.

The total number of voters in Gujarat will be 4.33 crore, up from 4.27 crore in the last election. The total number of polling stations will be 50,128 as against 44,579 in the last elections. Paper trail of votes will be used in all the 50,128 polling stations of the 182 Assembly constituencies to ensure transparency, Joti said. All voters in Gujarat will be able to see their votes cast through Voter-Verified Paper Trail Audit (VVPAT) machines, which will be installed along with Electronic Voting Machines (EVMs). The Commission has set up 182 all-women polling stations, one in each Assembly constituency. The height of the voting compartment has also been increased to ensure secrecy.

FINANCIAL INSTITUTIONS


NOW FOR THE REFORM

Recapitalising Indias public sectorbanksmust be accompanied by sectoral reform

Indias public sector banks have been struggling with non-performing assets (NPAs) for the past five years and theGovernmenthas finally decided to bite the bullet. This was in part because the Government realised the private finance market just cant cope with Indias huge banking needs even today, public sector banks fulfil the banking needs of 70 per cent of Indians. And Government-owned banks were petrified of lending more money because their balance sheets were in a mess thanks to non-performing assets. The Government, as the largest shareholder in the banks, did have voices within that argued for privatisation although with such damaged books the taxpayer would have still lost out. Already on the backfoot with critics making much of the slowdown in economic growth, the Rs 2.1 lakh crore infusion into the banks (a massive US $33 billion), two-third of it through bonds, is to get the banks lending again, boost industry, agriculture and services, and get growth back to eight per cent plus which is needed in order to provide employment to the million Indians joining the workforce monthly.

Critics argue that the method employed by the Government, to recapitalise the banks via recapitalisation bonds, is nothing but financial jugglery. However, it is a way for the largest shareholder in the banks to be able to infuse money without adding to the deficit. Of course, despite the big bang nature of the announcement, a keen observer of the Indian economy would know that the government has taken on more liability. But even critics of the Governments economic policies acknowledge that something needed to be done when it came to these lenders. The success or failure of this recapitalisation plan for public sector banks, though, cannot be judged for a few years yet. And if it is to succeed, public sector banks need to be far more autonomous. As the promoter of the banks, the Finance Ministry should give a general direction to banks, identify priority sectors and, after the banks have recovered a bit, explore the possibility of merging some of them to make them larger and thereby less susceptible to a financial crisis. Selling stakes in some banks to raise money also needs to be considered. The smaller public sector banks have the most NPAs. It is hoped that investigations will reveal how politicians and bureaucrats put pressure on public sector banks to approve loans to their favoured industrialists and for non-viable projects. For example, when private banks figured out that Vijay Mallyas airline was flying on hot air they cut him off, but Mallya still managed to raise money from public banks. The same applies to real-estate developers and infrastructure builders who gold-plated their projects. Recapitalisation should help the public banks start disbursing funds all over again, but more professionalism and less interference from the Government has to be institutionalised now.

HINDU, OCT 27, 2017A bold step in bank reform

T.T. Ram Mohan

Its been late coming, but the recapitalisation of public sector banks is a winner

With Indias economic growth faltering in the last couple of years, the government has been casting about for ways to galvanise the economy. Last November, it tried demonetisation. It was a bold move but its economic benefits will be long in coming while the short-term disruption has been very real and demoralising. This year, it pushed through the goods and services tax (GST). Again, this is hugely positive over the medium term, but is painful in the short run.

Cheering the markets

The government seems to have realised that a simpler, more effective remedy is at hand: recapitalising public sector banks (PSBs) and enhancing the flow of credit. The proposal to recapitalise PSBs to the extent of Rs. 2.11 trillion (Rs. 2.11 lakh crore) is a winner by any reckoning. It is, perhaps, the most effective way to provide a much-needed fiscal stimulus to the economy and revive growth. Small wonder that the markets have given the move a rapturous welcome.

To understand the significance of bank recapitalisation, we need a little primer on bank capital. Regulation requires that banks hold assets only in proportion to the capital they have. Capital is a combination of equity, equity-like instruments and bonds. For a given balance sheet, there is a certain minimum of capital that banks must hold. This is called capital adequacy. The higher the capital is above the regulatory minimum, the greater the freedom banks have to make loans. The closer bank capital is to the minimum, the less inclined banks are to lend. If capital falls below the regulatory minimum, banks cannot lend or face restrictions on lending.

When loans go bad and turn into non-performing assets (NPAs), banks have to make provisions for potential losses. This tends to erode bank capital and put the brakes on loan growth. That is precisely the situation PSBs have been facing since 2012-13.

Stressed advances (which represent non-performing loans as well as restructured loans) have risen from a little over 10% in 2012-13 to 15% in 2016-17. This has caused capital adequacy at PSBs to fall. Average capital at PSBs has fallen from over 13% in 2011-12 to 12.2% in 2016-17. The minimum capital required is 10.5%. An estimated 10 out of 20 PSBs have capital of just one percentage point above the minimum or less. Inadequate capital at PSBs has taken its toll on the flow of credit. Growth in credit has fallen below double digits over the last three years. Between 2009-10 and 2014-15, annual credit growth was in the range of 15-20%. In the India Shining period of 2004-09, credit growth had been over 20%.

Some observers ascribe the deceleration in credit growth to poor demand. They say that corporates have excessive debt and are in no position to finance any investment. This may be true of large corporates. However, it is not true of enterprises in general. One study, which covered over 4,000 companies, showed that the debt to equity ratio fell below 0.8 (which is a low level of debt) in 2008-09 and remained low until 2012-13. (J. Dennis Rajakumar, Are corporates overleveraged?,Economic and Political Weekly, October 31, 2015).

Moreover, demand for investment finance may have decelerated but demand for working capital remains strong. If anything, the introduction of GST has increased small business demand for working capital. Low growth in credit is confined to PSBs. Private banks have seen loan growth of 15% this year.

Evident since 2014

The government has realised that there is a problem with the supply of credit. It has to do with PSBs inability to lend for want of adequate capital. The National Democratic Alliance (NDA) government should have recognised the problem when it assumed office in May 2014. At the time, stressed advances were already 10% of the total. The NDA government should have moved swiftly to recapitalise PSBs.

Instead, it chose to sweep the problem under the carpet. Market estimates had placed the requirement of government capital at a minimum of Rs. 2 lakh crore over a four-year period. In 2015, under the Indradhanush Plan, the government chose to commit a mere Rs. 70,000 crore over the period.

The dominant view in government at the time seemed to be that PSBs had messed up in a big way, so putting more capital into them was simply money down the drain. Their role needed to be shrunk through consolidation or by selling strategic stakes to private investors.

This is a mistaken view. The bad loan problem at PSBs is not entirely the result of mismanagement. There have certainly been cases of malfeasance and poor appraisal of credit. However, as the Economic Survey of 2016-17 made clear, these are not responsible for the bulk of the NPA problem. The problem is overwhelmingly the result of factors extraneous to management.

PSBs, unlike their private sector counterparts, had lent heavily to infrastructure and other related sectors of the economy. Following the global financial crisis of 2007, sectors to which PSBs were exposed came to be impacted in ways that could not have been entirely foreseen. Blaming PSBs for the outcomes and starving them of capital was not the answer.

The failure to quickly recapitalise PSBs has adversely impacted the economy in many ways. First, it has come in the way of adequate supply of credit. Second, it has hindered the effective resolution of the NPA problem and kept major projects from going through to completion. Resolution requires banks to write-off a portion of their loans in order to render projects viable. They cannot do so if they see that write-offs will cause their capital to fall below the regulatory minimum. Third, corporates are stuck with high levels of debt and are unable to make fresh investments.

The governments move to recapitalise banks changes the picture. Of the Rs. 2.11 trillion package, Rs. 1.35 trillion will be towards issue of recapitalisation bonds. PSBs will subscribe to these bonds. The government will plough back the funds into banks as equity. Another Rs. 180 billion will be provided as budgetary support. The remaining Rs. 580 billion will be raised from the market. Analysts believe the package should enable banks to provide adequately for NPAs and support modest loan growth. Once PSBs have enough capital and are in a mood to lend, they can liquidate excess holding of government securities and use the cash to make more loans.

Analysts worry about the fiscal impact of the recapitalisation package. International norms allow borrowings for bank recapitalisation not to be counted towards the fiscal deficit. In the past, India has used this accounting fudge. The proposed recapitalisation bonds are likely to add to the fiscal deficit unless the government resorts to other fudges such as getting the Life Insurance Corporation of India or a separate holding company to issue the bonds. The government should not worry unduly about missing the fiscal deficit target of 3.2% of GDP. The markets will understand that the fiscal stimulus is well spent.

Getting the record straight

Analysts also fret over repeated bailouts of PSBs and the costs to the exchequer. They seem to think that bank bailouts have to do with government ownership and inefficiency and the answer is to privatise some of our PSBs. They couldnt be more wrong.

The overwhelming majority of bank systems worldwide are privately owned. And yet these systems are prone to periodic bouts of bank failures. The International Monetary Fund has documented 140 episodes of banking crises in 115 economies in the world in the period 1970-2011. The median cost of bank recapitalisation in these crises was 6.8% of GDP. Indias cost of recapitalisation over a 20-year period is less than 1% of the average GDP during this period.

The Modi government has shown courage in opting for substantial recapitalisation of banks. This is not something that fits into the reform mantra whereby private is good and public is bad. Reserve Bank of India Governor Urjit Patel has welcomed the move in effusive terms: The Government of Indias decisive package to restore the health of the Indian banking system is in the view of the [RBI] a monumental step forward in safeguarding the countrys economic future. Indeed. The governments recapitalisation move promises to do more to quickly usher in acche din than any other single measure it has initiated during its tenure.

T.T. Ram Mohan is a professor at IIM Ahmedabad. E-mail: [email protected]

HEALTH SERVICES


GOVT EMPLOYEES, PENSIONERS CAN AVAIL CASHLESS EMERGENCY TREATMENT

State government employees and pensioners can now avail cashless emergency treatment and other cashless treatments of incurable diseases. They can do so as Uttar Pradesh Medical and Health Department has started Pt. Deen Dayal Upadhyay State Employee Cashless Medical Scheme. This was stated by CEO, National Health Insurance Scheme, Alok Kumar Mitra in Lucknow on Monday.

Under the scheme, the process of online registration of state government employees and pensioners was being done on the websitewww.upsects.in.

Mitra said that beneficiaries themselves could print their State Health Card after completing online registration on the basis of which they could avail cashless treatment facility in hospitals empanelled under the scheme.

The cashless treatment includes treatments during emergency and all types of heart, kidney and liver diseases along with knee replacement etc. The cashless treatment facility will be available in Government Medical Colleges, Medical Institutes and C.G.H.S. and empanelled private hospitals.

The CEO said that before launching the scheme, a list of empanelled hospitals and date of the schemes commencement will be issued and will also be available on the schemes website. The scheme is likely to be launched in February 2018.


Over 10,000 govt doctors submit resignations to association

Hundreds of government doctors today gathered here to submit their resignation to the All Rajasthan In Service Doctors Association (ARISDA) in support of their 33 long-pending demands.

The demands include formation of a separate cadre for in-service doctors, Rs 10,000 grade pay benefit to doctors, rectification in salary discrepancy, housing facility and safety for all doctors, said Dr Ajay Chaudhary, president ARISDA.

They are also demanding for running government health centres in a single shift and rural allowance, he said.

There are 10,000 doctors who are protesting for the demands to be fulfilled.

He also said that if the government does not fulfill their demands, the resignations will be effective from November 6.

JUDICIARY


Centre is right, judges must be evaluated

The central government has rightly objected to the Supreme Court collegiums decision to scrap the mechanism for evaluation of the judicial performance of additional judges of high courts before recommending their names for promotion as permanent judges. The union law ministry has written to the collegium that it did not agree with its decision and requested it to review it. The governments position is sound. The practice of professional evaluation of additional judges was started in 2010 when Justice S H Kapadia was the Chief Justice of India. Additional judges are appointed for an initial period of two years. They are later made permanent judges on the recommendation of the collegium. A Judgments Evaluation Committee constituted by the chief justice of the high court and consisting of senior judges studies the judgements delivered by the additional judges and forms an opinion on whether they can be confirmed as permanent judges. It is this practice which the collegium proposes to do away with.

Former CJI J S Khehar wrote to the chief justices of high courts in March this year that the practice should be stopped immediately as it went against a 1981 judgement of the Supreme Court. He also informed the government of the decision. The decision goes against all well-established norms of selection of a person for an official position. How can anybody be promoted to a position without an evaluation of his or her eligibility for it? Such an evaluation is all the more important in the case of judges because it is almost impossible to remove them if they turn out to be incompetent, unequal to the job or otherwise unfit for it. There are quite a few examples of wrong and inappropriate choices, like Justice P D Dinakaran and Justice Karnan who brought discredit and embarrassment to the judiciary.

The government has told the collegium that it has done away with the only parameter available for evaluation of judges before their elevation. In the absence of such an evaluation, the appointments are likely to be based on the arbitrary views and opinions of the collegium. This is against the spirit of the recent decision of the collegium itself to make its proceedings public. If the collegium does not review its decision on evaluation it can lead to another confrontation between it and the government. There are already other issues of contention between the two. All these differences have arisen from the Supreme Courts refusal to accept the role of the executive in judicial appointments. Unfortunately, it has now discarded its own responsibility to evaluate candidates before they are appointed. If the collegium wont evaluate judges, it should let the executive do it.


Browbeating the judiciary

Constitution defines the lakshman rekha

IF last weeks developments are any indication, the government and the judiciary appear to be headed for another round of confrontation. First, Attorney General KK Venugopal came close to admonishing a Bench headed by CJI Dipak Misra when he suggested that the Supreme Court had acquired vast powers to become the worlds most powerful court and that in its expansionist binge it had added at least 30 new rights to the Fundamental Rights. The Attorney General was probably reflecting the gathering impatience in the executive with the apex court. The ball was, accordingly, picked up by Union Minister Arun Jaitley who chided the judiciary for allowing itself to be influenced by the events of the day, instead of inculcating judicial statesmanship. The intended rebuke was all too obvious.

In its turn, the Supreme Court reminded the government the issue of drafting of Memorandum of Procedure (MoP) for judges appointments cannot linger on for an indefinite period. This remains an unfinished and, touchy business ever since the National Judicial Appointments Commission was ruled unconstitutional in October 2015. Of late, various judicial pronouncements have had the cumulative effect of slowing down a politically rampant government. On several issues, like deportation of the Rohingya, the government had reason to feel strongly that the judiciary could have kept away.

It seems tempers will not cool down easily. No executive, especially one enjoying a clear majority in the Lok Sabha, likes to feel checkmated by the un-elected judges. Judges often get reminded of a lakshman rekha; routinely, the judges also commit themselves to the restraint implicit in such a rekha. But the higher judiciary is only too cognisant of the political classs proclivity to push controversial hot potatoes in its corner. In fact, it has found itself embroiled in the politicians gamesfor examples, verdicts in criminal defamation cases and bails have vital consequences for political fortunes. Every government has resorted to a judicial inquiry stratagem to see off a political sensitive moment. Judges are not innocent babes in the wood. Those who oblige have won post-retirement perks, including a gubernatorial slot. Judiciary needs to maintain its institutional equanimity and rectitude.

STATESMAN, OCT 24, 2017

Speak up, milords

Time was when courts spoke through their judgments. Of late much importance is attached to the observations and comments of the Bench ~ in the apex court particularly ~ during the course of hearings. For those pearls of wisdomoften provide much insight into prevailing judicial thinking, even if at times the final orders do not reflect some of the comments, or dilute their severity. It is in that context that the system should analyse the point made by a group of young lawyers that justice must be heard as much as it is seen. Hence their appeal to the Chief Justice of India that he request his brother/sister judges to use the sound-system with which the courtroomshave long between equipped.

There is reason to appreciate the case of the young lawyers: the apex court has a strict hierarchy, Senior counsel occupy the front benches in the courtroom and the juniors often miss out on whatflows from the Bench. While journalists reporting the proceedings often miss out too, the real sufferersare the litigants ~ it is common to see them surrounding counsel after the hearing inquiring after the fate of their pleas. Often misleading versions are presented, albeit unintentionally, which sometimes get flashed by the electronic media in an age of highly competitive breaking news. Some of that could be avoided if the microphones were activated.

The response of their Lordships is awaited, if the courts have adopted technology for enhanced efficiency ~ some lower courts have even opted for video-conferencing ~ using a public address system need not be frowned upon. Drawing parallels between the Supreme Court and Parliament might be touchy, but who can deny thatkey national issues are increasingly being processed as much in the apex court as in the national legislature,and the peoples right to know cannot be undervalued.

It is possible that some Senior counsel will not be thrilled with the move by their juniors, and the name of Whistle for Public Interest (WHIP) that the group of practising lawyers and law students have chosen for themselves will not be appreciated (it does have an upstart ring to it), but the point on microphones seems valid. The judicial system has to change with times.

Indeed it has, but without he perceptible fall in standards that plague other institutions of the democracy. In their black robes the judges and counsel do exude a certain aura which is not to be scoffed at or ridiculed in these times, and the majesty of the Supreme Court has to be preserved at all costs. Using mikes will not detract from that glory, the p.a. system has been refurbished at considerable cost and money must be effectively utilised. Let the nation hear justice being delivered.

POLITICAL PARTIES

BUSINESS STANDARD, OCT 27, 2017

Congress manifesto to focus on happiness index of GujaratThe manifesto will promise navasarjan or rejuvenation of Gujarati society, state unit chief Bharatsinh Solanki said

Archis Mohan

In Gujarat, the Congress will highlight pro-poor policies: Ashok GehlotBJP calls Congress a sinking ship; not scared, say Gujarat Cong MLAsHold Gujarat polls after Dec 14, when Hindu wedding season ends: BJP to ECModi flays Congress, assures traders on GST in Gandhinagar: Key highlightsAssembly polls: Congress faces political battles with BJP in 6 states

To counter the Bharatiya Janata Party (BJP)s Gujarat model of development plank, theCongress partyin its campaign for the Assembly polls in the state will focus on the allegedly declining happiness index during theBJP rule.

The manifesto will promise navasarjan or rejuvenation of Gujarati society, state unit chief Bharatsinh Solanki said. The manifesto will question the famed Gujarat model as a hoax, and attempt an alternative vision based on the happiness index, instead of indicators such as data related to gross state domestic product.

After Gujarat and Maharashtra were carved out of the Bombay state in 1960, the Congress government in Gujarat laid the foundation of happiness in the state. Our slogan this time is that the Congress will be the harbinger of navasarjan, Solanki said.

The manifesto will focus on farm distress, joblessness of youth and the impact on traders of the Centres economic policies or how the BJP governments policies have brought despair to all sections of the Gujarati society. The human development indices of the state bear this out, Solanki said.

Former Gujarat chief minister Suresh Mehta has also campaigned in the past few months to highlight the hoax of the Gujarat model. Mehta was finance minister and chief minister in BJP governments in the mid-1990s. He points to data on quality of health services, education, water supply and sanitation having plummeted.

There has been increased privatisation of education and health services in Gujarat, Solanki said. Mehta, who currently runs the Lokshahi Bachao Abhiyan or save democracy campaign said governments in Gujarat had not delivered on commitments made to the people on waters of the Narmada river reaching them. Farmers have not benefitted. Much of the water is being given to industries and free of cost, he said.

Ashok Gehlot, Congress incharge for the state, says the party would promise farm loans on zero per cent interest. Its manifesto will also focus on job creation through small and medium enterprises and skill development for youth to meet the problem of joblessness.

Win or lose, the central leadership hopes its campaign for the Gujarat polls will help it reclaim its perch in Indian politics as an umbrella party a party that isnt sectarian, and represents the interests of all sections. However, the state unit is keen that the party manifesto make explicit promises to the Patidar community, especially to provide reservations in government jobs to Patidars and other such communities under a separate EBC, or extremely backward community category.

Party's Gujarat unit is of the view that theCongress manifestoshould promise its government would assure 20 per cent reservation to EBCs over and above what is currently provided under the Constitution.

The central leadership has not only said this would be legally untenable but pointed to the mistakes the party committed in its Uttar Pradesh campaign by presenting itself as a party relying on votes of particular castes and religion.

If the state unit wants to recreate the KHAM (Kshatriya, Harijan, Adivasi and Muslim) alliance that had helped Congress win in Gujarat in the past, the central leadership believes the party should effect such alliances on the ground but preferably have an inclusive overarching narrative to appeal to all sections of the society.

The Congress is in contact with dissident Janata Dal (United) legislator Chhotubhai Vasava, Patidar leader Hardik Patel and Dalit leader Jignesh Mewani. Samajwadi Party chief Akhilesh Yadav has also approached the Congress leadership for a possible alliance.

POLITICS AND GOVERNMENT


Rumbling in Gujarat- The Bharatiya Janata Party's nervousness is intriguing

Manini Chatterjee

With the victoryof Ahmed Patel,the Grand Old Partyhas been infused with new energy

Since the Bharatiya Janata Party president, Amit Shah, does not seem to be a man given to self-criticism, it is unlikely that he will ever admit that his Rajya Sabha adventure in August this year was a terrible mistake. On the contrary, he might be congratulating himself for executing an operation which, but for a last minute hitch, almost achieved its objective.

For those who may not remember, here's a brief flashback. Three Rajya Sabha seats from Gujarat were up for election, and the numbers in the state assembly ensured that the BJP would easily win two, and the Congress the third seat. The ruling party duly nominated Amit Shah and Smriti Zubin Irani; and the Congress fielded Ahmed Patel.

Since the Congress had 57 members of the legislative assembly in the state, and needed only 45 to win the seat, there was little doubt that

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