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LIST OF NEWSPAPERS COVERED - Indian Institute of …iipa.org.in/www/iipalibrary/iipa/news/FEB 1-7,...

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PIONEER, FEB 3, 2017


The restoration work at a four-storey Victorian building here, used by Babasaheb Ambedkar during his student days in the UK, will be completed by July, a senior Maharastra minister has said as he set up a committee to oversee the completion work at the memorial.

The international memorial is inspired from the life of eminent jurist and social reformer during his student days at the London School of Economics (LSE) in 1921-22.

Rajkumar S Badole, Maharashtra's minister for social justice, during his four-day visit to London this week, convened the first meeting of the advisory committee set up to oversee the restoration work at the Babasaheb Ambedkar International Memorial.

The meeting was chaired by Indian high commissioner to the UK Yashvardhan Kumar Sinha.

The six-room, four-storey Victorian home at 10 King Henry's Road in north London was acquired by the Maharashtra government in August 2015 and its ground floor has already been renovated and open to the public as a memorial.

"It was decided at the meeting to accelerate the pace of work on the rest of the building. The committee has put forward a number of proposals, which will now be implemented," Badole told PTI yesterday.

The plans are being financed by the Maharashtra government's budget of Rs 10 crores set aside for the 125th birth anniversary celebrations of Ambedkar.

The memorial will include a library-cum-conference room for visitors, a multi-media space to project archival audios and videos from Ambedkar's life and his old bedroom to be restored to the way it was back in his student days.

"The memorial will be inspired from his life. We will be hiring a curator once the main refurbishment work is complete," Badole added.

The minister also held follow up talks with the South Asia Centre at LSE for the purpose of setting up a permanent Chair in the name of Babasaheb Ambedkar as well as two scholarships for students from Maharashtra who study at LSE.

The state government hopes the fully completed memorial will be ready to be unveiled by July this year, he said.

The 10 King Henry's Road townhouse on a leafy street in Chalk Farm area of north London had gone up for sale in 2014.

London-based FABO UK had written to the Indian government to purchase the property as a historically relevant monument and make it a "focal point to spread Dr Ambedkar's message about equality, human rights and social justice".

The decision for to purchase the home was cleared by Chief Minister Devendra Fadnavis and it became one of the focal points of Prime Minister Narendra Modi's visit to the UK in November 2015.



Finance ministry warns employees of action for criticizing govt policiesHIGHLIGHTS

Disciplinary actions will be taken against employees criticizing government policies

This is according to the service rules of government employees

Some associations recently took part in a protest against decisions of the GST council

NEW DELHI: The finance ministry has warned employees of disciplinary action if they criticize the government or its policies.

The directive assumes significance as associations representing employees of Central Board of Excise andCustoms(CBEC) are protesting against certain decisions taken by theGSTCouncil led by finance minister Arun Jaitley on Goods andServices Tax.

"Instructions have been issued in the past wherein it has been impressed upon all concerned to refrain from commenting adversely on the government and its policies," the ministry said in a recent order.

It said failing to comply with its instructions "may lead to appropriate action (including disciplinary action)".

The instructions cite service rules that bar any government servant from making any adverse criticism of any policy or action of the government.

"No government servant shall, in any radio broadcast, telecast through any electronic media or in any document published in his own name or anonymously, pseudonymously or in the name of any other person or in any communication to the press or in any public utterance, make any statement of fact or opinion which has the effect of an adverse criticism of any current or recent policy or action of the central government or state government," reads the service rules.

Certain members of Indian Revenue Service (Customs and Central Excise), All India Association of Central Excise Gazetted Executive Officers, All India Central Excise Inspectors' Association and All India Central Excise and Service Tax Ministerial Officers Association had recently participated in a symbolic protest to oppose some decisions taken by the GST Council.

When contacted, President of IRS (Customs and Central Excise) officers association, Anup Srivastava, said their members are not adversely commenting on the state's policies by any way.

HINDU, FEB 6, 2017

Retiring govt. staff to get ceremonial send-off

N. Rahul

KCR favours dropping a public servant home in car on the last day of service

From this month, government staff who leave office on their last working day on attaining superannuation will be dropped home in government vehicles.

Government offices generally organise get-together of staff on the last day of a month when the retiring staff call it a day. They are offered a bouquet or a shawl, group photographs taken and snacks shared , all by pooling money from their pockets. And that is all the good memories they carry home.

On Sunday, the Telangana government came up with a decorative idea to honour the retiring staff. Chief Minister K. Chandrasekhar Rao asked the district Collectors at their conference to drop them home in government vehicle.

Mr. Rao made the suggestion in the context of asking Collectors to see to it that the officers and lower staff did not have to make frequent visit to them for retirement benefits. All their benefits should be handed over on the last day in a cover. They would feel proud if they were sent home in a car.

The Chief Minister also wanted the Collectors not to delay government benefits for general public. They should visit individual houses for payment of ex gratia when any of the inmates died in lightning strike or other natural calamities.

Mr. Raos advice on car-drive was welcomed in official circles. They drew parallel to a tradition in the office of the Director-General of Police when the incumbent retired. After all the goodies are exchanged at the time of changeover, subordinate IPS officers pull with ropes over their shoulders an open-top jeep that carried the outgoing DGP till the gate. The bottom line is : hum aap ko apne khandon pe rakhte hain (we carry you on our shoulders post-retirement).


Give senior-most IAS officer post equivalent to chief secretary: CAT toPunjabThe tribunal expressed the posting order was vitiated on account of arbitrary exercise of power and deserves to be quashed.

Written by Sanjeev Verma

An order dated March 29, 2012, equating the post of Member Secretary of the Punjab State Women Commission with that of the Chief Secretary, has also been quashed.

GRANTING RELIEF to the senior-most Punjab IAS officer, Himmat Singh, who was aggrieved by the SAD-BJP governments decision to give him a post much junior to his status, the Central Administrative Tribunal (CAT) has directed the Punjab government to appoint him within two weeks on a post equivalent to that of the state Chief Secretary. The tribunal expressed the posting order was vitiated on account of arbitrary exercise of power and deserves to be quashed. The Chandigarh bench of the CAT, in its judgment released Wednesday, while coming down heavily on Punjab Chief Minister Parkash Singh Badal, said, The order of equivalence has been issued without application of mind by the competent authority that directed the issue of the posting order i.e. the Chief Minister of the state.

The tribunal has thus quashed the Punjab governments order dated March 16, 2012, of posting 1980-batch IAS officer Himmat Singh as Member Secretary of the Punjab State Women Commission as the post is manned by a much junior joint secretary level officer. Even Punjab Chief Secretary Sarvesh Kaushal is from the 1982 batch. An order dated March 29, 2012, equating the post of Member Secretary of the Punjab State Women Commission with that of the Chief Secretary, has also been quashed.

The tribunal observed, From the content of the Punjab State Commission for Women Act, 2011, it is evident that the work expected to be performed by the Member Secretary, State Women Commission can by no stretch of imagination, be considered to be equal in responsibility to that of the Chief Secretary.

Petitioner IAS officers counsel NS Boparai had submitted that it is clearly evident that by exercising its arbitrary powers just to belittle Himmat Singh, the Punjab government even denied all the facilities to which the officer of Chief Secretary rank was entitled like residential accommodation, official transport and even a telephone. Therefore, the applicant, since his appointment, has been driving himself to his office in his personal car and using his personal phone for official work, submitted Boparai.

Shocked by the state governments action, the tribunal observed, it is also not understood why an officer who had been promoted from time to time and had reached the Apex Scale, should suddenly have been posted against a post that was as per the Punjab Commission for Women Act to be manned by officers of the rank of joint secretaryparticularly, when the officer posted as Member Secretary would be expected to work under the guidance and control of the chairperson of the Commission whose own status was only that of Administrative Secretary.



CBSE to award marks, grades for Class X

Prakash Kumar

The Central Board of Secondary Education (CBSE) will award both marks and grades to Class X students in the board examinations to be held from 2018. The board will conduct examinations for a total of 80 marks in each subject and the respective schools will hold internal assessment of students for the remaining 20 marks in each subject.

In each of the two examinations, the students will have to secure at least 33%. The board will conduct Class X examination for 80 marks in each subject covering 100% syllabus of the subject of Class X only. Marks and grades both will be awarded for individual subjects, the CBSE said on Wednesday, notifying the remodelled format of the board examinations for Class X students. The students will get a nine-point grading as the CBSE awards Class XII students, it said.

Under a scheme for internal assessment, the schools will conduct periodic written tests for each of the subjects. The schools will hold a total of three written tests for each subject in an academic year. Out of 20, a total of 10 marks will be allocated to these tests. Average of the best two of the period tests will be taken for final marks submission.


Budget 2017: National Testing Agency to conduct all entrance examinations for higher education institutions

By Anubhuti Vishnoi

The finance minister announced a 10% hike in allocation for education at Rs 79,685 crore for 2017-18 along with a strong focus on reform and quality.

NEW DELHI: Budget 2017 has proposed a potentially game-changing overhaul of the University Grants Commission and greater administrative and academic autonomy for good quality higher education institutes.

Finance Minister Arun Jaitleys proposal to restructure the apex higher education regulator is in accordance with recommendations of a number of committees and experts. Most recently, the Group of Secretaries made a strong pitch in this regard in a report last month. The report even suggested that top ranking institutions be unfettered from UGCs stringent regulatory framework and a graded regulation regime with broad-based, less prescriptive and less intrusive regulations be brought in.

The finance minister announced a 10% hike in allocation for education at Rs 79,685 crore for 2017-18 along with a strong focus on reform and quality upgrade across schools and higher education institutions.

While Rs 46,356 crore has been allocated for school education, with the highest funds apportioned towards Sarva Shiksha Abhiyan, Rs 33,329 crore has been earmarked for higher education.

Most of the budgetary announcements on education have little or no financial component to them. Key proposals from the human resources development ministry on higher allocations for a separate National Research Foundation and Project Vishwajeet for additional funding for top-notch IITs and IISERs have been ignored.

Jaitley also announced the setting up of a National Testing Agency, an autonomous organisation to conduct all entrance examinations for higher education institutions. Currently, CBSE conducts most entrance examinations such as NEET, UGC-NET and JEE Main.

On school education, the focus continues to be on learning outcomes. Jaitley proposed an Innovation Fund for Secondary Education be introduced in 3,479 educationally backward districts to encourage local innovation and ensure universal access, gender parity and quality improvement.


CBSE discontinues open-book exams for class IX and XI

Two years after it was introduced, CBSE has decided that students of class IX and XI can no longer carry textbooks to examination halls from this academic year as, the board said, this practice was hindering development of students' critical abilities.

The Central Board of Secondary Education has decided to discontinue Open Text Based Assessment (OTBA) as negative feedback has been received from schools about the system, board officials said.

"Based on discussion with various stakeholders the board has decided to withdraw OTBA from the Scheme of Studies in Classes IX and XI from the Session 2017-18 after we got feedback from schools that the system was hindering the development of critical abilities of students," a senior board official said.

OTBA was introduced by CBSE in Class IX for Hindi, English, Mathematics, Science and Social Science and final examination of Class XI in a few subjects such as Economics, Biology and Geography from March, 2014.

Under OTBA, students were provided text materials four months in advance and they were allowed to carry the case studies during the examination.

The students were allowed to refer to their notes or textbooks while answering questions. The focus was not on rote-learning, but on applying that information critically.


Minimum learning mandatory from 2018 for elementary classes

From 2018, it will be mandatory for all government and private schools to ensure that students of the elementary classes at the end of their academic session achieve a minimum learning outcome laid down by the Human Resource Development (HRD) Ministry.

We have laid down the minimum learning outcome, incorporating the suggestions from the stakeholders. We are going to make it part of the RTE (Right to Education) Rules and make it mandatory for all schools from the academic session of 2017-18, HRD Minister Prakash Javadekar told reporters on Sunday.

By the time a student completes the academic year of Class VIII, he or she should be able to recognise political, social and economic issues and the way they affect their daily lives across the time and space, according to the learning outcome document prepared by the National Council for Educational Research and Training (NCERT).

These students must also gain a sense of the working of Indian democracy its institutions and process at the local state and union levels. They should be able to recognize contributions of the different sections of the society, political, social, cultural and environmental process including process of elections to Lok Sabha.

Schools and teachers concerned would also need to ensure that they imbibe the value of Constitution in Class VIII students, make them understand the socio-economic role of their family as well as the government and make them familiar with their own region and their interdependence on other regions under the curriculum of social studies.

The learning outcomes have been developed class-wise from classes I to VIII for environment studies, science, mathematics, social sciences, Hindi, English and Urdu languages.

This is to help students and teachers make their efforts in the right direction to ensure learning among the students providing quality education. Schools will have to ensure that the stipulated learning outcome is achieved by students of each class by the end of the academic year as it will be made part of the RTE Rule, a ministry official told DH.


Delhi HC directs UGC to set up grievance redressal system in all varsities

Soibam Rocky Singh

Students in colleges and universities will finally have someone who will hear and act on their grievances and complaints, even if it is against the institution they are studying in.

The Delhi High Court on Friday directed the University Grants Commission (UGC) to ensure that all colleges and universities, including capitals Delhi University (DU), set up a grievance redressal committee (GRC) for students within four months.

In May 2013, the UGC had published a gazette notification asking every university and institute recognised by it to set up a GRC, where students can lodge their complaints on issues related to admissions, discrimination and sexual harassment.

The regulations, part of an effort to bring in reforms in higher education, also gave rights to a person seeking admission to any institution of higher education to make his complaint to the committee.

The notification said that a student could even complain against denial of quality education as promised at the time of admission, delay in conduct of examinations or declaration of results. Students have the option of approaching the ombudsman if they are not happy with the decision of the GRC.

However, in 2015, a former Delhi University law student, Harpal Singh Sangwan, moved high court contending that the UGC regulations were not followed by many universities, particularly DU.

After numerous hearings over a period of about two years, a bench comprising Chief Justice G Rohini and Justice Sangita Dhingra Sehgal ruled that appointment of an ombudsman in every university and a GRC for every college or group of colleges were mandatory.

The DU had constituted GRC in 2014, but failed to appoint the ombudsman till date.

The court also directed DU to take necessary steps forthwith and appoint the ombudsman in terms of provisions of the regulations as expeditiously as possible, preferably within a period of four months from today (Friday).

It noted that UGC is empowered to take action against institutions that willfully contravenes or repeatedly fails to comply with orders of the ombudsman.

Under the regulation, if any institution willfully contravenes or repeatedly fails to comply with orders of the ombudsman or the GRC, the UGC could resort to withdrawal of declaration of fitness to receive grants or withhold any grant allocated to the institution.


HRD to bring 'graded regulatory mechanism' in UGC, says Javadekar

The HRD ministry will bring in a "graded regulatory mechanism" as part of key reforms in the University Grants Commission (UGC) to usher in greater transparency, freedom and autonomy, Union Minister Prakash Javadekar said on Sunday.

The HRD minister also announced that 'SWAYAM', an open web based platform from which 2000 courses will be run for students across the country, will be launched next month .

Referring to the Union Budget 2017, Javadekar said that it reflects the government's vision of raising quality in the education sector, which has got additional funds this time to the tune of Rs.6,000 crore.

He said that as per the Right to Education Act, learning outcomes are being defined and will be part of the coming academic session.

Another initiative is an innovation fund of Rs.100 crore for schools which will be introduced in educationally backward districts, he said.

He said a separate exam agency has also been announced which will conduct major exams, many of which are being conducted by an "overburdened" CBSE, he said. The CBSE's main focus is to look after school education.

Speaking about UGC reforms, Javadekar said that thrust is to give more autonomy to good institutes and "monitor mid-level and monitor more those in the lower rungs".

"Everybody would be incentivised to go upwards," Javadekar told reporters here.

Referring to the IIM Bill, which is expected to come up in the current Parliament session, Javadekar said it indicates the shape of things to come.

He referred to SWAYAM which is a MOOCs platform and said that it would become what ATM is for money.

"It will be any time learning and anywhere learning," he said while thanking Prime Minister Narendra Modi and Finance Minister Arun Jaitley for the budget provisions.



Federalism redefined ~ I

Gyan Ranjan Saha

Amartya Sen has remarked that before demonetising the high-value currency notes of Rs.500 and Rs.1000, the Union Government should have discussed the matter with the States (29 in all), and preferably obtained their concurrence. A similar sentiment has been echoed, rather vehemently, by one of the crusaders against the decision. Participatory governance may be a statutory requirement or else, a conventional imperative based on ethical considerations in certain circumstances. But for the former, there has to be a legal provision. He has not pointed out any such procedure laid down in law. As for the latter, it is, always and entirely, a normative issue and would be contingent on the political inclinations of the ruling party.

Further, if the Centre wanted the matter to be discussed and agreed to by the State Governments, it would have been impossible to achieve the objective. Consider the history of the enactment of the goods and services law. The Centre has been struggling to sew up the frayed ends of the proposed law for almost a decade and yet, there is no silver lining in the immediate future, despite the constitutional imprimatur of 1 September having been fixed as the time-limit. It is apparently proving to be a huge task; no one knows when it will be completed.

If the Centre had decided to embark on such an adventure, the demonetisation would never have materialised. There is another aspect which was highlighted by the Prime Minister on 8 November in course of his address to the nation. This relates to confidentiality. In the process of consultation with the state governments, confidentiality would have been the immediate and first casualty and the purpose of the entire exercise would have been defeated. As it is, there have been allegations that despite the cloak of secrecy maintained and the fact that just four civil servants were taken on board, certain vested sections of the political spectrum, allegedly, got wind of the imminent action to enable them to take precaution. Of course, nothing concrete by way of credible evidence has surfaced till date and the allegations of prior leakage, as is customary in such matters, remain in the realm of speculation.

It is also interesting to note that the word federal is not mentioned in the Constitution. This word has been interpreted in a subjective manner. It reminds us of the childhood story of six blind men trying to define the appearance of an elephant. Equally interesting is the fact that federalism continues to be the buzzword of those who are disgruntled because of the policies of the Union Government. In terms of Schedule VII of the Constitution, item No. 36, currency, coinage and legal tender are in the exclusive domain of the Union Government. There is, thus, no legal requirement for consultation and approbation of the state governments in matters connected with these items. Further, instead of issuing the currency or bank notes, the government has entrusted such tasks to the Reserve Bank of India. This again is subject to the conditions laid down in Chapter III, Schedule 22 of the same Act. It also needs to be mentioned that the law that established the Reserve Bank of India is a pre-independence legislation. Of course, there have been several amendments to the RBI Act since independence, but the delegation of the power to issue and manage the bank notes have not been materially changed. The decision to make changes in the bank notes as per this provision rests with the Union Government, which asks RBI to call the meeting of its Central Board, deliberate on the advice of the government, and send its recommendation to the Centre which in turn announces the decision to the people of the country. The person who can make the announcement is not mentioned in the law. The manner of announcement is entirely at the discretion of the government and cannot be questioned or be subject to judicial review.

We also need to consider if India meets the classical definition of a federal state. The state, as mentioned in the Preamble to the Constitution, did not volunteer to join the Union as happened in the historical federal polity of the United States of America. It has been the case of one sovereign transferring the reins of the country to another sovereign under a law passed in the legislature of the former. The states did not federate into a Union. It was to a lesser extent, the subsequent merger of the Princely States by separate legislative instruments. The economic and political relations between the Union and the States are well-defined in the Constitution. The specious argument that the subject of law and order comes within the domain of the states as per list II of Schedule VII has been used, almost indiscriminately, to criticise the decisions taken by the Union Ministries as being against the federal spirit of the Constitution. However, there can be any number of situations when such consultations may not be feasible or possible. The spirit of federalism cannot impede the Centre to move in the best interests of the country. In the case of a natural calamity or for security reasons, it is necessary to take immediate steps by the Union. If the Centre has to obtain prior permission of the affected State and the state government does not give the permission, then should the Union Government remain paralysed?

It seems odd that Prof Sen should advocate that the Union Government should have consulted with the states or at least obtained their concurrence. This leads us to the main issue sought to be discussed, namely, the redefinition of the concept of Federalism in the Indian context. Those who framed the Constitution did not invent the philosophy out of the blue. They were definitely inspired by the development of the theory to a large extent from the American experience. If one goes through the historical background of federalism in the United States of America, it will be noticed that it is not a strategy among the diverse contending political forces of the newly-set up states seeking ways to put in place a binding and permanent establishment of a strong, unified and progresive polity.

It acknowledged the competing and often, conflicting interests of the federating states and looked for an amicable and acceptable resolution of such claims and counter-claims. One needs to examine the Federalist Papers (85 in number) which three eminent constitutional experts and political leaders of the day, namely, Alexander Hamilton, John Jay and James Madison wrote and published in three newspapers, addressed, apparently, to the people of New York state under the common pseudonym ~ Publius. Charting the whole gamut of the constitutional structure and the philosophical underpinning of the new nation, they laid extra emphasis on the most controversial issues. These included Centre-state relations, inter-state relations and government formation. Surely, it would not be incorrect to assume that our Constitution framers were heavily indebted to them.

(To be concluded)

The writer is a retired officer of the Indian Revenue Service


Federalism redefined ~ II

Gyan Ranjan Saha

In the wake of demonetisation, a suggestion was floated by several state governments on the formation of a national government at the Centre. This would have signalled the death of the federal structure of governance which, ironically, has been advocated as part of their agenda for a long time.

Their brand of federalism has been advocated on numerous occasions. Most of the measures, adopted by the Union Government, are invariably regarded as anti-federal by their ministers. One may not find fault with such shenanigans if one grasps the political compulsions of the parties ruling these states. But an intermittent blitzkrieg of such out-of-the-box views is certainly not conducive to a stable and mature polity like India. There is a clear distinction between a federal and a national government as was pointed out by Alexander Hamilton in his essay.

A national government is essentially responsible to the people of the country irrespective of the political leanings of the constituent parties. A federal government, on the other hand, is accountable to the party which enjoys the majority in the legislature. The problem arises when one party has the majority in the Union legislature while different parties do so in the legislatures of the constituent states, as is the case at the present juncture.

More often than not, irreconcilable conflicts emerge where governance becomes the victim. The framers of the Constitution possibly could not foresee such a political logjam.

The US Constitution took care of such an eventuality by adopting the Presidential system where the President is elected by the people of the country directly with built-in constitutional checks and balances to prevent untrammelled exercise of authority by the President.

Unfortunately, the Indian experience is throwing up indefensible roadblocks in the way of a smooth working of the government. Added to the problem is the provision of a bicameral legislature at the Centre. Recent history suggests that except the money bills, it has become practically impossible for the executive to achieve its legislative agenda. A bicameral legislature under the Government of India Act 1935 could function as an effective system because of the overriding powers enjoyed by the Viceroy-in-Council. In the existing system, no such safeguard is available and so, despite having a majority mandate, the government is handicapped in getting its agenda passed through the respective Houses.

It is also necessary to examine the issues which unexpectedly arise in the process of governing Union-State relations as would be apparent if one traces the recent history of the country. For example, with the changes in the Union legislature brought about by the installation of a new government, the status of the Governors of the states who were appointed by the previous government becomes precarious when the new government starts the process of replacing them with their own nominees.

This phenomenon has assumed importance over the past seven decades, to the extent that the matter had to be referred to the Supreme Court for resolution. The controversy seems to resurface with every change in the ruling disposition at the Centre. The sensitive issue erupts at regular intervals when the need to choose and appoint officials for strategically vital slots arises. Despite an apparently workable mechanism in place, parties are often seen to be bickering over the selections. One keeps wondering if this is a healthy sign of a democratic set-up in the federal system of governance. A recent instance is the abolition of the Planning Commission.

It is nobodys case that the erstwhile entity was able to achieve the mission for which it was established. It gradually transformed itself into a gargantuan institution whose main raison de etre was to act as an alter ego of the Union Government and provide a waiting-room for superannuated bureaucrats and unelectable politicians. Yet, when abolished, it created an opportunity for some state governments to attack the decision on the ground of violating the federal system of governance. Also, consider the criticism of many decisions of the Defence Ministry taken in course of its normal line of duty.

For an efficient functioning of the various organs of the services, it is absolutely imperative for them to undertake manoeuvres and surveys from time to time in specific territories of the country. If such programmes are thought to be subject to prior permission of the state governments then the armed forces cannot be expected to perform at all. There may be occasions when a particular geographical area requires immediate movement of the forces as perceived by the Union Government.

Before undertaking such a task on an urgent basis, can the Central Government be hamstrung by the prior concurrence theory?

Two expressions have gained almost universal currency in the political discourse ~ cooperative federalism and competitive federalism. Even President Pranab Mukherjee referred to them while inaugurating the third edition of the Bengal Global Summit in Kolkata. The first concept would essentially mean a smooth relationship between the Union and the States. In reality, however, we have seen just the opposite. Most of the States are victims of a fortress mentality.

They leave no stone unturned to put a spanner in the facile working of the system. There have been personal attacks against the Head of the Union Government with aview to reap political dividends. Similarly, there have been efforts to project one state against another and the Union Government, to show ones achievements. This does not advance either cooperative or competitive federalism. They simply appear fanciful and untrue.

It is time for a relook at the federal system envisaged by the Constitution. Jawaharlal Nehrus famous expression ~ Unity in Diversity ~ has been devalued by the ominous trends in governance. The country is suffering under the personal ego of political leaders, bordering on narcissism, intense sectarianism, and chauvinism of language, caste, community, religion and provincialism. There is a strong urge towards and hope for a radical change. One wonders if the Founding Fathers had bargained for this metamorphosis of the nascent Republic.



HINDU, FEB 6, 2017

Congress brings out Uttarakhand manifesto

The Congress on Sunday released its manifesto for Uttarakhand which focusses on disaster management, infrastructure development, economic empowerment of women and stopping migration from the hills. The State goes to the polls on February 15.

Releasing the manifesto, Chief Minister Harish Rawat said the emphasis was on halting migration from the hills caused by an absence of employment avenues, economic empowerment of women and creation of basic infrastructure.

Congress in-charge of the State Ambika Soni, Pradesh Congress Committee president Kishore Upadhyay and Kumari Selja were present.

The manifesto has set a target to make at least 30 per cent of unirrigated land partially or fully irrigated over the next five years.

The disaster management mechanism will be strengthened by appointing five aapda [disaster] mitras in every village.

Employment opportunities will be generated in the remote hill areas through renewed emphasis on skill development of local youth to stop the exodus in search of work, the Chief Minister said.

The manifesto promises creation of new districts, development of infrastructure, boosting connectivity and building a modern Uttarakhand.

PIONEER, FEB 6, 2017


A day after the Bharatiya Janata Party released its vision document, the Congress released its manifesto in the presence of Congress state in charge Ambika Soni, partys assistant election in charge Kumari Selja and Pradesh Congress Committee president Kishore Upadhyay here in Dehradun on Sunday. Chief Minister Harish Rawat has promised that he would stop migration by 2020 and will create employment opportunity by 2022 so that people would return to their village from urban areas. He also promised that if elected, the Congress government would distribute pressure cooker to each household and free smart phone with internet connectivity and calling for next one year.

If elected, the Congress government would lay emphasis on disaster management, infrastructure development and economic empowerment of women. With this manifesto, which Rawat has termed a pledge and roadmap for the party led government, Congress has tried to get associated with each class of the society.

He further said that so far SC/ST are getting reservation in job but now they would give reservation in commercial activity as well. It means in each tender 15 percent work will be done by the SC/ST in the state. He also promised that if the Congress is voted to office then he would provide wheat to APL card holder @ Rs four per kg which will be further reduced to @ Rs two per kg by 2018. State would distribute Rs 2500 per month as unemployment allowances to all unemployed youth between age group of 18-25 in next 100 days. Government would set up chief minister office at Gairsain and CMO would be functional for one week in each month.

To woo the ex-servicemen he promised that government would create cooperative committee on the pattern of eco-task force, which would comprise of the block domicile ex-servicemen or ex-para military forces and it would be led by ex-servicemen only. The government is committed to include the servicemen, who have either taken VRS or were relieved before completing 15 years of service on medical or other grounds, will be included under One Rank One Pension (OROP). The Congress government would focus its first two years on soliders, youth and women empowerment. One high school or intermediate school will be converted into residential school in each block of the state. Government would provide free wi-fi service in each college and university of the state. Government would also shift the hazardous overhead power lines from where people have built their homes on priority level. Government would introduce health insurance and accidental insurance for all the advocates and 50 percent of its premium would be paid by the state.

He also promised that their government would lay emphasis on agriculture. Around 30 percent unirrigated land will be provided irrigation facility or 50 percent would be brought under irrigation system in next five years. Replying to a media query about chief minister Harish Rawat already having unveiled a nine-point pledge about eight days ago and how would it be different from that manifesto, Rawat said that the nine points was signage and signage itself speaks that it is beginning of the road.

For women voters, the Congress has promised that it would provide subsidised cylinder to the women so that they would get rid of smoke which they have to face while cooking food without LPG. For women in the BPL category, Congress party government would provide financial help to build kitchen or upgrade their existing kitchen upto Rs 25,000.

Attacking BJPs vision document, which was released by union finance minister Arun Jaitley, Rawat said that their document is copy of their (Congress) work. He also thanked them that by including their schemes into the BJP manifesto they have ascertained Congress work.

Sarcastically he said that after 16 years of Uttarakhand state being created, the BJP has released a vision document but state needs roadmap and the Congress has given a roadmap to the people of Uttarakhand. Replying to a query on how the government would mobilse money to meet these committed expenditures, the CM said that we have been working form the beginning to mobilise our own resource and will be able to channelise at least Rs 3000 crore additional money.

Appreciating the manifesto, the Congress state in charge Ambika Soni said that it is appreciable that they have compiled it as a party pledge.


TRIBUNE, FEB 7, 2017

The Trump Reality Show: US President breeds ill-will and illiberalism

Within two weeks of his installation as the President of the United States Donald Trump has breathtakingly managed to offend conventional sensibilities at home and disgust decent voices all over the world. His ban on all refugees and travellers from seven Muslim-dominated countries has, understandably, evoked criticism domestically and disapproval from almost each one of American allies and friends. That ban order has now run into judicial difficulties but that has not prevented President Trump and his surrogates from growling and snarling at the judges. He seems to be totally unwilling to submit himself to the constitutional stipulations of restraint, including judicial scrutiny of executive actions.

Though he has rightly refused to judge President Putin of Russia, Donald Trump has been prone to be provocatively boorish in his interactions with foreign leaders. His telephonic conversation with the Australian Prime Minister, Malcolm Turnbull, was over-spiced with arrogance; no leader, even if he happens to be the President of the United States, has any business to conduct himself so presumptuously with another Head of Government. President Trump has already had nasty exchanges with the Mexican President. Protocols and proprieties in international behaviour are not empty rituals and do serve the purpose of deepening civilised conduct. Influential voices in Germany and France are already urging their leaders to stand up to Trump and his bullying habits.

From prescribing dress codes for his female staff to telling publicly Arnold Schwarzenegger how to conduct a reality show, the President is just being himself impulsive, abusive and reckless, and ever ready for a Twitter combat. For now his antics are generating dismay and amusement. Those who had hoped that responsibilities of the new office would sober him up are disappointed. After all, the US presidency is conducted in the open with almost daily negotiation with the Congress (even when both Houses are controlled by the Republicans), the judiciary and a combative media. But the President is happy calling, almost daily, media names. His take-no-prisoners demeanour is bound to beget divisions, bitterness and partisanship at home; more ominously, his anti-elite rhetoric is likely to encourage illiberalism abroad.

ASIAN AGE, FEB 6, 2017

Sasikala Natarajan to take over as Tamil Nadu Chief Minister


Once sworn in, Sasikala will be the third woman CM of the state after Janaki Ramachandran and J. Jayalalithaa.

Chennai: Two months to the day that charismatic J. Jayalalithaa passed away after suffering a cardiac arrest, V.K. Sasikala, the formers close aide for 30 years, was on Sunday unanimously elected AIADMK legislature party leader, replacing incumbent O. Panneerselvam. Ms Sasikala is likely to take the oath as chief minister of Tamil Nadu on February 9.

The much-awaited meeting of the AIADMK legislature party resolved to hand over the CMs mantle to 61-year-old Sasikala, who came into contact with the late Jayalalithaa in 1983.

Her election brings back a long-held tradition in the party by which both a single person leads both the party and the government.

Interestingly, outgoing chief minister O. Panneerselvam, who had stood in for the late Jayalalithaa twice due to court cases and was sworn in after her death on December 5, proposed Ms Sasikalas name for the top post in the state.

Once sworn in, Ms Sasikala will be the third woman CM of the state after Janaki Ramachandran and J. Jayalalithaa.

I, O. Panneerselvam, Tamil Nadu CM and AIADMK treasurer, propose a resolution to elect Chinamma as leader of the AIADMK legislature party. I propose the resolution since we all feel that the head of the party and the government should be one and the same. And I have resigned as chief minister, he told the meeting, amid thunderous applause from the legislators.

As Mr Panneerselvam, who held discussions with Ms Sasikala at the Poes Garden residence before the crucial meeting, moved the resolution which was passed unanimously, AIADMK cadres outside hall the went into celebratory mode, bursting crackers and distributing sweets. Ms Sasikala later said it was my dear brother Panneerselvam who had first proposed that I should take over as the CM and party supremo.

The AIADMK government will follow the principles of Amma. We will always work for the welfare of the people, she said.

I was not in a position to accept the request (by OPS) and I agreed to take over as party supremo only after repeated requests from the partymen. Every partyman who met me during the last two months insisted that I should take over as the CM. Left with no option, I decided to heed to the request, she said.


PIONEER, FEB 7, 2017


Sandhya Jain

The Finance Ministers revision of income tax slabs to reduce honest taxpayers burden, is in the fitness of things. Overall, the Budget is unexciting; the most redeeming feature is the absence of nasty surprises

The suspicion of many salaried professionals that successive Governments have extracted unduly high taxes from those considered sitting ducks (persons in the formal economy with no escape routes), was vindicated, but not ameliorated, in Union Finance Minister Arun Jaitleys Budget speech of February 1. A reconsideration of income tax slabs to redeem the Prime Ministers campaign pledge to reduce the burden of honest tax payers would be in the fitness of things.

Since independence, when income tax was first imposed upon citizens, tax evasion has been a way of life for many. Demonetisation was to bring all sectors of the economy into the banking sector, and the tax net. While it is premature to expect the figures of those who should be paying taxes post-demonetisation to reflect in the Budget speech (which would have been under finalisation while demonetisation was underway), a much wider tax base is expected to materialise during the financial year 2017-2018. Hence, a more generous tax structure was a legitimate expectation.

Some information that has recently come into the public realm deserves notice. The Finance Minister pointed to discrepancy between rising car sales and growing number of Indians travelling abroad, and the paltry number of high income taxpayers. He observed, Of the 76 lakh individual assessees who declare income above five lakh rupees, 56 lakh are in the salaried class. The number of people showing income more than Rs 50 lakh in the entire country is only 1.72 lakh. We can contrast this with the fact that in the last five years, more than 1.25 crore cars have been sold, and the number of Indian citizens, who flew abroad, either for business or tourism, is two crore in the year 2015.

It follows that the number of assessees in the financial year 2017-18 must rise from 76 lakh to at least two crore, which too is paltry for a country of Indias size and economy. Unless the entire population is below poverty line, it is a safe bet that at least five per cent should be high net worth individuals (annual income above Rs 50 lakh), at least 30 per cent middle income bracket and at least 30 per cent entry level tax bracket (at existing exemption levels). That leaves roughly 35 per cent, which includes the poor and marginal, unemployed, youth/students and the exempted farm sector (including rich farmers).

Financial planning that does not think in such broad strokes will never control or kill the black economy. The Finance Ministry will have to dig deeper, collate data from each sector, to make us a truly tax compliant economy.

Jaitleys observations are well known. Complaints about the growing number of Government employees, whose families were taking tour packages to destinations like Singapore, Hong Kong and Dubai, and returning laden with goods, had prompted the then Finance Minister P Chidambaram to put such persons on a watch list. Things do not seem to have improved much since, but the post-demonetisation scenario must change dramatically.

Revenue secretary Hasmukh Adhia has revealed that over two-thirds of the demonetised currency deposited in banks, roughly Rs 10.38 crore, came from deposits of over two lakh rupees. As Government had initially said the income tax department would not trouble people depositing up to Rs 2.5 lakh into their bank accounts, many made deposits of around Rs 2.25 lakh, in multiple accounts. Many accounts were operated against a single PAN number. However, the exemption limit of Rs 2.5 lakh per individual was mainly intended to cover the genuine savings of housewives.

A far greater scrutiny of shell companies is warranted. Recently, a cash deposit of six crore rupees in a bank account unearthed a huge Internet scam by a Noida-based firm. As Uttar Pradesh police arrested three top employees of the company, who had duped nearly seven lakh persons by promising handsome returns for clicking on certain web links, tax authorities discovered that the firm was not doing any real business, but was luring investors (who paid thousands of rupees to join the scheme) and rotating their money. The firms turnover jumped to Rs 3,700 crore in 2016-17, from just Rs 26 crore the previous year. There would be thousands of such companies across the country, which can be unearthed with due diligence.

The Budget has reduced tax on income between Rs 2.5 lakh and five lakh rupees from the present 10 per cent to five per cent, and slashed the rebate of Rs 5,000 on income between Rs 2.5 lakh to Rs 3.5 lakh to Rs 2,500. Thus, for income up to three lakh rupees, tax would be zero and those earning Rs 3.5 lakh would pay Rs 2,500. Those earning above Rs 3.5 lakh would save Rs 12,500 in tax a niggardly concession. Ideally, the exemption limit should have been raised to five lakh rupees, as suggested by some columnists, and subsequent slabs revised upwards.

This would put more purchasing power in the hands of citizens, stimulate spending, and bring some much-needed buoyancy into the market. At a time when all citizens are being coaxed into the tax net, a tax of 10 per cent for income up to Rs 20 lakh, 20 per cent for income up to Rs 50 lakh, with surcharge for income over one crore rupees, would better meet the needs of the economy and be fair to compliant citizens.

The reduction of presumptive income tax for small and medium trades/businesses with a turnover of up to two crore rupees, from eight per cent of turnover to six per cent in respect of turnover received by non-cash means, is needless nitpicking. Bifurcating turnover into cash and non-cash will inconvenience traders and customers. Instead, market associations should ensure that every shop makes sales by computerised billing only.

Finally, the Finance Minister promised to cut corporate tax from his first Budget. But in the fourth Budget, tax has been cut from 30 per cent to 25 per cent only for companies with a turnover of Rs 50 crore (this reportedly benefits 96 per cent companies). Yet it is the remaining larger companies that pay the bulk of taxes and were looking forward to the promised reform.

This exemption could have been shared across the board as one objective was to enable Indian firms to compete with their Association of Southeast Asian Nations (Asean) peers. Presently, companies benefitting from the reduction do not typically compete with Asean firms. Overall, an unexciting Budget, whose most redeeming feature is the absence of nasty surprises.

(The writer is a political analyst and an independent researcher)


Budget that ignores people's distress

Bharat Dogra

At a time when there was compelling need for a bold and path-breaking budget to bring relief to tens of millions of people adversely affected by demonetisation, the NDA government has come up with an ordinary, business-as-usual budget which fails to meet expectations of people and the needs of the economy in very critical times. The people have been repeatedly assured of light at the end of the tunnel but they have failed to see it after the much-publicised 50 days. Even after the presentation of the budget this light is not visible.

Within the existing paradigm of development and government programmes, a significant increase in the MGNREGA budget would have been the most obvious and convenient-to-implement budgetary provision for providing relief to villagers as well as those urban workers who have been forced to return to their villages as a result of demonetization related disruption. The available data and other evidence also points to much greater demand among people for work under MGNREGA in the aftermath of demonetisation.

But all that the budget had to offer was a very modest rise compared to the actual expenditure in the previous year, and even this modest increase may prove to be a false one once we take into account the pending wage payments.

Yet another area where it was relatively easy to provide relief was in increasing the allocation for providing pensions to elderly people from weaker sections, including widows and disabled people. This subject has been widely discussed and significant levels of help have been found to be within manageable limits of fiscal options. A few states have even been able to make significant breakthroughs on their own.

The elderly have suffered quite a lot due to demonetisation. Increasing pensions for them as well as increasing the number of beneficiaries directly would have helped them and their families. But this very practical and convenient way of providing relief has also been denied to people.

The situation was also appropriate for some well thought-out debt relief for farmers. This also has been much discussed and, learning from past mistakes, an improved version of debtrelief would have served a useful purpose in view of the recent accentuation of distress. Farmers may well be asking in the context of widely anticipated relief - if not now then can we ever expect relief from you? Attractive promises of doubling income will hardly provide consolation to farmers whose recent experience has been of increasing hardships.

Significant increases in budgetary provisions for several social sectors, particularly public health have been long overdue and this need became all the more pressing in the aftermath of demonetization.

Improvement of publi health and education can help to reduce the distress of people. But the wait for these badly needed increases has just become prolonged after the presentation of the budget for 2016-17. This is not to say that there are no good initiatives in the budget proposals.

The announcement of special campaigns against Kala azar, TB and leprosy can open up new hope as can the special scheme for villages affected by excess of fluorides and arsenic in their water supply. As leather and textiles in particular have been very adversely affected by demonetisation, the announcements of revival and relief for these industries are welcome, as are some wider announcements for helping small and medium scale units. But these few good provisions fall short of the much wider initiatives that were needed.

These initiatives were needed on the one hand for providing short-term relief to tens of millions of distressed people and on the other for bringing such stability in economy as was needed for restoration of disrupted livelihoods.

However such hopes have been shattered by a very ordinary budget which shows no signs of even trying to live up to the special responsibilities of the present times. This attitude is in keeping with the self-denial mood of the Union Government towards the widespread distress it has inflicted on people.

Instead there are many signs and warnings that the distress and disruption caused by demonetisation may be prolonged, particularly if the external situation also gets adverse on fronts like increasing import bill of oil and reduced earnings from IT exports.

From the perspective of common people and particularly the weaker sections, therefore, there is need for increasing unity of people particularly farmers and workers for asserting and protecting their livelihood rights.

The writer is a free-lance journalist who has been involved with several movements and initiatives.


Budget fails to meet expectations

Coming after a disruptive measure to demonetise high value currency notes, leading to a painful nearly three-month period of decline in economic growth inflicting unexpected difficulties, the Union Budget was expected to bring significant relief to all, including industries, enterprises and individuals. But the 2017-18 Budget of the Narendra Modi government does not really provide any great relief. However, Finance Minister Arun Jaitley, to some extent, has tried to soothe the painful experience of the note ban that people went through from November 8, 2016 when the government announced it. The minister has provided 24% higher resources of Rs 1.87 lakh crore for rural India, which suffered the most because of the cash ban. Small and medium enterprises, yet another victim of demonetisation, have been given a positive discrimination of a 5% cut in tax, though wider expectation of 25% corporate tax from 30% was belied.

There was, however, a great relief that exemption from the long-term capital gains tax (LTCGT) on shares would continue. In the midst of building a popular support for the currency ban, Modi had indicated the possibility of LTCGT on equity, unnerving the markets. With the general Budget subsuming the Railway Budget, the effort is to integrate different modes of transport, including roads and shipping into an efficient infrastructure, for which a combined sum of Rs 2.41 lakh crore has been provided for. Even as there were expectations of a game-changing Budget, advanced with the objective of improving quality of government expenditure, some analysts had the lurking fear whether a reckless streak could creep into those holding keys to the exchequer. With a small deviation but sticking to 3.20% fiscal deficit, the finance minister has maintained financial discipline which should go well with the global rating agencies, always keeping an eagles eye on government finances.

There is not much for the middle class in the Budget. Jaitley has disappointed the salaried and pension class tax payers. The lower middle class will get some relief as they pay less income tax, virtually nothing up to Rs 3 lakh income. As regards political funding, proposals make them transparent and limiting cash donations are welcome efforts towards curbing black money. The net giveaways in direct taxes amount to Rs 20,000 crore while there are no implications for indirect taxes. Given that a bigger uncertainty over the impact of the impending Goods and Services Tax both at the Centre and state levels looms large, a key question remains whether the assumption of over 11% nominal GDP growth for over 15% tax expansion would come true. If these assumptions, including an ambitious disinvestment target of Rs 72,500 crore go wrong, the finance minister could have problems going forward.


Budget 2017: Jaitley goes in for a degree of populism

Pulin Nayak

A large number of initiatives have been proposed in the budget. Like in the past years budget, the government has again stated its commitment to double farm incomes in five years time(REUTERS)

At least three factors make this years budget somewhat unusual. This is the first budget to have been presented a full month in advance, on the first rather than the last day in February. Secondly, there has been no separate rail budget this year, a tradition that went back to 1924, and this years rail budget was subsumed within the general budget. Finally, the budget comes in the aftermath of the demonetisation drive that brought about a serious break in the growth momentum.

Union finance minister Arun Jaitley covered a very wide ground in his long budget speech in the Lok Sabha . There was a sense of purposive action on several fronts. Jaitley has focused specially on farmers, rural employment, poverty alleviation and infrastructure development. A large number of initiatives have been proposed. Like in the past years budget, the government has again stated its commitment to double farm incomes in five years time. The coverage under the crop insurance scheme is to be increased. The highest ever allocation of Rs 48,000 crore has been made for MGNREGA. All of these measures should be welcome, especially in a situation where there continues to be reports of considerable distress in the farm sector.

Coming to the tax proposals, the minister has proposed a tax cut for small and medium scale enterprises to 25%. This is expected to benefit 96% of the Indian SMSEs. Personal income tax rates in the Rs 2.5-5 lakh slab has been cut to 5%, but there is a surcharge of 10% for those with income between Rs 50 lakhs to Rs 1 crore. The 15% surcharge for those with incomes above Rs 1 crore remains. All of these measures indicate a degree of populism, and the only justification could be that it would help the bulk of the low end income tax assesses. It is also possible to argue that the smaller companies needed some relief in a setting where the performance of the industrial sector has been lacklustre in recent times.

There had been a lot of hype before the budget for a lowering of personal income tax rates across the whole income range. Contrary to popular opinion, Indias personal income tax rates, with a 30% top marginal rate, are not particularly high by international standards. The top marginal tax rates in the US, UK and major European countries are higher. As is well-known from public finance theory, what one should aim for is moderation in tax rates and a widening of the base.

From the figures of car purchases and foreign trips made by Indians last year as mentioned by the minister, one should expect much higher numbers of potential income tax assesses from the 3.7 crore we have at the moment. The need of the hour in the Indian context is base widening. It is therefore good that Jaitley has not pandered to any reduction in the top marginal tax rates.

We now come to the overall growth picture. It is already apparent that the GDP growth rate would be less than the rate of 7.1% forecast earlier by the Central Statistical Organisation. The Economic Survey observes that the demonetisation measure could possibly reduce the 2016-17 growth rate by 0.25 to 0.5 percentage points compared to the baseline of 7%. This could take the present years growth rate to as low as 6.5%.

Last years figure of 7.6% had placed India as the fastest growing major economy of the world. Why the prime minister should have dragged the economy onto the demonetisation path, bringing in its wake job losses and a serious slowdown of the economy must remain a deep conundrum. Both the Survey and the budget speech try to offer a rationalisation of the measure, but they lack conviction.

The demonetisation measure was originally supposed to bring out the black income and counterfeit currency. It was soon found that this rationalisation was untenable, and the discourse was altered to argue for a cashless economy. There appears to be a delusional presumption that going cashless is inherently better than having a normal cash based economy. There is nothing in economic theory that suggests that having a cash economy is in any sense problematic. Adam Smith believed that the propensity to truck, barter and exchange is inherent in human nature. If cash facilitates this process there can be no case for discouraging its use.

It is important to state here that budget making is a mammoth and complex exercise in which a huge amount of effort goes in by the varied arms of the government. A perusal of the Economic Survey reveals a substantial and commendable effort at analysing the key developmental issues confronting the Indian economy. There is, for example, an interesting analysis of internal migration in India using railway passenger data. It is shown that almost 9 million workers migrate each year in search of better job opportunities. The Survey also shows that there is a high level of internal trade in goods, and contrary to expectations, India trades more than China.There are major issues pertaining to poverty alleviation and expenditure on the social sector. Public expenditure on health continues to be a paltry 1.3% of GDP. The investment scenario in the private sector is weak and there is a major need for the government to step up public investment, particularly on rural infrastructure. At the end of the day it would be important to see how the budget is able to make a difference to the sagging industrial sector, and the alarmingly low rate of job creation. The budget appears to be weak on these issues.

Pulin Nayak is a former professor of economics, Delhi School of Economics The views expressed are personal


Some high spots- A budget sans surprises, with space for lower and rural incomes

Ashok Sekhar Ganguly

The annual speech on the Indian budget by the minister of finance is usually, presented to the Lok Sabha on the last day of February. This year, the budget was presented on February 1. A novel feature in this years budget is that it subsumes, for the first time, the annual request for grants of the Indian railways into the national budget. The level of anticipation regarding the finance bill builds up during the weeks preceding the budget in the Indian media, and growing numbers of expert-speak programmes and analyses continue while the budget speech is being delivered by the finance minister in the Lok Sabha, as well as for several days after the budget has been presented. The time devoted to and the intensity of expert analyses and comments that the Indian annual budget generates are of a magnitude not witnessed in most other countries.

On the other hand, what the common men or women actually feel about the impact of the budget on their daily life, remains a dark space.

Therefore, once in a while, it is interesting to assess what the budget means to a common citizen.

The finance ministers budget speech needs to be judged in the background of events of the last one year as well as of some legacy issues of the Indian economy.

In this context, the event which stands out is demonetization. Its suddenness and impact on the lives of every citizen can be best described as unprecedented. Furthermore, how the consequences will unfold remains uncertain even in its fourth month. The huge amount of data available with banks on the return of old 500- and 1,000-rupee notes is expected to provide quantitative information regarding unaccounted for wealth. The immediate impact of the slowdown of economic activity, domestic consumption, new investments and so on is already being felt. While India remains the leader amongst emerging economies, the outcome of demonetization, in the foreseeable future, remains hazy.

The major initiative to move towards a less cash and more digital transaction-based system is bold as well as challenging.

The good news is that there is now a light at the end of the tunnel, because of the introduction of the goods and services tax in Indias daily transactions. This will have a major influence on Indias indirect tax regime, and, hopefully, on the ease of doing business. Over and above this is the finance ministers announcement of the proposal to abolish the foreign investment promotion board that should significantly enhance the ease of investing and doing business in India. This is rather significant, given the uncertainties of the emerging hurdles to Indias international trade and commerce.

Furthermore, the 2016-17 kharif agriculture growth has been very good, preceded by two years of drought, although the scanty winter rains in the southern states may impact the rabi agriculture production.

One of the important and persistent challenges is that Indias attractive economic growth record is not matched by the numbers of new jobs being created to meet the escalating demand for jobs. The social and economic problems this mismatch creates are not to be underestimated.

In this background, the budget proposals presented yesterday may be thought of as being moderate to encouraging, particularly considering the forthcoming state elections. The highlight, in summary, can be described as its being more rural oriented, while providing attractive incentives to the micro, small and medium enterprises sector to aggressively expand in numbers, and tax relief to those in the medium and low income category. The two surprises were, as mentioned earlier, the proposal to abolish the FIPB, and the other was regarding political funding. It may be worthwhile to reiterate some of the key aspects of the finance bill, which was placed on the floor of the Lok Sabha yesterday.

The proposal to usher in transparency in political funding limits the maximum cash to Rs 2,000 per individual donor. This has to be paid either digitally or by cheque. There is also a proposal to introduce electoral bonds, which could be purchased from banks.

Individuals with an annual income of five lakh rupees or less have their income tax reduced to a maximum of five per cent with a sliding step at lower levels. In the income tax bill, there is no other change in the higher income brackets, except that income between Rs 50 lakh to one crore will attract a surcharge of 10 per cent. The preamble to the personal income tax proposal was the highlighting of the low number of individuals who pay income tax in India, while there are a fairly large number of high net worth Indians. The government expects that, following demonetization, the massive data collected by banks will provide a wealth of information on tax avoidance from the deposit and exchange of the old 500- and 1,000-rupee notes.

The ongoing schemes for low income housing have become popular and the proposal is to extend the scheme.

There are a number of schemes specifically aimed at the rural sector with particular attention to people below the poverty line. The increase in allocation to schemes under the Mahatma Gandhi National Rural Employment Guarantee Act emphasizes the building of durable assets, and a scheme to achieve total electrification by 2020. While listing schemes to improve productivity in the farming sector, there was no mention of the highly anticipated debt relief for farmers. In addition, it was also expected that specific schemes for the supply chain from farm to consumers would be modernized; one needs to seek details from the text for this. There is a proposal to significantly enhance support for the girl child and for mothers as well as anganwadis.

The period for capital gains, derived from land and building, is proposed to be reduced from three to two years. The period for scrutiny of tax assessment is proposed to be reduced from 21 months to 18 months by 2018-2019 and to 12 months from 2019-2020.

There is a proposal to recapitalize banks and schemes to deal more purposefully with non-performing assets. In this context, the government proposes to enact a new law to confiscate assets of defaulters and enforce more stringent debt recovery procedures.

This is the first budget since 1924 where the allocation for the railways is part of the finance bill. The principal item is the allocation of one lakh crore of rupees as a fund, dedicated to the upgradation of rail and passenger safety.

Amongst other highlights was the mention by the finance minister that the concept of plan and non-plan expenditures is being abandoned.

He also announced the provision for the long overdue reform of the University Grants Commission.

There were no specific issues raised regarding indirect taxes. It is expected that these will be a part of the GST when it is introduced.

In summing up, one may consider the 2017-2018 budget as one without surprises, weighted towards those in the low income bracket and those engaged in farming. The emphasis on fiscal prudence is worth noting. The impact of demonetization on the revival of industrial growth, investment in manufacturing and infrastructure as well as high expectations from less cash and more digitization and employment generation needs to be watched closely and with great care.

At the end of the day, the devil is in the details.


Finance minister Arun Jaitley has not gone in for a big bang budget

Subir Roy

Every budget has a historical context. The one for 2017-18 came after the pain inflicted by demonetisation, which is expected to shave 0.5-1% off the growth rate. There was wide expectation that the budget would come with a feel good factor that would take away some of the pain of demonetisation. That has not happened.

On the other hand, the budget has scrupulously trodden the responsible path, kept a firm rein on the fiscal deficit and done nothing that might stoke inflation. Of course, Prime Minister Narendra Modi had pre-empted Union finance minister Arun Jaitley by announcing some goodies at the turn of the year (the budget speech mentions them) leaving that much less for him to dole out. Hence, Jaitley has carefully chosen and measured out the giveaways. He has, as is his wont, gone in for incremental progress and not dramatic assertiveness through a big bang approach.

For demonetisation to lead to some permanent good it is important to strike at the roots of corruption, the role of black money in elections. The budget has done this by sharply reducing the ceiling on individual unaccounted donations (these by their very nature are in cash) from Rs 20,000 to Rs 2,000. This is good as far as it goes but not good enough. What prevents a political party from getting around the same amount of unaccounted donations by claiming a quantum jump in the number of donations? Why has no ceiling been fixed (say 2% of total inflow) on receiving unaccounted donations? So the budget does not contain a final answer as to whether the government is serious about curbing the role of black money.

The traditional critique of Indias high growth phase is to ask: To what purpose is it? Despite lower income levels, neighbouring countries like Nepal and Bangladesh have forged ahead of India in terms of the quality of peoples lives as reflected in human development indicators. With the growth rate becoming a bit subdued, it is even more important to ask what the budget has done to help bump up Indias poor human development indicators.

This directs us towards social sector spending. Allocation for the rural employment guarantee programme is up by a hefty 25%, the health budget is up 24%, but allocation for the mid-day meal is up by a mere 3% and zero or negligible additional allocation for the drinking water programme and pensions for the poor. The positive view is this is a mixed picture. The negative view is that, considering the low share of the social sector in overall government expenditure, dont expect the budget to seriously boost the effort to improve human development indicators.

One reason for the disconnect between income growth and quality of life is inequality of income. The GDP has been growing fast but the poor havent got to see much of it. The budget does take a minuscule step towards redistribution of income between the not-so better-off and others. If your income is up to Rs 50 lakh then you gain by way of paying less tax. But if you are in the Rs 50 lakh-Rs 1 crore bracket, then you are a loser. So far so good but if your income is over Rs 1 crore, then also you gain. Is there a method in this?

Where the budget does strike a blow in favour of the poor is by making the environment for low-cost housing so much better. A critical way in which house buyers suffer is by apartments being sold based on built up area and not carpet area. By defining the sector in terms of carpet area, the government has expanded the universe of low-cost housing by 30%. The sector is being given infrastructure status, thus lowering the interest rate that developers of such housing have to pay for bank loans. The initial tax holiday for builders in low-cost housing has been raised from three to five years. Plus, the allocation under the Pradhan Mantri Awas Yojana has been hiked by a sharp 50%.

It is now vital for all three layers of government to take this forward and make it worthwhile for people to move into modern pucca houses by providing the necessary infrastructure electricity, roads, drinking water, sewerage and broadband Internet. The smart city programme should pay special heed to creating a positive environment for low-cost housing development.

There are enough successful builders focusing on low-cost housing to establish it as a viable sector for private capital to go into. Since the defining limit for low-cost housing is twice for all areas except the municipal limits of Indias four metros, a revolution can now happen in urban and peri-urban India. If this came about then a spin-off benefit would be new jobs, created by the accompanying construction boom.

We began by noting that Jaitley has been careful to keep the central governments fiscal deficit under control. But the catch is that it continues to exploit the cess and surcharge route to raise more tax revenue, even as it lowers the nominal income tax rate, thus depriving the state governments of their due share of tax revenue. This goes poorly with the central governments declared aim of taking forward fiscal federalism under which it expects the states to do their bit for the social sector.

Subir Roy is a financial journalist and has also worked in the SBI

The views expressed are personal

TRIBUNE, FEB 2, 2017

An incremental budget: Welcome thrust on rural infrastructure

The Union Budget for 2017-18 is in line with the BJPs changed political stance of wooing the poor and shedding its suit-boot-ki-sarkar image. The Modi government has changed track and turned to the side where the numbers are the poor, farmers and the middle class which makes sense electorally. This is what every party tries to do look credible on welfare and capture the constituency of the deprived. Congress and BJP budgets frequently look similar. How to deliver the dole is the real challenge and the switchover to a technology-based foolproof system is being unnecessarily delayed.

Indias economy moves mainly on four wheels-government spending, consumption, exports and private investment. This Budget focuses only on the first two. Exports have lost momentum due to a slowdown in Europe and the US. The situation can only worsen as Western leaders, including President Trump, increasingly turn protectionist. The windfall from oil has gone into refurbishing the government finances and good times may end if crude prices keep inching up. Indias companies, even the cash rich, are not investing here or abroad. Bank credit offtake is at its lowest in decades. Jaitley has pumped more money into banks. He had no option other than stimulating demand with government expenditure.

Welfare carries its costs: more government, more taxes. Worse, the extended hand does not reach the needy. Since infrastructure is still not ready for direct cash transfers, the leaky system persists to the advantage of the vested interests. Poverty reduction efforts have drained the exchequer over the years. Competitive populism has led to cuts in funds for educational and health institutions which the poor access. It is not enough to say farmers' income will be doubled in five years without answering how and when. Incomes can rise if either farm inputs cost less or farm products fetch higher prices. The government is showing them the way to new markets. Job creation through MNREGA is welcome but Jaitley need not take much pride in making the highest-ever allocation for this UPA scheme. Instead the focus should be on plugging the leakages. MNREGA, say critics, is a needless burden on the taxpayer and a 2013 government audit found fault with its implementation.

Ideally, in keeping with economic reforms, the government should limit itself to taking care of essentials like education, health and infrastructure and make institutions deliver. Every rupee of the taxpayers money must be accounted for. Modi has abandoned his idea of a minimum government. A lean efficient government with vibrant institutions is possible but no party, it seems, needs it as there are activists to adjust and the downtrodden to look after. Why it should take this long to scrap the FIPB (Foreign Investment Promotion Board) is a mystery. States have many such white elephants that feed on limited resources.

Despite a questionable government approach the budget has a lot to commend itself. The budgets rural, MSME, housing and infrastructure thrust would hopefully perk up consumption and employment generation. The grant of infrastructure status to affordable housing will help lower the costs for builders and attract buyers, while the steps to reduce the capital gains tax for property sellers may wake up the sleepy real estate sector. Individuals and MSMEs have been granted tax relief, possibly to compensate them for the pain of demonetisation, inflicted suddenly and thoughtlessly on an economy running smoothly. What is not broke need not be fixed.

Honest taxpayers and tax evaders should be treated differently. It is not enough to talk about a law to seize assets of economic offenders. Make it happen. Some states have already taken the lead. The drive against black money has kept a window open for political parties to let in nameless contributions. The 2,000 limit is open to as much misuse as the one for Rs 20,000. Jaitley has shied away from cleaning up an area notorious for peddling black money. There is a known route of laundering unaccounted cash through P-notes which remains unplugged.

Vote politics has weighed on priorities. Jailtey has not hurt any section but lost an opportunity for hard decisions. It is an incremental, more-of-the-same budget that does not inflict pain on anyone and is fiscally sound but falls below expectations of those looking for something transformative. Unexciting, Mr Jaitley.



No service fee for rail tickets booked through IRCTC

To promote digital transactions, the service charge on e-tickets booked through IRCTC has been withdrawn. Announcing this in the General Budget, Finance Minster Arun Jaitley said cashless reservations have gone up from 58% to 68%.

The government had earlier announced the withdrawal of services charges from November 8 to March 31, 2017, following demonetisation. Now the government wants to permanently withdraw service charges.

The minister also said the Railways will implement end to end integrated transport solutions for select commodities through partnership with logistics players, who would provide both front and back end connectivity.

Rolling stocks will be customised to transport perishable goods, especially agricultural products. As part of accounting reforms, accrual-based financial statements will be rolled out by March 2019, Jaitley said.

Tariff of the Railways would be fixed, taking into consideration costs, quality of service, social obligations and competition from other forms of transport, the minister added.



Budget 2017 proposes a fee for delayed filing of income tax return

Individuals having taxable income up to Rs 5 lakh can just fill up a simple one-page form for filing their tax returns.

NEW DELHI: Taxpayers who do not file their Income Tax Returns (ITRs) on time will have to shell out a penalty of upto Rs 10,000, but from the 2018-19 Assessment Year (AY).

"In order to ensure that return is filed within due date, it is proposed to insert a new section 234F in the Act (I-T Act) to provide that a fee for delay in furnishing of return shall be levied for assessment year 2018-19 and onwards in a case where the return is not filed within the due dates specified for filing of return under sub-section (1) of section 139," the memorandum for the Finance Bill 2017 said.

It specified two levels of penalty in this regard: "A fee of five thousand rupees shall be payable, if the return is furnished after the due date but on or before December 31 of the assessment year and a fee of ten thousand rupees shall be payable in any other case."

However, for small taxpayers or where where the total income does not exceed Rs five lakh, it is "proposed that the fee amount shall not exceed one thousand rupees."

The memorandum said the decision was being taken "in view of the non-intrusive information-driven approach for improving tax compliance and effective utilisation of information in tax administration it is important that the returns are filed within the due dates."

Further, it added that the "reduced time limits proposed for making of assessment" of I-T cases, as proposed in the latest Finance Bill, are also based on pre-requisite that returns are filed on time."

"These amendments will take effect from April 1, 2018 and will accordingly apply in relation to assessment year 2018-19 and subsequent years," it said.


Govt removes all taxes on PoS machines to push e-payments

In a move to push digital payments, the government on Wednesday removed all duties on devices used in the process of cashless transactions like point of sales machines, finger print readers etc.

Finance Minister Arun Jaitley said in his budget speech, "To promote cashless transactions, I propose to exempt BCD (basic custom duties), excise duties, CVD (countervailing duties), SAD (special additional duty) on miniaturised card readers and mPOS micro atms standards for version 1.5.1, finger print readers, scanners and iris scanners."

The minister also exempted components from taxes to encourage domestic manufacturing of these devices.

"Simultaneously, I propose to exempt parts... components for manufacturing of such device so as to encourage domestic manufacturing of these items," Jaitley said.

Elcina Electronic Industries Association of India said the exemption should be only for short-period to meet immediate needs to address shortages of such machines. In the long-term can, exemption to such machines can be detrimental for local manufacturing.

"It is a good move to encourage digital transactions.

However, it should be given to meet immediate needs. Long term exemption can lead to dumping of these machines from foreign markets. It should not be extended for full fiscal year," ELCINA Secretary Rajoo Goel said.


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