18th April – Police reforms must be expedited

police reforms

In the run-up to the 2019 general elections national security has emerged as a major issue. To strengthen only external security and ignore internal security proves inadequate for effective national security management.

Concern –

On the internal security front, the lack of the our government’s political will to implement long-pending police and intelligence reforms amounts to a failure of good governance.

Need of reforms –

  • The intelligence agencies continue to be helmed and staffed predominantly by police personnel and others on deputation from various government services.
  • The rank and file of policemen across the country have their grievances with no effective redressal mechanism in place. For instance, in June 2016 the Karnataka Police planned a protest but was reined in by systemic checks and balances. The Haryana Police were unable to control law and order when godman Baba Ram Rahim was arrested in August 2017; besides, the February 2016 Jat agitation. Clearly that amounts to failure of the police machinery in the State.
  • Today, the country is vulnerable to externally-fostered internal security threats wherein jihadi terrorists from Pakistan strike targets not only in the border States of Jammu & Kashmir, Punjab, Rajasthan and Gujarat — but also operate in the hinterland States like Karnataka or Tamil Nadu. Only the police and intelligence services can ensure strong internal security management.
  • The police are hobbled by political interference and the police chain of command does not really function because the subordinate police officers cultivate MLAs and Ministers to intervene on their behalf particularly their postings to different appointments. This hampers professional policing and investigations which is to the disadvantage of the common man.
  • Another aspect of police reform is linked to Intelligence reforms. Both the internal and external intelligence agencies are predominantly staffed with police officers and there have been several acts of omission and commission.

A shallow progress –

  • The Supreme Court directed the States to review the progress on police reforms in 2006 and cracked the whip on States which were reluctant to initiate reforms.
  • In July 2018, the Supreme Court once again reviewed the progress of States and UTs on this front.
  • Almost 23 States have ignored guidelines on appointment of DGPs. As of today, 12 States have not implemented the separation of investigation and law and order wings.

Way forward –

  • Police reforms include fixed tenures for Director Generals of Police (DGPs) and Superintendents of Police. Also, the DGPs should have a minimum residual service to ensure continuity and stability and avoid frequent leadership changes.
  • As much as the police as an institution requires reform to insulate it from political interference, the intelligence agencies too merit a review in terms of accountability, staffing and operations.
  • Unlike the police whose performance is tangible, the intelligence agencies work remains invisible and away from public gaze.

Conclusion –

Reforms will help the state police forces and intelligence agencies to evolve into professional organisations and avoid future failures of law and order and more importantly, provide security oriented to the common man.

SourceThe Hindu Business Line

Also Read: 17th April – State funding of elections

17th April – State funding of elections

Why state financing is the only way to ensure fair and transparent poll funding?

In just 28 days since the announcement of the general election, the Election Commission (EC) has seized cash, drugs, alcohol, precious metals and other items worth Rs 1,800 crore. Compare this to the legal upper limit of expenditure per candidate — Rs 70 lakh. Simple arithmetic would show that the seized amount can fully finance up to five candidates from each of the 543 constituencies.

State funding

What is the solution?

State funding of the recognised political parties and outlawing of corporate funding could be instrumental in making the electoral process fairer and more participatory.

Background –

  • In 1962, the late Atal Bihari Vajpayee moved a Private Member’s Bill to prevent electoral donations by corporates. It was argued that since all shareholders need not subscribe to the political endorsement by a corporate, it was immoral to allow donations against their consent.
  • Vajpayee had propositioned that such funding would only serve corporate interests. While all political parties welcomed the bill, the then ruling party did not vote in its favour. Never again was such a bill introduced.

Electoral funding provisions –

  • Under Section 29B of the Representation of the People Act 1951, political parties are free to accept donations from any person, except from a foreign source.
  • Two inferences can be drawn from this — first, money wields the ability to disrupt political agenda; second, foreign money dilutes electoral integrity.
  • Both reasons would equally be valid for any person who is alien to the election process — a non-voter.
  • The concerns that arise from foreign-funding are equally applicable to funding from corporates, with the distinction that while the former is a jurisdictional alien; the latter, on account of being a non-participant, is an alien. However, party interests deter further expansion in the law.

Limitation of Electoral Bonds –

  • Of the Rs 2,722 crore donated through the scheme in the last 15 months, almost 95 per cent has gone to the ruling party, which enjoys a 31.34 per cent vote share.
  • The remaining contestants with a 68.66 per cent vote share could only garner 5 per cent funding. The anonymity provision under the scheme is antagonistic to transparency — the bonds merely enable an “on-the-books” secretive transfer.
  • The State Bank as the facilitator would be privy to the details of the depositor and the political party funded, therefore allowing the ruling party to monitor its rivals. What would be unknown to others will be known by the ruling party.

Role of corporates –

  • Corporates have long defended their political donations on the grounds of freedom of speech. Like citizens, they seek to endorse their economic and political views through contributions to campaign finance.
  • Corporates are associations that further economic interests of their members who enjoy a freedom of trade. Therefore, their freedom of speech is based on their exercise of the freedom of trade, which is essentially for a commercial purpose.
  • Citizens, on the other hand, enjoy an unfettered freedom of speech which extends onto the political domain. Since corporates are not participants as voters, they have no claim to freedom of “political” speech and expression. Therefore, while citizen-voters can donate to a political party pursuant to free speech, corporates must refrain from donating to a political party.

Way forward –

  • In realpolitik terms, there is no incentive for any ruling political party to reform the law as it stands. Thus, necessity would dictate that the task of electoral funding be given to the EC under Article 324.
  • A fair and transparent manner to finance the political parties would require a censure of unaccounted money and direct donations by corporates and non-voters to political parties.
  • State funding of recognised political parties is a viable alternative. A state funding scheme would be viable through the levy of an election cess on the direct taxes.
  • A National Election Fund could be maintained by the EC, into which the proceeds from this cess may be deposited. At the current GDP-Direct Tax ratio and voter numbers, a 1 per cent election cess can fund Rs 500 for each vote cast in elections to the Lok Sabha and the state assemblies.
  • The cess being progressive would spare the poorer candidates from the costs of funding elections. Direct donations to political parties may be permitted only from persons who are entitled to vote. Those not entitled to vote may contribute to the neutral National Election Fund.
  • Donations from corporates into this fund will not distort the election process, but would instead improve the integrity of the peoples’ electoral choice.
  • Parties would be inclined to adopt a more inclusive agenda when in government since more votes will translate into more state funding.
  • Parties will also vie for votes in absolute numbers than merely be the first past the post. Democracy will then truly be of the people, for the people and by the people.

SourceThe Indian Express

Also Read: 16th April – Necessary steps to ending poverty

16th April – Necessary steps to ending poverty

ending poverty

It is by now close to 50 years since Indira Gandhi brought the idea of eradicating poverty into the electoral arena in India. ‘Garibi Hatao’ had been her slogan. The role that income generation actually played in lowering poverty in India may be gauged from the facts that economic growth had surged in the 1980s, and the late 1960s was when agricultural production quickened as the Green Revolution progressed.

Why we failed till now?

  • This is because the approach of public policy to the problem has been to initiate schemes which could serve as no more than a sedative.
  • These schemes failed to go to the root of poverty, which is capability deprivation that leaves an individual unable to earn sufficient income through work or entrepreneurship.
  • Income poverty is a manifestation of the deprivation, and focussing exclusively on the income shortfall can address only the symptom.

Politics over poverty –

  • Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) is paying farm households below a threshold ₹6,000 a year. An income-support scheme for any one section of the population is grossly inequitable. We can think of agricultural labourers and urban pavement dwellers as equally deserving of support as poor farmers.
  • The PM-Kisan has, however, been dwarfed by the promise of the Nyuntam Aay Yojana (NYAY), which envisages an annual transfer 12 times greater to the poorest 20% households. While this scheme is not discriminatory, it is severely challenged by the issue of beneficiary identification in real time.
  • Both the schemes on display, but NYAY in particular, have been criticised as running into the absence of fiscal space. This is really neither the case nor of the essence, the latter being the role of income transfers in eradicating as opposed to alleviating poverty in India.
  • Dissecting the fiscal costs –
  • NYAY is estimated to cost ₹3.6 lakh crore per annum at current prices. This comes to approximately 13% of the central budgetary outlay for 2019-20. This expenditure can be incurred without any consequence for the fiscal deficit if all Centrally Sponsored Schemes are taken off and subsidies trimmed just a bit.
  • But the point is that at 13% of outlay, NYAY would amount to more than twice the combined expenditure on health and education and more than capital expenditure in the same budget, they being the items of public expenditure that most impact poverty in the long run.
  • There is an opportunity cost to be acknowledged of an income-support scheme of this magnitude being implemented while there exists a severe deficit of social and physical infrastructure in the country.

What should be done?

  • In light of a pitch that has been made for the implementation in India of a publicly-funded universal basic income (UBI) scheme, we can say that from the perspective of eliminating poverty, universal basic services (UBS) from public sources are needed, though not necessarily financed through the budget.
  • There is indirect evidence that the provision of health, education and public services matters more for poverty than the Central government’s poverty alleviation schemes in place for almost half a century.
  • Per capita income levels and poverty vary across India’s States. A discernible pattern is that the southern and western regions of India have lower poverty than the northern, central and eastern ones. This, very likely, is related to higher human development attainment in the former.
  • A UBI would imply that a nationwide income support scheme that channels funds from a common pool to households in the poorer States would be tantamount to rewarding lower effort by their governments.
  • There is a crucial role for a few services in eliminating the capability deprivation that is poverty. At a minimum these services would involve the supply of water, sanitation and housing apart from health and education. It has been estimated that if the absence of such services is accounted for, poverty in India would be found to be far higher than recorded at present.

Conclusion –

There are no short cuts to ending poverty, but ending it soon is not insurmountable either.

SourceThe Hindu

Also Read: 15th April – Our bankruptcy code is world class

15th April – Our bankruptcy code is world class

BANKRUPTCY CODE

The World Bank conducts an annual examination to gauge the ‘Ease of Doing Business’ in nearly 200 economies and ranks them on ten sets of parameters, which include ‘Resolving Insolvency’. India ranked 142nd in ‘Ease of Doing Business’ for 2015.

In terms of resolving insolvency, the country ranked 137th. The government set an ambitious target of breaking into the top 50 on this index, and initiated a plethora of institutional reforms, including an overhaul of the insolvency framework. After four years, India ranks 77th, up by 65 places, in the aggregate rankings, and 108th on ‘Resolving insolvency’.

Bankruptcy

 

Features of IBC –

  • Its primary focus is revival of an ailing firm, while recovery by creditors is an incidental outcome. Secured creditors have absolute priority over other claims in insolvency (liquidation) proceedings.
  • The recovery rate is a function of time, cost and outcome of insolvency proceedings. In addition to reviving ailing firms, the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (Code) have returned 210 per cent of liquidation value for creditors. They are realising on an average 48 per cent of their claims through reorganisation, as compared to the erstwhile regime which recovered 26 per cent.
  • The Code provides a timeline of 180 days to conclude a corporate insolvency resolution process (CIRP), extendable by a one-time extension up to 90 days. Probably, no other regime in the world mandates a time-bound resolution. This push has meant that proceedings under the Code take on average about 300 days, including time spent on litigation, in contrast with the previous regime where processes took about 4.3 years.
  • The insolvency resolution process cost, which includes fee of insolvency practitioner and other professionals, and expenses related to meetings of committee of creditors (CoC), public announcements, filings and litigations, etc., have been 0.5 per cent of the realisation by the creditors in contrast with a cost of 9 per cent under the previous insolvency framework.
  • With realisation of 48 per cent of claims through reorganisations coupled with pre-admission and post-admission settlements, the Code has proved to be an efficacious remedy even for loan recovery.
  • The strength of an insolvency framework is a function of four indices relating to commencement of proceedings, management of a firm’s assets, reorganisation proceedings, and creditor participation. The Code does not envisage separate applications or processes for reorganisation and liquidation.

Transparency in proceedings –

  • The Code envisages a resolution plan for reorganisation of a defaulting firm. Irrespective of the composition of the CoC, other stakeholders have a right to receive the agenda and participate in the meetings of the CoC.
  • The CoC takes major decisions on behalf of the firm under CIRP. It appoints the insolvency practitioner to run the operations of the firm as a going concern and run the process as well.
  • Any creditor may seek any information about the firm’s business and financial affairs from the insolvency practitioner. Any creditor may contest the decision of the insolvency practitioner accepting or rejecting its own claims or claims of other creditors.

Conclusion –

It is a matter of satisfaction that within two years of the enactment of the Code, the Indian insolvency regime has all the essential elements and practices that any mature insolvency regime ought to have. Not surprisingly, it bagged the award for the ‘Most Improved Jurisdiction’ for 2018 from the Global Restructuring Review. Hopefully, it will also pass with flying colours in the ongoing examination of the World Bank.

SourceThe Hindu Business Line

Also Read: 13rd April – Fixing FAME-II

The Lessons of Demonetization | Livemint

Prime Minister Modi in his televised address to the nation his Government’s decision to demonetise the higher denomination currency notes. There is now ample proof that the grand demonetisation gamble has failed to meet its primary objective.
Signals of failure –

  • The Reserve Bank of India (RBI) has finally released numbers that show how most of the currency notes that were cancelled were deposited in banks.
  • The airy hopes that the Indian central bank would be able to extinguish a substantial chunk of its liabilities—and some mistakenly also argued that this would provide a fiscal bonanza that the government could use to recapitalize the banking system—have been belied.

What next?

  • Finance minister Arun Jaitley said that the money is now in the system, where the use of Big Data analytics could help the government identify who deposited black money.
  • The challenge now is to ensure that the creation of new black money is minimized. GST, which creates incentives for producers to seek bills from their input providers—will be part of the solution.

Positive consequences–
Every policy has a stated goal as well as secondary consequences, some of which are unintended. It is still quite possible that demonetisation will have positive consequences over a longer period—

  • the growth in the direct tax base,
  • the switch in the financial holdings of households from cash to bank deposits,
  • the increased use of digital payments.

The question to be asked is whether the potential long-term benefits will be greater than the short-term costs that the Indian economy had to bear.
Negative consequences –
The main negative economic consequence of demonetisation has been the disruption of unorganized supply chains that are dependent on cash transactions. However, it is also true that the Indian economy did not collapse because of the disruption of the monetary base, as some economists had predicted.
Lessons to be learnt from demonetisation –

  • The main lesson is that the Modi government did not seek the advice of experts before going ahead. The strategic decision to surprise holders of illegal wealth would anyway have restricted the circle of those who could be informed, but it seems that the idea came from outsiders with a penchant for impractical ideas rather than experienced policy advisers.
  • A good policy design should take into account how people will respond to any change in the rules of the game. In other words, incentives matter. Most rational human beings will adjust their behaviour to further their self-interest. Those who had illegal wealth held in cash obviously gamed the cash exchange process. Good incentive-compatible policy design is thus as important as good policy intent.

Conclusion –
The implementation of such a behemoth decision requires capacity building of those who would implement it on ground. A surprise invasion to the comforts of bureaucracy may seem desirable to check their readiness but it cannot be performed at the cost of common people and the economy as a whole. Government has derived the lessons and it is possible that the database of doubtful transactions, people and entities (formed post-demonetisation) would be fruitful for the Government to take the necessary legal action against such illicit wealth.

Mentor India Campaign | PIB Summary

NITI Aayog will launch the Mentor India Campaign, a strategic nation building initiative to engage leaders who can guide and mentor students at more than 900 Atal Tinkering Labs, established across the country as a part of the Atal Innovation Mission.

Details –

Mentor India is aimed at maximizing the impact of Atal Tinkering Labs, possibly the biggest disruption in formal education globally.

The idea is to engage leaders who will nurture and guide students in the Atal Tinkering Labs. These labs are non-prescriptive by nature, and mentors are expected to be enablers rather than instructors.

NITI Aayog is looking for leaders who can spend anywhere between one to two hours every week in one or more such labs to enable students experience, learn and practice future skills such as design and computational thinking.

Atal Tinkering Labs –

Atal Tinkering Labs are dedicated works spaces where students from Class 6th to Class 12th learn innovation skills and develop ideas that will go on to transform India. The labs are powered to acquaint students with state-of-the-art equipment such as 3D printers, robotics & electronics development tools, Internet of things & sensors etc.

Atal Innovation Mission –

NITI Aayog’s Atal Innovation Mission is among one of the flagship programs of the Government of India to promote innovation and entrepreneurship in the country to set up the Atal Tinkering Labs across the country. The Mission has / is in the process of setting up 900+ such labs across India and aims to have 2,000 such labs by end of 2017.

Tackling workplace harassment UPSC | Livemint

Introduction –
Workplace sexual harassment is an important issue that deserves more than the intermittent attention it receives when high-profile cases are in the news. This is particularly true in India where legal protection for victims was lacking in statutory cover until a few years ago. Some progress has been made since then—but there is still a considerable distance to go.
Background –
India’s response to workplace sexual harassment rests on two pillars –

  • The first is guidelines issued by the Securities Exchange Board of India (SEBI) in 2012. These guidelines mandate that listed companies must file a Business Responsibility Report annually that lists details of the sexual harassment complaints the company has received.
  • The second is the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Supreme Court-issued Vishaka Guidelines in 1997 that outlined procedural guidelines to be followed by establishments where a case of sexual harassment had occurred. The latter was finally put in place a decade and a half later with the Act, which drew heavily upon the Guidelines.

Reviewing the 2013 Act –
There is a sharp rise in the number of complaints (since 2013) which indicates that cases that would have been overlooked earlier are now being reported. That, in turn, shows that companies are making some progress when it comes to putting Act-mandated processes and frameworks in place.
Issues –

  • The Act mandates that employers must constitute a four-member internal complaints committee (ICC) in any branch or office that employs more than 10 people of any gender. The ICC must include a member of a non-governmental organization working for women’s causes—something that may not always be easy due to a paucity of such organizations and individuals.
  • The Act also lays the onus for sensitizing employees to sexual harassment issues, and creating awareness of redressal mechanisms, on employers. By all accounts, this has been observed more in the breach.
  • When it comes to implementation and accountability of SEBI guidelines, the preponderance of small and medium enterprises—not to mention the size of the informal sector—creates a conundrum. Women in domestic and informal sector have little recourse to institutionalized redressal mechanisms.

Solutions –

  • State governments should take on the responsibility of enforcing implementation.
  • The Act’s provision that complainants dissatisfied with the ICC’S recommendations can approach the courts is of little practical use in light of delays in judicial process and the harassment women continue to face at the hands of the police in filing such complaints.
  • The single best solution to harassment is greater gender diversity at the workplace—an area where India lags conspicuously. How this can best be achieved—improving pipelines is always preferable to hiring quotas—is an important debate.

Conclusion –
Tackling workplace sexual harassment is an ethical imperative; such harassment infringes on an individual’s right to freedom of profession and occupation and undercuts the ideals of a modern democracy. And it is an economic imperative; getting and retaining more women, who are disproportionately targets of harassment, in the workforce has the potential to be a major growth driver. The Act is a beginning—but currently, only that.

Ajeevika Grameen Express Yojana UPSC | PIB

The Government of India has decided to launch a new sub-scheme named “Aajeevika Grameen Express Yojana (AGEY)” as part of the Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM).

Significance –

The Self Help Groups under DAY-NRLM will operate road transport service in backward areas. This will help to provide safe, affordable and community monitored rural transport services to connect remote villages with key services and amenities (such as access to markets, education and health) for the overall economic development of backward rural areas.

This will also provide an additional avenue of livelihood for SHGs.

The Community Investment Fund (CIF) provided to Community Based Organization (CBOs) under DAY-NRLM will be utilized to support the SHG members in this new livelihoods initiative.

The beneficiary SHG member will be provided an interest free loan by the CBO from its Community Investment Fund up to Rs.6.50 lakh for purchase of the vehicle. Alternative, CBO will own the vehicle and lease it to an SHG member to operate the vehicle and pay lease rental to the CBO.

Details –

  • Ajeevika Grameen Express Yojana will be initially implemented in 250 Blocks in the country on pilot basis with each Block provided up to 6 vehicles to operate the transport services.
  • The Blocks will be selected by States from among the Blocks where NRLM is being implemented intensively and where mature CBOs are already functioning. Backwardness, lack of transportation links and sustainability of service would be the guiding factors in the selection of Blocks and routes.
  • The State Rural Livelihood Missions (SRLMs) will do a feasibility study and traffic survey in the selected blocks to identity the routes and the number and capacity of vehicles which can be operated on sustainable basis
  • The SRLMs will be co-ordinating with State Transport Department for issue of permit for the vehicle.
  • The SHG member shall run the vehicle on approved routes at pre-determined frequency as jointly agreed between the CBO and the SHG operator based on financial viability and the need for transport link.
  • All vehicles under the scheme shall have a defined colour code and carry Ajeevika Grameen Express Yojana branding to ensure their identity and avoid diversion to other routes.
  • The State Rural Livelihood Mission will arrange capacity building for their staff at State, District and Block levels for operating the Scheme.

Labour Reforms UPSC | PIB

The Ministry of Labour and Employment has taken a number of legislative initiatives in labour reforms laws during the last 3 years.

Such initiatives include –

Amendment to the Payment of Bonus Act, 1965 by which   eligibility limit for payment of bonus enhanced from Rs 10,000/- to Rs. 21,000/- per month and the Calculation Ceiling from Rs. 3,500/- to Rs. 7,000/- or the minimum wages.

Payment of Wages (Amendment) Act, 2017 enabling payment of Wages to employees by Cash or Cheque or crediting it to their bank account.

Child Labour (Prohibition and Regulation) Amendment Act, 2016 provides for complete ban on employment of children below 14 years in any occupation or process.

Maternity Benefit Amendment Act, 2017, increases the paid maternity leave from 12 weeks to 26 weeks.

The Employee Compensation (Amendment) Act, seeks to rationalize penalties and strengthen the rights of the workers under the Act.

Ministry has notified “Ease of Compliance to maintain Registers under various Labour Laws Rules, 2017” on 21st February 2017 which has in effect replaced the 56 Registers/Forms under 9 Central Labour Reforms Laws and Rules made there under in to 5 common Registers/Forms. This will save efforts, costs and lessen the compliance burden by various establishments.

A Model Shops and Establishments (RE&CS) Bill, 2016 has been circulated to all States/UTs for adoption with appropriate modification. The said Bill inter alia provides for freedom to operate an Establishment for 365 days in a year without any restriction on opening/closing time and enables employment of women during night shifts if adequate safety provisions exist.

A category i.e. Fixed Term Employment has been introduced under Industrial Employment (Standing Orders) Act, 1946 to impart flexibility to an establishment to employ people in case of Apparel Manufacturing Sector to meet the fluctuating demands of the sector due to its seasonal nature.

Conclusion –

These legislative initiatives are expected to not only facilitate effective enforcement but also enhance wage security, job security, social security and safety, health and working conditions for workers.

Labour Reforms is an important topic, and the aspirants are advised to keep noting down the points that they find. A question from Labour Reforms can appear in Prelims as well as Mains.

Test and Treat Policy for HIV patients | PIB

The Government has launched the ‘Test and Treat Policy for HIV patients’ in April 2017. As per this policy all people living with HIV (PLHIV) are to be treated with Antiretro Viral Therapy regardless of CD4 count, clinical stage, age or population. The National Strategic Plan for HIV/AIDS and STI 2017-2024 has been approved in June 2017.
Details –

  • Accelerating HIV prevention in key population and ‘at risk group’.
  • Expanding quality assured HIV testing with universal access to comprehensive HIV care.
  • Elimination of mother to child transmission of HIV and syphilis.
  • Addressing the critical enablers in HIV programming.
  • Restructuring the strategic information system to be efficient and patient-centric.

Facts and figures –

  • As per HIV estimation 2015, India is estimated to have 21 lakhs people infected with HIV and 15.2 lakhs PLHIV know their HIV status through the strategy of scaling up of HIV counselling & testing services in 23,019 health facilities.
  • A total of 536 Anti-retroviral Therapy (ART) centres are providing ART treatment across the country.
  • The National Guidelines on HIV Counselling & Testing Services (revised in Dec 2016) include the HIV screening through trained ancillary health care provider in community based setting for priority population including High Risk Groups, TB suspect & patients, STI/RTI attendees, sexual partners/ spouses of PLHIV, prison inmates, pregnant women, adolescent age group etc.

For More info keep visiting Raj Malhotra IAS Study Group