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The Hindu Analysis Free PDF Download

Date: 13 November 2019
  • Any recommendation by a Governor for President’s rule in a State under Article 356(1) of the Constitution should be based on “objective material” and not on a political whim or fancy, the Supreme Court had ruled in the 1994 S.R. Bommai case.
  • “It is not the personal whim, wish, view or opinion or the ipse dixit of the President de hors the material, but a legitimate inference is drawn from the material placed before him which is relevant for the purpose,” the nine-judge Bench had said.
  • Such objective material may be available in the report sent to the President by the Governor or otherwise or both from the report and other sources.Once such material is shown to exist, the satisfaction of the President based on the material is not open to question.
  • Article 356(1) has been deliberately drafted in a narrow language by the Founding Fathers so that political parties in the Centre does not misuse it to subvert federalism, it had noted.

Open to challenge

  • The proclamation of President’s Rule in a State is open to challenge if there is no supporting objective material. “It has further to be remembered that the Article requires that the President ‘has to be satisfied’ that the situation in question has arisen. Hence the material in question has to be such as would induce a reasonable man to come to the conclusion in question. The expression used in the Article is 'if the President is satisfied”, the court had observed in the order.In other words, the President has to be convinced of or should have sufficient proof of information with regard to or has to be free from doubt or uncertainty about the state of things indicating that the situation in question has arisen.The court had stated that although the sufficiency or otherwise of the material cannot be questioned, the legitimacy of inference drawn from such material is “certainly open to judicial review”.

On advice

  • The proclamation by the President under Article 356 is on the advice of the Council of Ministers tendered under Article 74(1). The judgment had explained that in a multi-party political system, chances are high that the political parties in the Centre and the State concerned may not be the same. Article 356 cannot be used for the purpose of political one-upmanship by the Centre.
  • The Supreme Court has made it clear that its Ayodhya judgment will not act as a precedent to justify communal mobilisations against places of worship of other faiths. The Constitution Bench led by Chief Justice of India Ranjan Gogoi has dealt with this apprehension by referring to Section 5 of the Places of Worship (Special Provisions) Act of 1991.
  • Section 5 had uniquely exempted the “place of worship — commonly known as Ram Janma Bhumi-Babri Masjid” from the ambit of the 1991 Act, which prohibits the conversion of any place of worship.
  • The 1,045-page judgment reproduces Section 5, which stipulates, “Nothing contained in this Act shall apply to the place or place of worship commonly known as Ram Janma Bhumi-Babri Masjid situated in Ayodhya in the State of Uttar Pradesh and to any suit, appeal or other proceeding relating to the said place or place of worship”.
  • The 1991 Act bans conversion of religious places of worship and further provides “for the maintenance of the religious character of any place of worship as it existed on August 15, 1947, and for matters connected therewith or incidental thereto”.The court highlighted that the express prohibition on conversion in the Places of Worship Act “speaks to the future by mandating that the character of a place of public worship shall not be altered”.

 ‘Positive obligation’

  • “Secondly, the law seeks to impose a positive obligation to maintain the religious character of every place of worship as it existed on August 15, 1947, when India achieved independence from colonial rule,” the judgment interpreted.The expression “place of worship” in Section 2(c) of the Act includes “a temple, mosque, gurudwara, church, monastery or any other place of public religious worship of any religious denomination or any section thereof, by whatever name called”.
  • Anyone found guilty of violating the bar would face a jail term of up to three years.

 BRICS Bond Fund likely on agenda

  • Prime Minister Narenda Modi left on Monday to attend the 11th BRICS summit to be held on November 13 and 14 in Brasilia. He will hold a round of bilateral meetings with leaders of the BRICS member countries after reaching the capital of Brazil on Wednesday morning.
  • Mr. Modi is expected to meet Russian President Vladimir Putin and Chinese President Xi Jinping on Wednesday ahead of participating in the BRICS Business Forum. The leaders are scheduled to have a restricted session on Thursday. The visit is also significant from the bilateral India-Brazil point of view as India is expected to host Brazil President Bolsonaro as the Republic Day Parade chief guest in 2020 January.
  • A Russian official on Tuesday said that during the summit, BRICS will discuss formation of BRICS Bond Fund, which will help member countries conduct intra-BRICS trade in national currencies, avoiding the U.S. dollar. “Trust in the U.S. dollar is not as high as it was and why we want to extend national currencies within BRICS,” said the official.
  • The summit will discuss the Afghanistan and Syria crisis. Both China and Russia have maintained dialogue with the Taliban even after the U.S. ended peace talks with the outfit. “Stable, peaceful and non-radicalized Afghanistan is the focus of Russian approach,” said the official.
  • The member countries will hold the plenary session of the BRICS on Thursday after which a BRICS MoU between trade and investment promotion agencies will be signed.
  • States were being “cajoled to reject” the agricultural produce marketing committee (APMC) system in favour of a pan-India electronic trading portal that creates a unified national market for agricultural commodities, according to Finance Minister Nirmala Sitharaman. So far, the Centre had been focussed on reforming APMCs, allocating funds to upgrade them, and persuading States to adopt a model APMC Act.
  • Speaking at a global conference on rural finance hosted by the National Bank for Agriculture and Rural Development (NABARD) on Tuesday, Ms. Sitharaman said the Centre was talking to States to “dismantle” the APMC system and move towards the electronic National Agriculture Market (e-NAM). “We’re also making sure that States are cajoled to reject the APMCs,” which, while having served their purpose at one time, were now posing many difficulties, she said.
  • While the Centre has been promoting e-NAM since its introduction in 2016, it is not clear if the online portal is ready to bear the entire burden of agricultural trade. Only 1.6 crore farmers have registered on the portal so far, from among the almost 12 crore cultivators in the country. According to data presented in the Lok Sabha in June, only about half of those registered have benefited from the platform.
  • Out of almost 2,500 APMCs, 585 in 18 States have been connected to the e-NAM portal so far. Interstate trade, which has the potential to give farmers wider market access and better prices, has 21 APMC mandi participants in 8 States so far.
  • NABARD Chairman Harsh Bhanwala told The Hindu that APMCs required reforms to ensure that a transparent price discovery mechanism exists, particularly for spot prices. “Also, they need to have infrastructure available for storage, collateral management and quality control assessment,” he said, adding “so I think we need to enhance the APMC infrastructure.”
  • NABARD is now ready to operationalise a ₹2,000 crore agri-market infrastructure fund aimed at upgrading 585 APMCs and 10,000 gramin agricultural markets.
  • There may be special support in the offing for Jammu and Kashmir’s farmers. Over the last two months, NAFED has aided J&K’s apple farmers by procuring their crop. Ms. Sitharaman said NABARD had now been asked to aid peach, walnut and saffron farmers as well. In Ladakh, farmers would be encouraged to earn additional income by installing solar panels to generate renewable energy, she said. The Centre was also finalising plans to step up investment in J&K’s rural infrastructure.
  • India’s cancer care infrastructure ishighly inadequate” and forces a majority of patients to travel “thousands of kilometres” for treatment.
  • The “systematic failure” to address the needs of patients contributes to a 20% higher mortality among Indian cancer patients than in countries with a “high” Human Development Index, said a report by a Parliamentary Standing Committee on Science, Technology and Environment.
  • The committee was constituted to examine an expanded role for the Department of Atomic Energy, through the Tata Memorial Centre (TMC), to address India’s rising cancer burden. The committee, led by former Union Environment Minister Jairam Ramesh, submitted its report to Rajya Sabha Chairman Venkaiah Naidu on Monday.
  • The incidence, or the number of newly diagnosed cases of cancer annually, is about 16 lakh. The disease kills 8 lakh people annually. Among these are 1,40,000 fresh cases of breast cancer, 1,00,000 cervical cancer cases, and 45,000 cases of oral cancer among women. Among men, the top three cancers with the highest incidence are those in the oral cavity (1,38,000 cases), cancer of the pharynx (90,000) and those of the gastrointestinal tract (2,00,000).
  • “The Committee would like to lay emphasis on the fact that mortality to incidence ratio of 0.68 in India is higher than that in the very high human development index (HDI) countries (0.38) and the high HDI countries (0.57),” it noted in the report viewed by The Hindu.
  • The International Agency for Research on Cancer expects India’s cancer burden to increase from an estimated 13 lakh cases in 2018 to about 17 lakh in 2035, and cancer deaths are expected to rise from 8.8 lakh in 2018 to 13 lakh in 2035.
  •  C-295 transport plane clears cost negotiations Tata-Airbus aircraft will replace the Air Force’s ageing fleet of Avros
  • The Defence Ministry has concluded cost negotiations with Tata and Airbus for the purchase of the Airbus C-295 transport aircraft as part of the longdelayed Avro replacement programme of the Indian Air Force (IAF). “Cost negotiations for the C-295 deal have been completed. It is now being processed to put it up for clearance from the Cabinet Committee on Security (CCS). It is expected to be signed in the next few months,” a senior Defence official said.
  • Initially, after the completion of cost negotiations, it was felt that a waiver from the Defence Acquisition Council would be needed on some technical issues. But Defence sources said the issue “has now been resolved.”
  • The IAF has 56 Avro transport aircraft which are in urgent need of replacement. A further six aircraft for a maritime mission role for the Indian Coast Guard have been added taking the total number required to 62, estimated to cost upwards of $3 billion. While sources expressed optimism that the deal would be signed in this financial year, it is contingent on the availability of funds. The IAF has a situation where committed liabilities for this year are more than the capital allocation in the budget and few big ticket deals are on the agenda.

Pneumonia, diarrhoea still a big threat

  • Progress short on ensuring children have access to prevention and treatment services, finds global study The 10th pneumonia and diarrhoea progress report card has found that health systems are falling short of ensuring the world’s most vulnerable children access to prevention and treatment services in the 23 countries that together account for 75% of global pneumonia and diarrhoea deaths in children under five. India, which is home to a large population of under-five children, accounts for a major portion of these deaths, notes the report.
  • Rollout of rotavirus vaccines, beginning in 2016, and the pneumococcal conjugate vaccine, beginning in 2017, helped India’s scores improve.
  • India’s exclusive breastfeeding rate, at 55%, is among the highest of the 23 countries. However, the proportion of children receiving important treatments, as with many other countries, remains below targets. Half of the children with diarrhoea receive ORS (oral rehydration solution) and 20% receive zinc supplementation — to help protect against, prevent and treat pneumonia and diarrhoea,” notes the report.
  • This report analyses how effectively countries are delivering 10 key interventions, including breastfeeding, vaccination, access to care, use of antibiotics, ORS, and zinc supplementation.
  • Additional reports from organisations like Save the Children and UNICEF have noted that, in 2017, the highest risk factors for child pneumonia death in India were: 53% caused by child wasting, 27% by outdoor air pollution, and 22% caused by indoor air pollution from solid fuels.
  • Pulmonologit noted that children are the worst hit by sustained high levels of air pollution.
  • The report card concludes that the global community must increase investment and support countries in developing smart, sustainable strategies that close gaps and accelerate progress. Globally, pneumonia and diarrhoea led to nearly one of every four deaths in children under five years of age in 2017.
  • Released ahead of World Pneumonia Day, on November 12, the 2019 Pneumonia and Diarrhoea Progress Report Card, by the International Vaccine Access Center (IVAC) at the Johns Hopkins Bloomberg School of Public Health, describes progress in fighting pneumonia and diarrhoea in countries with the highest absolute number of deaths, and for the first time in countries with the highest rates of deaths from these illnesses.

Background to the dispute

  • But these are not normal times in India for users and producers of the national accounts. For the past four years there has been a raging controversy over the current GDP figures on account of questionable methodologies and databases used. According to official data, the annual economic growth rate has sharply decelerated to about 5% in the latest quarter, from over 8% a few years ago. The reality may, however, be far worse. Independent studies using multiple statistical methods to validate the official GDP estimates by the former Chief Economic Adviser, Arvind Subramanian, and Sebastian Morris of the Indian Institute of Management, Ahmedabad, have suggested that the annual GDP growth rates during the last few years may have been overestimated by 0.36 to 2.5 percentage points.
  • Why is there such distrust in the official GDP figures? To understand the origins of the dispute, one has to go back to early 2015 when the CSO released a new series of GDP with 2011-12 as base-year, replacing the earlier series with the base-year 2004-05. Periodic rebasing of GDP series every seven to 10 years is carried out to account for the changing economic structure and relative prices. Such re-basing usually led to a marginal rise in the absolute GDP size on account of better capturing of domestic production using improved methods and new databases. However, the underlying growth rates seldom change, meaning that the rebasing does not alter the underlying pace of economic expansion.
  • The 2011-12 base year revision was different, however. The absolute GDP size in the new base year 2011-12 contracted by 2.3% (compared to the old series), and the annual GDP growth rate went up sharply from 4.8% in the old series to 6.2% in 2013-14.
  • Similarly, the manufacturing sector growth rate for 2013-14, swung from (-) 0.7% in the old series to (+) 5.3% in the 2011-12 series. Such large variations in growth rates for the same year may be justified if the material conditions of production warranted. But the higher growth estimates recorded by the new series did not square with related economic indicators such as bank credit growth, industrial capacity utilisation or fixed investment growth. Thus began the questioning of the new GDP series.
  • Demonetisation as shock
  • The suspicion of official output estimates became particularly intense after the demonetisation of high valued currency notes in November 2016. By most analyses, the economic shock severely hurt output and employment. For example, the Ministry of Finance’s Report on Income Tax Reforms for Building New India (September 2018; convenor: Arbind Modi), provided data on fixed investment in the private corporate sector based on actual corporate tax returns.
  • It shows that the fixed investment to GDP ratio in the private corporate sector fell sharply from 7.5% in 2015-16 to 2.8% in 2016-17 (suspected to be on account of demonetisation). However, surprisingly, the ratio in the national accounts went up from 11.7% in 2015-16 to 12% in 2016- 17.
  • Similarly, chief economist of the International Monetary Fund, Gita Gopinath’s academic research paper (co-authored) published by the highly regarded National Bureau of Economic Research in the U.S. in May 2019 showed an adverse effect of demonetisation on growth rate. Yet, the official GDP for the year 2016-17 grew at 8.2%, the highest in a decade.

The root of the problem

  • The source of the problem, according to many economists, is the underlying methodologies for calculating GDP (in the 2011-12 series) which they claim are deeply flawed, as well as the new dataset used in estimating the private corporate sector’s contribution. Some of the recent, prominent criticisms are as follows.
  • In a first, the CSO estimated value addition in the private corporate sector using the statutory filing of financial results with the Ministry of Corporate Affairs. The private corporate sector accounts for about a third of GDP, and spans all production sectors, and roughly about half of the private corporate sector output originates in manufacturing. The database of the Ministry of Corporate Affairs has been criticised by many as unreliable; hence it is possible that the private corporate sector output has been overestimated.
  • For example, the Ministry’s database on “active” companies — that is companies claiming to have submitted audited financial results regularly for three years — seems to contain many companies that are actually inactive (not producing output on a regular basis).
  • Last year when the National Sample Survey Office (the government’s premier, independent, data-gathering agency), used the Ministry of Corporate Affairs list of active companies to canvass a sample of companies in the services sector, it found that up to 42% of the sample companies were not traceable, had failed to provide the information for the survey, or had failed to provide audited accounts.
  • For estimating GDP of the private corporate sector, questionable methods are also used for blowing-up unverified “sample” estimates for the unknown and varying universe of “working” or active companies.
  • State domestic product (SDP) estimation uses many of the same databases and methodologies used in all-India GDP estimation.
  • The methodological changes made in the 2011-12 base-year revision have adversely impacted the quality of SDP estimates on two counts.
  • First, the Ministry of Corporate Affairs data does not have factory identifiers (that is, location of production units, but only has the location of the company head office); it has distorted distribution of the SDP estimates across States.
  • Second, for estimating value-added in the informal or unorganised sector, State-specific labour productivity estimates are unavailable in the 2011-12 series. Hence the method used distorts output estimation.
  • The CSO has denied the claim that the underlying methodology is flawed and that there are serious problems with the new database being used. The official response throughout the debate has been that the 2011-12 GDP series follows global best practices (meaning, following the latest United Nations System of National Accounts guidelines) and applies better methods using much larger datasets; hence the official estimates are blemish-less. This ignores the fact that India has always followed UN guidelines, and that larger data sets are not necessarily better.

Need for a review

  • The proposed change over to a new base-year of 2017-18, is, in principle, a welcome decision. However, considering the methodological disputes and data related questions relating to the current national accounts series, as illustrated above, what would the rebasing potentially accomplish? Doubts will persist so long as the underlying methodological apparatus remains the same; feeding it with up-to-date data is unlikely to improve its quality.
  • In view of the problems with the current series, a chorus of academic and public voices has proposed setting up an independent commission of national and international experts to review the GDP methodology. The ideal time to do this would be now so that solutions could be found and incorporated into the new GDP series.
  • Conversely, if a new rebased series is introduced without any changes it will only entrench the existing methodological problems, and ensuring that the debate will continue for the next half-decade. And as the debate continues, so will the loss of credibility.