Bharat Bond ETF would be India’s first corporate bond exchange traded fund
The Union Cabinet on Wednesday approved the government’s plan to create and launch India’s first corporate bond exchange traded fund (ETF) — Bharat Bond ETF.
“The Cabinet Committee on Economic Affairs has given its approval for creation and launch of Bharat Bond Exchange Traded Fund (ETF) to create an additional source of funding for Central Public Sector Undertakings (CPSUs), Central Public Sector Enterprises (CPSEs), Central Public Financial Institutions (CPFIs), and other government organizations,” the government said in a release.
“Bharat Bond ETF would be the first corporate bond ETF in the country,” it added. The ETF will comprise a basket of bonds issued by the CPSEs, CPSUs, CPFIs, and other government organizations and all will be initially AAA-rated bonds.
“The unit size of the bond has been kept at just ₹1,000 so that retail investors can invest and it’s not a matter of having crores to invest,” Finance Minister Nirmala Sitharaman said at a press conference following the Cabinet meeting.
Each ETF will have a fixed maturity date and initially they will be issued in two series, of three years and 10 years.
“Bond ETF will provide safety (underlying bonds are issued by CPSEs and other government-owned entities), liquidity (tradability on exchange) and predictable tax efficient returns,” the government release added.
The low unit value of ₹1,000, it said, would help deepen India’s bond market as it will encourage the participation of those retail investors who are currently not participating in bond markets due to liquidity and accessibility constraints.
On the issuer side, the bond ETFs are expected to offer CPSEs, CPSUs, CPFIs and other government organizations an additional source of meeting their borrowing requirements, apart from bank financing.
“It will expand their investor base through retail and HNI [high net worth individual] participation, which can increase demand for their bonds,” the government added. “With increase in demand for their bonds, these issuers may be able to borrow at reduced cost thereby reducing their cost of borrowing over a period of time.”
An Exchange-traded fund (ETF) is a type of security that involves a collection of securities—such as stocks—that often tracks an underlying index, although they can invest in any number of industry sectors or use various strategies. ETFs are in many ways similar to mutual funds; however, they are listed on exchanges and ETF shares trade throughout the day just like ordinary stock.
Some well-known example is the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 Index. ETFs can contain many types of investments, including stocks, commodities, bonds, or a mixture of investment types. An exchange-traded fund is a marketable security, meaning it has an associated price that allows it to be easily bought and sold.
An ETF is called an exchange-traded fund since it's traded on an exchange just like stocks. The price of an ETF’s shares will change throughout the trading day as the shares are bought and sold on the market. This is unlike mutual funds, which are not traded on an exchange, and trade only once per day after the markets close.
An exchange-traded fund (ETF) is a basket of securities that trade on an exchange, just like a stock. • ETF share prices fluctuate all day as the ETF is bought and sold; this is different from mutual funds that only trade once a day after the market closes.
ETFs can contain all types of investments including stocks, commodities, or bonds; some offer U.S. only holdings, while others are international.
ETFs offer low expense ratios and fewer broker commissions than buying the stocks individually.
Climate-related disasters on the uptick
Japan worst-hit, India ranked fifth for water shortages, crop failures and flooding
Worsening HEATWAVES are taking a heavier toll on rich as well as poor countries, according to an annual ranking that measures the damage done by extreme weather to human life and economies.
The Global Climate Risk Index, published on Wednesday by environmental think-tank Germanwatch, rated Japan as the most-affected country in 2018, while Germany was in third position.
Both of the industrialised nations were hit hard by heatwaves and drought that year, as was India — in fifth position — which suffered water shortages, crop failures and worst flooding, Germanwatch said in a report.
“Recent science has confirmed the long-established link between climate change and the frequency and severity of extreme heat,” it added in a statement.
In 2018, a severe summer heatwave in Japan killed 138 people and caused more than 70,000 people to be hospitalized with heat stroke and exhaustion, the report said. Climate-related disasters on the uptick Japan worst-hit, India ranked fifth for water shortages, crop failures and flooding
And in Germany, the period from April-July 2018 was the hottest ever recorded in the country, leading to the deaths of over 1,200 people.
Across Europe, extreme heat spells are now up to 100 times more likely than a century ago, says the report. It noted that the impact of heatwaves on African countries may be under-represented due to a lack of data.
Powerful storms also left a trail of destruction in 2018, with the Philippines second in the climate risk index due to large losses when it was battered by top-strength Typhoon Mangkhut.
‘Crisis can’t be ignored’
Madagascar was the fourth most weather-affected country as two cyclones killed about 70 people and forced 70,000 to seek refuge.
Laura Schaefer, a policy adviser with Germanwatch, told journalists at the UN climate talks in Madrid that the index results showed that the “signs of climate crisis”, on all continents, could no longer be ignored.
Who suffers Most from Extreme Weather Events? Weather-related Loss Events in 2018 and 1999 to 2018
The Global Climate Risk Index 2020 analyses to what extent countries and regions have been affected by impacts of weather-related loss events (storms, floods, heat waves etc.). The most recent data available — for 2018 and from 1999 to 2018 — were taken into account.
The countries and territories affected most in 2018 were Japan, the Philippines as well as Germany. For the period from 1999 to 2018 Puerto Rico, Myanmar and Haiti rank highest.
This year's 15th edition of the analysis reconfirms earlier results of the Climate Risk Index: Less developed countries are generally more affected than industrialised countries.
Regarding future climate change, the Climate Risk Index may serve as a red flag for already existing vulnerability that may further increase in regions where extreme events will become more frequent or more severe due to climate change. But the 2018 heatwaves and droughts also proved: High income countries feel climate impacts more clearly than ever before. Effective climate change mitigation is therefore in the selfinterest of all countries worldwide.
Components of PM-AASHA:
The new Umbrella Scheme includes the mechanism of ensuring remunerative prices to the farmers and is comprised of
Price Support Scheme (PSS),
Price Deficiency Payment Scheme (PDPS)
Pilot of Private Procurement & Stockist Scheme (PPPS).
The other existing schemes of Department of Food and Public Distribution (DFPD) for procurement of paddy, wheat and nutricereals/coarse grains and of Ministry of Textile for cotton and jute will be continued for providing MSP to farmers for these crops.
Election to power
The success of this sea-change in popular imagination is evident in the ubiquity of elections around the world. Today a mere handful of states, clustered mainly in the Arabian Gulf, remain the only places not to use elections as the means of allocating national power. But everyone else uses elections, even when only one party is allowed to compete and no one believes the election is free or fair. The quality of these elections notwithstanding, the point of elections is simple: they are an efficient way of determining the will of the majority.
Yet if establishing democracy required replacing unelected elites with the representatives of the ‘people’, then preserving democracy requires defending it against the ‘people’.
Democracy requires two things: rulers who reflect the majority’s choice, and respect for those in the minority. This is critical because the power of free and fair elections is that today’s government can be tomorrow’s opposition (see Maharashtra). Even more to the point, democracy presumes the possibility that voters might shift their loyalty depending on the issues most salient to them. Today’s health-care voter might be tomorrow’s national defence voter and day after’s climate change voter.
This fluidity means that rational voters fully expect to be in the opposition at some point, and, when that happens, want to know that their rights will not be trampled upon by the newly empowered. This is the point of constitutional democracy: the constitution guarantees us certain inalienable rights that cannot be rescinded by the whims of those in power.
Confronting abuse of power
If the majority’s interests are represented by the government, then the minority’s rights must be protected by institutions of the state capable of checking government action that infringes upon minority rights. Of course, governments can enact all manner of policy that is not liked by those in the opposition — elections have consequences after all or why bother holding them. But when government’s overreach threatens to violate constitutional principles, the courts and the press are obliged to step in to confront this abuse of power. Such counter-majoritarian institutions such as the judiciary and the press are critical to the health of democracy. Ironically, by constraining the abuse of power by the majority, counter-majoritarian institutions preserve the legitimacy of majority rule.
The jousting and interplay between governments and opposition is sustainable when winning elections are constructed on programmatic appeals. But for politicians to win on the basis of policy promise requires state capacity — fiscal space and bureaucratic wherewithal — to deliver government services broadly and fairly, including to those who might not have voted for the government. But when state capacity is limited or nonexistent, politicians target their efforts to narrower slices of society. To get credit for the targeted provision of public goods, politicians must target on the basis of a clearly identifiable marker, such as religion, caste, language, or ethnicity.
In this equilibrium, politicians do not represent ideas or policy positions, they stand for groups of people. Think of any state election in India. What are the policy planks on which politicians and parties compete? (I could not answer this question either and I study Indian politics for a living.) No wonder that election analysis in India is couched more in terms of ethnic combinatorics, what pundits refer to as caste-community arithmetic.
Populists understand this dynamic. Their instinct is to build identity-based coalitions that harness a majoritarian impulse. The legitimacy populists claim is cloaked in the will of the majority, but the premise of their appeal is that the majority has hitherto been undermined by the minority. This accusation can be augmented — the minority might be anti-national or in cahoots with foreign anti-national elements — but the core contention is the same: the majority, which represents the true interests of the true nation, is tired of minority appeasement and betrayal and, now that it has its turn in power, will not relinquish power.
Pressure on judiciary, media
By framing their responsibility as being to the ‘true’ national interest, represented by the majoritarian coalition that brought them to power, populists accuse counter-majoritarian checks and balances on executive authority, as anti-national. Indeed, rather than guardians of liberty, judges and journalists are portrayed as anti-majority, against the will of the people, and therefore fundamentally anti-democratic. It is hardly a surprise that populists expend so much effort undermining these institutions. Judges are threatened and coerced, and politicians use appointment powers and influence to install pliant judges on the bench who are more attentive to majoritarian sentiments than to minority rights. The media is choked and vilified until the only rational response is to be a mouthpiece for the government rather than its adversary; much easier to hide behind the flag than to defend it. Not even staid bureaucrats in their dusty cubicles are safe — ask awkward questions about environmental impacts of infrastructure projects, and run the risk of being added to the rolls of the ‘tukde tukde gang.’
For advocates of democracy, these are worrying times. Over the past 30 years, national elections worldwide are more likely to result in the deterioration of democracy than its deepening. The populist revolt dovetailed with a technocratic middle-class skepticism about the ‘state’. Politics becomes a bad word to be avoided personally and hedged against professionally. Much better to place authority in the hands of the consultant class, whom we assume will be less venal and power-hungry, and more focused on getting the right answer. But this plays right into the hands of populist leaders whose primary objective is to undermine the legitimacy of the political process.
Democracy is the casualty — mocked by technocrats and populists, it is stripped of its constitutional guardians. This is the irony of democracy: government of the people, for the people, and by the people, works best when it is protected from ‘the people’, or, more accurately, those whose hubris and ambition allow them to claim to speak for the people. The responsibility for this debacle is equally shared by the left and the right — for every Viktor Orbán in Hungary who openly calls for ‘illiberal democracy’ is an Evo Morales in Bolivia who abrogates constitutional term limits to preserve his grip on power in the name of the people.
Democracies work best when we remember that there is no one people and no one party or politician has a monopoly on knowing what the people want.
Unless today’s winners can expect and accept that they might be tomorrow’s losers, electoral democracy is doomed.
And unless today’s losers can have confidence that their rights will be defended by democratic countermajoritarian institutions, they have no reason to keep faith with elections. When that happens, the populists win, the people lose, and democracy dies.
The horrific violence, gang rape and murder of the young woman veterinarian on a national highway close to Hyderabad has led to national outrage and protests in several States. Around the same time in Tonk, Rajasthan, a six-year-old child, returning home after having attended a school sports competition, went missing. Later, her bloodied body was found, sexually brutalized. In Coimbatore, a student of Class XI, returning from celebrating her birthday, was abducted and gang raped. In Ranchi, an Adivasi law student was abducted and gang raped by a group of armed men.
The week of dreadful sexual crimes brings home the reality that there is a national emergency in India as far as crimes against women, specifically sexual crimes, are concerned. A rape culture embodied in the brutal power of male sexual entitlement and impunity seems to have gained strength. But the government is in a state of denial. Since 2016, the annual National Crime Research Bureau (NCRB) reports have been suppressed. The 2017 report was released only in 2019. Apart from the deliberate omissions in reporting lynching cases and honour crimes, the report showed an alarming increase in registered crimes against women. Specifically, on an average, around 1,000 crimes were registered every day, over 3.5 lakh in the year. On an average, 93 women were victims of rape every day. One-third of them were minors. Around 87,924 women registered cases of sexual harassment, an average of 241 a day. Every day, on an average, 28 women were burnt to death in cases registered as ‘dowry deaths’.
Most cases go unreported
These figures, shocking as they are, reflect only a small percentage of the crimes committed against women. As is known, most cases go unreported. For example, the National Family Health Survey-4 revealed that every third married woman had experienced physical and/or sexual violence but only 1.5% had sought help from the police. Accurate data collection is very important to inform policy initiatives. Unfortunately, the present Central government prefers to suppress or to rubbish statistics that reveal its failures.
The terrible crime in Hyderabad also showed the callousness of elected leaders. The Chief Minister of Telangana has not yet cared to visit the grieving family. In Parliament, when the issue was raised, Amit Shah, the Home Minister, was conspicuous by his absence. Delhi is directly under his watch. It is the most unsafe city for women. Has he even once reviewed the issue with the police in the capital or expressed concern? The safety of India’s women and children does not seem to be on his list of priorities. Meanwhile, in response to the anguish expressed by several members during the parliamentary discussion on the Hyderabad case, Rajnath Singh, who was standing in for the Home Minister, said “all suggestions given by everyone present here will be taken and a law can be formed if needed. Our government is open to every suggestion anyone has to give to curb such heinous crimes. We are willing to do whatever it takes to ensure that the most stringent rules be implemented.”
Once again, the government deliberately turned attention to the issue of extent of punishment, instead of focusing on the urgent steps required for the prevention of such crimes. Every time the government is held accountable, it diverts attention to the “stringency” of punishment. In this context, Jaya Bachchan’s call for public lynching is dangerous and should be withdrawn. The death penalty for rape and murder is already on the statute book. Global experience is clear enough that such punishments have not led to a decrease in crimes. The issue, as repeatedly stressed by activists, is not just the extent and stringency of punishment, but as much the certainty of it through swift and fair procedures that discourage crime. There has been no improvement on this score.
Huge backlog of cases
The NCRB report shows that the backlog of cases, including cases of child rape, is huge. For all crimes against women, the pendency of cases is as high as 89.6%. In 2017, there were as many as 1.17 lakh rape cases from previous years pending trial. That year, 28,750 more cases were sent for trial. How many accused in this huge number of cases under trial were convicted? Just 5,822. This utter failure to reform the justice system and ensure conviction leads to an increase in the impunity with which crimes against women are committed. A UN report on steps required to provide safety and security for women states that “women’s safety involves strategies and policies that take place before violence has occurred to prevent perpetration or victimization... Prevention efforts involve strategic, long-term, comprehensive initiatives that address the risk and protective factors related to perpetration, victimization and bystander behaviour.”
In India, after the Nirbhaya case, the committee set up under Justice J.S. Verma had made a series of recommendations for prevention of crimes. It placed the responsibility on the Central and State governments to ensure the social and physical infrastructure to prevent crimes against women. It added to and expanded on various proposals which had already been made. The suggestions included changes in school and college syllabi to educate young people on the social values of equality and respect for women’s autonomy; ensuring safe public transport, city and street lighting, CCTV cameras; mapping unsafe areas and provision of increased police patrolling in such areas; and a slew of other steps. If these measures had been implemented seriously, perhaps the young woman veterinarian would be alive and safe today.
Basic safety measures
The Verma report stated: “What is even more shocking is the incapability of the government of India and of the various State Governments to implement even the most basic safety measures with any amount of efficacy... Despite numerous recommendations, deliberations, consultations, studies, directions from the judiciary and, most importantly, the protests of civil society, the state continues to fall woefully short of ensuring the safety of women in this country.” And now six years after this report, the government asks Parliament for further suggestions, displaying an utter lack of political will.
Under the present regime, retrogressive approaches to women’s rights have become more prominent. Ministers and elected representatives openly side with the rape accused as in Kathua or Shahjahanpur. It is the victims who are named, shamed, and blamed. Women’s assertions for a right to safe public spaces are met with a ferocious backlash. In particular, Dalit and Adivasi women, poor women working in the most unsafe conditions created by resurgent caste and class hierarchies, are the most vulnerable. The struggle against sexual violence is equally a struggle against the policies and cultures which disempower women.
The way forward is through increased public action for social change and enforcement of a code of accountability and responsibility on the Central and State governments to implement the recommendations necessary to make India safe for its women and children.