Panel for giving coal to end-useplants linked to cancelled mines

CIL shall assess the quantity of coal that could be made available for this dispensation.

An inter-ministerial panel on fuel linkages has recommended providing coal to end-use plants linked to the blocks that have been cancelled by the Supreme Court.

The Standing Linkage Committee (Long Term) recommended that “in view of the scarcity situation of coal, prioritisation of categories of coal supply be done...in case of the de-allocated/cancelled coal blocks,” according to an official document.

The first category is of those end-use plants (EUPs) which already had long-term linkages/LoAs (Letter of Assurances) but were later converted to tapering-linkage.

The second category is of those EUPs which were granted tapering linkages.

Tapering linkages are interim supply arrangement made for power projects where production from linked captive coal blocks was delayed.

“The Committee recommended that coal be supplied to the EUPs subject to availability (of coal),” it said.

“For the purpose of supply of coal...CIL (Coal India) shall assess the quantity of coal that could be made available for this dispensation and keeping that in view, may enter into MoU with EUPs,” it added. The document said that tentatively, additional 5-7 million tonnes of coal may be made available under current arrangement and till March 31, 2015. “Preference would be given to the running plants. Further, coal supply...shall be confined to EUPs under sponge iron/steel and cement sectors only....The Captive Power plants shall be excluded from the above arrangement (because of scarcity of coal),” it said.

EUPs linked with the operational blocks should not be covered under the current arrangements as they are entitled to receive coal till March 31, 2015. EUPs to be supplied coal under current proposal would be offered coal from the mines nearest to them and they should lift coal by road, it added.

EUPs linked with those coal blocks which are under the investigation of CBI and FIRs have been registered against them should not be considered for supply of coal.

Source - The Hindu

[PIB] [Eco] Quarterly Report on India’s External Debt at End-September 2014 Released;

India’s External Debt Stood at US$ 455.9 Billion, Reflecting an Increase of US$ 13.7 Billion Over the Level at End-March 2014; Government (Sovereign) External Debt Stood at US$ 88.4 Billion at End-September 2014 vis-a-vis US$ 81.5 Billion at End-March 2014.

Department of Economic Affairs, Ministry of Finance, Government of India has been compiling and releasing quarterly statistics on India’s External Debt for the quarters ending September and December every year. This press release relates to India’s external debt at end-September 2014.

At end-September 2014, India’s total external debt stock stood at US$ 455.9 billion, recording an increase of US$ 13.7 billion (3.1 per cent) over the level at end-March 2014. The rise in external debt during the period was due to long-term external debt particularly commercial borrowings and NRI deposits.

Long-term debt was US$ 369.5 billion at end-September 2014, showing an increase of 4.7 per cent over the end-March 2014 level, while short-term debt declined by 3.2 per cent to US$ 86.4 billion.

Short-term debt accounted for 18.9 per cent of India’s total external debt at end-September 2014, while the remaining (81.1 per cent) was long-term debt. Component-wise, the share of commercial borrowings stood highest at 35.4 per cent of total external debt, followed by NRI deposits (23.8 per cent) and multilateral debt (11.7 per cent).

Government (Sovereign) external debt stood at US$ 88.4 billion, (19.4 per cent of total external debt) at end-September 2014 vis-a-vis US$ 81.5 billion (18.4 per cent) at end-March 2014.

The share of US dollar denominated debt continued to be the highest in external debt stock at 60.1 per cent at end-September 2014, followed by the Indian rupee (24.2 per cent), SDR (6.5 per cent), Japanese yen (4.5 per cent), and euro (3.0 per cent).

The ratio of concessional debt to total external debt was 9.8 per cent at end-September 2014 as compared to 10.5 per cent at end-March 2014.

India’s foreign exchange reserves provided a cover of 68.9 per cent to the total external debt stock at end-September 2014 vis-à-vis 68.8 per cent at end-March 2014.

The ratio of short-term external debt to foreign exchange reserves was at 27.5 per cent at end-September 2014 as against 29.3 per cent at end-March 2014.

The complete quarterly report of India’s external debt at end-September 2014 is available on the website of Ministry of Finance – www.finmin.nic.in.

Source - PIB

Outrage over BJP MP’s remarks on farmers suicide

Farmers should be “let to die” if they are incapable of or cannot afford farming, Sanjay Dhotre said at a meeting.

Coming on the heels of a dozen reported farmer suicides within three days in Maharashtra’s Vidarbha region, BJP MP Sanjay Dhotre has kicked up a major controversy after he said that farmers should be “let to die” if they are incapable of or cannot afford farming.

“Let these farmers fend for themselves. If crops fail, they will figure out what to do. And if they dying, let them die,” said Mr. Dhotre, the parliamentarian from Akola.

Mr. Dhotre’s comments came at a farmers’ conference in his constituency on Sunday. Revenue Minister Eknath Khadse was on stage and was seen nodding at Mr. Dhotre’s remarks.

"Very few of us know about organic and Genetically Modified crop even as they have been discussed for decades. If this is our situation, imagine the plight of the poor farmers. I have many times spoken in despair…let the farmers die if they must. Those who can afford farming will do it, others will not do it,” Mr. Dhotre said.

Mr. Dhotre came under attack from various corners for “casual” and “insensitive” comments. However, he later clarified that his words were highlighted out of context.

"What I meant was that the various schemes launched for farmers are not doing anything to improve their lives but only making it worse for them. So if the farmers are on their own they might as well be better off. I did not mean it in an offensive manner when I said that if farmers are dying we should let them die. I said it in anger,” Mr. Dhotre explained.

Within a span of 72 hours, 12 farmers had committed suicide in the cotton belt of western Vidarbha, according to the Vidarbha Jan Andolan Samiti, a local farmer interest group.

Mr. Khadse had last month raked up a similar controversy in Akola when he remarked that though farmers had the money to pay their mobile bills they were often found reluctant in clearing their electricity bills. Sena chief Uddhav Thackeray had criticized Mr. Khadse saying his comments were “insensitive.”

Source - The Hindu

AirAsia tragedy: bodies, debris found in Java Sea

Signs of the jet found in shallow waters, about 16 km from its last-known coordinatesAfter three days of intense search, debris of the missing AirAsia aircraft carrying 162 people was found on Tuesday in the Java Sea off Indonesia, but only three bodies have been retrieved so far as mystery remained over the cause of the crash.








Source - The Hindu

Ordinance to amend law on arbitration

To send out a signal to foreign investors that settling commercial disputes in India will no longer be a time-consuming affair, the government has decided to promulgate an Ordinance to amend the Arbitration and Conciliation Act, 1996.

The Ordinance is aimed at making it mandatory for commercial disputes to be settled within nine months and also putting a cap on fee of arbitrator. The Centre has sent it to President Pranab Mukherjee for his assent.

The proposed amendments stipulate that the presiding officer of a commercial dispute will have to clear the case within nine months, reported agencies quoting an unnamed official. The arbitrator will be free to seek an extension from the High Court. But in case of further delays, the High Court will be free to debar the arbitrator from taking up fresh cases for a certain period.

The government had to take the Ordinance route as it wanted the reforms to be put in place at the earliest, the official said.

“Most of the recommendations of the Law Commission have been accepted. While some have been incorporated in the law itself, some of the recommendations will be used while framing rules,” the official was quoted as saying.

The Federation of Indian Chambers of Commerce and Industry (FICCI) said in a statement that the move would make India a more investor-friendly destination and help promote institutional arbitration.

FICCI Secretary-General and Indian Council of Arbitration Director-General A. Didar Singh said the proposed amendment of capping arbitrators’ fee and introducing timelines for giving final awards would make dispute-resolution less expensive and give a push to commercial activity.

It is is aimed at making it mandatory for commercial disputes to be settled within nine months and also putting a cap on fee of arbitrator

Source - The Hindu

[Ed] Impropriety of ordinance

By promulgating ordinances within days of the winter session of Parliament coming to a close, the Narendra Modi government has shown that it is not averse to repeating what his party would have considered a constitutional impropriety, had it been done by a Congress government. The power to issue ordinances is normally to be exercised to bring in urgent legislative measures when Parliament is in recess. It is not one to be resorted to merely because the government of the day lacks a majority in the Upper House or is unable to break a deadlock in Parliament. However, it is seen that inefficient floor management, fear of facing a House in which the incumbent party does not have a majority, and a reluctance to make pragmatic concessions across the floor in the interest of sticking to its legislative agenda are the main reasons for prolonged deadlocks. It is a situation rich in irony as the BJP had often questioned the United Progressive Alliance government’s promulgation of ordinances in close proximity to a parliamentary session. As in the case of the impasse in the Rajya Sabha that occasioned the ordinances recently issued to make legislative changes in the coal and insurance sectors, logjams are often the result of the government’s aversion to resolving issues raised by the Opposition. The Bharatiya Janata Party’s justification for exercising the President’s legislative power is that it had to avoid any further delay in the e-auction of coal blocks; and that raising the cap on foreign direct investment in insurance from 26 per cent to 49 brooked no further delay. And it has now approved yet another ordinance to amend the land acquisition law when there appears to be no urgent need to do so.

On the flip side, it is a fact that the combined opposition, which outnumbers the ruling party and its allies in the Rajya Sabha, was determined to stall the proceedings until the demand that the Prime Minister himself make a statement on the ongoing ‘reconversion’ drive organised by affiliates of the Sangh Parivar was met. Mr. Modi could have intervened at least once to clear the air on allegations that his government was conniving at the controversial ghar vapsi programmes across the country. For a government committed to undoing the ‘policy paralysis’ of the previous regime and revitalising economic reforms and good governance, his regime has shown notable reluctance to rein in fringe Hindutva elements that do not seem to care for the government’s growth and development objectives. Finance Minister Arun Jaitley’s claim that the promulgation of the ordinances signify the government’s commitment to reform is questionable. An easier way to demonstrate its commitment to reform would have been to create conditions conducive to getting the Bills passed in the House.

Source - The Hindu

Centre invites studies of river basins

To understand the impact of climate change on water systems

To understand the impact of climate change on water systems, the government has invited proposals from knowledge institutions like the Indian Institutes of Technology (IITs) and the Indian Institute of Science (IISc), Bangalore to undertake studies on 20 major river basins in the country. This is one of the steps under the National Water Mission which is one of the eight priority missions under the National Action Plan on Climate Change (NAPCC).

Official sources told The Hindu on Tuesday that these institutions would study impacts using downscaled global climate models. The studies are expected to be commissioned shortly and will take between six months to two years for completion. Six IITs and the IISc will be involved in the project which will provide valuable inputs to policy decisions and adaptation measures. This is the first time that such studies will be undertaken on a large-scale with downscaled models which will be relevant for local regions, he said.

According to the NAPCC, 2008, government expenditure on adaptation to climate variability exceeds 2.6 per cent of the GDP. The technical document says that many parts of India are water stressed and the country is likely to be water scarce by 2050. There is a decline in total run off for all rivers projected, except for Narmada and Tapti.

Most of India’s eight national missions are adaptation centric and the National Water Mission has five goals, official sources said. The Mission has already set up a comprehensive data base called the Water Resources Information System, in partnership with the National Remote Sensing Agency which is updated every six months.

The Mission is focusing on capacity building right down to local self-governments which is an ongoing exercise and has an MoU with the National Institute of Rural Development and other agencies for this purpose.

As part of adaptation it has focused attention on critical areas like depleting ground water and is undertaking aquifer mapping, and flood management with a focus away from structural measures like building embankments and instead working with communities for preparedness.

Two pilot projects with technical assistance from Asian Development Bank in the Burhi Gandak basin in Bihar and Brahmani in Orissa will lead to a master plan on preventive action in flood-prone areas, using best practices and providing value additions.

With the aim of increasing water use efficiency by 20 per cent across all sectors, the government is developing a National Bureau of Water Use Efficiency which is in the advanced state of being set up on the lines of the Bureau of Energy Efficiency. Among other things it will set national standards on water appliances and also focus on efficient technology and best practices.

While the Water Mission has taken several steps, there are several challenges. In 2012, a study said the mission should be led by interdisciplinary experts, which is not how the Ministry is currently set up.

Source - The Hindu

Gadkari wants foreign investment in waterways

Boosting the nation’s inland waterways network will be one of the biggest focus areas in 2015, Union Shipping and Surface Transport Minister Nitin Gadkari said on Tuesday.

“It is my dream to have an inland waterways network just like the national highways… We will try to attract foreign investment in inland waterways,” he told journalists here.

The first step, he said, would be to develop the Varanasi-Haldia project for which the World Bank sanctioned Rs. 4,200 crore. The project on the Ganga would later be extended to Allahabad.

Mr. Gadkari said that increasing road safety was a continuing priority. The road transport and safety Bill was expected to be passed by Parliament next year; thereafter, minimum safety standards for all vehicles would be announced. “Some time by the middle of next year, minimum safety standards for all car models, economy or luxury, would be notified,” Surface Transport Secretary Vijay Chhibber told The Hindu.

Adherence to the minimum standards, which would be in line with the U.N. guidelines, would be voluntary for automobile companies for the first year, after which they would be made mandatory, he said.

Beyond the minimum standards, carmakers could offer star-rated models with enhanced safety features for a higher price.

The norms would require vehicles to pass crash tests with “no fatality” at 56 km/hour.

Mr. Gadkari said the government viewed the regularisation of e-rickshaws as a humanitarian issue. “It allows a poor person to make a living using technology to ferry passengers. It is better than the inhuman manual and cycle rickshaws. E-rickshaw should be compared to manual and cycle rickshaws and not to autorickshaws,” he said.

Source - The Hindu

[Int.] Lakhvi stays imprisoned; arrested in abduction case

Mumbai attack mastermind Zakiur Rehman Lakhvi was on Tuesday arrested just before his release following a Pakistani court’s suspension of his detention.

“Lakhvi has been arrested in another case,” an interior ministry spokesman told PTI.

Lakhvi was set to be freed from the Adaila Jail Rawalpindi Tuesday morning on the order of the Islamabad High Court.

“Lakhvi was then presented before a magistrate who remanded him in custody,” the official said.

The Islamabad High Court on Monday suspended the government’s Maintenance of Public Order (MPO) under which Lakhvi was being held under detention, paving the way for his release.

Foreign Secretary Sujatha Singh summoned Pakistan High Commissioner Basit in New Delhi and the Indian mission in Islamabad took up the issue with the Pakistan Foreign Office.

While suspending Lakhvi’s detention order, the court directed the Pakistan government to file a reply in this regard on January 15.

Lakhvi, who was the operations commander of the Lashkar-e-Taiba, was charged along with six others in 2009 in the Mumbai attack case. Ajmal Kasab, executed in India, and David Coleman Headley, convicted in the U.S. for planning the attacks, had identified Zaki-ur-Rehman Lakhvi as the operations mastermind for the 26/11 terror attack on Mumbai in which 166 people were killed.
Top developments


Source - The Hindu

[Int.] Another Jamaat leader gets death sentence

A commander of Al-Badr killing squad, A.T.M. Azharul Islam, was awarded death penalty on charges of genocide, mass killing and crimes against humanity during the country’s Liberation War in 1971.

Azhar, now the assistant-secretary-general of Jamaat-e-Islami, was also sentenced to 25 and five years imprisonment on two other charges for rape and abduction.

The International Crimes Tribunal (ICT)-1 found the Jamaat-e-Islami leader guilty of five out of six charges on Tuesday. Azhar was the chief of Jamaat student front ‘Islami Chhatra Sangha’ and led the dreaded Al-Badr killing squad, formed by the Pakistan Army to suppress Bangladesh’s independence, in northern Rangpur region .

The verdict has been hailed by the people of Rangpur, who took out processions and distributed sweets. The prosecution was satisfied with the verdict and said that the punishment served the expectation of the victims’ families and the countrymen. The defence said Azhar was not awarded a fair verdict and will file an appeal.

Azhar is the eighth senior Jamaat leader to be convicted of war crimes.

The tribunal awarded capital punishment to Azhar for Mokshedpur massacre on April 16, killing of around 1,400 unarmed civilians at Jharuarbeel in Rangpur on April 17 and abduction and murder of four Hindu teachers of Carmichael College and others on April 30 in 1971.

He was sentenced to 25 years’ rigorous imprisonment for raping women at Rangour Town Hall between March 25 and December 16 and five years for torturing two persons from November to December 1.

The head of the three-member tribunal, M. Enayetur Rahim, while delivering the verdict, referred to a section of foreign media which depicted Azhar as a ‘religious figure’. “His [Azhar’s] stature as an Islamic or religious figure is not our concern. We are trying him as a suspected war criminal,” the judge remarked.

Call for shutdown

The Jamaat-e-Islami has called a two-day countryside shutdown for Wednesday and Thursday to protest against the death verdict. Jamaat had responded violently to its leaders’ convictions in the past.

Source - The Hindu

[Int.] US Congress notifies $532 million assistance package for Pakistan

ISLAMABAD: The United States Congress has notified a $532 million civilian assistance package for Pakistan under the Kerry-Lugar Act, said US Ambassador to Pakistan Richard G Olson during a meeting with Federal Minister for Finance Ishaq Dar.

An official statement issued here on Monday said that Olson discussed with the minister the breakup of assistance being given for different sectors such as energy, defence against terrorism, economic growth, community building, education and health.

The finance minister remarked that the government should spend a large amount of this assistance for the rehabilitation of the temporary displaced persons (TDPs) of North Waziristan Agency.

The act was passed in the year 2009 by the US Congress to authorise appropriations for fiscal years 2010 through 2014 to promote an enhanced strategic partnership with Pakistan and its people, and for other purposes.

Olson also discussed the agenda for the expected visit of US Secretary of State John Kerry to Pakistan in January 2015.

Dar discussed with the ambassador the speedy delivery of Boeing aircraft which PIA has sought to acquire to upgrade its fleet, which he said was on the priority list of the govt.

The minister told the ambassador that they are preparing for giving a briefing to the donors about the rehabilitation work being carried out for the TDPs of North Waziristan and the flood affected communities.

Source - DAWN.COM

[Int.] Chinese ‘tiger eater’ gets 13 years in jail

A Chinese businessman who bought and ate three tigers has been sentenced to 13 years in prison, state media reported on Tuesday.

The wealthy real estate developer, identified only by his surname Xu, has “a special hobby of grilling tiger bones, boning tiger paws, storing tiger penis, eating tiger meat and drinking tiger blood alcohol,” the official Xinhua news agency said in June when he went on trial.

Xu organised three separate trips last year for a total of 15 people, including himself, to Leizhou in the southern province of Guangdong, where they bought tigers for a “huge amount of money” that were killed and dismembered as they watched, the government-run news portal gxnews.com.cn reported on Tuesday.

One of them filmed the entire process of a tiger slaughter with his mobile phone. The footage was later obtained by police.

Police seized eight pieces of animal meat and bones from a refrigerator in Xu’s home, some of which were later identified as tiger parts, the report said, adding that 16 geckos and a cobra were also found.

Tiger bones have long been an ingredient of traditional Chinese medicine, supposedly for a capacity to strengthen the human body, and while they have been removed from its official ingredient list the belief persists among some.

Source - The Hindu

[Eco] SEBI moots new norms for issue of municipal bonds

These are good alternative investment opportunity for conservative investors, says regulator

To help in the Government’s ‘smart cities’ programme, the Securities and Exchange Board of India (SEBI), on Tuesday, proposed a new set of norms for listing and trading of municipal bonds on stock exchanges, while channelising household investments for urban infrastructure development.

Issuing draft regulations for such municipal bonds, also known as ‘muni bonds’, SEBI said that that issuing authorities would need to contribute at least 20 per cent of the total project cost for which they wish to raise funds.

Besides, these municipal authorities would need to have a strong financial track record and such bonds should have a minimum tenure of three years.

“Conservative Indian investor mainly invests in fixed deposits, small saving schemes or gold. Bonds issued by municipalities having good financial track record would be an good alternative investment opportunity for such conservative investors, as it provides reasonable return with less risk, which in turn may accelerate the capital markets,” SEBI said.

Popular in U.S.

‘Muni bonds’ are very popular among investors in many developed nations, especially in the U.S., where these have attracted investments totalling over $500 billion and are among preferred avenues for household savings.

Comments have been invited on the draft regulations till January 30.

Further, the capital market regulator said that municipal bonds would add to instruments where provident funds, pension funds and insurance companies can put in their money.

While such bonds have been issued by various municipal authorities in the country, the total funds raised through them stand at only about Rs.1,353 crore.

The Bangalore Municipal Corporation was the first municipal corporation to issue a municipal bond of Rs.125 crore with a State guarantee in 1997.

However, the access to capital market commenced in January 1998, when the Ahmedabad Municipal Corporation (AMC) issued the first municipal bonds in the country without State government guarantee for financing infrastructure projects in the city. AMC raised Rs.100 crore through its public issue.

Among others, Hyderabad, Nashik, Visakhapatnam, Chennai and Nagpur municipal authorities have issued such bonds, however, there is no provision as yet for listing and subsequent trading of muni bonds on stock exchanges in India.

As per guidelines of the Urban Development Ministry, only bonds carrying interest rate up to maximum 8 per cent per annum shall be eligible for being notified as tax-free bonds. However, SEBI’s Corporate Bonds and Securitisation Advisory Committee is of the view that having a fixed rate of 8 per cent might not attract investors.

There can be “flexibility in setting interest rate cap by linking it to a benchmark market rate,” the concept paper said. Under the proposed norms, municipal authorities having negative net worth and those which have defaulted on payments to financial institutions would be barred from issuing the bonds.

Corporate municipal entity or its directors restrained or prohibited by SEBI would also be ineligible.

Minimum subscription limit

According to draft regulations, the minimum subscription limit should not be less than 75 per cent of the issue size.

In the event of non-receipt of minimum subscription, all application money received in the public issue should be refunded to the applicants, within 12 days from the date of the closure of the issue.

When there is a delay by the issuer in making the refund, then it has to give back the subscription amount along with interest at 10 per cent rate per annum for the delayed period.

Further, SEBI said the issuer’s contribution for each project should be at least 20 per cent of the project costs, which shall be contributed from their internal resources or grants.

“An issuer, proposing to issue debt securities shall maintain 100 per cent asset cover sufficient to discharge the principal amount at all times for the debt securities issued,” it added.

There is massive capital investment need in municipal infrastructure and funds from programmes such as Jawaharlal Nehru National Urban Renewal Mission (JNNURM) can only partly meet the requirement, it said.

“Therefore, to meet their financing needs, the municipalities have to seek recourse to other means including issuance of municipal bonds,” the paper said.

Source - The Hindu 

[Ed] Fencing the farmer out

In the name of economic reforms and development, the government has taken a significant step backward in India’s march to land justice. The pushing through of the Land Act ordinance violates all democratic norms

On Monday, the Bharatiya Janata Party government cleared the proposed ordinance to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013. This amendment, insofar as has been made known to the public, creates a separate category of projects which shall be “fast tracked.” The items covered under this category include industrial corridors, defence and defence production, rural infrastructure including electrification, housing for the poor including affordable housing, and infrastructure projects including projects taken up under Public-Private Partnership (PPP) mode.

The immediate and likely impact of this amendment is that land can now be acquired for these projects without having to exhaust the pre-acquisition processes that had been put in place, namely the Social Impact Assessment (SIA) and the determination of prior informed consent from affected families. A cursory analysis of this amendment shows why the same is not just problematic but is also a serious step backward.

Reason behind pre-acquisition steps

First, there is a reason why the consent and SIA process had been hardcoded into the DNA of the law. Acquisition had become a tool for the use of brutal force by the state. Acquisition was almost always forceful, leading invariably to riots and protests (often violent in nature). By requiring the state to seek the consent of 70 to 80 per cent of the affected families, the law empowered those who were to be directly impacted against the arbitrary exercise of the power by the state. For the first time in the history of independent India was the citizenry given a say in how the state would deal with their land. Now with this one step, the BJP has returned us to the days of the British enacted law where our citizens enjoyed no say in their development.

Second, the unamended law was enacted after unprecedented nationwide consultations which took place over two years. Two all-party meetings were convened. The Bill was subject to 12 hour debates in both Houses in which over 60 members took part. Two key amendments suggested by Ms. Sushma Swaraj and Mr. Arun Jaitley were also accepted (These related to providing for lease as an option and the share of an original owner in case his land was subsequently acquired). The BJP unambiguously supported the law in Parliament and even expressed support for these very provisions it now seeks to exclude. In this context, this sharp ‘U-turn’ becomes all the more surprising.

Infrastructure projects
Third, under the unamended Act, the only exemptions to the consent and the SIA clause were the 13 laws given in the Fourth Schedule to the Act itself. Mindful of the fact that some projects were of greater national importance than others, the framers had already created this separate class of projects which included acquisition for the purposes of railways, national highways, atomic energy, electricity, etc. Acquisition for defence and national security had also been protected under the urgency clause. And even these 13 laws had to be amended within one year, i.e. by December 31, 2014 to ensure that compensation, rehabilitation and resettlement clauses were brought on a par with the new law (vide section 105 of the unamended law). With regard to this particular amendment, the government is attempting to make a virtue out of a necessity prescribed by their predecessors.

Fourth, crafting a set of categories which includes vague items such as infrastructure projects (including PPP projects) solely for the purpose of exempting them from consent requires enormous application of mind. The exemptions given in the unamended law were the result of sustained public consultation. In the case of the ordinance, exemptions have been created without any explanation as to why these activities or sectors are being placed in a class of their own. Such lawmaking practices veer dangerously close to arbitrariness in administrative decision-making.

Importance of a safeguard
Supporters of the amendment will undoubtedly argue that the law does not dilute the provisions of compensation, rehabilitation and resettlement but instead only makes the process for acquiring the land easier.

What they fail to realise is the gap between the bargaining power of the state and the lowest common denominator is a very wide chasm.

The SIA process gave these people (often farmers) the right to negotiate fairer rates of compensation while determining if the project was truly in the public interest. It had also removed the scope for the subjective use of discretion by the Collector and other representatives of the government.

Now, with the SIA process being waived, the Collector can once again determine what constitutes a public purpose and how soon can land be acquired. It was this unchecked authority that was at the heart of the multiple abuses of the law chronicled over the last 70 years. Discretion had been replaced by verifiable systems and processes to check capricious decision-making. Now, this safeguard stands eroded.

The SIA was designed to ensure that no acquisition in excess of the bare minimum requirement took place. This was an important objective as most acquisitions were characterised by excess zeal on the part of the state. More land was always acquired than was needed for the project in question. Without SIA, the possibility of arbitrary diversions once again becomes a reality.

No restrictions
Also, the new law didn’t introduce the concepts of rehabilitation and resettlement. It merely put in place a process that ensured compliance and enforcement. The Supreme Court of India had already mandated rehabilitation and resettlement even before the new law was enacted. There was even a national policy that existed on the subject but violations remained rampant. The SIA was created to provide a framework that would ensure its implementation.

Another fear is that this new ordinance will effectively undo the implicit limits that had been placed on the acquisition of agricultural or multi-crop land by the unamended Act (done to ensure continued food security for our citizens). However, the amendments seem to allow such acquisitions without restrictions. This gives rise to worrying questions as to who is the natural constituency of the party in power.

The government should have instead used this opportunity to strengthen the legal regime governing land titles in States where it is now in power (since land is primarily a state subject). Knowledge asymmetry and an active land mafia lead to the purchase of land being a risky proposition (and hence making acquisition more attractive). It is a pity that the government did not take this opportunity given that it is in power in both the Centre and in key States where acquisition is a burning issue (Maharashtra, Haryana, Rajasthan and Madhya Pradesh). The amendments will only disempower gram sabhas.

In the name of economic reforms and development, the government has taken a significant step backward in India’s march to land justice. An ordinance pushed through in this manner violates all democratic norms and is the shape of things to come in the Modi sarkar. Given this cloak-and-dagger approach becoming the norm for lawmaking in our country, we can only hope that in this era of acronym-anchored governance, ‘Modi’ does not come to stand for ‘Murder of Democratic India’.

(Jairam Ramesh is a Member of Parliament, Rajya Sabha, and Muhammad Khan is an advocate.)

Source - The Hindu

[Eco] Degrees of default

Robert Frost once said, “A bank is a place where they would lend you an umbrella in fair weather and ask for it back when it begins to rain.” In a perfect banking market, bankers lend and borrowers pay back the amount lent in due course of time. But no market is perfect. Consequently, some borrowers pay and some don’t. If both the quality and quantity of borrowers who don’t pay increases, the bank starts to panic.

Normally, a borrower does not repay a loan due to a genuine inability to pay, a temporary cash flow mismatch impacting his desire to pay or a permanent unwillingness to pay. The Reserve Bank of India (RBI) labels the last category as wilful defaulters — though it would be almost impossible to prove intentional or wilful unwillingness to pay. As a part of its framework for revitalising distressed assets in the economy, the RBI recently announced instructions to classify borrowers as “non-cooperative” borrowers.

Non-cooperative borrowers

A non-cooperative borrower is one who does not engage constructively with his lender by defaulting in timely repayment of dues while having ability to pay, thwarting lenders’ efforts for recovery of dues — basically a defaulter who deliberately stonewalls legitimate efforts to recover dues.

A non-cooperative borrower in case of a company will include, besides the company, its promoters and directors (excluding independent directors and directors nominated by the government and lending institutions). In the case of business enterprises (other than companies), non-cooperative borrowers would include persons in charge and responsible for the management of the affairs of the enterprise.

The instructions envisage a two-committee process to label a borrower as non-cooperative. While this detailed procedure could be useful, it could delay the classification. A single high-powered committee could do the job, and it would probably be a good idea to invite the statutory auditors to this committee as they are the ones that go through the asset classification norms with a fine-tooth comb.

The intention

The banks should send a show-cause notice to the borrower asking why he should not be christened non-cooperative. Banks should insist on a time limit for the borrower to respond to this failing which his loan account would be classified as non-cooperative. Half-yearly reviews of the status are to be done.

Once the label has been stuck on a borrower, additional loans as also new loans sanctioned to the borrower or any other company that has on its board any of the whole time directors/promoters of a non-cooperative borrowing company or any firm in which such a non-cooperative borrower is in charge of management of the affairs will entail higher provisioning norms and the loans would be priced higher.

It is apparent that the intention behind the instructions for classifying a borrower non-cooperative is two-fold: one is to exert pressure on the borrower to cough up the amount owed and the other is to ensure that he does not lead a comfortable life in the world of debt.

To ensure that this is implemented, banks should commence by making public the names of a few borrowers whom they have classified as non-cooperative. This would also stop the general feeling that nothing would ever happen to a well-heeled borrower who has taken care of his banker. Bankers should not agree to a small credit in the borrowers’ account to buy peace for a couple of years. This is the sub-text that the RBI has written in its instructions.

The writer is a chartered accountant

Source - The Hindu

[Ed] When the Opposition refuses to oppose

It leaves the government hogging the limelight and pushing the reformist agenda. Big business couldn’t be happier

Somnath Lahiri, the lone communist in the Constituent Assembly, said during a debate that the objective of Fundamental Rights in a “bourgeois national democracy” is that a political opposition must have full freedom to express its views, to draw its own conclusions and to say anything it likes.

“If I am in the Opposition or if someone else is in the Opposition it is certainly his business to say that the existing government is despicable; otherwise he would not be in the Opposition,” he said, defining the Opposition.

After almost seven decades, we now have a situation where the government hardly has any opposition, particularly on economic and policy issues. The principal opposition party, the Congress, seems to have taken the position that it will lend whole-hearted support to the government whenever reforms are discussed.

Consider the speech of the Congress’ general secretary Madhusudan Mistry in the Rajya Sabha on the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Amendment Bill. Mistry, a trade unionist, listed a number of problems with the Bill and said it went against the rights enjoyed by workers in the country. But, he concluded, his party had decided to support the Bill even though “I staunchly oppose the content of this Bill.” And the Bill was passed in the Upper House.Different scenario

A year ago, the situation was different. In the 2012 winter session of Parliament, both Houses discussed the proposal to increase FDI limit in the retail sector. The BJP was in the forefront of protests against it. Arun Jaitley, then leader of the Opposition in the Rajya Sabha, said young Indians would end up as sales girls and boys once this proposal was implemented. His party voted against the government’s decision in both Houses. There were not many differences in the speeches of Jaitley and the CPI(M) leader, Sitaram Yechury.

And this was not just in the case of FDI in retail. The BJP, as the Opposition for a decade, took a position similar to the Left on a number of issues ranging from the Indo-US civilian nuclear deal to the UIDAI. This has definitely helped the BJP strengthen its base as an opposition party.

The party’s campaign during the last general elections was pegged on the indecisiveness of the Manmohan Singh government even as it showcased the Gujarat model as the best reform-oriented government. So, a curious mixture of Left-leaning opposition arguments and promises of good governance helped it come back to power after its debacle in 2004.In session

When in the opposition, the BJP took an anti-government position in Parliament, in the tradition of Indian opposition parties. This ended up making it seem anti-reforms. The party ensured an informal floor co-ordination with the Left on several issues, including the Pension Bill which it had initiated when the NDA had been in power.

What about this winter session? The productivity of the Lok Sabha in these four weeks is at 102 per cent, against the Rajya Sabha’s 61 per cent. Also, the functioning of Question Hour is 84 per cent in the Lok Sabha and 27 per cent in the Rajya Sabha. While 98 questions were answered orally in the former, 43 were answered in the latter. The Lok Sabha passed 17 and the Rajya Sabha 10 Bills. While 15 Bills have been introduced in the Lok Sabha so far, one has been introduced in the Rajya Sabha.

Two years ago, both Houses witnessed several hours of disruption on issues such as FDI in retail and women’s safety. According to PRS India, a research organisation, the productivity of the Lok Sabha was 53 per cent of the scheduled hours and the Rajya Sabha, 58 per cent in the 2012 winter session. Only six Bills were passed at that time.When Left is not right

The Congress’ decision to not toe the ‘Left line’ on the issue of reforms presents a new scenario in Indian politics. As an opposition party between 1998 and 2004, the Congress upheld its ‘socialist’ credentials in Parliament to oppose several reform initiatives of the NDA such as, for instance, divestment of major public sector undertakings. It campaigned against the Centre on issues such as agrarian distress and farmer suicides. The Vidarbha region saw more than 1,050 suicides in 2014. The principal opposition party is not in a position now to take up that issue with the government.

A considerable section in the Congress believes that taking a ‘Leftist’ position when you are in the Opposition may not win you votes. Citing the plight of Left parties and the Aam Aadmi Party, Congress leaders say that “correcting” the administration rather than “criticising” it can fetch you votes. An analysis by a section of the Congress is that the AAP’s decision to turn Left from being a rightist outfit taking the moral high ground was the reason for its weak performance during the Lok Sabha elections.

By projecting the ‘socialist’ Mallikarjun Kharge as its leader in the Lok Sabha, the Congress gave some indications that it may also go the BJP way. But the party’s performance in the last two sessions proves that it works with the government on policy issues — risking unity in the Opposition. The hindutva — or rather, the anti-hindutva — campaign is the only rallying point for the opposition parties. Reforms may now be pushed without any major debates or discussions in Parliament as the non-Congress opposition in Parliament, including Leftists, socialists and the Trinamool Congress, are a micro minority. Two major regional parties — the AIADMK and the Biju Janata Dal — are taking a pro-government position.

Prime Minister Narendra Modi thus has a free hand to implement the agenda of the business class. He knows how to silence the Congress by throwing its own policies to them. Which means that reforms are also now a part of the ‘majoritarian’ agenda.

Source - The Hindu

[Eco] RBI allows banks to invest freely in FIs bonds

The RBI has exempted bank investments in equities and bonds issued by financial institutions from the ceiling of five per cent of incremental deposits over the previous year. According to a circular issued by the RBI on Wednesday, investments by banks in equities and bonds issued by the FIs will be outside the ceiling of five per cent prescribed for that in shares and debentures of corporate bodies. The move is expected to provide a boost to investments by banks in bonds issued by corporates considering several floating rate bond issues by private corporates met with a poor response due to the ceiling.

Source - The Hindu