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Jan 2, 2015

[PIB] Implementation of Bezbaruah Committee

Union Home Minister briefs media on the implementation of Bezbaruah Committee 

Shri Rajnath Singh says amendments to IPC under consideration 


The Ministry of Home Affairs had constituted a Committee in February 2014 under the chairmanship of Shri M.P. Bezbaruah to look into the various concerns of the citizens hailing from the North Eastern States who are living in different parts of the country and to suggest suitable remedial measures including legal measures which could be taken up by the Government.

As part of the Legal Measures, Shri Rajnath Singh said the Indian Penal Code (IPC) will be amended for insertion of new sections of 153C and 509A as recommended by the Committee. The Ministry of Law & Justice has agreed to the amendment.

As part of Legal Assistance, the Home Minister said a panel of seven lawyers including five women lawyers has been constituted by the Delhi State Legal Service Authority (DSLSA) for providing legal assistance to the needy people from the North East. The Delhi Government will also be providing compensation and monetary assistance to the NE people under Delhi Victim Compensation Scheme 2011. State Bhawans of concerned NE States have also agreed to play active roles to assist the persons in distress.

Shri Rajnath Singh further said that all the recommendations made by the Committee regarding Special Police Initiatives and additional steps to be taken by the various State Police Forces and Delhi Police have been accepted for immediate implementation. These include:


  •  Delhi police will recruit 20 police personnel, (10 male – 10 female) each from North East States.
  •  Police exchange programme has been approved between NE States and metropolitan cities including Delhi.
  • North East Special Unit at New Delhi is activated to address the grievances of the NE people. Other States have been advised to do the same.
  •  A decision has been taken that cases of NE people be referred to the existing fast track courts for early decision.
  •  A special helpline No.1093 for NE people is being synchronized with helpline No.100. Other States are advised to set up special helpline.
  • Various Metropolitan Police including Delhi Police are being advised to post NE Personnel in their force in the visible positions in vulnerable areas prone to crime against NE people. Also they will be advised to have due representation of the senior officers at the field level.

The Union Home Minister said some recommendations relate to the Ministry of Human Resource Development and several steps have already been initiated in this regard including:

  • In order to educate the people about the North East, Universities have been advised that history of North East and participation in the freedom movement of the country should be taught at graduation level and post graduation level, and for this purpose, curriculum be changed.
  • Similar action is being taken by the NCERT with respect to elementary and higher secondary education.
  • A special scholarship scheme for students of North East Region ‘Ishan Uday’ has been launched from the academic session 2014-15 providing 10,000 scholarships ranging from Rs.3,500/- to Rs.5,000/- per month for studying at under-graduate level in colleges and universities of the country.
  • Under ‘Ishan Vikas’ scheme, selected students from school and college levels from the North Eastern States will be taken to Indian Institute of Technology (IITs), National Institute of Technology (NITs) and other engineering institutes for exposure/internship programme.

Shri Rajnath Singh said the Ministries of Culture, Tourism, Information & Broadcasting have also planned to roll out prorgammes for bridging the gap between the peoples of the North-Eastern Region and the rest of the country, including:

  • Chalking out action plan for educating the people about the rich cultural heritage of the North Eastern States and its wider coverage & promotion at the national level.
  • The North East Film Festival & North East Festival to be organized annually at New Delhi, showcasing culture, films, foods, sports etc.

Besides, the Ministry of Sports has also been roped in this endeavour:

  • Has committed itself for identification of talented sports persons from North East with the help of State Governments for arranging their training in reputed sports training centres.
  • Sports Ministry is taking action for organizing Sports Tournaments/Events in the North Eastern States.
  • An amount of Rs.100 crore has been earmarked for setting up of National Sports University in Manipur.

Shri Rajnath Singh said the Ministry of DoNER being the nodal agency for development of the remote region has also initiated the following steps:

  • DONER Ministry is in the process of clearing the proposal for construction of a hostel at the Jawaharlal Nehru University and four other colleges at Delhi expeditiously.
  • DONER is also exploring the effective measures to deal with the problem of accommodation and high rent faced by the students and professionals/service persons from the North East in Delhi.
  • Govt. of Delhi is being advised to initiate measures to resolve the problem, of less payment/non-payment of wages being faced by the North Eastern People.

Source - PIB

[Eco] Bifurcating top post in PSBs will bring in transparency: experts

The government’s decision to bifurcate the top position at public sector banks will bring in transparency and accountability, say experts.

On Wednesday, the government initiated management reforms in public sector banks by splitting the post of Chairman and Managing Director in four banks and appointing managing directors (MDs)/chief executive officers (CEOs) in Vijaya Bank, Indian Overseas Bank, United Bank of India and Oriental Bank of Commerce.

“It is an extremely healthy move, and will improve governance. In the U.S., more than 50 per cent of enterprises follow this and this practice is followed all over the world,” said Shailesh Haribhakti, Chairman, DH Consultants.

Combining the positions of Chairman and Managing Director with one person is contradictory to the effective functioning of the organisation as the Chairman is the custodian of governance, while the MD/CEO is the custodian of assets and efficiency of running of the organisation. When the same person holds both positions, it leads to confusion and some time even to sacrifices. These are different roles, and so these positions must be occupied by different individuals,” Mr. Haribhakti added.

The move to separate the posts would bring in more professionalism in their functioning, said D. S. Rawat, national Secretary-General, Associated Chambers of Commerce and Industry of India.

“It looks as though the government wants to bring in outside experts as chairmen in some of the banks, which will be a great value addition to the state-owned banks,” said Mr. Rawat.

“However, it is time the remuneration of CEOs in PSU banks is enhanced somewhere near to their peers in the private sector. It cannot be that while we expect the CEO to give performance under challenging circumstances taking into account the social obligations of these banks, but we do not pay them the commensurate salaries,” he added.


Source - The Hindu

[Eco] RBI relaxes ECB norms

The Reserve Bank of India on Thursday introduced changes in external commercial borrowings (ECB) norms under which authorised money changing banks had been allowed to create a charge on securities.

At present, the choice of security to be provided to the overseas lender or the supplier for securing ECB is left to the borrower.

The decision was taken “with a view to liberalising, expanding the options of securities and consolidating various provisions related to creation of charge over securities for ECB at one place,” the RBI said in a notification.

Immediate effect

The relaxations are with immediate effect. “It has been decided that AD Category-I banks may allow creation of charge on immovable assets, movable assets, financial securities and issue of corporate and/or personal guarantees in favour of overseas lender/security trustee, to secure the ECB to be raised/raised by the borrower,” it added.

However, the new rules are subject to certain conditions.

The underlying ECB must be in compliance with extant ECB guidelines, there should be a security clause in the loan agreement, requiring the ECB borrower to create charge, and a no objection certificate will have to be obtained from an existing domestic lender.

Additionally, AD Category-I bank may permit creation of charge on immovable assets, movable assets, financial securities and issue of corporate and/or personal guarantees. — PTI


Source - The Hindu

Moves to deny access to officials’ assets info

Although the Department of Personnel and Training has simplified the form for declaration of assets and liabilities by government employees, the Ministry of Personnel may amend the Lokpal and Lokayuktas Act to address their concerns about possible misuse of information thus made public.
We have already simplified the declaration form and accordingly an order was issued last week. The officials are no more required to reveal the names of banks or financial institutions in which they have invested. However, we are alive to the concerns expressed by government employees on making the disclosures public,” a senior Ministry official said.

A major worry for the employees is Section 44(6) of the Lokpal Act, which provides that “the competent authority in respect of each Ministry or department shall ensure that all such statements [declaration] are published on the website of such Ministry or department ...”

Discussions on
The official said the issue of making the information public, as made mandatory under the Act, was being discussed at the senior-most level in the Ministry and that all possibilities were being explored, including amendments.

“We are also trying to ascertain if there can be a system to keep the declarations for access only within the government. If necessary, we may also bring in amendments in view of the concerns raised,” he said.

The revised order, issued on December 26, makes it mandatory for government employees to declare their deposits in foreign banks as also those of their spouses and dependent children.

However, the deadline has been extended from December 31 to April 30.


Source - The Hindu

Forest Rights Act not delaying projects: official

The Union Ministry of Tribal Affairs says that there is no evidence that the process under the Forest Rights Act (FRA) delays projects, even as there is pressure from the Ministry of Environment to dilute the law and do away with the condition that gram sabhas should give consent for projects.

Hrushikesh Panda, Secretary, Union Ministry of Tribal Affairs, assured members attending a national convention on community forest rights here recently that the FRA will not be diluted.

Dr. Panda, in a letter dated November 12, 2014 to his counterpart in the Ministry of Environment and Forests, said though the Ministry of Tribal Affairs is the nodal ministry of the FRA, the Ministry of Environment has been issuing advisories to States, relaxing certain provisions of the FRA.
Taking a legal stand, he said the FRA does not provide any scope to any executive agency for any kind of relaxation of the applicability of the Act. The responsibility is neither vested in the Environment Ministry nor in the Tribal Affairs Ministry, he added.

An impression is being created that the administration/implementation of the FRA is hindering or delaying clearance of the developmental projects, he said. If there has been any study or evidence on delay of the projects because of the processes of FRA, it should be brought to the notice of the Tribal Affairs Ministry.

The process of the FRA can be expeditious, he said. It takes less time than the procedures under the Forest Conservation Act and land acquisition. The Environment Ministry letter of October takes a short cut, which can derail projects completely, he added. A letter taking this up was given short shrift by the Environment Ministry.

‘Wrong message’
Dr. Panda said the October 28 order was violative of the law of the land and a project, which takes a short cut, can be stopped by just one village, which has land classified as “forest”. The recent order had given a message that the government is against fair implementation of the FRA. This is not desirable in the interests of peace and governance in forest areas, he added, demanding its withdrawal.

The October 28, 2014 letter of the Environment Ministry said no forests were likely to be recognised under the provisions of the FRA, in case of plantations notified as forests for any period less than 75 years prior to December 13, 2005 and in villages in such areas which have no recorded populations of Scheduled Tribes, according to the 2001 and 2011 censuses, since a person residing in such a forest will not be eligible as other traditional forest dwellers or scheduled tribes according to the FRA.

In such plantations, a certificate of the District Collector certifying the land to be a plantation and having no population of Scheduled Tribes or other traditional forest dwellers is sufficient.


Source - The Hindu

Security to be factored into Whistleblowers Act

Aspects related to national security and sovereignty are set to be taken out of the ambit of the Whistleblowers’ Protection Act, which provides a mechanism for protecting the identity of those who expose corruption.

The Act was part of a bouquet of legislations brought by the previous UPA government to check corruption but its implementation had been put on hold by the Modi government for removing issues related to national security and sovereignty.

Amendments to the law, enacted in May last, are expected to be taken up by the Union Cabinet soon, sources said here on Thursday.

The Act was passed by the Lok Sabha in 2011 but the Rajya Sabha could clear it only on February 21 last year.

The Presidential assent to it was given in May last. The issue of safeguarding information on national security was first raised by the BJP when the then Minister of State for Personnel V. Narayanasamy had tabled the Bill in Rajya Sabha. — PTI

Source - The Hindu

Non-subsidised gas too become cheaper

As global oil prices hit a five-and-a-half year slump, oil companies effected price cuts for Aviation Turbine Fuel (ATF) and non-subsidised cooking gas on Thursday. While the non-subsidised LPG price was cut by Rs. 43.50 per 14.2 kg cylinder, ATF prices were reduced by 12.5 per cent.

In another development, the government hiked the excise duty on diesel and petrol by Rs. 2 a litre each to fund its “ambitious infrastructure” programme. However, the hike will not impact retail prices, an Indian Oil Corporation official told The Hindu.

“In order to fund the ambitious infrastructure development programme of the government, particularly the building of 15,000 km of roads… the government has decided to increase basic excise duty on petrol and diesel [both branded and unbranded] by Rs. 2 per litre. Allocation of these resources to the road sector will also spur economic activity and employment generation,” a Finance Ministry statement said.

This is the sixth consecutive reduction in jet fuel prices since August last year, with the last cut announced on December 1 when prices were reduced by 4.1 per cent.

Prices of global benchmark Brent crude which fell 49 per cent during 2014, hit $53 on Wednesday, with demand continuing to weaken amid a supply glut owing to the U.S. shale boom and the Organization of Petroleum Exporting Countries (OPEC) refusing to cut production.

Source - The Hindu

Govt. targets climate groups

MHA says it will not compromise on national interestAfter taking action against the international environment group Greenpeace, the government has clamped down on four American NGOs working in the same field — Avaaz, Bank Information Centre (BIC), Sierra Club and 350.org.

Over the past month, the Ministry of Home Affairs (MHA) has directed the Reserve Bank of India (RBI) to stop all foreign funding into the accounts of these NGOs or their representatives without MHA clearance. A letter issued by the Director of the Monitoring unit for NGOs said it had been decided “to keep a watch on all the activities funded by U.S.-based donor agencies” and lists the four groups.

The order could create a controversy ahead of U.S. President Barack Obama’s visit to India this month, given that the U.S. has in the past issued statements regarding India’s restrictions on international NGOs.

In 2013, after India took similar action against anti-nuclear groups in Kudankulam, the U.S. State Department had denied it was linked to the NGOs, but said such groups “are among the essential building blocks of any healthy democracy.” Later, the funding for Greenpeace was also frozen.

As a result of the latest MHA order, every fund transfer from abroad for their activists in India will be held back pending clearance.

According to RBI records, the international NGOs were not registered with the government. Neither had their employees in India applied for FCRA clearance. The MHA is also going to inquire into all remittances into India from these groups since January 2013.

Last year also saw the leak of an IB report titled “Concerted efforts by select foreign-funded NGOs to take down Indian development projects.” It contended that several foreign-funded environmental NGOs were targeting development projects across the country. Apart from Greenpeace, Sierra Club and 350.org were mentioned in Annexure B of the IB report in a graph.

Home Ministry and Foreign Ministry officials did not comment on the order and declined to speak about why U.S.-based NGOs had been singled out for scrutiny.

Reason to worry, says NGO representative

A representative of an American green NGO, one of four whose foreign funding will be stopped unless they are cleared by the Ministry of Home Affairs (MHA), told TheHindu that the move appeared to question democratic effort that individuals and organisations could exercise in the country. “False allegations against activists of political subversion are becoming commonplace and that is enough reason to worry,” he said.

A letter the representative received dated December 10 said the MHA Foreigners Division (FCRA wing) regulates receipt of foreign contribution by NGOs to ensure that it is utilised for bonafide welfare activities, without compromising on concerns about national interest and security.

The government has clamped down on four American NGOs — Avaaz, Bank Information Centre (BIC), Sierra Club and 350.org. Earlier it had acted against Greenpeace.

With a claimed membership of about 40 million worldwide, New York-based Avaaz works on several public issues and in September 2014, it had organised a ‘People’s climate march’ in Delhi.

The Bank Information Centre (BIC) is an NGO-based in Washington that tracks World Bank and Asian Development Bank (ADB) funded projects worldwide, but has a special focus on India. According to a description on its website, its work involves public debate on coal and energy projects in India, as “there is a complete lack of transparency and the agencies who receive these borrowings are not accountable to the people.”

BIC was particularly critical of the Tata Mundhra 4,000 MW Ultra Mega Power Project in Gujarat, a key project for the Gujarat government.

New York-based NGO 350.org which works on climate-change and the California-based Sierra Club have been opposing coal imports from Australia for Indian thermal plants, including deals that were finalised during Prime Minister Narendra Modi’s visit to Australia in November 2014.


Source - The Hindu

[Ed] Taking on good, bad, all Talibans

Despite a change in mood in Pakistan after the Peshawar massacre, India cannot afford to be complacent given that the network of the various ‘Talibans’ is more united and synchronised than ever, and benefits from the differences between South Asian neighbours

In its multi-point National Action Plan against terror, Pakistan’s government and military has envisaged a plan more comprehensive than any other in the past 20 years. It was in 1994 that the Taliban first emerged to take power in Kandahar, funded and trained by Pakistani officials, and will be full circle for the country if its leaders go ahead with the ambitious course laid out in the plan. The steps include the establishment of fast-track anti-terror courts, a crackdown on banned organisations and terrorists and choking their finances, disarming all militia, and the regulation of madrassas that indoctrinate them.

Pakistan has made such declarations before. The first was when it became a “partner” in the war on terror in 2001 and agreed to look for Osama bin Laden, and again in 2002, when President Pervez Musharraf announced a crackdown on anti-India groups like the Lashkar-e-Taiba (LeT) and the Jaish-e-Mohammad (JeM). Neither of those pronouncements came to much, but there is still reason to hope that the new announcement recognises that the people of Pakistan want a decisive turn after the massacre of over 130 schoolchildren in Peshawar. It is now a battle for Pakistan’s soul, one made even more complicated by the fact that the perpetrators of this diabolical operation once trained alongside the Afghan Taliban in a war in which Pakistan was once a prime mover.

The many Talibans
Much has changed since those days, in the 1990s, when the Taliban claimed Kabul, and welcomed every kind of jihadi group into the country, and some of those fighters were given access to Pakistan’s borders with India, so as to fight in Kashmir. A distinction between “good Taliban” and “bad Taliban” has come up between the Afghan Taliban groups and the Pakistani Taliban who target the Pakistani military and civilians. Prime Minister Nawaz Sharif’s statement that there will now be no good or bad Taliban is welcome for most Pakistanis, but the euphemisms of good and bad are only a more visible part of the threat they face from the Taliban. It is important that Pakistan’s leaders recognise the other Taliban threats today, in a self-destructive war they have already squandered too much time on, and after Mr. Sharif has committed to fighting “All the Talibans”.

To begin with, the Afghan Taliban and the Pakistani Taliban, as the Tehreek-e-Taliban Pakistan (TTP) that carried out the Peshawar massacre now represents, weren’t always separate entities. In 2008, when the TTP first came up under Baitullah Mehsud, its chief patron was Mullah Omar, the chief of the Taliban. Mehsud himself had been very close to the Taliban regime in Afghanistan, and declared a governor by Mullah Omar in 2004 before five major Taliban commanders, including men responsible for the death of Benazir Bhutto and assassination attempts on Mr. Hamid Karzai and Gen. Musharraf. Therefore, it is baffling how the narrative today has become one of Pakistan protecting the Afghan Taliban, while Pakistan accuses Afghanistan of sheltering TTP leaders and other members of the Pakistan Taliban.

The differences between Mehsud and other commanders — like his cousins Qari Hussain Mehsud, Hakimullah Mehsud, or rival Mullah Nazir — ultimately led to factions coming up on the Pakistani side of the border. But having trained in the Afghan jihad, they never really strayed from that evil purpose, of killing Pakistani civilians and Army personnel and training scores of Pakistani children as suicide bombers. For Pakistan’s purposes, none of them should have been counted as the “good Taliban” as they were.

Reign of terror

The next distinction that should never have been made is with the Punjabi Taliban. The groups in Punjab like the JeM, the Lashkar-e-Jhangvi (LeJ), the Sipah-e-Sahaba, and the LeT now control vast parts of Pakistan’s most powerful province, with compounds across acres, congregations in the lakhs, and thousands of young recruits at their seminaries. Despite all the outrage expressed by India over 26/11 mastermind Hafiz Saeed, the hijacking of an Indian flight (IC-814) and Parliament attack mastermind Masood Azhar, Pakistan still sees these men as allies and is quite comfortable in letting their groups run riot in Punjab. But they have missed two important outcomes: first, whether it is Masood Azhar’s control of Bahawalpur, or Hafiz Saeed’s citadel in Muridke, these groups now run terror enclaves within Pakistan, unchallenged. Second, like Abdul Ghazi, the ‘Maulana’ of Islamabad’s Lal Masjid, sooner or later these two men will end up challenging their military patrons in much the same way that Ghazi took on Gen. Musharraf a stone’s throw from Inter-Services Intelligence (ISI) headquarters.

Notwithstanding a stand-off that left more than 100 people dead, and an operation that claimed Gen. Musharraf’s job, in 2007, Ghazi remains a threat to the Pakistani establishment. In the wake of the Peshawar massacre, hundreds of Pakistani protesters surrounded the Lal Masjid and finally shamed the government into seeking an FIR against him. Despite obtaining a warrant, it is yet to arrest him. Meanwhile, the head of the LeJ, Malik Ishaq, in jail for the attack in Lahore on the Sri Lankan cricket team in 2009, has been released, while the LeT operations chief, Zaki Ur Rahman Lakhvi, has been nearly released twice.

With their access to trained jihadis in Federally Administered Tribal Areas (FATA), Khyber-Pakhtunkhwa and Kashmir, Azhar, Saeed and Ishaq will be much more difficult to control. And the stand-off with them is going to be even more bloody than the Lal Masjid operation was. It is inevitable because it is evident that the Punjabi Taliban is deeply linked to every major terror attack in Pakistan, including the brutal killings of Shias, Ahmadis and Christians. No one typifies this link more than the case of Dr. Usman, the first man Mr. Sharif ordered to be hanged after lifting the moratorium on executions in December. Usman, or Mohammad Aqeel, was trained in the Army’s medical corps, from where he was recruited by the LeJ. Along with TTP leaders and other Taliban commanders, he then went on to plan an assassination attempt on Gen. Musharraf, the General Head Quarters (GHQ) attack, the attack on the Sri Lankan cricketers and the Marriott hotel bombing. The Punjab link to the Peshawar massacre has already emerged, with four suspects detained in Hasilpur in Bahawalpur. It was from here that some calls were made to the attackers as they attacked the students.

Embedded in the establishment

Finally, there is the Taliban threat that no one, not even in Rawalpindi, Washington, or in New Delhi likes to speak of — the institutional Taliban, or the radicalised elements who exist within Pakistan’s military, civil and judicial establishments. For this, one has to read the works of Pakistan’s best investigative journalists. In his riveting work, Talibanisation of Pakistan: 9/11 to 26/11, journalist Amir Mir has written of the work of the Tableeghi Jamaat, whose headquarters in Raiwind adjoin Mr. Sharif’s family estate. It was former military leader Zia-ul-Haq who encouraged the Tableeghis to shape Pakistan’s military into “an army of Allah”. Since then, several top-level officers, and chiefs of the ISI in particular, have been members (most notably, Lt.Gen. Hameed Gul and Lt. Gen. Javed Nasir, both retired officers known to liaison with terror groups). “Many Pakistani government servants, military officers and scientists devote at least a part of their annual leave to do voluntary work for the Tableeghi Jamaat,” writes Mr. Mir, adding that the ‘Ijtema’ congregation represented “the picture of a well-designed, well-managed strategy to organize Islamic combatants, ready to wage jihad.” In fact, every attack on Pakistan’s military installations, from the GHQ, to Mehran naval base, to the Minhas air force base, or several attacks in FATA have been traced to radicalised officers.

It was this trail of radicalisation within the Pakistani forces that journalist Saleem Shahzad (who had interviewed both Kashmiri and Baitullah Mehsud) was uncovering when he was kidnapped in May 2011. His body was found in the Jhelum bearing signs of torture. In his book, Inside Al Qaeda and the Taliban: Beyond Bin Laden and 9/11, released just 10 days before his death, Shahzad says that there is an “ISI within the ISI” and a “jihadi army within the army” that operates as a sleeper cell while their interests align with the Pakistani establishment’s, i.e., in fighting India. It was his case that the Mumbai attacks were the work of a radicalised group of Army and ISI officers of the “313 brigade” run by ISI/LeT militant Ilyas Kashmiri, who subsequently became al-Qaeda’s commander and was killed in a drone attack in 2011. His theory, that found few takers in India as it did in Pakistan, was that this group, with help from the al-Qaeda, the LeT and others had one aim: to spark a major war between India and Pakistan. Though they haven’t succeeded as yet, Talibanised officials within the Pakistani establishment will keep trying to do so.

While there was deep outrage and empathy across India following the Peshawar incident, there was also a certain amount of Schadenfreude among strategists, that the terror Pakistani groups have unleashed against its neighbour had come home to their military masters. But India can hardly afford to be complacent, given that this network of the various “Talibans” is more united and synchronised than ever, and benefits from the differences between the South Asian neighbours in the areas of Afghanistan, Pakistan and India it focusses on. For Pakistan, the only hope is that Mr. Sharif challenges “all the Talibans”, if he wants to steer his country away from its course over a cliff. It is hard to see how long the Pakistani leadership can refuse to see what history has taught everyone — from the ancient Turks, to the United States with the Mujahideen, to the Saudis with al-Qaeda, and even what India learnt from the LTTE experience — that sooner or later, mercenaries you engage with will turn on you, your leaders, and even your children.

Source - The Hindu

[Int.] Uncertain outcome in Greece

Greek Prime Minister Antonis Samaras, who recently lost his gamble of holding an early presidential vote in order to shore up the terms of a fresh economic package from the European Union, forced a snap general election within two years of coming to power. The January 25 poll has brought centre-stage the main opposition party, the radical left-wing Syriza that takes an anti-austerity stance. Equally, the uncertainty over the Greek election outcome brought into sharp focus the capacity of European Union leaders to influence national governments to implement unpopular economic reforms. The developments in December, involving three rounds of voting by the Greek Parliament which eventually failed to elect a President, are reminiscent of the high political drama of 2011. On that occasion, George Papandreou had announced that the issue of approval of the Eurozone debt deal for Greece would be decided in a popular referendum, sending shock waves across European capitals and causing a splutter in the financial markets. Amid the groundswell of public anger against crippling cuts in government spending and reductions in wages and pensions, a plebiscite would have potentially risked a Greek exit from the Eurozone.

Syriza’s support has seen a steady surge over the past decade, culminating in its emergence as the second largest party in the outgoing Parliament. Under the charismatic leadership of Alexis Tsipras, it won the May 2014 European Parliament elections handsomely, relegating the country’s ruling New Democracy to the second position. Since then, Syriza has led in the opinion polls. The party rapidly rose to prominence since the debt crisis in Greece unravelled, by portraying the terms of the bailout with European and international institutions as a harsh and arbitrary imposition. In more recent months, it has spoken of softening the terms of the bailout and of having the country’s debt written off by half. Syriza’s sharp rhetoric in recent weeks seems to have been muted, perhaps from a recognition of Athens’s European obligations under the existing arrangements. The party may or may not capture power in the elections. But even if it comes anywhere close, it can be expected to exert considerable influence on the manner Athens negotiates with Brussels the terms of its economic reforms. Syriza’s performance would also be watched closely in countries where the appeal of anti-austerity, and even anti-EU parties, has been on the rise and where elections are due this year. Gradually, a scenario may be evolving where domestic forces exert greater influence on the trajectories of European integration. This may lay bare the limits of the post-War vision in a globalised world.

Source - The Hindu

[Ed] When the regulatory apparatus falls flat

During a recent star-studded seminar in Mumbai on the Indian Financial Code, Finance Minister Arun Jaitley said the government wished to implement a large number of recommendations of the Financial Sector Legislative Reforms Commission (FSLRC), including a cost-benefit analysis of regulations. He said the government had set up four task forces to study the IFC. These recommendations are in tune with the government’s agenda to ease doing business in India.

As a result of erratic, unpredictable and frequently changing policies, the cost of doing business is a big problem. Compliance with costly, multiple and antiquated directives of regulatory or government agencies is a burden on enterprises; it eventually smothers economic growth.

Stakeholders are not regularly consulted on policies or regulations, and there is no formal policy review mechanism. There have been instances galore of sub-optimal policymaking, such as retrospective amendments to taxation policies and unpredictable foreign investment norms. This has resulted in loss of investor confidence, thus increasing the barriers to economic growth.

Easing the burden

Consequently, the government has been trying to reduce the regulatory burden on stakeholders. One of the techniques of reducing the burden is cost-benefit analysis (internationally known as regulatory impact assessment, RIA) of proposed and existing laws. It involves a participatory approach to assess the impact of legislations and regulations on relevant stakeholders. RIA of legislations has also been recommended by the working group on business regulatory framework (WGBRF) of the Planning Commission to which CUTS acted as a knowledge partner. RIA is not limited to regulations, it is a holistic tool covering policies, laws, rules and practices in any one sector.
It is in this context that CUTS has facilitated the adoption of an RIA framework in India as part of its overall agenda of regulatory reforms. This has begun in the banking and insurance sector, followed by electricity. This article deals with the financial sectors in view of the humongous debt write-offs. One of the major areas is to look at the laws and institutions covering debt recovery in India.

Recovering debts

Debt Recovery Tribunals (DRTs) were originally set up to expedite the recovery process, without being subject to lengthy procedures followed by civil courts. While studies show that the establishment of DRTs has reduced delinquency, the piling up of a huge number of cases and a significantly lower recovery rate defeats the purpose.

The same holds true for dispute redressal fora in many other areas. The amount recovered from cases decided in 2013-14 by DRTs was a mere Rs.30,590 crore, which is only about 13 per cent of the total amount at stake, that is, Rs. 2,36,600 crore.

While the recovery is so low, commercial banks have written off loans amounting to Rs. 1,61,018 crore in the last five years and are trying to recover what they can. The Reserve Bank of India governor, Raghuram Rajan, wryly commented that the write-off is so high, it would have allowed 1.5 million of the poorest children to get a full university degree from top private universities in the country. The social and economic costs of the amount written off puts a big question mark on the debt recovery mechanism in India.

Low recovery under DRT could be attributed to the inadequate number of presiding officials . The law provides that DRT and DRAT (Debt Recovery Appellate Tribunal) shall consist of one presiding officer (PO) and one chairman respectively. Presently, a presiding officer handles almost 80-90 cases a day. If the PO is on leave, all the cases have to be adjourned.

Positions left vacant for long periods of time also contribute to their inefficiency. For instance, the position of PO at DRT-III, Chennai, remained unfilled from June to December 2014. The matters listed during this period at DRT-IIIwere transferred to the DRT-II, Chennai. This placed additional burden on DRT-II and resulted in delay in the recovery of debts.

An ex-ante impact assessment of the legislations which provide for mandating one PO and providing no mechanism to expeditiously fill the vacant positions could have prevented the sorry state of affairs prevailing today. There is no accountability woven into the law to ensure that vacancies are filled up well before time, and thus the files keep going around in circles.

Challenges remain
To make the debt recovery swifter, the government passed the Sarfaesi Act, 2002 (also known as the Securitisation Act). This was intended to enable banks and financial institutions enforce their security interest without having to resort to courts and tribunals so that debts could be recovered speedily.

But that too does not seem to have speeded up the process. The amount recovered (including cases related to earlier years) is only 27 per cent of the total outstanding amount under the Sarfaesi mode.

While the Act seems to have all the right provisions, the challenges of implementation and accountability remain. One way to address such issues is through a comprehensive RIA of the Sarfaesi Act and putting in place an effective mechanism to deal with such problems.
It is not only the debt recovery laws which are proving to be inadequate in recovery of debts. Interim injunctions granted by courts are also making life difficult for debt recovery despite the Supreme Court’s direction prohibiting the same. This is another ubiquitous problem; whether the apex court has a mechanism to check this is the question.

Whether these issues were thought through when the laws were made is a matter of conjecture. To address all them, RIA with full stakeholder participation could be useful. It has resulted in considerable economic benefits in countries like the US, UK and Australia. The Indian government has already stressed open, transparent and accountable governance. Adopting RIA could be a huge support to its agenda.

The writer is the secretary-general of CUTS International; assistant policy analyst Jitin Asudani contributed to this article


Source - The Hindu

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