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Date:02-09-19

Final NRC

With its publication, the foreigners issue in Assam needs to be buried for good

TOI Editorials

The much-anticipated National Register of Citizens (NRC) in Assam saw its final publication on Saturday with just over 19 lakh people excluded from the list. Those who do not find themselves in the final NRC now will have to approach foreigners tribunals to appeal their cases. In fact, these tribunals are the only ones authorised to declare a person a foreigner. Hence, no coercive action should be taken against those not on the NRC.

The NRC exercise has left almost everyone dismayed, including many original proponents. From All Assam Students’ Union to Assam Public Works – the original petitioner in the Supreme Court whose plea led to updation of NRC – all have said that the final registry is flawed. The state BJP, in opposing NRC, has said many citizens have been left out of the list while many foreigners have been included. The truth is such an outcome is inevitable in any such exercise, given the country’s poor documentation culture. This would explain why a 16% rate of exclusion was earlier noted in Assam’s tribal-dominated Karbi Anglong district. Much of this exercise, which cost Rs 12,000 crore of taxpayer’s money, resembles chasing a phantom.

Assam’s finance minister and BJP’s point-person in the north-east, Himanta Biswa Sarma, has expressed displeasure with the rolls and said that his party and government are thinking of an alternative mechanism to detect and expel foreigners. Such comments are highly irresponsible and show that vested political interests want to keep the foreigners issue alive in Assam.

NRC was meant to be a one-time exercise with massive resources devoted to it. The truth is it has been a mess, making it hard to comprehend why BJP wants to repeat it in other states. It has created hardships and anxieties for millions of people. Besides, the whole exercise always had an ethnic dimension to it, with Bengalis being conflated with Bangladeshis. With the final NRC publication it is time to put a stop to all of this. Those excluded must be treated humanely – one can’t put away 19 lakh people, amounting to 6% of the state’s population, in detention camps – and given fair legal redress. Breeding uncertainty and disorder is not the best way to convert the north-east into a bridgehead for New Delhi’s Act East policy. BJP must prioritise what it wants to go for: a $5 trillion economy, or large scale witch hunts comparable to China’s “Great Proletarian Cultural Revolution”.

Date:02-09-19

Welcome Initiative on Climate Resilience

Editorials

The Cabinet decision last week to set up the International Coalition for Disaster Resilient Infrastructure is yet another leadership effort by India towards tackling climate and other environmental crises confronting the world. This will be a concrete commitment that India will make at the United Nations General Secretary’s Climate Action Summit this month.

It is estimated that, over the next two decades, countries will invest nearly $94 trillion in infrastructure, at a time of marked climate impact. This infrastructure build-up must be undertaken so as not contribute further to the planet’s warming, via design, mode of construction and use, while also being capable of withstanding the impacts of the changes that are underway and are not reversible in some cases. The infrastructure must be able to withstand extreme weather events such as floods, whose frequency and intensity will rise and vary as the earth warms, and the impact of gradually and variably accretive events such as sea level rise, land and forest degradation, and desertification. Building infrastructure that is resilient to the impacts of climate change and disaster is central for sustained human well-being. As a platform that brings together existing knowledge to generate new ideas and knowledge on disaster and climate resilience of infrastructure and finds practical implementation of these ideas, the coalition must focus on reducing risk. This is challenging, given that the risk that climate change presents is neither static nor uniform. The coalition must be more than a knowledge-exchange platform and be able to assist countries to upgrade their capacities and practices, with regard to infrastructure development in accordance with their risk context and economic needs.

Date:02-09-19

What to Learn From the Flawed NRC

Work rights , proper border control solutions

Editorial

The good thing about the final list of the National Register of Citizens (NRC) in Assam released Saturday is that it has pretty much taken the political wind out of inherently flawed exercises like these. Not only is the final number of those deemed non-citizens not even 20 lakh, the number may come down to 6-7 lakh — if that indeed turns out to be the final number — after foreigners tribunals and courts hear appeals, according to Assam politicians, including those from BJP. Whether you are aggressively anti-immigration or reflexively pro, you would wonder why the state spent Rs 1,200 crore-plus to achieve no more than identifying just seven lakh ‘illegal’ residents. And the fact that many of those excluded now are Hindus, and therefore many Hindus may remain excluded even after appeals, further questions the right-wing political logic that celebrated NRC. To replicate NRC in other Indian states is a bad idea that some state politicians should seriously reconsider suggesting.

The macro picture hides many micro complications and tragedies. It is perfectly possible that ‘illegals’ have bribed their way into the register, as alleged by many in Assam. Just as it is possible that some genuine residents were excluded because their paperwork going back three generations was deemed faulty. Hopefully, the appeal process will do justice to the latter. Most important is that governments, whether central or state, must not try to either push back lakhs of people across the India-Bangladesh border or build detention camps. Those deemed ‘stateless’ after all appeals should be given economic and not political rights.

Migration from Bangladesh will continue and reasons will remain mostly economic, as with most migration, including from India. New Delhi will have to get smarter about this, beginning with proper border fencing and tackling corruption in border forces and border district authorities. Much illegal migration happens via organised gangs that pay off officials. Government should tackle these problems first. There should also be policies on work permits and non-citizenship resident status. NRC’s many flaws should incentivise the state to look for better solutions.

Date:02-09-19

Submerged in Mergers

GoI’s forced mega merger of public sector banks could seriously scupper economic recovery

Mythili Bhusnurmath

I am not saying we maintain a Panglossian countenance, that we smile away every difficulty. But, in any real economy, the mood is very important,’ observed RBI governor Shaktikanta Das, speaking at an event in Mumbai late August. Sound advice. Sentiment matters. Irrational despondency can be as damaging for the economy as ‘irrational exuberance’.

But even the best Pollyannas will find it difficult to smile in the face of fresh evidence from the Central Statistics Office (CSO) that the economy is in deeper trouble than GoI has cared (dared?) to admit so far — GDP grew by just 5%, a 25-quarter low, during Q1 2019-20. The last time growth slipped to a comparable low was in Q1 2013, when the UPA government under Manmohan Singh was battling charges of ‘policy paralysis’ following the Comptroller and Auditor General (CAG) report on the coal block scam. Afar from flattering comparison.

Who Moved My News?

But whether by design or fortuitously, GoI was saved the blushes. Thanks to finance minister Nirmala Sitharaman’s announcement of a mega merger of public sector banks (PSBs), media attention was diverted from dismal growth numbers to bank mergers. Despite the fact that the proposal may have had merit when it was mooted by the Narasimham Committee 27 years ago, it is no longer regarded as the final word on the ideal size of banks. Indeed, one of the biggest learnings from the 200708 global financial crisis is that large banks could pose systemic risks that endanger the entire economy. On the contrary, small is beautiful.

That may not gel with the image of a muscular government. But whatever the reason, after the shotgun weddings brokered by the finance ministry, the number of PSBs will shrink dramatically: from 18 as on date (27 in 2017) to around dozen. But as with all mergers, especially those that are board-driven only in name, the cost-benefit trade-offs are far from obvious. The benefits are highly questionable. But the pain and cost are real, and are likely to prove enduring. Ask any Punjab National Bank (PNB) official who lived through the trauma of its merger with New Bank of India back in 1993. Despite the ‘common’ culture of the two Delhi-based banks, it took years for PNB to recover from the ill-effects of being a reluctant suitor.

Even if one is willing, for the sake of argument, to give the benefit of the doubt to the business rationale of the mergers, there’s no getting away from the nagging sense that the timing is most unfortunate. At a time when PSBs across the board should be focusing on revival of bank lending and recovery of bad loans — remember the Insolvency and Bankruptcy Code (IBC) process is yet to stabilise — PSB managements accounting for close to 82% of PSB business and 56% of all bank business will, instead, be engaged in trying to see mergers through.

Tackling a New NPA

Take the merger between Chennaibased Indian Bank and Kolkata-based Allahabad Bank. It is a no-brainer that much of management bandwidth in the next few years will be spent trying to make the merger work. True, bank unions are no longer the force they once were, but even so. Caught between outraged cries of ‘Cholbe na!’ (Won’t allow this!) in Allahabad Bank and ‘Muddiya du’ (Cannot be done) in Indian Bank, senior management of the merged entity will have its hands full. Meanwhile, the more important business of banking will take a back seat. As with the similarly illtimed demonetisation, recovery will suffer a setback.

Unfortunately, GoI seems to be blind to the risks. The need of the hour is higher credit growth. Upfront recapitalisation of PSBs to the tune of .` 55,000 crore (out of .` 70,000 crore promised in the Budget) would have spurred credit growth with multiplier benefits for investment and growth. But that’s not going to happen if the bulk of the PSB universe is grappling with existential angst. Consequently, even though Sitharaman has largely delivered on her promise to front-load capital infusion into PSBs to ‘nudge an additional lending of .` 5 lakh crore’, this is unlikely to happen. At a time when Q1 GDP numbers clearly show we don’t have any time to lose, this is akin to shooting ourselves in the foot.

Economists might argue it is important to first analyse the nature of the slowdown — whether it is cyclical or structural, since that will decide the policy response. But it is difficult to disentangle cyclical from structural factors, and as the slowdown continues and reports of job losses become a daily phenomenon, academics must take a back seat. As Deng Xiaoping, noted for opening up the Chinese economy, had famously said, ‘It doesn’t matter if the cat is black or white as long as it catches mice.’

What is clear is that when gross fixed capital formation has been falling quarter on quarter, and the private sector is shy of investing, there is no alternative but for GoI to invest. Ideally by reorienting expenditure towards capital, rather than revenue expenditure. But if that is not possible, by easing up on the fiscal deficit target. And in a bank-oriented economy, by allowing PSBs to support growth by not pushing pointless bank mergers.

Date:02-09-19

कंपनी निदेशक की जवाबदेही पर एक और अदालती व्यवस्था

सोमशेखर सुंदरेशन

सर्वोच्च न्यायालय ने अपने एक और निर्णय में नई दिल्ली में होटल चलाने वाली एक कंपनी के प्रबंध निदेशक के खिलाफ फौजदारी प्रक्रिया चलाने की बात को खारिज कर दिया है। उसने कहा है कि केवल प्रबंध निदेशक होने भर से उसकी इतनी जवाबदेही नहीं बनती कि उसके खिलाफ फौजदारी प्रक्रिया शुरू की जाए। इसके बावजूद अभी यह कहना मुश्किल है कि इससे प्रवर्तन एजेंसियों के व्यवहार में कुछ सुधार आएगा अथवा नहीं।

इससे अक्टूबर फिल्म का एक दृश्य याद आता है। एक आगंतुक होटल की छठी मंजिल से चौथी मंजिल पर गिर जाता है। पाया जाता है कि छठे माले पर स्थित क्लब लाउंज के पास वाले टैरेस का उपयोग अक्सर लोग धूम्रपान के लिए करते थे। होटल पर आरोप लगता है कि उसने सुरक्षा व्यवस्था कायम करने के लिए पर्याप्त उपाय नहीं अपनाए।

प्रबंध निदेशक पर आरोप इस आधार पर लगाया गया था कि वह कंपनी का इकलौता कार्यकारी निदेशक था। वह सभी बोर्ड बैठकों की अध्यक्षता करता था और इसलिए अधिकारियों द्वारा किए गए तमाम सही-गलत कामों की जवाबदेही उसकी बनती थी।

होटल में काम करने वाले कर्मचारियों को भी आरोपित किया गया लेकिन प्रबंध निदेशक पर केवल इसलिए अभियोग लगा क्योंकि वह वहां का शीर्ष कार्यकारी था। दिल्ली उच्च न्यायालय ने भी प्रबंध निदेशक के इस अभियोजन को खारिज करने के अनुरोध को ठुकरा दिया लेकिन सर्वोच्च न्यायालय इससे सहमत नहीं हुआ।

सर्वोच्च न्यायालय द्वारा निर्धारित विधि के अनुसार किसी व्यक्ति को आरोपित कर समन करने के पहले आपराधिक न्यायालय को प्रस्तुत प्रमाणों से इस बात के लिए संतुष्ट होना चाहिए कि व्यक्ति के खिलाफ मामला बनता है। अगर न्यायालय को किसी व्यक्ति को अभियुक्त बनाने के पर्याप्त प्रमाण या साक्ष्य नहीं मिलते हैं लेकिन बाद में परीक्षण के दौरान किसी नए व्यक्ति के बारे में ऐसे प्रमाण प्राप्त होते हैं तो उस स्थिति में दंड प्रक्रिया संहिता की धारा 319 के तहत उसके खिलाफ भी मामला चलाया जा सकता है। परंतु इसके बावजूद अक्सर ऐसे मामले सामने आते हैं जहां प्रथम दृष्टïया ही समन जारी कर दिया जाता है।

समन उस वक्त भी जारी किया जा सकता है जब न्यायाधीश यह निर्णय कर ले कि आरोपित व्यक्ति पर आपराधिक मामला चलना चाहिए। हम जिस मामले की बात कर रहे हैं उसमें दिल्ली उच्च न्यायालय इस बात पर सहमत था कि उक्त व्यक्ति पर सही आरोप लगे हैं। आरोप पत्र में प्रबंध निदेशक के खिलाफ केवल यही कहा गया था कि वह कंपनी के समस्त परिचालन के लिए उत्तरदायी था और इकलौता कार्यकारी निदेशक होने के नाते वही आरोपित होगा। यह भी कहा गया कि यदि कंपनी में अन्य कार्यकारी निदेशक होते तो उन्हें भी मामले में आरोपित किया जाता।

अद्र्घ दीवानी प्रक्रियाओं के चलते मामला और जटिल हो जाता है। इन्हें वे नियामक अंजाम देते हैं जिनके पास विधायी, कार्यकारी और न्यायिक तमाम भूमिकाएं एक साथ समाहित होती हैं। हाल ही में प्रतिभूति अपील पंचाट के सामने एक ऐसी अपील आई जहां पूंजी बाजार नियामक नियमित रूप से सभी निदेशकों को कहता था कि वे बिना प्रारूप के जुटाई धनराशि निजी तौर पर वापस करें। पंचाट ने कानून को स्पष्टï करते हुए कहा कि कानून के तहत जवाबदेही केवल पद से उत्पन्न नहीं होती बल्कि उसका संबंध दिए गए समय में किसी व्यक्ति द्वारा निभाई जा रही भूमिका और जवाबदेहियों से भी है। जाहिर है यह बात सर्वोच्च न्यायालय की राय पर ही आधारित थी जिसमें उसने कहा था कि जब तक कि किसी व्यक्ति के जिम्मेदार होने के प्रमाण सामने न हों, जवाबदेही स्वत: लागू नहीं होती।

कंपनी अधिनियम, 2013 में भी सत्यम मामले के बाद कानून के अधीन धोखाधड़ी के मामलों में जमानत के लिए आपराधिकता का स्तर माद्रक द्रव्य तस्करी कानून के स्तर तक उठा दिया गया। इस दौरान भी इस बात का ध्यान रखा गया कि किसी निदेशक को आरोपित करते वक्त बोर्ड प्रक्रिया में सहभागिता और संबंधित जानकारी का इस्तेमाल किया जाए। पूंजी बाजार नियामक द्वारा सूचीबद्घ कंपनियों के दायित्वों के मामले में भी ऐसे मानक तय किए गए जिनमें बोर्ड प्रक्रिया की जानकारी की बात शामिल थी।

जब कोई निदेशक कंपनी के बोर्ड में शामिल होता है तो उसे उन प्रक्रियाओं पर भरोसा करना होता है जो प्रबंधन द्वारा निदेशकों को बताई जाती हैं। अगर तमाम जानकारियां प्राप्त करने की तमाम कोशिशों के बावजूद निदेशक अनभिज्ञ रहता है तो कानून उसके खिलाफ प्रक्रिया चलाने की इजाजत नहीं देगा। इसके बावजूद इसका व्यवहार में अमल नहीं हो पाता और मानक शिथिल हो जाते हैं।

प्रवर्तन एजेंसियां इस बात को प्राथमिकता देती हैं कि वे जिस पर भी हाथ डाल सकें, उन सभी लोगों को आरोपित कर दिया जाए। इसके बाद गलती सुधारने का काम न्याय व्यवस्था के हवाले रह जाता है। इस विषय पर और निर्णय आ सकते हैं लेकिन जब तक अनुपालन की संस्कृति प्रवर्तन विभागों में नहीं आएगी तब तक ये फैसले केवल निबंध बनकर रह जाएंगे और अमल में नहीं आएंगे। न्याय व्यवस्था पर पहले ही प्रवर्तन की गलतियों को सुधारने का बोझ है।