20-12-2016 (Important News Clippings)
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The primary task of Election Commission is to monitor political expenditure
The Election Commission’s (EC) reported proposal to ban all anonymous political donations in excess of Rs 2,000 is, no doubt, well-intended but is totally naïve and inadequate. Parties routinely report a tiny fraction of their actual income and expenditure. If the EC sets up a tussle over how transparently, say, 5% of the actual expenditure is financed, it would only serve to blot out that undeclared, anonymous 95% of political expenditure from the public discourse. This would be a disservice to Indian democracy. Cleaning up political funding has to begin with political parties’ expenditure, rather than their income.
Every party should declare every month how much money it spent at the level of the polling booth, the panchayat, the municipal ward, the district, the state and the nation. This amount should include money spent by activists and well-wishers as well. Rival parties, the media, watchdog bodies and all sorts of non-government organisations should be free to challenge this expenditure claim, citing rallies help, posters printed, leaders ferried, etc. An expanded monitoring unit of the Election Commission should moderate this contest and finalise the expenditure figure at every level. The party should then identify the source of every rupee it has spent. With hand-held devices that can record and store every small contribution in the cloud, the needed technology is simple enough. Expenditure calls for transparency in financing, not artificial limits that get routinely breached.Improved corporate governance and a culture of companies funding their new investments using the bond market rather than through bank loans will help. A handful of bankers alone need to be persuaded to sanction a loan and defend that decision. A bond market has very many analysts, brokers and rating agencies pronouncing on the merits of the project undertaken and how much it should actually cost. This would reduce the scope for project overinvoicing, a routine method of generating unaccounted funds with which to finance parties. The EC must think through its options.
Way to bring down cash usage should be structural reform not by taxing it
State Bank of India chairman Arundhati Bhattacharya wants a levy on cash withdrawals. This is a suboptimal solution. True, cash entails a huge cost: for the RBI, to print, replace, transport and secure notes; for the government, by way of lost revenue from opaque transactions; and to merchants, who have to store and guard their cash. But the way to bring down these costs is by a combination of structural reform that kills the demand for cash and positive incentives for use of digital payments, not penalising cash. If at all transaction fee on cash withdrawals is considered, it should be tiny and kick in above, say, Rs2.5 lakh — equivalent to the threshold set for banks to file information returns on deposits.
The real challenge is to root out the factors that generate demand for cash: corruption, high levels of tax and steep rates of stamp duty. The key to removing corruption is transparency of political funding.That would end misuse of the state machinery by the politician to raise funds, roping in the services of civil servants and undermining both accountability and integrity of the administration. So long as people need cash for bribes, they would withdraw cash and a transaction cost would not deter them.
Cleaning up political funding is hard work and will create enemies. Levying a tax on cash withdrawals is easy and people have little choice other than to bear it. Chances are, we will see a tax on cash and little action on political funding.The RBI can pass on the potential savings from reduced cash handling to lower the cost of electronic transactions. So can the government. Outlays from the RBI and the government, in tandem with competition to Visa and MasterCard from RuPay, should make digital payments virtually costless for merchants and consumers.
पर्यावरण के साहित्य गुरु थे अनुपम मिश्र
इकोनॉमी के कैशलेस होने में कई तरह की अड़चनें
जितेंद्र सोलंकी सदस्य, फाइनेंशियल प्लानर्स गिल्ड ऑफ इंडिया
A single tribunal to adjudicate inter-state river disputes is a step forward, but not sufficient to settle claims and complaints.
On December 15, the Union cabinet announced wide-ranging amendments to the Inter-State Water Disputes Act, 1956. It has proposed an agency to collect and maintain water data including those pertaining to rainfall, irrigation and inter-basin flows. For a country beset with numerous water conflicts, the salience of this move cannot be overstated. Collection of data is the first step towards resolving water disputes. The country has lacked a specialised agency for the purpose. The new agency will ensure that water data is regularly updated and this will obviate the haste to collect data every time there is a water dispute. The cabinet has also decided to constitute a permanent tribunal to adjudicate on all inter-state water disputes over river waters. This will mean doing away with the current practice of having a separate tribunal for every inter-state river dispute.
In recent times, the practice of creating a tribunal every time an inter-state water dispute crops up, has been subject to criticism. These tribunals take inordinate amount of time and do not resolve the problem satisfactorily. The Cauvery Tribunal, for example, took 17 years to give its final award and the dispute is by no means resolved. The cabinet’s decision to constitute a permanent tribunal is in consonance with the National Water Policy 2012, which had pointed out that a multiplicity of tribunals militates against the early resolution of water conflicts and tribunals often work at cross purposes.
There is, however, an even more serious shortcoming of these ad hoc tribunals. That stems from their Constitutional status. The Constitution attaches a special status to inter-state water disputes, whereby they neither fall under the Supreme Court’s nor any other court’s jurisdiction. The courts can, at best, interpret a tribunal’s award. The award is binding, but legal anomalies have meant that a tribunal’s decision is not enforceable — one reason inter-state river disputes have become virtually irresolvable. Non-compliance of tribunal awards by states remains a weak link in dispute resolution. That might persist even when there is a permanent tribunal. In recent times, scholars and administrators have recognised the limitations of the litigation-centred approach to resolving water disputes. Rights of lower riparian states or regions — and concomitantly duties of upper riparian regions — are finding their way into water management discourses, globally. An agency to collect water data can aid the development of such a discourse in the country. A permanent water tribunal too can facilitate the just sharing of water resources. But it should be free of the legal anomalies of its ad hoc predecessors and also try to work around the changing discourse of water management.
Partial security for farmers
The government’s insurance scheme for agriculture is a major success over earlier schemes. But it remains beset by implementation glitches
In the aftermath of the move to demonetise the economy, the midpoint of the Narendra Modi government, November 26, went almost unnoticed. Normally, the mid-point of a government’s tenure is an occasion to pause and reflect. We do that here with reference to agriculture, which engages half of the county’s workforce. As is well-known, there were droughts in the first two years of this government, and the agri-GDP growth collapsed to just 0.5 per cent. Some regions like Marathwada experienced acute distress. But on occasion, bad times lead to good policies. The Modi government launched a new crop insurance scheme, PM’s Fasal Bima Yojana (PMFBY), in February 2016, with a view to de-risk agriculture from the vagaries of nature. Kharif 2016 was the first season of this scheme. It would be good to evaluate its performance with a view to improve it.
Before the launch of this initiative, the National Agriculture Insurance Scheme (NAIS) and Modified NAIS (MNAIS) were not serving the farmers’ interests well. The sum insured under MNAIS, particularly for risky crops and districts, was meagre. It was based either on the quantum of crop loans or on the capping of the sum insured; the crop damage assessment based on crop cutting experiments was time-consuming, and compensation to farmers often took several months —very often, more than a year.
The Modi government decided to revamp all this, and as per the new PMFBY, a technical committee in each district decides the “scale of finance” for the sum insured taking into account all the costs incurred by the farmers. The premiums are decided on an actuarial basis, without any capping. Bids are invited from public and private insurance companies to decide the premiums. The premiums so discovered are then subsidised for farmers, who pay only two per cent for kharif crops, 1.5 per cent for rabi crops and five per cent for annual commercial crops including horticulture crops. The rest is paid by the government, divided equally between the Centre and state governments. High technology including smartphones, GPS, drones and satellites will be used for accuracy, transparency, and faster assessment of damages and settling claims.
An appropriate evaluation of this scheme demands comparing it with NAIS plus MNAIS, over the last three years, especially with kharif 2013, which experienced a normal rainfall. It also demands comparison with kharif 2015, which experienced a severe drought — a second year in a row drought. The weather-based crop insurance scheme is a different one, and is continuing in its earlier avatar.
PMFBY insured 35.5 million farmers compared to just 12.1 million in kharif 2013, and 25.4 million in kharif 2015 under NAIS and MNAIS combined. This is a whopping increase: By almost 193 per cent over kharif 2013 and 40 per cent over kharif 2015. Within this, as per the Press Information Bureau, the number of non-loanee farmers increased by more than six times. But these figures need to be probed further before we celebrate the scheme’s success.
The area insured also increased from 16.5 million hectares (mha) in kharif 2013 and 27.2 mha in kharif 2015 to 37.5 mha under PMFBY. But the most spectacular increase has been in the sum insured, which went up from Rs 34,749 crores in kharif 2013 to Rs 60,773 crores in kharif 2015, and now to Rs 1,08,055 crores under PMFBY. All these indicators point that the programme is going in the right direction and at the correct pace. At this rate, India may soon have half of its cropped area insured within three to five years.
But one needs to straighten out some of the implementation glitches to make it serve farmers well, and at a lower cost to the treasury. The first problem encountered with this scheme is that the actuarial premium, instead of coming down with the increasing scale of coverage, has gone up, sharply, from 9.8 per cent in kharif 2015 to 14.9 per cent in kharif 2016. This defies the very logic of insurance, that premiums should drop when scale increases. On digging deeper, we found that the states which completed the tendering process early got premium rates ranging from four to eight per cent, but the states which were late got much higher premium rates, touching as high as 20 per cent.
Our discussions with some insurance companies revealed that this happened because companies and their re-insurers had stretched their capacity to the brim, and then started quoting abnormally high premiums to make moolah. Hopefully, with competition in the subsequent seasons, these rates will drop significantly even to three per cent once 100 m ha are covered. This would bring huge savings to the treasury, and the PMO or finance ministry needs to appoint a committee to look into this issue and realise this potential cost savings.
But the litmus test of any insurance scheme lies in how quickly it can assess crop-damages of farmers and how fast it can settle their claims. Luckily, in kharif 2016, rainfall was normal at the all-India level. However, there were pockets (for example, eastern Uttar Pradesh, Bihar and Assam) which faced floods, and farmers lost their crops. The assessment of the damages had to be done by eye-inspection. Drones could have been easily employed, but they were not. Under the guidelines, smart phones had to be issued to field officials , but they were not. States had to pay premiums to companies in advance, but in many cases they were not. As a result, only a miniscule of affected farmers got compensation till now. All this is not inspiring.
Lesson: Unless a bold policy is matched by effective implementation, it may not deliver fully. The government is spending more than Rs 16,000 crores on the PMFBY, but a “chalta hai” attitude of some states may spoil the show. One needs a champion fully committed to the idea of PMFBY to ensure its effective implementation. Only then will it truly serve the cause of peasantry.
The unmaking of Parliament
Representative democracy is the only form of democracy that enables a relationship between the citizen and the state, provided our representatives do what they are supposed to be doing in Parliament.
The Indian Parliament meets, the Indian Parliament ceases to meet, and there is nary an impact of these meetings/non-meetings on the democratic discourse in the country. Newspaper columns rue the waste of time and money, commentators complain about the clatter and ear-splitting clamour in Parliament, analysts regret that widening of the social base of the body has not resulted in meaningful legislation or responsible legislators, legal minds register the shift to law-making by ordinance, and most Indians find Parliament irrelevant to the needs of the day.
The chaos and the paradox
Why should they not find it so? The Opposition focusses on denigrating the government rather than engaging with policies, the government hardly bothers to reply, political theatrics replace calm, reflective and reasoned debate, and the Prime Minister prefers to speak directly to existing and potential voters. What Jawaharlal Nehru termed the ‘majesty’ of Parliament is insistently, systematically and repeatedly desecrated. Is not democracy also subverted in the process?
The paradox is that generalised loss of confidence in representative institutions has not led to disenchantment with democracy. Surveys show that Indians value democracy. They value democracy because this form of government has enabled them to realise the primordial desire of each human being to be treated as an equal, at least during election time. Over the years, we see the making of a body politic shaped by democratic imaginings, and struggles to attain equality and dignity. Elections are marked by high voter turnouts, voters exercise freedom of choice and elect and dismiss governments in often unpredictable ways.
The biography of India’s democracy validates confidence in the maturity of the political public. The Motilal Nehru Constitutional Draft recommended adult suffrage for both men and women as far back as 1928, the very year women finally got the vote in England. “We,” held the report, “attach no weight to the objections based on the prevailing illiteracy of the masses and their lack of political experience… Political experience can only be acquired by an active participation in political institutions and does not entirely depend on literacy. There should be equal opportunities available to all to acquire this experience.” The belief, which was reiterated in the Constituent Assembly, underscored the competence of ordinary women and men to participate in political deliberations. Simply put, politics is too important an activity to be left to professional politicians.
In eighteenth century France, the great defender of direct democracy, Jean-Jacques Rousseau, wrote that sovereignty “lies essentially in the general will, and will does not admit of representation: it is either the same or the other; there is no intermediate possibility”. But direct democracy can hardly be practised in large and complex societies. In market-oriented societies, dominated as they are by the imperative of ‘need satisfaction’, citizens cannot afford to put aside the time and energy-consuming task of earning their daily bread, and participate whole-time in an activity called politics. Besides modern citizens, unlike ancient Athenians, value and guard their personal spaces, their vocation, their interests, their social life, and their privacy. For these reasons and more, democracy requires a third set of political agents to mediate between the first two sets: the citizen and the state. This is the representative.
To stand in
Whereas the status of the citizen as the primary unit of political society is incontrovertible, the status of the representative is derivative. Voters authorise representatives to speak and act on their behalf. Notably, the representative does not speak for individuals, her duty is to ensure that the opinions, interests and needs of constituents are adequately, competently and effectively represented in forums of decision-making. Representatives are obliged to perform the functions that they have been charged with, notably to assist in the production of appropriate policies. Finally, the representative is accountable to her constituency for all acts of omission and commission. In theory, citizens have command over who they want to be represented by, and what issues representatives, normally members of political parties, should represent.
Civil society in India is inhabited by a large number of organisations, the media, social associations, neighbourhood groups, all kinds of professional lobbies, non-governmental and non-profit organisations, philanthropic bodies, social and political movements, and trade unions. Each of them claims to represent the interests of their members. Political representatives, however, possess three advantages over other modes of representation. One, they represent all the members of a territorially delimited constituency, as opposed to say trade unions. Two, political representatives are accountable to their constituents via the route of election. And three, the party representative acquires legitimacy by the fact that she has been elected by the people whose interests she is charged with representing and furthering. Representative democracy is not perfect, it is flawed, but it is the only form of democracy that enables a relationship between the citizen and the state, provided our representatives do what they are supposed to be doing in Parliament.
Parliament makes laws, ensures accountability of the government, and considers and scrutinises legislation through the committee system. But above all, Parliament provides a forum and establishes procedures for reflection on, and critical engagement with, what has been done, and what needs to be done in the light of popular expectations. Representatives are expected to ‘stand in’ for their constituents, even as they keep in mind that they are in Parliament to promote the public good, and not for advancing petty, grasping projects.
This is the job of representatives, the reason for which they have been elected, the source of their power and privilege, the rationale for their very existence. This is no small matter we are discussing, says Socrates in Plato’s Republic, we are discussing how we should live. The deliberative aspect of Parliament is no small matter, nor is it just another function of the body. Deliberation, by way of representation of different points of view, is an indispensable component of how we, as a collective, should live. For policies generated by the parliamentary process establish a framework for the transaction of all manners of projects in different settings.
A sharp decline
It is precisely this aspect of our Parliament that has visibly gone missing. The failure of the body to deliberate on the public good is condemnable. Telecasts showed empty benches in the Rajya Sabha on the opening day of the winter session of Parliament. It made for a sorry spectacle. Some members delivered excellent speeches on the benefits, or the lack thereof, of demonetisation. But parliamentarians simply could not be bothered to listen to or participate in a debate on what misery an ill-thought-out action had caused their own constituents.
The sharp decline in the effectiveness of Parliament, its failure to monitor the executive, delegation of power to non-representative regulatory institutions, the substitution of deal-making for informed arguments, the rushing through of legislation without discussion, and the increasing concentration of power in the hands of the executive, has been commented on extensively. Of overriding concern is the wilting of the representative and deliberative functions of the body.
If India wishes to hold on to her democratic credentials, parliamentarians must recognise that the task of representing the opinions, interests and needs of citizens is their paramount responsibility. Nehru, in a famous speech he made in the Lok Sabha on March 28, 1957, had said that historians will not pay much attention to the time expended on speeches, or the number of questions asked and answered in Parliament. They will be interested in the deeper things that go into the making of a nation. There is no higher responsibility than to be a member of this sovereign body responsible for the fate of vast numbers of human beings. “Whether we are worthy of it or not is another matter.” Our Parliamentarians have proved unworthy of the great responsibility bestowed on them. This is the political tragedy of our democracy.
Neera Chandhoke is a former Professor of Political Science, Delhi University.