India at WTO: The global trade facilitation agreement row

An agreement by the WTO’s 160 members, including India, during the ninth ministerial conference in Bali last December saw the members committing to streamline the flow of goods across international borders. Key to the deal was a consensus on pushing through a “trade facilitation agreement” or TFA, which seeks to streamline border procedures, making it easier for merchandise goods to cross international borders. The new NDA government’s threat to veto the implementation of the TFA, in an effort to seek a negotiating space for public stockholding in food grain and food subsidies, has shaken up the WTO set-up.

What is the recent controversy all about?

The ongoing controversy has its roots in the Indian government threatening to veto the implementation of the deal struck in Bali, in an effort to seek a negotiating space for public stockholding in food grain and food subsidies. The current WTO norms limit the value of food subsidies at 10 per cent of the value of foodgrain production. However, the support is calculated at the prices that are over two decades old and not at the current prices.

If India blocks the global attempt to push through a “trade facilitation agreement”, it will be the only country in the entire WTO membership to stop the deal from getting implemented. The WTO’s agriculture committee, which is dealing with the food security issue, is due to meet later on Wednesday in what will only be its third meeting since the Bali ministerial last December. The agriculture committee meeting will be followed by a crucial meeting of the general council on Thursday.

Why is the TFA ratification so important?

The TFA faces its first implementation deadline on July 31 when WTO members, who make decisions by consensus, must approve a one-paragraph “accession protocol”. The deadline of July 31 is by when all the 160 WTO member countries have to sign the agreement into a protocol, marking implementation of the first phase of the deal. It was to come into force fully from 2015.

When the deal was struck in Bali in December, it was decided that as an interim measure, in respect of public stockholding for food security, developing countries would be protected from WTO disputes for non-compliance with the relevant provisions of the Agreement on Agriculture. This protection would be available till a permanent solution, the deadline for which was 2017.

What is the Indian position?

India wants the talks on public stockholding for food security to happen immediately, an issue that has domestic compulsions in India. For the government, the issue of livelihood of its marginal farmers is a deeply political one, especially in light of the stockpiling needs on account of requirements of the Right To Food Act.

Commerce minister Nirmala Sitharaman has indicated earlier this month that India would not back the TFA protocol because itwas unhappy with the progress of talks on food security that ministers also committed to in Bali. Those, she was quoted as saying, had been cast aside.

Soon after, commerce secretary Rajeev Kher issued a statement saying until India got an assurance that WTO members were ready to discuss a permanent solution on public stockholding, it would be difficult for it to sign the protocol on TFA.

Central to the Indian position is the government’s move to procure grains, largely by way of offering a minimum support price to farmers, and distributing them to BPL consumers through the public distribution system (PDS) at a subsidised price.

To treat such schemes under WTO rules remains an area of contention that ministers in Bali agreed to tackle by 2017. The government is demanding a reworking of the rules to ensure that developing countries do not breach the prescribed subsidy cap.

Is there support for India?

South Africa is said to be backing India, and other African members of the WTO have raised concerns over whether the financial aid they were promised to help revamp customs procedures will materialise. But broadly, India could be isolated. Domestic analysts say that India is perhaps not doing the right thing by going against the broader global coalition.

Critics have even hinted that India is doing this because it is not prepared to take on the requirements of TFA, with a relatively weak trade infrastructure.

Cabinet approves raising of FDI in insurance to 49 pct with Indian control

The Cabinet today approved 49 per cent foreign investment in insurance companies through the FIPB route ensuring management control in the hands of Indian promoters.

“The Cabinet Committee on Economic Affairs has approved raising of FDI cap in insurance sector to 49 per cent from 26 per cent,” sources said after a meeting of the CCEA, headed by Prime Minister Narendra Modi.

With the Cabinet approving the amendments to the long pending Insurance Laws (Amendment) Bill, it will now be taken up by Parliament.

In his budget speech, Finance Minister Arun Jaitley had said that the insurance sector is investment starved and there is a need to increase the composite cap in the sector to 49 per cent, with full Indian management and control, through the FIPB route.

The move would help insurance firms to get much needed capital from overseas partners.

The proposal to raise FDI cap has been pending since 2008 when the previous UPA government introduced the Insurance Laws (Amendment) Bill to hike foreign holding in insurance joint ventures to 49 per cent from the existing 26 per cent.

However, the Bill could not be taken up in the Rajya Sabha because of opposition from several political parties, including the BJP.

The insurance sector was opened up for private sector in 2000 after the enactment of the Insurance Regulatory and Development Authority Act, 1999 (IRDA Act, 1999).

This Act permitted foreign shareholding in insurance companies to the extent of 26 per cent with an aim to provide better insurance coverage and to augment the flow of long term resources for financing infrastructure.

The industry has been demanding for long to increase the FDI limit for adequate funds for expansion of the sector.

Not a grown-up debate

The women and child development ministry posted the Juvenile Justice Bill 2014 on its website on June 18 and is already set to send it to the law ministry. This bill does not reflect the deliberations of the review committee. The fate of submissions made to the ministry remains a mystery and it is being rushed even though the Law Commission of India is preparing a report on the subject.

Women and Child Development Minister Maneka Gandhi is reported to have said, “According to the police, 50 per cent of all sexual crimes were committed by 16-year-olds who know the Juvenile Justice Act so they can do it.” Three arguments have been put forth in the media in support of excluding children who are aged between 16 and 18, and have committed serious crimes, from juvenile justice. First, that children aged 16-18 are old enough to distinguish between right and wrong and so must bear the penal consequences of their actions. Second, there has reportedly been a tremendous increase in rape and murder by children. Third, children are committing more offences because apparently they know that they cannot be punished under the JJ Act, 2000. Each one of these assumptions is incorrect and needs to be refuted.

Children aged between 16 and 18 can distinguish right from wrong, but their ability to control risk- and pleasure-seeking behaviour is very weak. Adolescent brain imaging and monitoring have found that the part of the brain that promotes risk-taking behaviour is much more developed than the part that controls those instincts. In the absence of sufficient social guidance and supervision from parents as well as from the state, adolescents are even more vulnerable to the pressures of their brain. Adolescents cannot be dealt with like adults as their brains at that age are not like adults’.

According to official records, a total of 1,372 boys and 16 girls in the 16-18 age group were arrested (but not convicted) for rape in 2013. This constitutes 4 per cent of the total number of rape cases reported, not 50 per cent, as claimed by Maneka Gandhi. It also amounts to a mere 0.002 per cent of the children in this age group in India.

The National Crime Records Bureau’s “Crime in India 2013” does report a 60.3 per cent increase in the number of children and a 35.2 per cent increase in the number of adults arrested for rape in 2013 over 2012. This increase can be directly attributed to the widening of the definition of rape by the Protection of Children from Sexual Offences (POCSO) Act in 2012 and in the Indian Penal Code in 2013, rather than the protectiveapproach of the JJ Act. Penetrative sexual assault or rape now includes not just penile penetration of the vagina but also anal and oral penetration by objects and fingers. It has been made gender neutral in the case of children below 18 years of age. Raising the age of consent from 16 to 18 years has brought many more juveniles within the net of sexual offences.

Many relationships between adolescents have given rise to rape charges since the age of consent for sexual intercourse has been raised. There is concern in judicial circles and among child rights activists about the criminalisation of young persons for romantic relationships. The Bombay High Court has already decided to examine the wider issue of consensual sex leading to the charge of rape. It is ironic that instead of amending the POCSO Act to decriminalise adolescent sexual behaviour, the ministry for women and child development is trying to send children to prison.

“Adult punishment for adult offences” is sought to be justified by the idea that such deeds deserve severe punishment and by the “deterrent effect” this punishment will have. The former rationale is based on a barbaric notion of retribution, and there is no evidence that severe punishment deters. Amendments to the IPC in 1983 and 2013 put in place stringent penalties such as mandatory minimum sentences of seven, 10 and 20 years, life imprisonment without parole and the death sentence. But rapes by adults have been continually on the rise. What makes anyone believe that adolescents will be deterred by the fear of harsh punishment in the adult system?

America was sent into a panic in the 1990s by its high violent juvenile crime rate. Today, America reports that transferring children to the adult system has had an adverse impact on children’s rehabilitation. There is no reason to adopt the American approach in India, which has a much lower juvenile crime rate. Improving socio-economic circumstances, addressing the patriarchal values that promote discrimination and violence against women, improving standards of education, reducing the drop-out rate in schools, providing the necessary infrastructure and personnel in children’s homes are needed to create robust citizens of tomorrow. Sending them to prison is no solution.

Some judgement, please,corruption in judiciary

Justice Markandey Katju’s mendacious allegations against his former colleagues, rather than provoking a sensible debate, has brought out just how dangerous the framework within which we think of judicial accountability is. It is pointless to speculate on Katju’s motives. But only the most obtuse observer will fail to recognise the political implications of what he has said. Politicians are salivating at the prospect of the judiciary committing hara kiri on its own legitimacy, thus creating grounds for greater control. After two decades, a legislative majority makes it possible that at the end of this road of delegitimisation will come, not greater accountability, but more political control. Katju has obliged at the moment when these tussles are getting particularly acute.

The judiciary’s damage is self-inflicted. This column has consistently argued that there is a serious crisis in the judiciary. Of late, the Supreme Court, in particular, has not distinguished itself. It has abdicated moral stewardship of the Constitution. The intellectual quality of judgments is widely perceived to be mediocre. Several judges have come under the ambit of all kinds of unseemly allegations. Cumulatively, this has led to two conclusions. First, the judicial usurpation that gave it almost exclusive powers over higher judicial appointments needs to be revisited; the executive’s more explicit role needs to be restored. Second, some mechanism needs to be devised to hold judges accountable. Hence the call for a national judicial appointments commission.

The exact design of this commission will be a matter for another occasion. But two dangerous tendencies in our current clamour for accountability need urgent attention. The first is the dangerous elevation of the Intelligence Bureau to the role of ultimate arbiter of character and competence. I cannot speak to particular cases. But the ease with which IB reports are used as an argument for or against candidates should give sleepless nights to those citizens who care about democracy. This is so for several reasons. It is ironic that in the discourse of accountability, we often invoke the single most unaccountable institution in Indian democracy: the Intelligence Bureau. This shadowy institution, whose own functioning is beyond all accountability, whose own norms are unclear and whose competence is doubtful, is now paraded as the final word on the suitability of candidates.

So let us put it gracelessly. Inputs from the IB can be important. But if they are accepted uncritically, if no one has the courage to ever overrule them, Indian democracy will be in great danger. How many times in the past have you heard that potentially worthy judges were scuttled by the IB? Katju may feel entitled to ask his brother judges why they went against whathe claims were their own judgements. But it is utterly naive to think that an IB report cannot itself be politicised through omission and commission. The IB can easily create a fog of suspicion where none exists and scuttle good candidates; it can also choose to underemphasise what is already known. Since there is apparently deep IB scrutiny of candidates, what explains the fact that apparently so many bad apples made it through?

This point is important because, regardless of the structure of appointments, we rely on the IB and immobilise natural justice. In governments where the IB seems to leak more than ministers are allowed to speak, the possibility of IB subversion of candidates is great. Only in India can the demand for accountability involve a greater role for the even more unaccountable institution.

The second issue that needs some sanity is transparency. Transparency is an attractive idea, but its contours need to be clearly defined. A bit of historical context is in order. One of the reasons we got a more mediocre judiciary, or in some aspects, civil service, is that we had this illusion that no one needs to exercise complicated judgement. The only way to appear to be fair and transparent is to come up with objective criteria. Seniority became the default criteria, albeit occasionally manipulated. One danger with certain demands for transparency is that it cannot happen without a counterproductive reductionism. The use of transparently accessible numerical criteria in academic selections is a good example of perverse incentives.

There is a clamour for selection committees to explain their appointments publicly. This is nonsense. There are good reasons not to malign reputations or cast doubt on the competence of rejected candidates. If they are serving judges, it might undermine their authority. It is possible to select one without suggesting others were unworthy; but public articulations make this difficult. Do you really want unelected judges or senior counsel to go with a sign on their head: “unworthy of the Supreme Court”? All institutions run on something called presumptive worthiness. Undermining this has long-term consequences for the institution.

Selection is a matter of judgement. It is not just a matter of objective qualifications but involves subtle points of judgement like institutional fit, temperament and so forth. These are all relevant. But the more selection committees have to explain themselves, the less likely it is that the relevant criteria will be taken into account, because these criteria are context specific. In India, there is also the misconception that the US process is transparent. It is transparent in the sense that their political system transparently accepts the political nature of judicial appointments. Public hearings are not about selecting the best candidate. Few would accuse the Supreme Court of the United States of achieving that distinction. I doubt we are ready to accept a politicised judiciary in that sense.

Notice another irony in l’affaire Katju. We want to have it both ways. On one hand, we say the judiciary should not have an exclusive say. Then,based on select leaks, we go after a former prime minister who merely asked a question he was within his rights to ask. Under our current system, what is wrong in the prime minister asking questions about a particular appointment? How can this government, which used IB leaks to buttress its stand in the Gopal Subramanium case, object to Manmohan Singh merely asking a question? This controversy is not about reform, it is has a political odour to it.

The Supreme Court seems to have recognised the rot. It has made a good start by making direct appointments to the bench. A critical mass of these appointments could transform its calibre and culture for the better, bringing in both competence and an outside perspective. The judiciary needs to repair its own deep disfigurement. But the wider politics of the judiciary is taking a dangerous turn. Indian democracy will rue the day it compromises on judicial independence in the name of accountability.

Flood Management

The State Governments formulate the proposals for flood management and such eligible proposals which secure all mandatory clearance including investment clearance of Planning Commission are sent to Ministry of Water Resources for availing central assistance through the monitoring agencies for approval under Flood Management Programme. In October, 2013, the Cabinet approved continuation of Flood Management Programme during XII Plan. Under this Programme, a total of 97 new flood management projects having all mandatory clearances were received and the same were approved during the years 2012-13 to 2014-15 of XII Plan. The total utilisable water resource in the country has been estimated by Central Water Commission as 1123 Billion Cubic Metre ( BCM) of which 690 BCM is surface water resource and 433 BCM is ground water resource. It has been estimated in the year 2009 by Central Water Commission (CWC) that about 450 BCM of surface water is being utilised for various purposes. Further, Central Ground Water Board (CGWB) has also assessed in 2009 that about 243 BCM of ground water is being utilised for various purposes. The rest of the water could be considered to be currently flowing into sea flows and the neighbouring countries as also being lost due to evaporation. During every monsoon, the Central Water Commission (CWC) monitors on monthly basis the identified glacial lakes and water bodies having water spread area more than 50 hectare. Any untoward growth in size of such lakes is informed to the concerned State Governments and then high resolution monitoring of such lakes is carried out through National Remote Sensing Centre (NRSC).

Ganga Manthan

A national level consultation in the name of ‘Ganga Manthan’ was organized on July 07, 2014 at New Delhi to facilitate interaction with various stakeholders including policy makers and implementers, academicians, environmentalists, spiritual leaders and NGOs. The event was organized by the National Mission for Clean Ganga (NMCG), a registered society under Ministry of Environment & Forests (MoEF), implementing the river Ganga pollution abatement programme under National Ganga River Basin Authority (NGRBA). It was aimed to provide a platform for various stakeholders to come together to discuss the issues and possible solutions to the challenging task of Ganga Rejuvenation. The views expressed by the stakeholders participating in ‘Ganga Manthan’ would be helpful for the preparation of a road map for the preparation of a comprehensive plan to rejuvenate the River Ganga. A Memorandum of Agreement for 10 years has been signed in 2010 by MoEF and a consortium of seven IITs for preparation of a comprehensive River Basin Management Plan for Ganga. Besides the IITs, National Institute of Hydrology (NIH), Roorkee, Banaras Hindu University, various universities and research institutes are also involved in Ganga River Basin Management Plan (GRBMP). Interim report has been submitted, which is circulated to different ministries, departments and other stakeholders for comments. For rivers other than Ganga, National River Conservation Directorate (NRCD) in MoEF, which is entrusted with implementation of Centrally Sponsored Scheme of National River Conservation Plan (NRCP) jointly with the State Governments on a cost-sharing basis, has identified polluted stretches of 40 major rivers in 121 towns spread over 19 States in the country, in which pollution abatement activities are being implemented under NRCP. Ministry of Environment & Forests (MoEF) have informed that pollution abatement of rivers, including building of toilets etc., is to be undertaken by the State Government/ local bodies concerned, as per their priorities. The role of the Central Government is promotional and to supplement the efforts of the State Govt. Central Pollution Control Board has inventorised 144 drains discharging wastewater into river Ganga directly. The total wastewater discharge from these drains is 6475 million litres per day (mld) and carrying total Biological Oxygen Demand (BOD) load of 426 tonnes/ day.

400 districts already covered by the Strengthened & Resurrected ICDS Scheme Remaining districts to be covered in the current year

An amount of Rs. 1626748.57 lakhs was released to States by the Union Ministry of Women and Child Development under the ICDS Scheme in the year 2013-14 against a release of Rs. 1570149.59 lakhs in the year 2012-13. In the current year (upto 30th June, 2014) an amount of Rs. 570651.62 lakhs has already been released to the States under the ICDS scheme. In order to address various programmatic, management and institutional gaps and to meet administrative and operational challenges, Government approved Strengthening and Restructuring of ICDS Scheme in September 2012 with an over-all budget allocation of Rs. 1,23,580 crore during 12th Five Year Plan. Roll out of Restructured and Strengthened ICDS has been taken place as per the following schedule: I. In 200 high burden districts in the first year (2012-13); II. In additional 200 districts in second year (2013-14) (i.e. w.e.f. 1.4.2013) including districts from special category States and NER; III. In remaining districts in third year (2014-15) (i.e. w.e.f. 1.4.2014). The key features of Strengthened and Restructured ICDS include addressing the gaps and challenges with (a) special focus on children under 3 years and pregnant and lactating mothers (P&L) (b) strengthening and repackaging of services including , care and nutrition counseling services and care of severely underweight children (c) a provision for an additional Anganwadi Worker cum Nutrition Counselor for focus on children under 3 years of age and to improve the family contact, care and nutrition counseling for P&L Mothers in the selected 200 high-burden districts across the country, besides having provision of link worker, 5% crèche cum Anganwadi centre (d) focus on Early Childhood Care and Education (ECCE) (e) forging strong institutional and programmatic convergence particularly, at the district, block and village levels (f) models providing flexibility at local levels for community participation (g) introduction of Annual Programme Implementation Plan (APIP) (h) improving Supplementary Nutrition Programme including cost revision, (i) provision for construction and improvement of buildings of Anganwadi centres (j) allocating adequate financial resources for other components including Monitoring and Management and Information System(MIS), Training and use of Information and communication technology (ICT), (k) to put ICDS in a mission mode and (l) revision of financial norms etc.