A first step: On Multi Commodity Exchange

A first step: On Multi Commodity Exchange
With the introduction of a new financial instrument, India is a step closer to building a vibrant market for commodities. Success in the long journey, however, will require avoiding some policy mistakes of the past. The Multi Commodity Exchange has introduced gold option contracts for the first time in India. The derivative instrument allows investors to enter into contracts to either buy or sell gold some time in the future at a pre-determined price, thus allowing investors to hedge any volatility in the price of the metal, for a price. The fact that options usually also turn out to be cheaper than binding future agreements will help in the wider participation of investors in the realm of commodity speculation. As Finance Minister Arun Jaitley stated during the launch of the derivative at the MCX, gold options will also help bring into formal channels more of the gold that is traded. Notably, the introduction of gold options is in line with the government’s announcement last year that it would take steps towards introducing new varieties of commodity derivatives in the market. MCX, in fact, has said it might seek permission to write options contracts on other commodities which, based on their current futures trading volumes, satisfy rules set by SEBI. To improve market efficiency, the market regulator is also mulling the entry of mutual funds and portfolio management services into the business of investing in commodity derivatives.

Naturally, some concerns have been expressed over financial speculation. The benefits of well-regulated commodity speculation, however, are likely to outweigh the potential systemic risk from asset bubbles. Options, like other financial derivatives, allow price risks to be transferred between market players in an efficient manner. The business of anticipating prices in the future is left to professional speculators while their clients benefit from the prospect of stable prices. In the process, financial derivatives can facilitate the conduct of real economic activity in higher risk segments — including in agriculture and industrial activity — that would not happen otherwise. Confusion over this has led to an unjustified hostility towards financial speculation, as well as some hasty policy measures. Almost a decade ago, a rapid increase in food prices pushed the government to impose a blanket ban on any speculation on agricultural products. While it may have been relevant for the specific circumstances, the wide-ranging nature of the move slowed the development of a healthy market for commodity speculation. The government should now resist similar temptation and focus instead on real-time monitoring systems. Apart from the standardised derivatives approved by SEBI for trading in exchanges, a framework that promotes over-the-counter products will help improve the scope for risk mitigation. The debut of gold options should be seen as a step towards greater reforms.

Toxic farming: on insecticide regulation

Toxic farming: on insecticide regulation
Reports of farmers dying from pesticide exposure in Maharashtra’s cotton belt in Yavatmal make it evident that the government’s efforts to regulate toxic chemicals used in agriculture have miserably failed. It is natural for cotton growers under pressure to protect their investments to rely on greater volumes of insecticides in the face of severe pest attacks. It appears many of them have suffered high levels of exposure to the poisons, leading to their death. The fact that they had to rely mainly on the advice of unscrupulous agents and commercial outlets for pesticides, rather than on agricultural extension officers, shows gross irresponsibility on the part of the government. But the problem runs deeper. The system of regulation of insecticides in India is obsolete, and even the feeble efforts at reform initiated by the UPA government have fallen by the wayside. A new Pesticides Management Bill introduced in 2008 was studied by the Parliamentary Standing Committee, but it is still pending. At the same time, there is worrying evidence that a large quantum of pesticides sold to farmers today is spurious, and such fakes are enjoying a higher growth rate than the genuine products. Clearly, there is a need for a high-level inquiry into the nature of pesticides used across the country, and the failure of the regulatory system. This should be similar to the 2003 Joint Parliamentary Committee that looked into harmful chemical residues in beverages and recommended the setting of tolerance limits.

It is incongruous that the Centre has failed to grasp the need for reform in the regulation of pesticides, when it is focussed on growth in both agricultural production and exports. Agricultural products from India, including fruits and vegetables, have been subjected to import restrictions internationally for failing to comply with safety norms. It is imperative that a Central Pesticides Board be formed to advise on use and disposal of pesticides on sound lines, as envisaged under the law proposed in 2008. This will strengthen oversight of registration, distribution and sale of toxic chemicals. There can be no delay in updating the outmoded Insecticides Act of 1968. A stronger law will eliminate the weaknesses in the current rules that govern enforcement and introduce penalties where there are none. Aligning the new pesticides regulatory framework with food safety laws and products used in health care will make it broad-based. After the recent deaths, Maharashtra officials have hinted at the loss of efficacy of some hybrids of genetically modified cotton in warding off pests to explain the growth and intensity of pesticide use. The responsible course would be to make a proper assessment of the causes. It is also an irony that the Centre has failed to use its vast communication infrastructure, including DD Kisan, the satellite television channel from Doordarshan dedicated to agriculture, to address distressed farmers. A forward-looking farm policy would minimise the use of toxic chemicals, and encourage organic methods where they are efficacious. This will benefit both farmer and consumer.

Saving child brides — on SC ruling on sex with minor wife

Saving child brides — on SC ruling on sex with minor wife
Not the reasoning but the implications of the ruling on child marriage are a cause for worry

By ruling that marriage cannot be a licence to have sex with a minor girl, the Supreme Court has corrected an anomaly in the country’s criminal law. Under the Indian Penal Code, it is an offence to have sex with a girl below 18 years of age, regardless of consent. However, it made an exception if the girl was the man’s wife, provided she was not below 15. In other words, what was statutory rape is treated as permissible within a marriage. By reading down the exception to limit it to girls aged 18 and older, the court has sought to harmonise the various laws in which any person under 18 is a minor. Overall, the judgment is in keeping with the reformist, and indisputably correct, view that early marriage is a serious infringement of child rights. The judges draw extensively on studies that demonstrate child marriage is a social evil that adversely affects the physical and mental health of children, denies them opportunities for education and self-advancement, infringes on their bodily autonomy and deprives them of any role in deciding on many aspects of their lives.

As a move to strengthen the fight against child marriage and help stricter enforcement of the Prohibition of Child Marriage Act, 2006, the judgment cannot be faulted. But the practical implications of the judgment are worrying. Are all men married to girls between the ages of 15 and 18 to be condemned to face criminal cases as rapists? Given the prevalence of child marriage in this country, it is doubtful whether it is possible — or even desirable — to implement the statutory rape law uniformly in the context of marriages. What, for instance, does this mean for those married under Muslim personal law, which permits girls below 18 to be married? The age of consent under the IPC was raised in 2013 from 16 to 18 to bring it in line with the Protection of Children from Sexual Offences Act, 2012. However, the age above which marriage is an exception to rape was retained at 15, as fixed in 1940. POCSO criminalises even consensual teenage sexual activity and the latest ruling has brought this into the domain of marriage. A teenager could be prosecuted for a sexual offence under POCSO even if he was just a little above 18. In the same way, a teenage husband may now be threatened with prosecution for rape. Significantly, if boys under 18 but over 16 are charged with penetrative sexual assault under POCSO or rape under the IPC, which can be termed ‘heinous offences’, they could face the prospect of being tried as adults, according to the juvenile law as it stands now. Treating all below 18 as children may be good for their care and protection, but whether 18 is the right age for consent in this day and age remains a moot question. The state’s argument that given the widespread prevalence of child marriage it is not possible to remove the exception may be flawed from a formal standpoint, but its concerns about the implications of the verdict must not be underestimated.

Towards transparency — on judicial appointments

Towards transparency — on judicial appointments
Supreme Court collegium’s decision to disclose the reasons for its recommendations marks a historic and welcome departure from the entrenched culture of secrecy surrounding judicial appointments. The collegium, comprising the Chief Justice of India and four senior judges, has said it would indicate the reasons behind decisions on the initial appointment of candidates to High Court benches, their confirmation as permanent judges and elevation as High Court Chief Justices and to the Supreme Court, and transfer of judges and Chief Justices from one High Court to another. This means there will now be some material available in the public domain to indicate why additional judges are confirmed and why judges are transferred or elevated. A certain degree of discreetness is necessary and inevitable as in many cases the reasons will pertain to sitting judges. At the same time, it would become meaningless if these disclosures fail to provide a window of understanding into the mind of the collegium. It is important to strike the right balance between full disclosure and opaqueness. The collegium has suggested as much, albeit obliquely, when it says the resolution was intended “to ensure transparency, yet maintain confidentiality in the Collegium system”. It is to be hoped that this balancing of transparency and confidentiality will augur well for the judiciary. The introduction of transparency acquires salience in the light of the resignation of Justice Jayant M. Patel of the Karnataka High Court after he was transferred to the Allahabad High Court as a puisne judge, despite his being senior enough to be a High Court Chief Justice.

Going by the decisions disclosed so far with regard to the elevation of district judges, it is clear that quality of judgments, the opinion of Supreme Court judges conversant with the affairs of the high court concerned, and reports of the Intelligence Bureau together form the basis of an initial appointment being recommended. While district judges of sufficient seniority and in the relevant age group are readily available for consideration, there may be some unease about how certain advocates and not others come to be considered. Given the perception that family members and former colleagues of judges are more likely to be appointed high court judges, it is essential that a system to widen the zone of consideration is put in place. There are 387 vacancies in the various High Courts as on October 1. The mammoth task of filling these vacancies would be better served if a revised Memorandum of Procedure for appointments is agreed upon soon. A screening system, along with a permanent secretariat for the collegium, would be ideal for the task. The introduction of transparency should be backed by a continuous process of addressing perceived shortcomings. The present disclosure norm is a commendable beginning

The birthday of Himalayan explorer Nain Singh Rawat

The birthday of Himalayan explorer Nain Singh Rawat
#REALLYGREATWORK .
#NAINSINGHRAWAT

Rawat, born 187 years ago, was the first to survey Tibet

Today’s Google Doodle celebrates the 187th birth anniversary of Nain Singh Rawat, a 19th century mountaineer and one of the first to explore the Himalayas for the British. Rawat was the first to survey Tibet, determining the exact location and altitude of the Tibetan capital Lhasa, and mapping the Tsangpo river.

Created by paper cut artists Hari and Deepti Panicker, the doodle is a silhouette diorama illustration with Rawat (a tripod placed in front depicting his ‘day job’) looking out at the horizon, a majestic lake below, and the sun in all its glory behind the mountains.

Born in 1830 in Milam, a Shauka tribe village in the valley of Johar in present-day Uttarakhand, Rawat as a young man visited Tibet with his father and picked up the local language, traditions and customs, which would later come in handy.

In the early 19th century, European explorers were fascinated by the Central Asian terrain and wanted to understand the local customs. But given the challenges, they realised they needed trained locals to help them in their quest. Rawat was one among the select group of local explorers.

As Europeans were not welcome everywhere, these explorers had to go under cover. Disguised as a Tibetan monk, Rawat walked from his home in Kumaon to places such as Lhasa, Kathmandu and Tawang. He would cover one mile in 2000 steps and measured each of them using a rosary. And in order to maintain the secrecy, he hid a compass in his prayer wheel and disguised travel records as prayers.

Rawat’s first exploration trip was with the Germans between 1855 and 1857. He travelled to the Manasarovar and Rakas Tal lakes and then further to Gartok and Ladakh. He then furthered his knowledge of surveying at the Great Trignometric Survey office in Dehradun, where he trained for two years. It is said that his greatest journey was from Leh in Ladhak to Assam via Lhasa, from 1873-75.

Rawat was the recipient of awards by the Royal Geographic Society and in June 2004, a postage stamp was released dedicated to him.

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1. Rai Bahadur Nain Singh Rawat was born in a Shauka village located in the valley of Johar in Kumaon Hills, which is famous for being the home of Bhotia explorers from the British Era.

2. After leaving school, Nain Singh helped his father and visited different centres in Tibet with him. In the process, not only did he learn the Tibetan language, but also comprehended the customs and mannerisms practised by the local people, which would prove to be extremely beneficial in years to follow.

3. In 1855, a 25-year-old Nain Singh was first recruited by German geographers, the Schlagintweit brothers. The German scientists had approached the office of the Survey of India, which reluctantly allowed them to proceed with their survey.

4. Following which, along with three members of his family, Nain Singh set afoot on his first exploration trip between 1855 and 1857 and travelled to Lakes Manasarovar and Rakas Tal and then further to Gartok and Ladakh.

5. After the exploration with the German brothers, Nain Singh Rawat joined the Education Department and was appointed as the headmaster of a government vernacular school in his village at Milam from 1858 to 1863.

6. In 1863, Nain Singh Rawat and his cousin, Mani Singh Rawat, were selected and sent to the Great Trigonometrical Survey office in Dehradun where they underwent training for two years. This included training on the use of scientific instruments and ingenious ways of measuring and recording and the art of disguise.

The legendary explorer, Nain Singh Rawat. Source: History Nuggets.
7. Being exceptionally intelligent, Nain Singh Rawat quickly learned the correct use of scientific instruments like the sextant and compass and could easily recognise all major stars and different constellations easily.

8. Part of the secret ‘spy’ exploration mission, he had donned the guise of a Tibetan Monk and walked from his home region of Kumaon to places as far as Kathmandu, Lhasa, and Tawang. He was trained to maintain a precisely measured pace, which included covering one mile in 2000 steps, and measuring those steps using a modified Buddhist rosary or mala.

9. Several other ingenious methods were devised, where the notes of measurements were coded in the form of written prayers, and these scrolls of paper were hidden in the cylinder of the prayer wheel to escape notice during the secret missions.
10. Collecting intelligence under the most testing conditions, he travelled closely with the local population in caravans and thus followed some of the most fascinating accounts in the history of exploration, which led Nain Singh to map the vast expanses of Tibet and its river systems.

11. In 1865, Nain Singh left the Trigonometrical Survey and head out for Nepal with Mani Singh. While Mani returned to India soon, Nain went on to explore Tashilhunpo, where he met the Panchen Lama, and later Lhasa, where he met the Dalai Lama.

12. During his stay in Lhasa, his true identity was discovered by two Kashmiri Muslim merchants. Interestingly, they not report him to the authorities and on the contrary, lent him a small sum of money against the pledge of his watch.
13. On his second voyage, in 1867, Singh explored western Tibet and stumbled across the fabled gold mines of Thok Jalung. He was also blown away by the humility of the workers, who only dug for gold near the surface, as they believed that digging deeper was a crime against the Earth and would deprive it of its fertility.

14. His last and greatest journey was completed between the years 1873 and 1875, where he travelled from Leh in Kashmir to Lhasa, by a route more northerly than the one along the Tsangpo that he had taken on his first journey.

15. In recognition of his stupendous feats of exploration, Nain Singh was presented with an inscribed gold chronometer by the Royal Geographic Society (RGS) in 1868. According to Colonel Henry Yule, “his explorations had added a larger amount of important knowledge to the map of Asia than any other living man”.

16. Nain Singh was also conferred with the award of the Victoria or Patron’s Medal of the RGS in 1877 along with an inscribed watch by the Society of Geographers of Paris. In recognition of his fabulous achievements, the erstwhile government of India honoured the man with a land-grant of two villages.

Turning the poor’s assets into capital

Turning the poor’s assets into capital
Using blockchain to secure land titles will integrate more citizens into the formal economy
The Indian judiciary is crumbling under the weight of pending cases. More than 28 million cases are pending in the country’s district courts. Of these, more than 7.5 million are civil cases, and Bengaluru-based NGO Daksh’s data shows that more than 66% of the civil cases are related to land or property. Not only is the judiciary overburdened, the poor litigants are also losing Rs1,300 on average per day of court hearing in litigation costs and foregone business. In this context, the Andhra Pradesh government’s steps to use blockchain technology for land titling are a laudable development.

Blockchain technology is at the forefront of a technological shift called disintermediation; the removal of intermediaries in exchange processes that enables people to transact in a peer-to-peer fashion based on the trust provided by blockchain.

At present, land ownership data is stored with the government in centralized ledgers (records). This means that the data can be accessed and modified only by the government. This is a problem because if this data is erroneously entered, lost or forged, the ledger will no longer represent the true ownership of assets. Blockchain allows the government to maintain a public ledger of asset-ownership in a distributed fashion. The data is stored on a network of devices and there is no central point of failure. It ensures trust by being transparent—it is visible for everyone to verify. At the same time, it ensures privacy for the owner by ensuring that the ownership of the asset only changes hands after authorization.

At present in India, trading an asset requires an enormous effort just to determine the basics of the transaction: Does the seller own the real estate and have the right to transfer it? Will the new owner be accepted as such by those who enforce property rights? What are the effective means to exclude other claimants? Such questions are difficult to answer. For most goods, there is no place where the answers are reliably fixed. That is why the sale or lease of a house may involve lengthy and cumbersome procedures of approval involving all the neighbours. This is often the only way to verify that the owner truly owns the house and there are no other claims on it. Blockchain has the potential to change this by representing what is economically meaningful about any asset—size, location, use-restrictions, etc.—linking it to the owner unambiguously, and tracking all future exchanges.

Secure land ownership will prove immensely beneficial for India’s poor. The prosperity of Western nations can be traced to the security provided to property by the formal legal system. The poor in India do own things, but they don’t have a way to represent their property and create capital. They have houses but not titles; crops but not deeds; businesses but not statutes of incorporation. They produce all kinds of things—from clothing and footwear to leather bags and wrist watches. But due to missing documents of ownership, they are pushed into the unregulated sector of the economy—unable to access credit and public utilities like water and power. These enterprises of the poor are very much like corporations that cannot issue shares or bonds to obtain finance and investment. In the words of Peruvian economist Hernando de Soto, without representations their assets are “dead capital”.

With a trustworthy asset ownership system, millions of people will move out of the anonymous mass of citizens and become individuals with property interests. By intractably linking themselves to a property, they will become identifiable and have to forfeit their anonymity. Thus, people who use goods and services and don’t pay for them will be identified and charged interest penalties; contract violations will be traced; and legal infractions can be more easily prosecuted. On the other hand, they will be able to save and invest, avail of credit and maintain credit histories, and benefit from lower insurance premiums. Buildings are always the terminals of public utilities like power, water, broadband service, etc. But legal property transforms them into accountable and responsible terminals. The threat of forfeiture will discipline households and erstwhile unserved citizens will be treated like responsible members of society whose engagement is backed by a pledge of property.

Blockchain has the potential to end the days of large-scale property-related litigation; it will free the assets of the poorest Indians to create capital and enter the formal economy. However, recognizing the present owners of the lands is a huge task in itself. In 2013, Action Research in Community Health and Development (ARCH), Liberty Institute and some other NGOs helped tribal farmers in Gujarat use GPS technology to mark their lands on government maps and secure their property. Something similar must be done for the vast swathes of India’s countryside. There is enormous value locked in the assets of India’s poor. One can hope that the government will take swift action given the potential gains for them.

Do you think more Indian states should use blockchain for giving land titles to the poor?

Queen of Thumri’ Girija Devi dead

Queen of Thumri’ Girija Devi dead
Doyen of the Benaras gharana

Eminent classical singer and Padma Vibhushan awardee Girija Devi passed away at a city hospital here on Tuesday night following a cardiac arrest, hospital sources said. She was 88 and is survived by her daughter.

Considered as the queen of thumri and fondly called Appa-ji, Girija Devi was admitted to the city’s BM Birla Heart Research Centre earlier in the afternoon with cardiovascular ailments, She was put on life support, her family sources said.
Girija Devi’s condition was quite critical when she was brought to the hospital. She was admitted to the CCU and was under constant watch. But she passed away around 8.45 p.m.,” a hospital spokesperson said.

Prime Minister Narendra Modi condoled her death, saying the singer’s music appealed across generations and her pioneering efforts to popularise Indian classical music would always be remembered.

“Saddened by demise of Girija Devi-ji. Indian classical music has lost one of its most melodious voices. My thoughts are with her admirers,” he tweeted.

A legendary singer of the Benaras gharana, Girija Devi was awarded the Padma Shri in 1972, Padma Bhushan in 1989 and the Padma Vibhushan in 2016.