Editorials With English Vocab 25/12/2015

#everydayquiz  TheHindu Business Standard INDIAN Express

The Hindu: Judicial overreaction

The initiation of criminal contempt proceedings against Booker Prize-winning writer Arundhati Roy by the Bombay High Court appears to be an excessive reaction to adverse comment. Judges are expected to be uninfluenced by occasional criticism relating to their judicial orders, especially by journalists and writers who are not parties before them. It behoves the superior judiciary to ignore remarks on court proceedings and orders made out of activist zeal. In times when both mainstream and social media are full of observers, critics, commentators and detractors, courts ought not to be unduly sensitive to outspoken critics, subject of course to the rule that the criticism is fair and does not attribute motives to judges or malice to judicial functioning. Ms. Roy is no stranger to the long arm of the court’s contempt jurisdiction. The Supreme Court sentenced her to one day in prison for criminal contempt for ‘scandalising the judiciary’ through some remarks in 2002. A few years earlier, in 1999, the Supreme Court decided to be lenient towards her and her associates in the Narmada Bachao Andolan for their comments on court orders. “[T]he court’s shoulders are broad enough to shrug off their comments,” the Bench had remarked then, in a measure of how the court’s dignity is better served if it takes routine criticism in its stride and moves only against vicious and tendentious remarks or actions that bring the judiciary into disrepute or ridicule.

Ms. Roy’s article in a magazine relating to the arrest and denial of bail to G.N. Saibaba of Delhi University does not appear entirely to fall under such a category. The political sympathies reflected in the article for the wheelchair-bound lecturer are quite obvious, but it is not possible to discern any wilful contempt for judicial processes in its expression of concern for his freedom, health and well-being. Unfortunately, Justice A.B. Chaudhari sees in the piece a “gameplan” to obtain an order of bail “knowing fully well that the plea was turned down by the Sessions Court as well as a Single Judge of this Court.” While initiating action against Ms. Roy for criminal contempt, he seems to have read too much into an article sharply critical of the government and the police that relates only indirectly to the judiciary in its comparison of instances of those who got bail (Babulal Bajrangi, Maya Kodnani and Amit Shah) and those who did not. The majesty of the court ought to be any judge’s concern, but it is inconceivable why an author’s “nasty” language against the government and the police should be. The conclusion that her article, prima facie, tends to interfere in the administration of justice merely because it appears to argue that Mr. Saibaba is entitled to release is unfortunate. While safeguarding the judiciary’s reputation and dignity, courts of law should not be seen as stifling free comment and suppressing political dissent. The power of contempt should be used sparingly and that too, only against those wilfully subverting justice, and not against critics of the state.

be·hoove

It is a duty or responsibility for someone to do something; it is incumbent on.

zeal

Great energy or enthusiasm in pursuit of a cause or an objective.

de·trac·tor

A person who disparages someone or something.

mal·ice

The intention or desire to do evil; ill will.

le·ni·ent

(of punishment or a person in authority) permissive, merciful, or tolerant.

stride

Walk with long, decisive steps in a specified direction

vi·cious

Deliberately cruel or violent.

ten·den·tious

Expressing or intending to promote a particular cause or point of view, especially a controversial one

dis·re·pute

The state of being held in low esteem by the public.

dis·cern

Perceive or recognize (something).

con·tempt

The feeling that a person or a thing is beneath consideration, worthless, or deserving scorn.

maj·es·ty

Impressive stateliness, dignity, or beauty.

in·con·ceiv·a·ble

Not capable of being imagined or grasped mentally; unbelievable.

nas·ty

Highly unpleasant, especially to the senses; physically nauseating.

sti·fling

(of heat, air, or a room) very hot and causing difficulties in breathing; suffocating.

sparingly

Meagerly: to a meager degree or in a meager manner; "these voices are meagerly represented at the conference"; "the area is slenderly endowed with natural resources"

sub·vert

Undermine the power and authority of (an established system or institution).

The Hindu: Cess proceeds in a black hole

The National Democratic Alliance government has just introduced a cess of 0.5 per cent on all taxable services for the Swachh Bharat campaign. In February 2016, it will introduce a 2 per cent cess on airfares for all domestic flyers except those flying to remote locations, and international travellers. This cess is meant to fund losses that airlines may incur in connecting to hinterland locations. The Central government loves cesses, partly because it doesn’t have to share the proceeds with State governments. It has been levying them for several important causes including primary education, secondary education, road development, the welfare of construction workers and beedi workers, clean energy, research and development and universalisation of telecom coverage, among several others. But good intentions often pave the road to hell, as is evident from the fact that over Rs.1.4 lakh crore of cess proceeds lie unutilised and inadequately accounted for in the government’s books. Take, for example, the case of the Secondary and Higher Education Cess paid by all income tax payers that has yielded over Rs.64,000 crore between 2006 and 2015. Not a rupee of that has been spent, while hundreds of students now fork out more for higher education since the government has discontinued the non-National Eligibility Test fellowship. That the government has failed to even set up a fund to pool the proceeds shows the lack of planning that precludes and follows the levy of a cess. So is the case with the proposed airfare cess. The government is yet to identify routes that the cess would subsidise, or spruce up the many defunct civil airports.

The point of a cess is that the money it generates can only be used for the designated purpose so it can be an effective policy tool in theory. But if the money isn’t spent for the designated purpose, as the audit report of the Comptroller and Auditor General of India tabled in Parliament has shown, it just stagnates and distorts the economy further: the additional tax brings down real incomes without any accompanying gain in socio-economic indicators as targeted. Then there is the question of whether a given cess is needed at all. Most reasons cited for levying a cess, such as purposes of education, are important enough for direct budgetary allocations — as happens in the developed world. So the government can simply raise the tax rate rather than impose multiple cess levies. But with the Fourteenth Finance Commission increasing States’ share of the common pool of resources, cesses are tempting for the Centre to shore up its own finances. If it wants to keep complicating the taxation system for good intentions, the government should start disclosing a deployment plan to achieve the intended outcomes from cess collections before imposing the next such levy on citizens.

hin·ter·land

The often uncharted areas beyond a coastal district or a river's banks.

fork out sth : to pay an amount of money, especially unwillingly

pre·clude

Prevent from happening; make impossible.

spruce

Neat in dress and appearance.

de·funct

No longer existing or functioning.

dis·tort

Pull or twist out of shape.

deployment

The distribution of forces in preparation for battle or work

Business Standard 

Financial stability

Reserve Bank of India (RBI) Governor Raghuram Rajan has called for closer monitoring of the threat to banks from weakening corporate performance and thus the debt-servicing capabilities of leveraged business groups. Indeed, the proportion of bad loans held by large borrowers has risen to over 87 per cent and the gross non-performing assets (NPAs) of scheduled commercial banks as a percentage of their loans are now over five per cent. According to one estimate, banks in India have leverage of roughly 20 times. Losses of roughly five per cent of total assets should thus be sufficient to bring down a bank. Since the recovery rate for NPAs is roughly 20 per cent, all that bankruptcy requires is gross NPAs of roughly six per cent of total assets. Many banks in India are flirting with danger of this nature.

While bad news about banks can be hidden, bad news about borrowers is visible to all. Roughly a third of the overall corporate balance sheet is in firms which are not producing enough operating profit to pay interest. Banking regulation and supervision are about ensuring that matters do not come to such a pass. This requires tough rules about loss recognition and about adequacy of equity capital. It requires an effective supervisory system. The RBI, therefore, must ensure that banks are not allowed to hide bad news.

It must, however, be noted that India is not likely to have a dramatic banking crisis with PSU banks having a virtually unlimited government guarantee. Things have been held up in the past by three factors: a cartel of banks which pays low interest rates on current accounts and savings account, a steady injection of taxpayer money into banks, and high growth in the size of banking. With a sharp decline in nominal GDP growth, the third factor has been removed. Injections of taxpayer money into banks will become more difficult given the acute fiscal stress. The cartel of banks has been challenged by some new entrants and will become increasingly unsustainable given the activities of the Competition Commission of India. Hence, the ways of the past will not carry forward into the future. The strategy of weak regulation and supervision, coupled with hiding bad news, has been utilised in Japan and China. Japan got "lost decades" of bad economic growth as a consequence, and China is also on the early stages of that process.

Simplistic solutions involve putting in more taxpayer money. This is a poor use of taxpayer resources, much like putting taxpayer money into Air India is unwise. Fiscal constraints also rule out a resource outlay of the scale required. Solving this problem requires reforming regulation, enacting and implementing the new bankruptcy code, and reducing the government's stake in PSU banks. It appears hard for the government to muster the public administration capabilities required to achieve success on all three fronts simultaneously. On a horizon of five years, it appears unlikely that substantial progress will be made on all three fronts. For all practical purposes, slow growth in bank credit could hold back GDP growth in coming years. One tool through which policy makers can alleviate the pain, at least for the top 1,000 companies of the country, is by developing the bond market. However this also involves confronting political economy constraints, as was seen in the roll back of the bond market initiatives of Budget 2015.

lev·er·age

Use borrowed capital for (an investment), expecting the profits made to be greater than the interest payable.

flirt

Behave as though attracted to or trying to attract someone, but for amusement rather than with serious intentions.

dra·mat·ic

Of or relating to drama or the performance or study of drama.

car·tel

An association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.

a·cute

(of a bad, difficult, or unwelcome situation or phenomenon) present or experienced to a severe or intense degree.

con·straint

A limitation or restriction.

mus·ter

Assemble (troops), especially for inspection or in preparation for battle.

al·le·vi·ate

Make (suffering, deficiency, or a problem) less severe.

con·front

Meet (someone) face to face with hostile or argumentative intent.

The INDIAN EXPRESS: Matches and hearts

In one of the most stirring sports images of 2015, New Zealand batsman Grant Elliot is seen lifting a devastated Dale Steyn off the pitch after he had hit the South African pacer for an almighty six to put the Black Caps into the World
Cup final. The gesture sat perfectly with the team outgoing captain Brendon McCullum, who will quit international cricket in February, has helped shape. One that wins matches — and hearts. New Zealand have always been a likeable lot, mostly because of their underdog status. But, under McCullum, they learned to win consistently and yet stay grounded.

McCullum was born in South Dunedin and battle-hardened by rugby at school. He brought this attitude to cricket, and played hard and aggressively. Former Kiwi captain Stephen Fleming says the New Zealand public initially wasn’t at ease with McCullum’s style. But he evolved his aggression in a way that it ceased to be an act of offence. Under his captaincy, a wicket didn’t follow a send-off. A six didn’t give licence to stare back at the bowler. A personal sledge? Ignore. An umpiring howler? Accept and move on.

Cricket felt nothing like the Orwellian war-minus-the-shooting that Messrs David Warner and Ishant Sharma led us into believing it is. The Black Caps’ brand of aggression was peaceful, almost Gandhian. And it similarly confounded opponents. Brad Haddin admitted Australia were uncomfortable against New Zealand in the World Cup because they thought the Black Caps were too nice. Before the final, Haddin would brace himself to give McCullum and his team ugly send-offs. “They deserved it,” he later said. Many Aussies don’t agree. Earlier this week, when McCullum announced his retirement, one Aussie blogger wished his team would have the decency to give McCullum a guard of honour in his final Test in Christchurch.

stir·ring

Causing great excitement or strong emotion; rousing

dev·as·tate

Destroy or ruin (something).

un·der·dog

A competitor thought to have little chance of winning a fight or contest.

e·volve

Develop gradually, especially from a simple to a more complex form.

cease

Bring or come to an end.

con·found

Cause surprise or confusion in (someone), especially by acting against their expectations.

brace

A device that clamps things tightly together or that gives support, in particular.

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