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THE HINDU: Questions after the deposition
Details
from the ongoing deposition of
David Coleman Headley have
brought back dark memories for India, not just of the horror of the 2008 Mumbai
attacks, but also of the cold-blooded planning that went into the massacre of
over 160 men, women and children.
It is certainly important that the Mumbai
court has been able to record the testimony of Headley, and make part of Indian
court records all that he had told a court in the United States several years
ago. The testimony has not yet revealed much that wasn’t in the court records,
or in the testimony he gave before National Investigation Agency officials in
2010. Even so, it will be significant in the trial of Abu Jundal as well as in
a future trial of Hafiz Saeed and any of the masterminds in the unlikely event
of Pakistan making them available to India. Although the move from the U.S. authorities to arrange the
deposition of Headley for the
Mumbai court now hearing the 26/11 conspiracy case has come late, it is still
no less welcome. The specifics of how Headley was sent to India, his contacts
with the Lashkar-e-Taiba leadership and the Inter-Services Intelligence
officers he names for having given him espionage training, and even perhaps
locals in India who may have colluded with him, are all vital to the case, and
it is hoped that prosecutors will extract more information from Headley in the
coming days.
Clearly,
the deposition from Headley, who expects a full judicial pardon in exchange for
giving it, comes at a cost that must be counted. It has meant that India gives
up all chances of bringing the self-confessed terror planner, who scoped out
the locations to be targeted as well as the entry and possible exit points for
the LeT terrorists. It also means that India has not questioned the delay from
the U.S., and prosecutors may not be able to fill the glaring gaps in their
understanding of Headley’s background that have been raised: including his
double role as a U.S. Drug Enforcement Administration informant, the cover for
his frequent visits to India, including one after the 26/11 attacks, and the
reasons his links with Pakistani military officials were not investigated by
the U.S. This is why after the hearing is completed the government must be more
forthcoming in explaining its decision to offer a pardon. The deal may have
been the best of imperfect choices before India, but given the magnitude of the
crime involved, the government must share the details. The spotlight on Headley
should also convince Pakistan to fast-track its trial of the masterminds of the
Mumbai attacks, perhaps even accepting a similar deposition from Headley in the
case. Eventually, it is in the interest of India-Pakistan relations as well as
justice for the victims of 26/11 that the trial in Pakistan is brought to a
successful conclusion. If Headley’s deposition prompts that, the benefit will
override all other concerns.
dep·o·si·tion
The
action of deposing someone, especially a monarch.
cold-blooded
a. Lacking feeling or emotion: a cold-blooded killer.
mas·sa·cre
An
indiscriminate and brutal slaughter of people.
tes·ti·mo·ny
A
formal written or spoken statement, especially one given in a court of law.
con·spir·a·cy
A
secret plan by a group to do something unlawful or harmful.
es·pi·o·nage
The
practice of spying or of using spies, typically by governments to obtain
political and military information.
pros·e·cu·tor
A
person, especially a public official, who institutes legal proceedings against
someone.
glar·ing
Giving
out or reflecting a strong or dazzling light.
prompt
(of an
event or fact) cause or bring about (an action or feeling).
o·ver·ride
Use
one's authority to reject or cancel (a decision, view, etc.
THE HINDU: Growth data send
conflicting signals
The
latest GDP data released by the
Central Statistics Office (CSO) raise
more questions than they answer. While on the face of it, the projection of 7.6
per cent growth at constant prices for the fiscal year ending March 31 sounds
both attainable and impressive, a closer look at the other sets of numbers,
including the third-quarter reading, raises some flags. The pace of economic
expansion is estimated to have slowed to 7.3 per cent in the three months ended
December, from 7.7 per cent (based on an upward revision) in the preceding
quarter. Separately, the gross value added (GVA) growth projections for seven
of the nine industry classifications for the full year show a slowdown from the
comparable 12-month period, which is a second flag. The two industries where
the CSO expects expansion in the current fiscal to outpace that of last year
are agriculture and manufacturing. The ‘agriculture, forestry and fishing’
sector is estimated to expand 1.1 per cent in 2015-16 as against a 0.2 per cent
contraction, and manufacturing is pencilled to post 9.5 per cent growth, from
5.5 per cent in 2014-15. This is where it gets more confusing. In its latest
monetary policy review on February 2, the Reserve Bank of India cited
“slackening agricultural and industrial growth” as a prime reason for a loss in
economic momentum in the third quarter. With the CSO data showing a 1 per cent
GVA contraction in agriculture in the period ended December and the RBI
pointing to a decline in rabi sowing
by end-January, it is hard to see where the farm sector will derive the
necessary impetus from in the current quarter to help undergird overall growth.
As
far as manufacturing goes, the January
purchasing managers’ index (PMI) expanded to a four-month high, partly helped
by resumption of output at factories affected by the December floods. Still, the
sustainability of this expansion could be undermined as the same PMI release
also pointed to a drop in output and new orders for makers of investment goods.
The weak overseas demand environment, reflected in the protracted exports
slump, is also a dampener. The robust growth estimate brings us to a crucial
related question: how reliable are the data as currently calculated, a concern raised by several economists
including RBI Governor Raghuram Rajan. He has cautioned against laying too much
store by the numbers if they don’t adequately capture the net economic impact
of an activity. For instance, under the new methodology indirect taxes are
included and this is seen by some experts as inflating the overall figures,
without necessarily resulting in increased output. The government has an
opportunity later this month to address many of these concerns and clarify on
both the data points and the rationale behind its methodology when it presents
the annual Economic Survey. It is important that it dispels all doubts and
enhances the credibility of official statistics at a time when India seeks its
rightful place at the high table of the world economic order.
pace
A
single step taken when walking or running
out·pace
Go,
rise, or improve faster than.
slack·en
Make or
become slack.
im·pe·tus
The
force or energy with which a body moves.
un·der·gird
Secure
or fasten from the underside, especially by a rope or chain passed underneath.
re·sump·tion
The
action of beginning something again after a pause or interruption.
sustainability
The
property of being sustainable
un·der·mine
Erode
the base or foundation of (a rock formation).
pro·tract
Prolong.
slump
Sit,
lean, or fall heavily and limply, especially with a bent back.
dampener
A
device that dampens or moistens something; "he used a dampener to moisten
the shirts before he ironed them"
ro·bust
Strong
and healthy; vigorous.
lay
Put
down, especially gently or carefully.
dis·pel
Make (a
doubt, feeling, or belief) disappear
BUSINESS STANDARD:Why
give stimulus to a 'recovering' economy?
The recent release of advance estimates of
national income for the current financial year by the Central Statistics
Organisation or CSO has highlighted a certain contradiction at the heart of the
government's policy focus. In the run-up to the Union Budget, to be presented
just a few weeks from now, this contradiction will have to be resolved one way
or the other. The essential question is this: Is there a manufacturing revival?
Or does the depressed state of the productive economy warrant a stimulus and a pause
on fiscal consolidation?
On the one hand, the government's own figures suggest a rosy picture. Overall, the gross domestic product (GDP) of the economy is supposed to grow at 7.6 per cent, but that is with agriculture growing at only 1.1 per cent in terms of gross value added (GVA). This means that growth in the rest of the economy is supposedly over nine per cent, in a year with a deficient monsoon. Manufacturing is supposed to grow at 9.5 per cent in 2015-16, compared to 5.5 per cent in the previous year. The figures are even higher for the third quarter of 2015-16, the three-month period from October to December of 2015. In that period, manufacturing grew at 12.6 per cent according to the CSO. This is in spite of the fact that during this very period at least one manufacturing hub, the area around Chennai, suffered devastating floods. The government has backed these figures with supporting data. Senior representatives of the government have defended the professionalism of the CSO and said they are using globally benchmarked methods. The growth in tax collections, particularly in indirect taxes, is being cited as further evidence of a recovery in economic activity. Certainly, the government can make a persuasive case if it wishes to, using generally available data, that the real economy is on the mend - and manufacturing in particular.
But, if this is the case, then why is there the need for further stimulus of demand, including through fiscal loosening to finance infrastructure spending? Here lies the problematic contradiction at the heart of the Budget-making process. If the real economy, including manufacturing, is indeed looking up as the government says it is, then it no longer needs hand-holding and fiscal laxity. Instead, the focus should be on widening the tax net, ensuring compliance through closing loopholes, on reducing and rationalising subsidies, and on controlling wasteful spending - all the paraphernalia of fiscal responsibility associated with an economy in which non-farm output is expanding at over nine per cent. It should also resist the temptation to respond to pleas from the corporate sector for handouts, for tax breaks, for tariff protection and so on - none of which surely is relevant if the manufacturing sector is growing at over nine per cent. If, on the other hand, the government wishes to expand fiscally, whether on infrastructure or through more lax tax measures, then it must acknowledge that all is not as rosy as the official figures suggest. It cannot, logically and practically, have it both ways.
On the one hand, the government's own figures suggest a rosy picture. Overall, the gross domestic product (GDP) of the economy is supposed to grow at 7.6 per cent, but that is with agriculture growing at only 1.1 per cent in terms of gross value added (GVA). This means that growth in the rest of the economy is supposedly over nine per cent, in a year with a deficient monsoon. Manufacturing is supposed to grow at 9.5 per cent in 2015-16, compared to 5.5 per cent in the previous year. The figures are even higher for the third quarter of 2015-16, the three-month period from October to December of 2015. In that period, manufacturing grew at 12.6 per cent according to the CSO. This is in spite of the fact that during this very period at least one manufacturing hub, the area around Chennai, suffered devastating floods. The government has backed these figures with supporting data. Senior representatives of the government have defended the professionalism of the CSO and said they are using globally benchmarked methods. The growth in tax collections, particularly in indirect taxes, is being cited as further evidence of a recovery in economic activity. Certainly, the government can make a persuasive case if it wishes to, using generally available data, that the real economy is on the mend - and manufacturing in particular.
But, if this is the case, then why is there the need for further stimulus of demand, including through fiscal loosening to finance infrastructure spending? Here lies the problematic contradiction at the heart of the Budget-making process. If the real economy, including manufacturing, is indeed looking up as the government says it is, then it no longer needs hand-holding and fiscal laxity. Instead, the focus should be on widening the tax net, ensuring compliance through closing loopholes, on reducing and rationalising subsidies, and on controlling wasteful spending - all the paraphernalia of fiscal responsibility associated with an economy in which non-farm output is expanding at over nine per cent. It should also resist the temptation to respond to pleas from the corporate sector for handouts, for tax breaks, for tariff protection and so on - none of which surely is relevant if the manufacturing sector is growing at over nine per cent. If, on the other hand, the government wishes to expand fiscally, whether on infrastructure or through more lax tax measures, then it must acknowledge that all is not as rosy as the official figures suggest. It cannot, logically and practically, have it both ways.
stim·u·lus
A thing
or event that evokes a specific functional reaction in an organ or tissue
con·tra·dic·tion
A
combination of statements, ideas, or features of a situation that are opposed
to one another.
re·viv·al
An
improvement in the condition or strength of something.
consolidation
Combining
into a solid mass
dev·as·tat·ing
Highly
destructive or damaging.
on the mend
improving in health or condition; recovering.
loos·en
Make
(something tied, fastened, or fixed in place) less tight or firm.
laxity
Laxness:
the condition of being physiologically lax; "baths can help the laxness of
the bowels"
com·pli·ance
The
action or fact of complying with a wish or command.
loop·hole
An
ambiguity or inadequacy in the law or a set of rules.
par·a·pher·na·lia
Miscellaneous
articles, especially the equipment needed for a particular activity.
INDIAN
EXPRESS: Doubly damaging
On the face of it, no major bank, state-owned or private, has
escaped the non-performing assets crisis unfolding in the country. The latest
addition to the list is the public-sector giant, Punjab National Bank. On
Tuesday, the bank announced that its gross NPAs in the third quarter of the
current fiscal increased to Rs 34,338 crore, a sharp rise from Rs 22,211 crore
last year. As a result, the PNB had to increase provisioning towards NPAs to Rs
3,775 crore for Q3, up from Rs 1,467 crore in the same quarter a year ago.
Eventually, the slippage due to NPAs resulted in the PNB’s net profits falling
93.4 per cent to Rs 51 crore in the October-December quarter. But the PNB was
not alone. Two more public-sector banks — Allahabad Bank and Dena Bank —
reported a combined loss of Rs 1,100 crore just for the December quarter. Even
private-sector banks are getting hit due to increasing NPAs but there is a
difference between how the NPA-induced pain in the banking sector affects
public-sector and private-sector banks.
According to an analysis by the P.J. Nayak Committee report on the
governance of bank boards in 2014, the market share of PSBs in India has fallen
from 80.2 per cent in 2000 to 73 per cent in 2013. It calculated that, given
this trend, PSBs will further relinquish market share and be reduced to just
63.2 per cent by 2025. This, the committee found, is due to several reasons.
Irrespective of which variable one looks at — return on assets, average net
interest margin, net profit per employee or the ratio of staff costs to
operating expenses — PSBs massively lag behind private-sector banks. This is
evident in the scale of the NPA crisis, too.
In its bid to give primacy to the goal of financial inclusion, the
Modi government unveiled a flurry of schemes such as the Jan Dhan Yojana, the
Atal Pension Yojana and the Suraksha Bima Yojana — PSBs were expected to be the
main vehicles to drive this change. At first, the hurried pace at which many of
these schemes were pushed was a cause for concern. But now, as PSBs declare the
true extent of stressed assets on their balance-sheets, it is becoming clear
that they will find it difficult to push financial inclusion, which requires
banks to put up with significant costs upfront. This underlines the urgency to
reform PSBs and ensure they follow prudential norms. Failure to do so will
adversely affect the goal of financial inclusion.
un·fold
Open or
spread out from a folded position.
slip·page
The
action or process of something slipping or subsiding; the amount or extent of
this.
re·lin·quish
Voluntarily
cease to keep or claim; give up.
un·veil
Remove
a veil or covering from, especially uncover (a new monument or work of art) as
part of a public ceremony.
flur·ry
A small
swirling mass of something, especially snow or leaves, moved by sudden gusts of
wind.
up·front
At the
front; in front
un·der·line
Draw a
line under (a word or phrase) to give emphasis or indicate special type.
pru·den·tial
Involving
or showing care and forethought, typically in business.
adversely
In an
adverse manner; "she was adversely affected by the new regulations"
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