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THE HINDU: Don’t
let down the children
With
worrying levels of stunting and lack of healthy
weight among childrenrevealed by the fourth round of the National Family Health
Survey (NFHS) for 15 States, Budget 2016-17 was
expected to provide some remedies. To begin with,
it could have raised funding
for the flagship nutrition programme, the Integrated Child Development
Services. Instead, the Budget has dealt the ICDS a blow in the form of a 7 per
cent cut over the revised estimate of expenditure for the previous year, of
about Rs.15,500 crore. This follows the pattern of Budget 2015-16 which cut the
outlay initially, but with provision of some supplementary grants later in the
year. Such an approach to a welfare programme that is so crucial to the health
of the next generation reflects a poor set of development priorities. It also
defies economic reasoning, given that India has been growing steadily after
liberalisation and has the wherewithal to substantially raise social sector
expenditure annually. To their credit, several States have used the ICDS to improve health and welfare by providing good supplementary
nutrition to children under six; the support of the Supreme Court has also
helped in ensuring that commercial interests are unable to corner the funds,
and there is provision for community oversight. The Ministry of Women and Child
Development must focus on States such as Bihar and Madhya Pradesh with a large
burden of stunted, wasted and underweight children as revealed by the latest
NFHS data. Figures for all States together will give a full picture, including
best practices.
Empirical
evidence on the effectiveness of supplementary nutrition should prompt the
Centre to enhance funding for the ICDS. Data from an earlier round of the NFHS
show that when nutrition is available every day to children under two, there is
a marked positive effect on their height, particularly for girls. Such early
interventions have a life-long impact, in the form of higher productivity and
earnings. Scholars have, however, found a tendency within the ICDS in some
States to neglect the needs of children less than two years old. Only 6 per
cent in this age group were getting adequate daily nutrition a decade ago. The
more progressive States have corrected the bias, with striking results. There
is a clear lesson here for others, and it is incumbent on the Central Ministry
to monitor the implementation of the scheme. It can take the support of local
communities and self-help groups, as provided for in the Supreme Court judgment
of 2004, to ensure that wholesome cooked meals are provided and contractors are
not engaged. More recently, the court wanted high standards of hygiene and
nutrition maintained in ICDS centres. Finance Minister Arjun Jaitley has missed
the opportunity in the Budget to secure the future of India’s children, but he
can still make amends. Raising the outlay, instituting a mechanism to heighten
awareness among communities in less developed States and achieving full
coverage are needed remedies.
stunt
Prevent from
growing or developing properly
flag·ship
The ship in a
fleet that carries the commanding admiral.
where·with·al
The money or
other means needed for a particular purpose.
em·pir·i·cal
Based on,
concerned with, or verifiable by observation or experience rather than theory
or pure logic.
in·cum·bent
Necessary for
(someone) as a duty or responsibility.
THE HINDU: Review the fiscal consolidation
path
Passed
almost three years after it was first introduced in Parliament, that too in a
significantly watered down form, the Fiscal Responsibility and Budget
Management Act has faced a rocky road in terms of implementation. Paused four
times since its enactment in August 2003, including for a reset of the fiscal deficit target in 2008-09 following the global financial crisis, the FRBM Act
has become a subject of animated debate. Central to this has been the question
of whether the law has served the purposes for which it was envisaged. There is
no denying that the Act has helped focus attention on the issues relating to
fiscal consolidation — thanks to the mandatory medium-term and strategy statements
that the government of the day is required to present annually before
Parliament. But with regard to the larger objective of ensuring macro-economic
stability, the record has been less than ideal. Both headline consumer price
inflation and the debt-servicing costs for the Central government were, at
different points in the post-FRBM era, at divergence with the performance of
fiscal deficit, raising questions about the over-emphasis on a cast-in-stone
target number. The nub of the issue is this: has the law allowed the government
the elbow room needed to use all the fiscal tools at its command to ensure that
the growth momentum is maintained, without either significantly fuelling
inflation or curtailing spending on vital and socio-economically relevant
development programmes? If it has not, this may be the time to review the Act,
and if necessary, amend it significantly.
It
is in this context that Finance Minister Arun Jaitley’s Budget proposal to have
a committee review the implementation of the FRBM Act — even as he committed
himself to sticking to the 3.5 per cent fiscal deficit target for the next
financial year — is timely and germane. He has referred, for instance, to the
possibility of adopting a target range rather than a specific number. The argument
is that this would give the necessary policy space to deal with dynamic and
volatile situations such as the one India currently faces — global economic and
financial market uncertainty, a
slowdown in China, and tepid private investment demand domestically. The
suggestion that fiscal expansion or contraction should be aligned with credit
contraction or expansion, as mentioned in the Budget speech, is worth
exploring. While any attempt to jettison or even revisit the fiscal deficit
targets is bound to draw sharp criticism from, among others, the global credit
rating agencies, Mr. Jaitley has to look no further than the BRICS compatriot
China. Chinese Premier Li Keqiang has just unveiled a budget deficit of 3 per cent of GDP, the
highest level for that country since 1979 and a significant jump from last
year’s 2.3 per cent target. But Mr. Jaitley will need to ensure that any
resources freed up from a fiscal reset, when that happens, are spent
imaginatively for an economic stimulus, and primarily on the creation of
long-term public assets.
watered down
A watered-down idea or opinion has been made less extremethan it originally was, usually so that people are more likelyto accept it
They have returned with a
watered-down version of the proposal.
en·vis·age
Contemplate or
conceive of as a possibility or a desirable future event.
di·ver·gence
The process or
state of diverging.
nub
The crux or
central point of a matter
ger·mane
Relevant to a
subject under consideration.
jet·ti·son
Throw or drop
(something) from an aircraft or ship.
BUSINESS STANDARD: Lessons from Gyan Sangam
Finance Minister Arun Jaitley’s announcement on Saturday
that the government is considering setting up an expert committee on public
sector bank (PSB) consolidation has raised hopes for concrete action on an
issue that has been discussed and debated for many years. Certainly, there is a
strong case, in theory, for merging some of the PSBs, which are still very
small compared to their global peers – India’s largest bank, State Bank of
India, ranks only 67th among global banks. ICICI Bank is the only other Indian
bank that features among the top 200 banks in the world in terms of assets. A
growing economy of the size of India needs a less fragmented domestic banking
industry. So Mr Jaitley is right when he said at the concluding session of Gyan
Sangam II, a two-day conclave of PSB chiefs and government policymakers, that
what India needed was stronger banks and not lots of banks.
The problem, however, lies elsewhere – bank consolidation as an idea isn’t new. The Narasimham Committee on financial sector reforms had mooted this first and several others followed suit. A working group set up by former Finance Minister P Chidambaram had come out with detailed modalities on how to go about it. In that sense, there is already enough wisdom available with Mr Jaitley, and the need for another expert committee isn’t clear, especially when the recently set up Banks Board Bureau also has bank consolidation as one of its mandates. The big concern is that mergers in the past have been used as a tool to bail out weak banks. The merger of New Bank of India with Punjab National Bank in the 1990s drained the acquirer massively; it took years to recoup. The merger of Global Trust Bank with Oriental Bank of Commerce was necessary to take care of the interest of depositors and prevent further turmoil in the affected bank, though the acquirer had to bear the financial load of that decision. A successful case of consolidation was the merger of two associate banks of the SBI with their financially strong parent. But for a large number of PSBs, which are struggling with stressed assets, it is debatable whether they are in any position to take over their smaller and weaker counterparts. There are also the usual challenges of technological compatibility, human resources issues, etc – each of which has to be thought through carefully. And, most importantly, it is doubtful if merely consolidating some PSBs would rid them of their current ills. Indeed, improving the operating environment for these banks and reducing the government stake in them to below 51 per cent would be a more effective remedy.
The Reserve Bank of India has stated at the Gyan Sangam that banks have other avenues to raise capital including the additional headroom on Tier-I capital because of the tweaking of Basel III norms. But there is a high risk of investors or rating agencies being sceptical of the easier capital recognition norms unveiled last week, as past experience suggests unlocking real estate to ensure capital adequacy is a time-consuming affair. Given their current financial situation – gross non-performing assets of listed public sector banks were Rs 3.9 lakh crore in December 2015 – many banks might need real capital. When the Centre unveiled its recapitalisation road map for PSBs, it said that excluding internal profit generation, the requirement of extra capital for the next four years up to FY19 is likely to be about Rs 1.8 lakh crore, although that estimate has now been reportedly scaled down. Implicit in the Centre’s plan was the expectation that these banks would be able to tap the capital markets for their remaining funding requirements. How this plan gets implemented will depend on a host of factors including the PSBs’s performance and the state of the markets.
The problem, however, lies elsewhere – bank consolidation as an idea isn’t new. The Narasimham Committee on financial sector reforms had mooted this first and several others followed suit. A working group set up by former Finance Minister P Chidambaram had come out with detailed modalities on how to go about it. In that sense, there is already enough wisdom available with Mr Jaitley, and the need for another expert committee isn’t clear, especially when the recently set up Banks Board Bureau also has bank consolidation as one of its mandates. The big concern is that mergers in the past have been used as a tool to bail out weak banks. The merger of New Bank of India with Punjab National Bank in the 1990s drained the acquirer massively; it took years to recoup. The merger of Global Trust Bank with Oriental Bank of Commerce was necessary to take care of the interest of depositors and prevent further turmoil in the affected bank, though the acquirer had to bear the financial load of that decision. A successful case of consolidation was the merger of two associate banks of the SBI with their financially strong parent. But for a large number of PSBs, which are struggling with stressed assets, it is debatable whether they are in any position to take over their smaller and weaker counterparts. There are also the usual challenges of technological compatibility, human resources issues, etc – each of which has to be thought through carefully. And, most importantly, it is doubtful if merely consolidating some PSBs would rid them of their current ills. Indeed, improving the operating environment for these banks and reducing the government stake in them to below 51 per cent would be a more effective remedy.
The Reserve Bank of India has stated at the Gyan Sangam that banks have other avenues to raise capital including the additional headroom on Tier-I capital because of the tweaking of Basel III norms. But there is a high risk of investors or rating agencies being sceptical of the easier capital recognition norms unveiled last week, as past experience suggests unlocking real estate to ensure capital adequacy is a time-consuming affair. Given their current financial situation – gross non-performing assets of listed public sector banks were Rs 3.9 lakh crore in December 2015 – many banks might need real capital. When the Centre unveiled its recapitalisation road map for PSBs, it said that excluding internal profit generation, the requirement of extra capital for the next four years up to FY19 is likely to be about Rs 1.8 lakh crore, although that estimate has now been reportedly scaled down. Implicit in the Centre’s plan was the expectation that these banks would be able to tap the capital markets for their remaining funding requirements. How this plan gets implemented will depend on a host of factors including the PSBs’s performance and the state of the markets.
frag·ment
Break or cause
to break into fragments.
con·clave
A private
meeting.
moot
Raise (a
question or topic) for discussion; suggest (an idea or possibility).
re·coup
Regain
(something lost or expended).
tur·moil
A state of
great disturbance, confusion, or uncertainty.
tweak
Twist or pull
(something) sharply.
skep·ti·cal
Not easily
convinced; having doubts or reservations.
im·plic·it
Implied though
not plainly expressed.
INDIAN EXPRESS: Building battles
The five states set
to vote, beginning April 4, have few things in common. State-specific factors,
including local alliances, leadership, and social and economic undercurrents,
influence assembly election results. Yet, the scale of the exercise — 170 million
voters, nearly one-sixth of India’s population, are expected to cast their vote
— makes it likely that the outcome will be mined for the mood of the nation.
With West Bengal
and Kerala being the two states where they continue to be electorally relevant,
much is at stake for the Left. Except once, in 1977, no party or front has won
consecutive assembly elections in Kerala and here, the Congress-led dispensation, mired in corruption charges,
faces a stiff challenge from the CPM-led Left Democratic Front. The picture is
dramatically different in West Bengal, where the Congress and the Left are
informal allies. Arithmetic based on past vote shares and cadre chemistry would
shore up a Left-Congress alliance, but elections are more than just math. Since
winning office in 2011, the Trinamool Congress has consolidated its position in
the state at the expense of the CPM and the Congress. The West Bengal outcome
could also crucially impact the internal dynamics of the CPM, since a section
of the party is bitterly opposed to any pre-poll understanding with the
Congress. If the arrangement is successful, on the other hand, it is likely to
bring the Congress and the Left closer at the national level. In Tamil Nadu,
the battle is between two regional actors, the AIADMK and the DMK, with others
reduced to the supporting cast. Desperate to win, the DMK is scouting for
allies and has already roped in the Congress.
Assam is the big
fight, where the Congress is set to square off with the BJP. The BJP made spectacular gains in the 2014 general
elections, replacing the Congress as the dominant force in the state. A win here
could help the party offset the losses in Delhi and Bihar and reverse
perceptions of a sagging of the fortunes of its national leadership. With the
BJP barely in the reckoning in the other election-bound states, failure to win
Assam could exaggerate the impression that the party has slid since it stormed
to power at the Centre in 2014, following it up with a succession of state
victories. A fourth consecutive term in Assam, however, could be a face-saver
for the Congress, which has not won a state election for some time now
dis·pen·sa·tion
Exemption from
a rule or usual requirement
mired in
in difficulties
stiff
Not easily bent
or changed in shape; rigid.
scout·ing
The action of
gathering information about enemy forces or an area.
roped in
to persuade someone to do something for you
set to square off
to prepare to fight, compete, or argue with someone
sag
Sink, subside,
or bulge downward under weight or pressure or through lack of strength.
reck·on
Establish by
counting or calculation; calculate.
DNA
:The American presumption
The Modi government has done the
right thing by refusing permission to the United States Commission on
International Religious Freedom (USCIRF) to visit India and examine conditions
of religious freedom in the country. The Manmohan Singh government took a similar
decision in 2009 with regard to the commission. One of the reasons cited by the
government is that the commission has no locus standi. The arguments against
allowing the commission are so commonsensical that they need not be enumerated.
But on an occasion like this, it would be better to re-examine the reasons.
According to norms of international law, a commission
created by a sovereign state cannot claim to have an oversight in the territory
of another sovereign state. The USCIRF is a creation of the US Congress — the
House of Representatives and the Senate — and its members are nominated by the
American President, the House speaker, and the leaders of the party of the
president and of the party which is not in the White House. This commission is not
an international body like the United Nations and many of its affiliated
organisations like the WHO or the International Atomic Energy Agency (IAEA).
Though the USCIRF claims to be not part of the State Department, which deals
with foreign affairs and has its own religious freedom monitoring body, it
remains an agent, however autonomous, of the US government.
The question that naturally comes up is as to why the
Americans presume to monitor the conditions of religious freedom in other
countries. It is indeed a matter of realpolitik, where the US wields enormous
influence through its economic and military aid programmes to many countries in
the world. The US Congress, and through it the American people, want to know
whether the American tax-payers money is being used to support tyrannies. As a
democracy with an evangelical zeal to promote democracy, the American
government and its people are quite justified in wanting to know whether their
money is going to the right places. Interestingly, the commission claims to
test the condition of religious freedom in other countries not by any American
statute but by the United Nations’ Universal Declaration of Human Rights and
the International Covenant on Civil and Political Rights. The commission
invokes Article 18 of the Universal Declaration which deals with freedom of
thought, conscience and belief. The argument that the commission puts forward
is that it is applying international standards and is not imposing American
values. But the commission is one of the many organisations through which the
US wants to play the role of a generous donor who demands to know from
recipient countries whether they adhere to democratic norms.
It can be argued that India will not have much to fear
from such a committee at the worst of times because religious freedoms in the
country are enshrined in the chapter on the Fundamental Rights of the
Constitution, that the courts interpret and defend the religious rights of the
individuals and groups, and that there are always disputes and contests
regarding the issue. There are instances of violation and there are also
instances where the right is fully honoured in practice. It can be asserted
that in terms of religious freedom India is second to none. The commission
should be allowed into the country, and its report should be treated benignly.
India has nothing to lose. For its part, the US should move the UN to set up
such a commission to gain international acceptance.
pre·sump·tion
An act or
instance of taking something to be true or adopting a particular attitude
toward something, especially at the start of a chain of argument or action.
locus
the place where something happens or the central area of interest in something being discussed
e·nu·mer·ate
Mention (a
number of things) one by one.
au·ton·o·mous
(of a country
or region) having self-government, at least to a significant degree.
re·al·po·li·tik
A system of
politics or principles based on practical rather than moral or ideological
considerations.
wield
Hold and use (a
weapon or tool).
e·nor·mous
Very large in
size, quantity, or extent.
tyr·an·ny
Cruel and
oppressive government or rule.
e·van·gel·i·cal
Of or according
to the teaching of the gospel or the Christian religion
cov·e·nant
An agreement.
ad·here
Stick fast to
(a surface or substance)
en·shrine
Place (a
revered or precious object) in an appropriate receptacle
benignly
In a benign
manner; "this drug is benignly soporific"
THE Dawn: Afghan
peace obstacles
THE road to a peace settlement in Afghanistan is likely to be a
rough one and the Afghan Taliban have provided yet another example of why.
Ostensibly
rejecting what were believed to be imminent talks with the Afghan government,
the Mansour Akhtar faction of the Taliban have returned to familiar
preconditions: withdrawal of all foreign troops; removing Taliban leaders from
international blacklists, which impeded travel; and the release of Taliban
prisoners.
The familiarity of those demands suggest that the likelihood of
talks has not evaporated, but that the Taliban are trying to win some
concessions that would give them a political and military advantage while they
pursue their strategy of fighting and talking.
The
relatively restrained reaction of the Afghan government appears to indicate
that talks will restart soon — President Ashraf Ghani addressed the opening of
parliament yesterday and saved his strongest words for elements of the militant
Islamic State group in Afghanistan.
Similarly,
a video conference between Mr Ghani and President Barack Obama on Friday
yielded a White House readout that spoke in positive terms about the
reconciliation process.
The US
president is unlikely to express support for a process that was on the verge of
collapse. What the Taliban demands may do, however, is exacerbate tensions
inside the Quadrilateral Coordination Group scheduled to meet in Islamabad
soon.
The
Afghan government has wanted Pakistan to take stronger action against
Pakistan-based Taliban factions that are reluctant to engage in talks.
Pakistan
has resisted the Afghan government demands on the sensible grounds that to
exclude certain groups from talks at the outset would undermine an eventual,
broad-based political settlement.
Yet,
Taliban intransigence does present a problem for Pakistan – and the QCG by
extension. Having last week acknowledged the presence of Taliban leaders in
Pakistan and outlined the leverage that the Pakistani state has over the
Taliban, the government and the security establishment will come under pressure
in the QCG.
It may
come down to the American and Chinese representatives in the QCG to try and
keep the situation from spiralling out of control.
Perhaps
what will be needed is a bit of calm perspective from Afghan and Pakistani
officials, difficult as that may be.
As Mr
Ghani has told The Hindu newspaper, “We have no other hope for peace” — a
reference to the QCG-guided peace process. Similarly, Pakistan must consider
that the cost of not doing its utmost to nudge the Afghan Taliban to the
negotiating table could result in a regional security meltdown.
os·ten·si·bly
Apparently or
purportedly, but perhaps not actually.
im·mi·nent
About to happen
pre·con·di·tion
A condition
that must be fulfilled before other things can happen or be done.
troop
A group of
soldiers, especially a cavalry unit commanded by a captain, or an airborne
unit.
ex·ac·er·bate
Make (a
problem, bad situation, or negative feeling) worse.
ut·most
Most extreme;
greatest
nudge
Prod (someone)
gently, typically with one's elbow, in order to draw their attention to
something.
melt·down
A disastrous
event, especially a rapid fall in share prices.
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