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Type: Op-ed

  • [op-ed of the day] GST may not have been revenue-neutral

    Context

    In theory, the shift to GST made eminent sense, yet in practice, some of these expectations have been belied.

    Why have GST collections not measured up to expectations?

    • This could be due to a combination of three factors:
    • First:  The tax rates under GST are lower than in the earlier regime-GST was not revenue neutral, to begin with.
    • Second: There has been massive tax evasion due to under-reporting, input credit scams and fake invoices
    • Third: A slowing economy has impacted firm revenues, and thus tax collections.

    GST should have been revenue-neutral but it is not

    • Fitment exercises not carried out: The fitment exercise should have been undertaken in a manner so as to ensure that collections pre and post GST are the same.
      • But, this fundamental principle was not adhered to, and other considerations dominated.
      • Revenue neutrality Vs. Multiple objectives: The GST council began its deliberations not with the single objective of revenue neutrality, but with multiple objectives in mind.
      • Closeness to existing tax: Council wanted to ensure that rates were close to the existing tax incidence (accounting for cascading); to ensure minimal impact on inflation.
      • Not regressive: The council also wanted the proposed rate structure was not regressive in nature.
      • The council wanted that items of mass consumption were not taxed at a higher rate.
      • Achieving all these objectives simultaneously proved a difficult task.

    The issue of tax evasion

    • It is difficult to arrive at firm estimates of the scale of the problem but there are some indications of its size.
    • In West Bengal, it was estimated that the value of goods (July 2017 to March 2018) entering a state appeared to be under-reported by around Rs 50,000 crore.
    • Rs 60,000 crore in Madhya Pradesh, and Rs 1,50,000 crore in Maharashtra.
    • Numerous cases of tax fraud and fake invoice scams have also been detected since then

    Problems involve and possible solutions

    • Invoice matching:  It is argued that invoice matching will help if implemented it from the beginning.
      • It could have helped plug the loopholes.
    • Issue of under-reporting: It is debatable whether invoice matching can end under-reporting (collusion) and fake invoices.
    • Limit of state capacity in handling cases: The Central and state administrations can intervene in only about 3 lakh cases in a year.
      • Their capacity to track lakhs of transactions on a daily basis is questionable.
    • Slowing economy: Already existing structural issues have been compounded by the slowing economy.

    Way forward

    • There are certain options available to the government.
    • First: Either recalibrate the expectation or carry on the efforts to plug the loopholes and the shortcoming in the system.
    • Second: Lower the cut-off for composition scheme. A higher level simply encourages business “splitting”.
    • Third: Reduce exemptions.
    • Fourth: The council must deliberate on the rate structure, bringing it in line with pre-GST levels.

  • [op-ed snap] A rough patch

    Context

    High inflation has reduced the fiscal space available for a rate cut.

    RBI target of 6% breached.

    • CPI at 7.35 %: Retail inflation, as measured by the consumer price index (CPI), has surged to 7.35 per cent in December 2019.
    • Latest inflation data seems to corroborate fears articulated by the Monetary Policy Committee (MPC) in its December meeting.
    • In the meeting, MPC refrained from cutting the benchmark repo rate.

    Consequences for the economy

    • Reduced scope for fiscal slippage: High inflation reduced the space for further easing of policy rates.
      • Even after clarity over the extent of the Centre’s fiscal slippage emerged.
    • Rise in yield for 10-year securities: The 10-year G-sec yields have reacted sharply to these developments, rising to 6.67 on Tuesday.
      • Offsetting operation twist: Rise in yield resulted in offsetting the impact of the RBI’s recent open market operations.
    • Inflation targeting under stress: The combination of weak economic activity and higher than expected supply-side inflationary pressures has put the inflation-targeting regime under test.

    Reasons for the inflation rise and chances of easing

    • Food prices rise: Much of the rise in the headline inflation number can be traced to higher food prices.
      • Food inflation has risen to a near six-year high of 14.12 per cent in December 2019, up from 10.01 per cent in the previous month.
      • Vegetable prices have surged to 60.5 per cent in December, contributing nearly 3.7 percentage points to the headline numbers.
    • Chances of ease in coming months: While vegetable crop cycles tend to be short, and supply-side pressures may ease in the coming months.
      • The stickiness in prices of protein items is likely to provide a floor for food inflation.

    Bleak outlook for inflation easing

    • No short-term return to normal level: Food inflation is unlikely to revert to previous levels in the short term.
    • Household inflation expectations, a key metric in the MPC’s assessment, are more responsive to food inflation, this will further exert upward pressure on MPC.
    • A factor of hostilities in the Middle East: The uncertainty over oil prices on account of hostilities in the Middle East, adds to the bleak outlook for inflation.

    Conclusion

    With limited fiscal space for a meaningful stimulus, the government intends to support the economy during this rough patch, and return growth to a higher trajectory.

     

  • [op-ed snap] Not ready for school

    Context

    The draft NEP (National Education Policy) document points out that close to five crore children currently in elementary school do not have foundational literacy and numeracy skills. 

    Severe learning crisis: The document cites several possible reasons for this crisis.

    • First reason:  Many children enter school before age six.
      • Lack of options: This is partly due to the lack of affordable and accessible options for pre-schooling.
      • Therefore, too many children go to Std. I with limited exposure to early childhood education.
      • Consequences for the poor: Children from poor families have a double disadvantage -lack of healthcare and nutrition and the absence of a supportive learning environment on the other.
    • Second reason: Lack of developmentally appropriate activities by age and phase.
      • The misplaced focus of ICDS: School readiness or early childhood development and education activities have not had a high priority in the ICDS system.
      • Acting as an extension of pre-school education: Private preschools that have increased access to preschool but are often designed to be a downward extension of schooling.
      • Thus, they bring in school-like features into the pre-school classroom, rather than developmentally appropriate activities by age and phase.

    Three clear trends in ASER-2019 data

    • First trend: Scope for expansion of Anganwadi network.
      • Expansion network: There is considerable scope for expanding Anganwadi outreach for three and four-year-old children.
      • All-India data from 2018 shows that slightly less than 30 per cent children at age three and 15.6 per cent of children at age four are not enrolled anywhere.
    • Second trend: Under 6 students in class I.
      • ASER 2018 data show that 27.6 per cent of all children in Std I are under six.
      • It is commonly assumed that children enter Standard I at age six and that they proceed year by year from Std I to Std VIII.
      • The Right to Education Act also refers to free and compulsory education for the age group six to 14.
      • However, the practice on the ground is quite different.
    • Third trend: There are important age implications for children’s learning.
      • Association with learning output: ASER-2019 indicate the higher learning output associated with age in the same class.
      • In Std. I, the ability to do cognitive activities among seven-eight-year olds can be 20 percentage points higher than their friends who are five years old but in the same class.
      • In terms of reading levels in Std. I, 37.1 per cent children who are under six can recognise letters whereas 76 per cent of those who are seven or eight can do the same.
      • Age distribution in Std. I vary considerably between government and private schools.
      • Private schools in many states have a relatively older age distribution.

    Way forward

    • Understanding the children: Understanding the challenges that children face when they are young is critical if we want to solve these problems early in children’s life.
    • Providing for developmentally appropriate skill: Instead of focusing on the pre-school years as the downward extension of school years there is a need for providing developmentally appropriate skill in these years.
    • Pedagogy: On the pedagogy side reworking of curriculum and activity is urgently needed for entire age band of four to eight.

     

  • [op-ed of the day] Economic reforms are best done brick by boring brick

    Context

    Rather than big bang measures or a stealthy agenda, India can count on small but significant improvements.

    Reforms only in crisis or by stealth

    • The accepted conventional wisdom is that economic reforms in India happen only in a crisis or by stealth.
    • Reforms in the crisis
      • Reforms of 1991 : The big example of the former are the 1991 reforms.
      • In 1991 the country faced a huge foreign exchange crisis, resulting partly from the fiscal profligacy of the previous decade.
      • 1999 telecom sector reforms: Another example is from 1999 when the telecom sector was in near bankruptcy, and that crisis led to the shift away from fixed fee for spectrum to revenue sharing.
      • The situation of no other choice: In both cases, there was considerable opposition to those reforms, but they were pushed through because the crisis left no other choice.
    • Reform by stealth: Other than a crisis, more often than not, it has been economic reform by stealth.
      • In the form of executive orders: These reforms are often in the form of an executive decision rather than legislation. Following are the examples of it-
      • Expansion of the list under licence: The expansion of the list of items under the Open General Licence for imports, which is a reform of protectionism, or the reduction in the set of industries reserved for small-scale businesses.
      • Electoral bond introduction: A more recent example of stealth reform was the insertion of an electoral bond scheme in the Finance Bill of 2018.
      • Advantages of going stealth: Reform by stealth offers the advantage of going in either direction.
      • In 2013, faced with a potential currency crisis, the Reserve Bank of India (RBI) quietly retracted the limits on the liberalized remittance scheme (LRS).
      • Problem with stealth reforms: Stealth reforms are introduced stealthily but when they do not yield the desired result they are rolled back unpredictably, increasing uncertainty in policies of the government.

    Persistent, encompassing, creative incrementalism in reforms

    • The Economic Survey of 2015 pretty much ruled out Big Bang reforms in India, calling instead for “persistent, encompassing, creative incrementalism” on them.
    • This is the right mantra.
    • What incrementalism means: It implies continuity, not slowness, a sustainable speed that gives reforms predictability and stability. Following are its examples of it-
    • Reform in food subsidy: Example of incrementalism could be reforms that are being carried out in food subsidies.
      • First: Reduce the leakages of the subsidy to non-farmers.
      • Thus, when procurement is done, payments go directly to their Aadhaar-linked accounts.
      • This will lead to non-farmers getting eliminated,
      • Second-Pay subsidy only to the poor: It will lead to subsidy savings, allowing us to limit the subsidy only to poor farmers.
    • Sovereign gold bond scheme: The use of paper gold greatly reduces imports of the physical metal and outgoes of foreign exchange.
      • The sale of these bonds is being expanded, and they would eventually be everywhere, even at post offices.
    • Aggregate licence by RBI: The next example is from a new category called account aggregators licensed by RBI.
      • It allows users’ control over the digital data trail that their transactions generate, and they can monetize it or use it to enhance their creditworthiness.
      • This is an incremental reform with huge ramifications.

    Conclusion

    • The reforms cited above are incremental, not a big bang, persistent but not slow, open and not by stealth, and finally, imaginative too, since they respond to real needs.
    • Effective reforms are those that are done brick by brick, the boring measures that chip away at everything that constrains high, inclusive and sustainable growth.

     

  • [op-ed snap] The world from Raisina.

    Context:

    As the world is moving from an era of predictability to an era of unpredictability led by the US and China, a new Middle Power coalition is the need of an hour.

    The “Rising India” narrative and challenges

    • The narrative was scripted over the two post-Cold War decades, 1991 to 2011.
    • Narrative of plural secular democracy: It was based on the improving performance of the economy and India’s political ability to deal with many longstanding diplomatic challenges within a paradigm of realism.
    • Three successive prime ministers – scripted the narrative of India rising as a plural, secular democracy, as opposed to China’s rise within an authoritarian system.
    • Opening of new vistas: India’s improving economic performance had opened up new vistas for cooperation with major powers and neighbours.
    • New challenges to the narrative: Now the economy’s subdued performance and domestic political issues have created new challenges for Indian foreign policy.
      • The new approach to relations with India adopted by both President Donald Trump and President Xi Jinping has created a more challenging external environment.

    Relations with the US

    • New demands from the US: Each time New Delhi has tried to meet a US demand, Washington DC has come up with new demands.
    • US-China dispute resolution and effects for India: Any resolution of US differences with China, can only reduce whatever little bargaining clout India has.
    • Complaint at WTO: The US has, in fact, actively lodged complaints against India at the World Trade Organisation.
    • Geopolitical effects for India:  On the geopolitical side, US intervention in West Asia has always imposed an additional economic burden on India.

    Relations with China

    • Consistent policy: There has been continuity and consistency in India-China policy over the past two decades, with some ups and downs.
    • Effects of power difference with China: As the bilateral power differential widens, China has little incentive or compulsion to be accommodative of Indian concerns, much less the interests. 
      • China never fails to remind India of the growing power differential between the two.
    • Building strength to deal with China: In dealing with China, India will have to, paraphrasing Deng Xiaoping, “build its strength and bide its time.

    Russia’s focus

    • It will remain focused on Eurasian geopolitics.
    • It will also be concerned with the geo-economics of energy.
    • Implications for India: Both these factors define Russia’s relations with China, and increasingly, with Pakistan, posing a challenge for India.

     

    Way forward in the relations with Pakistan

    • The government’s Pakistan policy has run its course.
      • It yielded some short-term results thanks to Pakistan’s efforts not to get “black-listed” by the Financial Action Task Force (FATF).
      • But the rest of the world is doing business with Pakistan, lending billions in aid.
    • The global community may increasingly accept future pleas from Pakistan that terror attacks in India are home-grown.
    • related to the situation in Kashmir or concerns about the welfare of Muslims, unless incontrovertible evidence to the contrary is offered.
    • The need for a new Pakistan policy: Backchannel talks should be resumed and visas should be given liberally to Pakistani intellectuals, media and entertainers to improve cross-border perceptions as a first step towards improving relations.

    The Middle Powers and opportunities for India

    • What are the middle powers?  It is a mix of developed and developing economies, some friends of the US and other friends of China.
      • It is an amorphous group but can emerge into a grouping of the like-minded in a world of uncertainty capable of taming both the US and China.
      • A new Middle Powers coalition may be the need of the year.
    • Which countries can be part of it?  Germany, France, Japan, Australia, Brazil, Indonesia, Vietnam and perhaps South Korea. One could include Russia, Nigeria and South Africa also in this group.
    • Stakes involved but no influence: Like India, these countries have a stake in what the US and China do, but little influence over either.
    • What India can do? These countries which constitute the part of the Middle Powers should engage the attention of India’s external affairs minister.

    Disruptive policies not an option

    • Adoption of disruptive approach: There is a view among some policy analysts that India too can adopt a “disruptive” approach as a clever tactic in foreign affairs.
      • Disruption is not an end in itself. It has to be a means to an end.
      • Powerful nations can afford disruption as tactics.
    • Unchanged strategic elements: The strategic elements defining Indian foreign policy in the post-Cold War era have not changed.
    • Not an option: India cannot risk such tactics without measuring the risk they pose to strategy.

    Conclusion

    With the changing geopolitical atmosphere particularly with respect to the US and Chiana, India needs to adopt a suitable approach to its foreign policy especially involving the Middle Powers.

     

     

  • [op-ed snap] Iran’s tightrope

    Context

    In the aftermath of recent events, Iran needs a new compact to deal with the domestic crisis and also a framework to deal with the US.

    The threat of “regime change” in Iran

    • The US policy-The temptation for a policy of “regime change” in Iran has never disappeared from the US policy towards Iran.
      • The policy is based on the hope that mounting external pressure and deepening internal dissent will combine to produce a “regime collapse” in Tehran.
      • US President has often insisted that he is not seeking to overthrow the clerical regime in Tehran led by Ayatollah Ali Khamenei.
      • The Us demands were an end to the nuclear and missile programmes, stop supporting terror in the region and end the interference in the internal affairs of its Arab neighbours.
    • Iran’s success in fending off these threats: Iran has been successful so far in fending off these external and internal challenges.
      • Iran has put down repeated mass uprisings and neutered attempts from within the elite to reform the system.

    De-escalation of the tension after the war-like situation

    • Fear of escalation: The widespread assessment after the killing of Soleimani was that Iran would inevitably escalate the confrontation.
      • Tehran set up a token retaliation for domestic political consumption and quickly called for de-escalation.
    • The message of peace from the US: Trump also told the Iranian leaders that America “is ready to embrace peace with all who seek it”.

    The shooting of a passenger jet and the aftermath 

    • The shooting of the jet:
      • The Ukrainian passenger jet was shot-down near Tehran killing all 176 passengers and crew on-board.
      • It included 82 Iranian nationals and many Canadian citizens of Iranian origin
    • After initial denial, Tehran was forced to accept responsibility for shooting down the plane.
    • The aftermath of the shooting of the plane
      • Protests: Soon after the confession, protests broke out against the government.
      • Demand for accountability: Iranians are angry at the attempt of the government to cover up initially and are demanding full accountability.

    The general discontent of the people against the government

    • The latest round of protests must be seen as a continuation of those that have raged since the end of 2017.
    • Reasons for the discontent: Economic grievances, frustration with widespread corruption, demands for liberalising the restrictions on women and political opposition to the regime are the reasons.
    • Discontent against external adventures: There was also strong criticism of the government’s costly external adventures in the Middle East amidst the deteriorating economic conditions.
      • There is little love for the Revolutionary Guards, the principal face of state oppression.
    • External pressure: As the regime cracks down on the protests against the airliner shooting, the external pressures against Iran are only likely to mount.

    Available option and their dangers

    • As sanctions squeeze the Iranian economy, the costs of regional overreach become apparent, and internal protests become persistent, Khamenei has few good options.
    • The option of the new political compact: Offering a new political compact to the people of Iran or a new framework to deal with the Arab neighbours and the US would seem reasonable goals.
      • But they involve considerable risk for the regime.
    • The option of pragmatism: All revolutionary regimes come to a point when they need to replace ideological fervour with pragmatism.
      • But the change from ideological fervour to pragmatism is also the time of the greatest vulnerability for the regime.

    Conclusion

    India as a friend of Iran will surely begin to debate if privately, the implications of the deepening regime crisis in Iran.

  • [op-ed of the day] Revisiting the NBFC Crisis

    Context

    While India was trying to deal with the problems arising out of the large NPA accumulated by the commercial banks, the Indian financial sector was dealt with another blow in the form of the NBFC crisis.

    Effects of IL&FS and DHFL collapse:

    • Balance sheets affected: The collapse of these two big entities affected the balance sheets of banks and mutual fund companies.
    • Credit crunch: It also resulted in a credit crunch that dampened demand and pushed a slowing economy towards recession.
    • Tarnished image of NBFCs: Being leaders in the industry, their failure has tarnished the image of the NBFC sector as a whole.

    Types of NBFCs and their numbers

    • Total number: As of September 2019 there were a total 9,642 NBFCs in India.
    • Deposit-taking NBFC (NBFCs-D): Only 82 of India’s NBFCs were deposit-taking institutions (NBFCs-D) permitted to mobilise and hold deposits.
    • Non-deposit taking NBFCs (NBFCs-ND): The rest of the NBFCs which are not deposit-taking, are categorised as non-deposit taking NBFCs.
      • They did not have access to the savings of ordinary households.
      • For this reason, the majority of these institutions were not considered to be entities that needed strict regulation
    • Systematically important (NBFCs-ND-SI): Of a large number of non-deposit taking NBFCs (NBFCs-ND), only 274 were identified as being systematically important (NBFCs-ND-SI), by virtue of having an asset size of ₹500 crores or more.

    Significance of NBFCs as expressed by assets holdings

    • A significant player in the financial markets: As at the end of March 2019, these two sets-NBFCs-D and NBFC-ND-SI- held assets that amounted to almost a fifth of that held by the scheduled commercial banks.
      • This made them significant players in the web of credit, as well as large enough as a group to affect the health of the financial sector.
    • Non-deposit taking NBFCs must rely on resources garnered from the “market,” including the banking system, besides the market for bonds, debentures, and short-term paper.
    • Extension of financial entities: Individual investors would only be marginally involved in direct investment in these instruments.
      • So, the NBFCs are essentially extensions of the activity of other financial entities such as banks, insurance companies, and mutual funds.

    Concentrated lending by NBFCs

    • Industry getting lion’s share: Industry accounted for the biggest chunk of lending, amounting to 57% of gross advances in September 2019.
      • Much of this lending to industry went to the infrastructural sector.
    • At second place-retail sector: A second major target for lending by the NBFCs was the retail sector, with retail loans accounting for 20% of gross advances.
      • Within the retail sector, vehicle/auto loans accounted for as much as 44% of loans.

    What went wrong?

    • Diversification by commercial banks: Following a surge in capital flows into India which began in 2004, banks were flush with liquidity.
      • Under pressure to lend and invest to cover the costs of capital and intermediation and earn a profit, banks were looking for new areas into which they could move
      • Increase in retail lending by banks: The pressure resulted in a significant increase in retail lending, with lending for housing, automobiles and consumer durables.
      • There was also a substantial increase in lending to the infrastructural sector and commercial real estate.
    • Why NBFCs flourished even in the face of competition by banks? What the growth of the NBFCs indicates is that banks were unable to exhaust the liquidity at their disposal.
      • Banks were also unable to satisfy the potential for lending to these sectors, providing a space for NBFCs to flourish.
    • The willingness of NBFCs suited the banks: The willingness of the NBFCs to enter these areas suited the banks in two ways.
      • First, it permitted the banks to use their liquidity even when they themselves were stretched and could not discover, scrutinise and monitor new borrowers.
      • Banks could lend to the NBFCs, which could then take on the tasks associated with expanding the universe of borrowers to match the increased access to liquid funds.
      • The second was that it helped the banks to move risks out of their own books.
    • Short term lending to NBFCs, and long-term lending by NBFCs: Banks accepts short term deposits, so there is limit in their ability to lend that short term deposits as a long term debt.
      • On the other hand, these were the sectors to which additional credit could be easily pushed.
      • Lending to NBFCs that in turn lent to these sectors, appeared to be a solution to the problem.
      • Bank lending to the NBFCs was short term, and the latter used these short-term funds to provide long-maturity loans
      • NBFCs expected that they would be able to roll over much of these loans so that they were not capital short.
      • Role of rating agencies: What they needed for the purpose were ratings that ranked their instruments as safe.
      • The ratings companies were more than willing to provide such ranks.
    • The two risks involved in this model: The NBFC-credit build-up was an edifice that was burdened with two kinds of risks.
      • First risk: A possible default on the part of borrowers.
      • The probability of which only increases as the universe of borrowers is expanded rapidly to exhaust the liquidity at hand.
      • The second risk: The second was the possibility that developments in the banking sector and other segments of the financial sector would reduce the appetite of these investors for the debentures, bonds and commercial paper issued by the NBFCs
      • Since the NBFCs banked on being able to roll-over short-term debt to sustain long-term lending.
      • A slowdown in or halt to the flow of funds would lead to a liquidity crunch that can damage the balance sheet of these institutions.
    • Which of the two risks is involved in the present crisis? The crisis that affected the NBFCs was a result of both kinds of setbacks.
      • First setback: Loans to areas like infrastructure, commercial real estate and housing went bad.
      • Second setback: With the non-performing assets problem in the commercial banking sector curtailing their access to bank lending.
    • Why the problem turned systemic? Given the importance of ratings and “image” in ensuring access to capital, some firms with the requisite image were able to mobilise large sums of capital and expand their business.
      • When entities like that go bust, the response of lenders and investors to the event tends to be drastic, with systemic effects on the sector as a whole.

    Conclusion

    The episode was a shadow banking crisis that has had far-reaching consequences for the economy as a whole. Therefore, its high time that measures are taken to avoid the occurrence of such a crisis in the future.

  • [op-ed snap] Naga peace plan lost in haze of optics, obstinacy

    Context

    The government-imposed deadline of October 31 for concluding talks with Naga groups has passed. And nothing concrete has come out of the Framework Agreement signed in 2015.

    Events so far

    • Framework Agreement with Naga rebel leader Thuingaleng Muivah was signed in 2015.
      • The agreement expresses an intent to work towards the final agreement.
      • The progress on the said agreement has stalled since then.
    • Problem with the Framework Agreement: It was signed only with Muivah’s leading faction, National Socialist Council of Nagalim (Isak-Muivah), or NSCN (I-M).
      • Exclusion of major players: The agreement excluded half a dozen more groups, besides Naga citizenry in Nagaland and contiguous Naga homelands in the neighbouring states of Manipur, Arunachal Pradesh, and Assam.
      • This weakened the process.

    Efforts made by the government

    • Appointment of an interlocutor: The government-appointed R.N. Ravi as the government’s interlocutor. That move signalled the seriousness from the government’s side.
    • Reach out toward the other players: The government reached out to Nagas across the board.
    • The government reached out to other rebel factions, much to the irritation of NSCN (I-M), and began peace talks with them in end-2017.
    • A breakaway faction of I-M’s arch enemies, NSCN’s Khaplang, joined the process in 2019.
    • Government-led outreach attempted to bring on board non-Naga people in Manipur, Arunachal Pradesh, and Assam.

    What is offered in the process and related issues

    • Disarmament, rehabilitation, and assimilation: A talks with I-M spelt out disarmament, rehabilitation, and assimilation of cadres and leaders through induction in paramilitary forces and political structures
    • Expanded legislature: An expanded legislature in Nagaland, for inducting the rebels and more legislative representation and relative autonomy in Naga homelands outside Nagaland.
    • Disagreement over flang and the separate state-constitution: Other Naga rebel groups agreed to what was offered by the government.
    • I-M remained intransigent over the dual use of a Naga flag alongside the Indian flag, and its constitution—
    • This I-M-scripted constitution is regressive, offers far less than what Nagas enjoy under Indian constitutional provisions, and effectively proposes Muivah as the overarching figure of Naga politics, development and destiny.
    • Unacceptance by the other groups: This is evidently unacceptable to numerous Nagas—let alone non-Nagas—for whom Muivah, a Tangkhul Naga from Manipur’s Ukhrul region, remains a divisive figure.

    Conclusion

    There is a need to reconcile the difference between the different groups and reach a proposed agreement as soon as possible for the welfare of the communities and the region as a whole.

  • [op-ed snap] The warp and weft of religious liberty

    Context

    While extending the scope and extent of the freedom of religion, the SC would face the difficult question of balancing it with the other provisions and rights enshrined in the Constitution.

    What the 9-Judge bench will deliberate on?

    • The establishment of the Bench emanated out of an order of reference made on review petitions filed against the Sabarimala judgment.
    • The scope and extent of religious liberty: It will answer a series of wide-ranging questions and expound the scope and extent of the Constitution’s religious liberty clauses.
    • It will also deliberate on cases including the practice of female genital mutilation and the rights of Parsi women to enter fire temples.

    The question of balance

    • Within the Constitution of India, there are two impulses that may, at times, come into conflict with one another.
    • First impulse-Religious freedom: India is a pluralist and diverse nation, where groups and communities — whether religious or cultural — have always played an important role in society.
      • Religious freedom: Following up on this impulse, the Constitution recognises both the freedom of religion as an individual right (Article 25), as well as the right of religious denominations to manage their own affairs in matters of religion (Article 26).
    • The second impulse-Protection of an individual: The second impulse, recognises that while the community can be a source of solidarity at the best of times, it can also be a terrain of oppression and exclusion.
      • So, both Articles 25 and 26 are subject to public order, morality, and health.
      • Article 25 is also subject to other fundamental rights guaranteed by the Constitution, and to the state’s power to bring in social reform laws.

    Finding the middle ground

    • The middle ground involves respecting and balancing the following-
      • The autonomy of communities: It involves respecting the autonomy of cultural and religious communities.
      • Individual rights: It involves ensuring that individual rights are not entirely sacrificed at the altar of the community.
    • Essential practice doctrine: Over the years, the Supreme Court has found the middle ground by carving out a jurisprudence that virtually allows it to sit in theological judgments.
      • What is constitutionally protected? It recognising that it is only those practices that are “essential” to religion that enjoys constitutional protection.
      • Any other ritual is seen as secular and amenable to the state’s interference.
      • This doctrine was used to rule, in 2004, that the performance of the Tandava dance was not an essential tenet of the religious faith of the Ananda Margis.
      • The SC said that the “essential religious practices” test is indeed the only way it can reconcile the two impulses.

    Anti-exclusion principle

    • What are the options with the SC?
      • Continue with the “essential practice” doctrine: One option before the nine-judge Bench would simply be to affirm existing jurisprudence, as it stands.
      • Anti-exclusion principle: The second option would be to ask whether the effect of the disputed religious practice is to cause harm to individual rights.
      • The enquiry, thus, is not whether the practice is truly religious, but whether its effect is to subordinate, exclude, or otherwise send a signal that one set of members is entitled to lesser respect and concern than others.
      • In Sabrimala case — both the concurring opinion of Justice D.Y. Chandrachud and the dissenting opinion of Justice Indu Malhotra agreed that this ought to be the test.
    • Protection of dissenters
      • Top-down nature: Many religious communities, norms, and practices are shaped and imposed from above, by community leaders, and then enforced with the force of social sanction.
      • Dissenters are then faced with an impossible choice: Either comply with discriminatory practices or make a painful exit from the community.
      • Judicial intervention: It is here that the Constitution can help by ensuring that the oppressed and excluded among communities can call upon the Court for aid.

    Conclusion

    • The nine-judge Bench will face a difficult and delicate task of constitutional interpretation. Much will ride upon its decision: the rights of women in particular and of many other vulnerable groups in general.
    • Also will depend on its decision the constitutional vision of ensuring a life of dignity and equality to all, both in the public sphere and in the sphere of community.

  • [op-ed of the day] Human rights are not solely an ‘internal matter’

    Context

    The human rights situation in Jammu and Kashmir following the dilution of Article 370 and the passage of the Citizenship (Amendment) Act (CAA) have brought renewed international focus on India’s human rights practice.

    Evolution of the modern Human Rights

    • Classical approach: Countries made agreements on the premise that a sovereign state had the exclusive right to take any action it thought fit to deal with its nationals.
      • No recognition of individuals’ rights:  Classic international law governed the conduct between states and did not recognise the rights of individuals.
    • The classical notion was challenged in the 19th century.
    • Modern Human Rights:  Slavery Convention adopted by the League of Nations prohibiting the slave trade heralded the first human rights treaty.
      • It was based on the principle of dignity of a human being.
    • The Universal Declaration of Human Rights: Adopted in 1948 by the United Nations, was the first comprehensive international human rights document.
    • The weakening of Unrestricted sovereignty: The evolution of international human rights law is also about the gradual weakening of the concept of unrestricted sovereignty.

    India and Human Rights

    • Unwarranted international scrutiny: The Indian government’s response to its human rights practice has always been that international scrutiny is unwarranted.
      • Why India claims so?: Since the country is the largest democracy in the world with an independent judiciary, free media, and an active civil society no international scrutiny is required.
      • Indian has always assured the international community that the judiciary (the SC) would provide adequate remedies to victims of human rights violations.
      • These claims sound less credible after the recent developments in J&K and the passage of the CAA.
    • Human rights and Discriminatory nature of CAA: Non–discrimination is a fundamental principle of human rights.
      • The Office of the High Commissioner for Human Rights (OHCHR) said that CAA is fundamentally discriminatory in nature”.

    Role of Civil Society and Media

    • Media’s questionable role: Responding to international concerns the Indian government also refers to the role of free media and civil society in protecting human rights.
      • However, the media’s role in J and K and after CAA is questionable.
    • Weakened Civil Society: The government has imposed various curbs on it since 2014.
      • It has become difficult for it to receive foreign contribution.
      • Use of FRCA: Since 2014, the government has canceled the registration of about 14,000 NGOs under the Foreign Contribution Regulation Act (FCRA).

    Conclusion

    • It is possible for the Indian government, due to its diplomatic clout, to avoid robust intervention by the UN Human Rights Council and other UN human rights mechanisms.
    • But it would be difficult to avoid scrutiny by the international community. So, the government must take steps to allay international concerns and avoid situations where it is seen as a violator of human rights.