Daily PT Capsule Mar 15

Ethics committee to scrutinize conduct

The Ethics committee of Rajya Sabha will scrutinize the conduct of VIjay Mallya who left India even as public sector banks moved the Supreme Court to recover dues of up to Rs. 9,000 crore from him. He is a member of Rajya Sabha.

Meanwhile, the CBI has registered its case under Section 409 (criminal breach of trust) read with Section 120 B (criminal conspiracy) of the Indian Penal Code and other provisions of the Prevention of Corruption Act against unknown IDBI officials pertaining to abuse of office to extend favours allegedly to Vijay Mallya’s Kingfisher Airlines.

Analysis

What is the Ethics committee of Rajya Sabha? – The Ethics Committee of Rajya Sabha was constituted by the Chairman, Rajya Sabha on 4 March 1997, with the mandate to oversee the moral and ethical conduct of members and to examine cases referred to it with reference to ethical and other misconduct of members. In respect of procedure and other matters, the rules applicable to the Committee of Privileges apply to the Ethics Committee with such variations and modifications as the Chairman, Rajya Sabha may from time to time make.

Leaders of political parties/groups in Rajya Sabha are nominated as the members of the Ethics Committee. The Chairman of the Committee is nominated by the Chairman, Rajya Sabha from among its members. It has 10 members in total.

Source: TheHindu

Challenges to Aadhaar

The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016,  was passed in the Lok Sabha as a money bill. The bill has been referred to the Rajya Sabha which will have to return it in 14 days in any case.

Civil groups and opposition have been criticizing the government for passing the bill as money bill. The States have their own concerns about the Aadhaar Bill, and that was why a discussion in the Rajya Sabha was vital.

Almost 40 per cent of people who have obtained Aadhaar numbers say that it has not helped them, with banking correspondents in rural areas reporting that accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) using Aadhaar face authentication issues, leading to failed transactions, according to a report by the international financial inclusion consultancy MicroSave.

Finance Minister Arun Jaitley had, at the time of introducing the Bill in Parliament, said that targeting the LPG subsidy through Aadhaar had resulted in savings of over Rs.15,000 crore by the Centre. Four States which had started PDS delivery by a similar exercise on a pilot basis had saved more than Rs.2,300 crore, he said.

Analysis

What is a money bill? – Under Article 110 (1) of the Constitution, a Bill is deemed to be a Money Bill if it contains provisions dealing with six specific matters [Article 110 (1)(a) to (1)(f)] broadly related to imposing, abolishing or regulating a tax; regulating government borrowings; the Consolidated and Contingency Funds of India; and “any matter incidental to any of the matters specified in (the previous six) sub-clauses… [Article 110(1)(g)]”. The expression “incidental to” makes the definition of a Money Bill comprehensive.

If any question arises whether a Bill is a Money Bill or not Article 110(3) says, “the decision of the Speaker of the House of the People thereon shall be final”.

Under Article 109(1), a Money Bill cannot be introduced in Rajya Sabha. Once passed by Lok Sabha, it is sent to Rajya Sabha — along with the Speaker’s certificate that it is a Money Bill — for its recommendations. Rajya Sabha cannot reject or amend the Bill, and must return it within 14 days, after which Lok Sabha may accept or reject its recommendations. In either case, the Bill is deemed to have been passed by both Houses. Under Article 109(5), if Rajya Sabha fails to return the Bill to Lok Sabha within 14 days, it is deemed to have been passed anyway.

What is the Aadhaar Bill? – The Bill intends to provide for targeted delivery of subsidies and services to individuals residing in India by assigning them unique identity numbers, called Aadhaar numbers. Every resident shall be entitled to obtain an Aadhaar number.

Eligibility – A resident is a person who has resided in India for 182 days, in the one year preceding the date of application for enrolment for Aadhaar.

Use – To verify the identity of a person receiving a subsidy or a service, the government may require them to have an Aadhaar number.  If a person does not have an Aadhaar number, government will require them to apply for it, and in the meanwhile, provide an alternative means of identification.

Revealing Information – Information related to aadhaar can be revealed in interest of national security and on the order of the court.

Unique Identification Authority – The key functions of the UID authority include, (i) specifying demographic and biometric information to be collected during enrolment, (ii) assigning Aadhaar numbers to individuals, (iii) authenticating Aadhaar numbers, and (iv) specifying the usage of Aadhaar numbers for delivery of subsidies and services.  The UID authority will consist of a chairperson, two part-time members and a chief executive officer.  The chairperson and members are required to have experience of at least ten years in matters such as technology, governance, etc.

Source: TheHindu, TheIndian Express, PRS

Russian troops withdrawal from Syria

Russian President Vladimir Putin on Monday, 14th March 2016 ordered the defence ministry to begin the withdrawal of Russian forces from Syria from Tuesday. The Kremlin announced that Mr. Putin had called President Bashar Al-Assad to inform Moscow’s long-standing ally of the surprise move that appears to end the main part of its intervention in Syria’s conflict that began in September, 2015.

Russia began its bombing campaign in support of Mr. Assad’s forces in September, a move that helped shore up the Syrian regime’s crumbling forces and go on the offensive. A fresh round of talks to end Syria’s civil war opened in Geneva.

Analysis

Why Russia is withdrawing now? – The decision by Russia seems to be unexpected and a surprise move. But the decision has been lauded by International leaders ahead of the dialogue at Geneva where a truce to the five year old war is being negotiated.

What are the Geneva talks? – The Geneva peace talks on Syria, also known as Geneva III, are intended peace negotiations between the Syrian government and opposition in Geneva under the auspices of the UN, that, although formally started on 1 February 2016, never yet really started, and have been formally suspended on 3 February 2016.

The talks have been started officially on Monday 14th March. The United Nations special envoy for Syria says the resumption of peace talks between Syrian government envoys and representatives of the opposition is a “moment of truth” for the war-torn nation.

Source: The Hindu, BBC

Retail Inflation at four month low and IIP contracts

Retail inflation slowed to a four-month low in February, while the wholesale price index posted a negative reading for a 16th straight month, prompting industry groups to call on the Reserve Bank of India (RBI) to cut interest rates to spur economic growth.

Consumer price index-based inflation decelerated to 5.2 per cent from 5.7 per cent in the preceding month. Wholesale prices also continued to soften with official numbers for the wholesale price index (WPI) showing a 0.91 per cent contraction in February.

The data marks the first break in the six-month streak of accelerating retail inflation. Coming soon after official statistics showing industrial output continues to shrink, the figures signal domestic demand is yet to gain significant traction.

Index for Industrial Production (IIP) in January showed output contracted 1.53 per cent compared with the 1.18 per cent contraction in December 2015.

RBI Governor Raghuram Rajan had taken note of the poor industrial performance in January and said while the economy was recovering, this recovery was volatile and that not all economic indicators were moving in the same direction.

Analysis

Why has the inflation declined? – The decline in inflation is attributed to a significant drop in food prices.

Food inflation in the CPI came in at 5.5 per cent in February compared with 6.7 per cent in January. In the WPI, the rate of inflation in food articles also decreased to 3.35 per cent in February from 6 per cent in January.

Primary article inflation in the WPI slowed down significantly in February to 1.6 per cent compared to 4.6 per cent in January.

Inflation in the housing segment of the CPI accelerated to 5.3 per cent from 5.2 per cent in January.

Why India faces continuous food inflation? – There is a theory that puts the onus of inflation in India on to structural inflation. Thus, it has been argued by the exponents of structural theory of inflation that economies of the developing countries of Latin America and India are structurally underdeveloped as well as highly fragmented due to the existence of market imperfections and structural rigidities of various types.

They mention various sectoral constraints or bottlenecks which generate the sectoral imbalances and lead to rise in prices. Therefore, to explain the origin and propagation of inflation in the developing countries, the forces which generate these bottlenecks or imbalances of various types in the process of economic development need to be analysed.

For example India faces inflation in pulses due to the high focus on cereals during and after the green revolution. The high inflation in vegetables and fruits is attributed to the absence of proper infrastructure  leading to waste of produce.

Source: The Hindu

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