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We cannot ignore the pollution crisis in India

 Officials in New Delhi are busy preparing to welcome representatives of the United Nations these days. People from various parts of the world will converge here on June 5 for the World Environment Day. This year’s theme is Beat Plastic Pollution. As the host, it is India’s responsibility to take a meaningful initiative on this issue. Though, plastic, in India, is only a part of the massive problem of pollution.

To begin with, some bad news. The stream of water in the Yamuna has become so feeble in Haryana and areas adjoining Uttar Pradesh that people are unable to even immerse the remains of their loved ones. As a result, instead of cremating them, nearby villagers have begin burying the remains of their loved ones. They are now waiting for the rains. After it rains, the Yamuna’s stream will once again get stronger and the souls of their ancestors can rest in peace.

This isn’t happening for the first time. The trend has only strengthened over the past three decades. The conditions have worsened so much that the devout who gather for the Ganga Dussehra in the border areas of Uttar Pradesh and Haryana don’t have enough water to carry out the aachman (a customary sip of holy water before the religious prayers). Some enterprising people have begun to deploy diesel pump sets on the banks of the Yamuna to provide them with water. One wishes they understood that this isn’t a problem that can be solved in one day.

After getting this news when we begin to investigate, the correspondents from Hindustan found that the Ganga is also drifting into a similar situation. In Varanasi, right in between the main flow of the river some islands of sand have emerged. These are so big and solid that some daredevil youth have been carrying out stunts on their bikes on these. As we already know, the Cauvery and the Krishna dry up for more than 100 days of the year, before they can complete their course. As they originated from the Himalayas, the Ganga and the Yamuna used to be exceptions to this. The Himalayan glaciers sent them to the plains and a number of small rivers also contribute. That these two rivers will reach such a scenario was something that was unimaginable till a few years ago.

To be an environmental world power

 cological ruin is on a gallop across South Asia, with life and livelihood of nearly a quarter of the world’s population affected. Yet, our polities are able to neither fathom nor address the degradation. The distress is paramount in the northern half of the subcontinent, roping in the swathe from the Brahmaputra basin to the Indus-Ganga plain.

Within each country, with politics dancing to the tune of populist consumerism, nature is without a guardian. The erosion of civility in geopolitics keeps South Asian societies apart when people should be joining hands across borders to save our common ground.

Because wildlife, disease vectors, aerosols and river flows do not respect national boundaries, the environmental trends must perforce be discussed at the regional inter-country level. As the largest nation-state of our region, and the biggest polluter whose population is the most vulnerable, India needs to be alert to the dangerous drift.

China has been resolutely tackling air pollution and promoting clean energy. But while Beijing’s centralised governance mandates environmentalism-by-decree, the subcontinental realities demand civic participation for sustainability to work. Unfortunately, despite being a vast democracy where people power should be in the driving seat, the Indian state not only neglects its own realm, it does not take the lead on cross-border environmentalism.

Thus, Bihar is helping destroy the Chure/Siwalik range of Nepal to feed the construction industry’s demand for boulders and conglomerate, even though this hurts Bihar itself through greater floods, desertification and aquifer depletion. Air pollution is strangling the denizens of Lahore, New Delhi,Kathmandu and Dhaka alike, but there is no collaboration. Wildlife corridors across States, provinces and countries are becoming constricted by the day, but we look the other way.

The UN Environment Programme (UNEP) has chosen India to be the ‘host country’ to mark World Environment Day today. But when will New Delhi rise to connect the dots between representative democracy and ecological sanity?

Violence in the hills: on Shillong unrest

 he spark for the week-long incidents of violence in downtown Shillong was a lie spread through WhatsApp, the ubiquitous messaging platform that has increasingly become an unfiltered medium for hate and rumour-mongering. A scuffle between members of the Mazhabi Sikh community, long-time settlers in the Punjabi Lane area of the city, and a Khasi youth and his associates over a local matter was amicably settled between representatives of the communities. But a fabricated story that the youth had succumbed to injuries sustained in the scuffle led to large numbers of Khasi protesters laying siege to Punjabi Lane, demanding that the Sikh residents move from the area. That the “settlers” have been in Shillong for more than a century and a half, having been originally brought there by the British colonials to work as manual scavengers, and have since integrated themselves within Shillong, has not insulated them from being described as outsiders. The administration did well to protect the dwellers of Punjabi Lane from physical harm, but mob violence persisted until curfew was imposed and the Army put on stand-by. Spokespersons of the Khasi Students’ Union, whose members were part of the agitation, continue to insist that the Punjabi Lane residents be moved from Shillong’s commercial heart to its outskirts. Picturesque Shillong is no longer just an idyllic hill station; it is a bustling city that has grown in an unplanned manner and requires reforms such as zoning regulation. But the agitators’ demand to shift the Sikh residents is unreasonable and must be resisted. In fact, the Meghalaya High Court had stayed an order by the District Commissioner to evict the residents from Punjabi Lane (also known as Sweepers’ Colony) in 1986.

Tribal angst over economic issues leading to the scapegoating of non-tribal long-time residents reflects the continued failure to forge a more inclusive politics in Meghalaya. Today, there are enough provisions of affirmative action for the tribal people — 80% reservation for the Khasi, Jaintia, Garo and other tribes in jobs and professional studies. Yet, discontent persists over the lack of adequate jobs in the State, especially in urban areas. A Labour Bureau report on employment in 2015-16 found Meghalaya to have among the highest urban unemployment rates (13.4%). Discontent over lack of opportunities in the past had led to incidents such as the violent targeting of the Bengali community in 1979 and Nepalis in 1987, many of whom then fled the State. To prevent a repeat of those incidents, the government must stand by and protect the Sikh residents, and not give in to the nativist arguments of the protestors. And as calm is restored, Meghalaya’s politicians and civil society leaders must forge a more inclusive vision of the State’s demographics.

The last to know: on ICICI imbroglio

 The board of ICICI Bank has finally acted on the allegations of misconduct against its CEO and managing director, Chanda Kochhar. It had earlier maintained that she was on annual personal leave; now, she will stay away from the office till the completion of an inquiry into the charges levelled against her by a whistle-blower. Rather than allow the controversy to fester, the board of ICICI Bank, an institution that often sought to hold a mirror up to the inefficiencies of public sector banks, should have acted earlier. Till the inquiry is complete the bank will be steered by a new chief operating officer, Sandeep Bakhshi. The official version is that he will report to Ms. Kochhar, who herself took the decision to go on leave till the end of the inquiry — but this is at best a face-saving cover for a board that was reluctant to act since the controversy broke. Meanwhile, the tenure of M.K. Sharma, the chairman of the bank’s board, is set to end this month and there is still no clarity on his successor. This extended uncertainty in a crisis situation is unwarranted. ICICI Bank’s troubles are rooted in a 2016 complaint by an investor alleging a quid pro quo deal between Ms. Kochhar’s immediate family members and the Videocon group, which got a ₹3,250-crore loan from it. When this ‘conflict of interest’ complaint resurfaced in the public domain this year, Mr. Sharma said he had personally inquired into it two years earlier and found nothing amiss.

With the Central Bureau of Investigation and later the stock market regulator SEBI swooping in, the issue of whether the bank had failed to make adequate disclosures about its dealings with the borrower (who is now a defaulter) and a firm related to Ms. Kochhar’s husband was spotlighted. The bank is yet to respond to SEBI, but changed tack after the latter decided to launch a probe into allegations of a quid pro quo and alleged misconduct by Ms. Kochhar. Three weeks on, the names of the members of and terms of reference for the probe panel to be led by retired Supreme Court judge B.N. Srikrishna are still awaited. It is debatable whether such a high-profile panel is required to ascertain if Ms. Kochhar, whose term ends next March, had made adequate disclosures while deciding on the loans. The board itself could have dealt with this through an internal investigation rather than giving the impression that it wanted to paper over the issue, sending a poor signal to all stakeholders. No doubt Ms. Kochhar, a star on the corporate firmament, enjoys a formidable reputation as a banker. While one should not prejudge the inquiry findings, there is no doubt that the strength of corporate governance practices in the bank has come under question because of the way the issue has played out.

Reality check: On bank NPAs

The worst is far from over for Indian banks. The financial stability report released by the Reserve Bank of India on Tuesday has warned that the gross non-performing assets (GNPAs) of scheduled commercial banks in the country could rise from 11.6% in March 2018 to 12.2% in March 2019, which would be the highest level of bad debt in almost two decades. This puts at rest the hope of a bottoming out of the NPA crisis that has affected the banking system and impeded credit growth in the economy. The GNPA of banks under the prompt corrective action framework, in particular, is expected to rise to 22.3% in March 2019, from 21% this March. The RBI believes that this will increase the size of provisioning for losses and affect the capital position of banks. In fact, the capital to risk-weighted assets ratio of the banking system as a whole is expected to drop from 13.5% in March 2018 to 12.8% in March 2019. The deteriorating health of banks is in contrast to the economy, which is on the path to recovery, clocking a healthy growth rate of 7.7% during the last quarter. The RBI, however, has warned about the rising external risks that pose a significant threat to the economy and to the banks. The tightening of monetary policy by the United States Federal Reserve and increased borrowing by the U.S. government have already caused credit to flow out of emerging markets such as India. The increase in commodity prices is another risk on the horizon that could pose a significant threat to the rupee and the country’s fiscal and current account deficits. All these factors could well combine to increase the risk of an economic slowdown and exert pressure on the entire banking system.

A major highlight of the financial stability report is the central bank’s finding that public sector banks (PSBs) are far more prone to fraud than their private sector counterparts. This is significant in light of the huge scam unearthed at a Punjab National Bank branch earlier this year. The RBI notes that more than 85% of frauds could be linked to PSBs, even though their share of overall credit is only about 65%. This should come as no surprise given the serious corporate governance issues faced by public sector banks, which to a large extent also contributed to the lax lending practices that are at the core of the NPA crisis. In his foreword to the report, RBI Deputy Governor Viral Acharya has noted that governance reforms at PSBs, if implemented, can help improve their financial performance and also reduce their operational risks. For now, the RBI expects the government’s recapitalisation plan for banks and the implementation of the Insolvency and Bankruptcy Code to improve the capital position of banks. These reforms can definitely help. But unless the government can gather the courage to make drastic changes to aspects of operational autonomy and the ownership of PSBs, future crises will be hard to prevent.

Overdue correction: on revisiting the Companies Act

 The Centre has announced the constitution of a committee to revisit several provisions of the Companies Act, 2013 that impose stiff penalties and, in some cases, prison terms as well, for directors and key management personnel. The 2013 law entailed the first massive overhaul of India’s legal regime to govern businesses that had been in place since 1956 and was borne of a long-drawn consultative process. Now, this 10-member committee appointed by the Corporate Affairs Ministry has been tasked with checking if certain offences can be ‘de-criminalised’. The panel, which includes top banker Uday Kotak, has been given 30 days to work out whether some of the violations that can attract imprisonment (such as a clerical failure by directors to make adequate disclosures about their interests) may instead be punished with monetary fines. It will also examine if offences punishable with a fine or imprisonment may be re-categorised as ‘acts’ that attract civil liabilities. Importantly, the committee has also been asked to suggest the broad contours for an adjudicatory mechanism that allows penalties to be levied for minor violations, perhaps in an automated manner, with minimal discretion available to officials. In fact, some of the provisions in the law are so tough that even a spelling mistake or typographical error could be construed as a fraud and lead to harsh strictures.

The government hopes such changes in the regulatory regime would allow trial courts to devote greater attention to serious offences rather than get overloaded with cases as zealous officials blindly pursue prosecutions for even minor violations. The decision to build in harsh penalties and prison terms for corporate misdemeanours in the 2013 law was, no doubt, influenced by the high-pitched anti-corruption discourse that prevailed in the country at that moment in time. Apart from several cases of crony capitalism that had come to light during the second UPA government, massive corporate frauds reported at once-revered firms such as the erstwhile Satyam Computer Services had spooked investors and other stakeholders about the credibility of corporate India’s books and governance standards. When the NDA came to power in May 2014, a comprehensive review of the Companies Act was at the top of industry’s wish list as a means to revive the economy. Industry captains had red-flagged the impact of such provisions on the ease of doing business, and investor sentiment in general. A trust deficit between industry and government owing to stray incidents of corporate malfeasance should not inhibit normal business operations, they had argued. Four years down the line, the government is finally moving purposefully on this, a rethink perhaps triggered by the fact that private sector investment is yet to pick up steam and capital still seeks foreign shores to avoid regulatory risks. One hopes this is followed up on swiftly, before the ruling party slips into election mode.

PRUDENT INCREASE ON RBI’S RATE HIKE

The decision by the Reserve Bank of India’s Monetary Policy Committee to raise benchmark interest rates again by 25 basis points is a prudent one. This is the second successive rate increase in as many months, a response to mounting uncertainties on the inflation front. Continuing volatility in crude oil prices, the recent softening notwithstanding, and its vulnerability to geopolitical tensions and supply disruptions is one of the main risks to the inflation outlook. Among the RBI’s other concerns are volatile global financial markets, possibilities of fiscal slippage at the Central and State levels, the likely impact of the increase in the minimum support price for kharif crops, and the staggered impact of upward revisions to house rent allowance paid by State governments. Rainfall has so far been 6% below the long-period average and deficient over a wider area than last year — more than a fifth of the country’s 36 sub-divisions have reported shortfalls. This has resulted in a drop in the total sown area under kharif. The monetary authority has flagged the need to keep a close watch on rain over the remainder of the season, given the risks regional imbalances may pose to paddy output and CPI inflation. The June round of the RBI’s own survey of household inflation expectations reveals that families see prices hardening even further over both the three- and 12-month horizons. Domestic economic activity having strengthened to a point where the output gap has ‘virtually closed’, manufacturers polled by the central bank have reported higher input costs and selling prices over the April-June quarter.

The portents could not be clearer. With retail inflation having accelerated to 5% in June, the RBI has revised its projection for CPI inflation in the second half of the current fiscal year to 4.8%, from the June forecast of 4.7%, and now sees price gains accelerating to 5% in the April-June quarter of 2019. Policymakers on the MPC have understandably spotlighted the risks to the domestic economic rebound from global developments. While rising trade protectionism threatens to impact investment flows, disrupt global supply chains and hurt all-round productivity, depreciations in the value of most currencies against the strengthening dollar have rippled through many major advanced and emerging economies, spurring inflation across these markets. The MPC’s primary remit is to ensure that retail inflation stays firmly within a band of 2-6%, and preferably anchored at 4% over the medium term. So there is no room to quibble over the committee’s majority decision to raise borrowing costs while retaining a ‘neutral’ policy stance. With inflation widely accepted as a hidden tax on the poor, the containment of price gains justifiably ought to be the raison d’etre of monetary policy

Freedom to pray: on Sabarimala verdict

 The Constitution protects religious freedom in two ways. It protects an individual’s right to profess, practise and propagate a religion, and it also assures similar protection to every religious denomination to manage its own affairs. The legal challenge to the exclusion of women in the 10-50 age group from the Sabarimala temple in Kerala represented a conflict between the group rights of the temple authorities in enforcing the presiding deity’s strict celibate status and the individual rights of women to offer worship there. The Supreme Court’s ruling, by a 4:1 majority, that the exclusionary practice violates the rights of women devotees establishes the legal principle that individual freedom prevails over purported group rights, even in matters of religion. The three concurring opinions that form the majority have demolished the principal defences of the practice — that Sabarimala devotees have constitutionally protected denominational rights, that they are entitled to prevent the entry of women to preserve the strict celibate nature of the deity, and that allowing women would interfere with an essential religious practice. The majority held that devotees of Lord Ayyappa do not constitute a separate religious denomination and that the prohibition on women is not an essential part of Hindu religion. In a dissenting opinion, Justice Indu Malhotra chose not to review the religious practice on the touchstone of gender equality or individual freedom. Her view that the court “cannot impose its morality or rationality with respect to the form of worship of a deity” accorded greater importance to the idea of religious freedom as being mainly the preserve of an institution rather than an individual’s right.

Beyond the legality of the practice, which could have been addressed solely as an issue of discrimination or a tussle between two aspects of religious freedom, the court has also sought to grapple with the stigmatisation of women devotees based on a medieval view of menstruation as symbolising impurity and pollution. The argument that the practice is justified because women of menstruating age would not be able to observe the 41-day period of abstinence before making a pilgrimage failed to impress the judges. To Chief Justice Dipak Misra, any rule based on segregation of women pertaining to biological characteristics is indefensible and unconstitutional. Devotion cannot be subjected to the stereotypes of gender. Justice D.Y. Chandrachud said stigma built around traditional notions of impurity has no place in the constitutional order, and exclusion based on the notion of impurity is a form of untouchability. Justice Rohinton F. Nariman said the fundamental rights claimed by worshippers based on ‘custom and usage’ must yield to the fundamental right of women to practise religion. The decision reaffirms the Constitution’s transformative character and derives strength from the centrality it accords to fundamental rights.

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