Open Forum

New Delhi, 6 March 2024 

Electoral Bonds Timing  

SBI’S PLAYS SPOILSPORT?

By Dhurjati Mukherjee 

The State Bank of India has wittingly or unwittingly come to the aid of the Modi government. The much-awaited exposure on who the donors were to the electoral bonds worth Rs 35,660 crore unfortunately will not be known till after the big battle of elections 2024. This as the SBI on Monday last petitioned the Supreme Court to extend the deadline for submitting the details on the purchase of these bonds to the Election Commission of India by June 30, instead of March 6 as directed following the landmark judgement striking down the bond scheme. 

Importantly, the Opposition will not have authentic ammunition, details of the donors which were to go on the ECI website by March 13, to flog its charges against the government of being pro-rich, during the ensuing polls. Some reactions to the SBI plea are worth a mention. The Congress said, “Narendra Modi is leaving no stone unturned to hide the business of donations. When the Supreme Court said it is the right of the people of the country to know the truth about the electoral bonds, then why does SBI not want this information to be made public before the elections?” The CPM said, “This would be a travesty of justice. Is the SBI seeking extension till the general elections are over to protect Modi and the BJP from exposure of the ‘quid pro quo’ that the Supreme Court apprehended. In this digital age, all this information is a mouse-click away. Seeking extension raises suspicious apprehensions.”   

Interestingly, in its plea to the top court the SBI said that while it ‘intends to comply with the directions issued, there are certain practical difficulties with the decoding exercise…due to stringent measures undertaken to ensure that the identity of the donors was kept anonymous…’

Indeed, the timing of the exposé would have played a significant role in these crucial elections and the delay tilts the balance in favour of the government.   

It’s no denying that money power in polls has put a big question mark on the country’s reputation of a vibrant democracy. The availability of vast financial resources, mainly to the ruling dispensation, obviously gives their candidates an unfair advantage over others, leading to an uneven playing field where those with more money dominate the political arena. 

The verdict of the 5-bench constitutional had referred to how large, anonymous donations by the rich to the ruling party can lead to “quid pro quo” in the form of influence over policy making and thus sought details – amount, date, donor and recipient – relating to every electoral bond purchased and cashed over the past six years, since April 2019. 

It was rightly felt that electoral bonds far from curbing black money and preventing money laundering has steeply increased the income of political parties from ‘unknown sources’ to a staggering Rs 11,829 crore during the years 2018-19 to 2021-22. The share of income from unknown sources for national parties rose from 66% during 2014-15 to 2016-17 to 72% during the years 2018-19 to 2021-22. Between 2019-20 and 2021, the bond income has been 81% of the total unknown income of national parties. 

Close on the heels of this development, the Congress wrote to Union Finance Minister Sitharaman citing information available on ECI website, furnished by the BJP itself, which showed how 30 companies hounded by the CBI, IT and ED paid Rs 335 crore to the ruling party in what looks like a quid pro quo. Reports, it said, “suggest that 30 companies embroiled in the net of central agencies which have become extortion agents paid Rs 335 crore donations to the BJP”. The above letter referred to reports that chronicle instances wherein the probe agencies arrested, searched or seized assets of certain companies and later were apparently coerced to donate to the BJP.  

According to the Association for Democratic Reforms, the total funds raised by political parties through electoral bonds between 2017-18 and 2022-23 was around Rs 12,000 crore out of which the BJP’s share was as high as 54.8%. Even if this is considered white money, the party has raised much more money for its expenses, which also includes ‘buying’ legislators and political leaders.     

According to Prof. Atul Sood of the Centre for the Study of Regional Development, JNU, multinational companies were involved in tax abuse to the tune of Rs 75,000 crore per annum.

The pro-corporate ruling party has thus allowed tax concessions of around Rs 1 lakh crore every year to Indian domestic corporate houses but most of these were not increasing their investments. 

Recall that the court verdict pointed out: “Economic inequality leads to differing levels of political engagement because of the deep association between money and politics. At a primary level, political contributions give ‘a seat in the table’ to the contributor”. It had rightly rejected the Centre’s argument that by ensuring anonymity, the scheme not only disincentivised money-laundering and the stashing of black money but granted immunity to the donor from victimisation by parties to which he did not make sufficient donations. 

According to available figures 47% of contributions to parties have been through bonds and 94% of these have been in the denomination of Rs 1 crore. Electoral bonds obviously created a genre of corporate kingmakers, who would have a big say in policy making with an additional incentive of anonymity.  

While the Supreme Court analysed the issue with specific focus on the right to information of citizens to the identity of the donor, which in turn would impact his/her choice of voting, of greater significance is that the judgment has strengthened the constitutional ideal of free and fair elections. Anonymous and exponential funding with no cap is possible only by corporate giants, who could claim illegitimate entry into governance. That money so obtained in donation can be used by political parties for any purpose and not necessarily for election expenditure, makes it not only unjust but also unjustifiable. Will the striking down of the electoral bond scheme make a big difference? Fear is another ingenious scheme would replace it and role of money power, not only in elections but governance itself would remain.       

Whether the country’s political leadership is at all interested in strengthening laws related to campaign, finance and enforcing transparency in political funding will need to be watched. Bolstering independence of institutions like the Election Commission and law enforcement agencies, under question, can be a step towards ensuring what is sought: free and fair elections. 

Addressing such challenges requires a collective effort from citizens, political parties, and the government. Transparency, accountability, and a culture of ethical politics is the need of the hour. It remains to be seen whether India can safeguard its democratic principles in the coming years and halt the political leadership’s schemes to undermine the republic. As said, if there’s a will, there’s a way.---INFA 

(Copyright, India News & Feature Alliance)

Political Diary

New Delhi, 5 March 2024

Court Tells Jan Sewak

NO MORE IMMUNITY

By Poonam I Kaushish

Jan sewaks or swayam sewaks? Public servants we are assert our Right Honourables. But that is only for public consumption. Where gold speaks, their tongues are silent. Politics is a highly lucrative business, which needs no personal capital: only the ability to con the public that you are their ultimate messiah. A one-man company whose cash counters keep ringing. And, which pays rich dividends to its owner depending on the fluctuating value of his stock!

Not any more. If the Supreme Court has its say -- and way. In a landmark unanimous judgment a seven-Judge Constitution Bench has brutally torn asunder the political facade. Exposing our netas in all their ugliness by overruling its 1998 five Bench ruling that gave legislators immunity from prosecution for accepting bribes to make a speech or cast a vote in Parliament or State legislatures.

 “We disagree with the majority judgment in Narasimha Rao case which grants immunity to legislators as it has a wide ramifications, grave danger and thus overruled,” said Chief Justice Chandrachud. Holding taking a bribe is an independent crime and has no link with Parliamentary privileges and what a lawmaker says or does inside Parliament or Assembly hence immunity from prosecution will not shield them.

Adding, “corruption and bribery is destructive of the aspirations and deliberative ideals of the Constitution and creates a polity which deprives citizens of a responsible, responsive, and representative democracy..

Thereby, discounting Articles 105 and 194 which protects MPs and MLAs freedom of speech and shields them from “any proceedings in any court in respect of anything said or any vote given by him in the Legislature” to enable them to work without fear of legal action. This, the Court warned would create a section that can enjoy unregulated exemption from law and potentially destroy functioning of our Parliamentary democracy.

Besides, the 1998 judgment had created a “paradoxical situation” where a legislator who accepts a bribe and votes accordingly is protected and a lawmaker who despite taking a bribe votes independently is prosecuted.

This verdict has its genesis in Circa July 20, 1993: A CPM MP moves a No Confidence Motion against Narasimha Rao’s minority Congress Government. The Congress has 251 in a 528 members Lok Sabha, but it defeats the motion with 265 votes by ‘garnering’ the 14 missing votes.

Circa 28 February 1996: Rashtriya Mukti Morcha files a complaint with the CBI alleging that these 14 MPs were paid over Rs. 3 crore for voting Congress. 

Circa 1 March 1996: In an iconic speech JMM MP Suraj Mandal one of those bribed by the Congress states in the Lok Sabha: “Which MP does not take money… I know the people who have made money from the coal and iron extracted…taken donations, money in thailis and gathris… the CPM and JMM take levy from people. What about petrol pumps? Even BJP is involved. Do saand ke beech bachchre ko kyon la rahe ho?” His speech was heard in pin-drop silence. None protested.  How could they? He was only speaking the truth. 

Again on Circa 22 July 2008: The Congress-led UPA Government moves a confidence vote in the Lok Sabha after the Left withdraws support over the Indo-US nuclear deal and wins it with a 19 vote victory (275 as against 256 of the Opposition's). Prior to voting, large amounts of cash are displayed by three MPs.  Predictably, all hell breaks loose. 

A Parliamentary Committee is set up to go into the unparallel Lok Sabha cash-for-vote scam. Eleven MPs are expelled and the case handed to the police in January 2009. 

Circa July-September 2011: The Supreme Court pulls up the police for its shoddy investigations. Two months later, late Samajwadi MP Amar Singh, two BJP MPs who exposed the scam and two middle men are jailed. On the Lok Sabha’s penultimate day, Working Chairman of the NDA Advani hails the BJP’s ex-MPs as whistle blowers and declares that if they are guilty, then he too should be jailed. “I did the sting, arrest me,” he dares. 

Circa May 2015: Telangana TDP leader is caught on video offering bribe to a nominated MLA in exchange for his vote in Legislative Council elections. One TDP MLA is sent to jail. But the High Court lets him out due to “insufficient evidence.”Wring your hands all you want, but all thre

e incidents highlight the deep malaise that affects our political system and absence of probity at all levels of public life alongside dishonesty and immorality. In fact, the under-belly of power politics has become more shameless, rotten, ugly and raw to the gutter level. Victory at any cost no matter what it takes. Forget Constitutional morality.

It is all very well for our Right Honourables today to rave and rant, appear horrified, adopt a holier-than-thou attitude and profess to uphold the best tenets of Parliamentary democracy. Sic. But the moot point is: Had our MPs gone in for some soul-cleansing, taken timely action and stemmed the rot in 1996, 2011-15 would not have happened.

But they did. Bluntly, because politics continues to be all about money, honey. Whereby, buying-selling of votes is on auto-mode all the time. Wads of notes are exchanged at a drop of a hat. And going to jail is fast becoming a badge of honour! Succinctly remarked a charge-sheeted MP, “We are only settling political scores, it has nothing to do with being corrupt or clean. We shall be judged by law of the land. But the main verdict comes from the electorate”. Conveniently, forgetting that an electoral victory does not erase a legal wrong. 

Alas, today we live in an era, where public morality and practical politics has acquired a particularly grotesque dimension whereby nine out of ten cases go unreported.  Confessed a seasoned politician: Es hamam me hum sab nange hain. Na BJP mein hain danav, na Congresss mein devta. An honest MP is one who is not caught.”

Arguably, in a milieu wherein large suitcases are proving too small to stuff political skeletons and in the business of democracy where everything comes for a price including politicians, it raises a moot point: How can our lawmakers ‘sell’ their dignity and honour for money? Worse, there is no remorse on an issue which impinges on the essence, dignity and credibility of Parliament? When will our netagan stop their immoral dhanda? Who is the culprit in whose eyes? 

All in all, the coming days are crucial. The Supreme Court has held a mirror. Time our politicians realize they are expected to be a notch above ordinary mortals. Our netas need to desist from Greed for Power and Power of Greed. Given that when an undataa becomes a saudagar , the aam aadmi  is bound to become garib!  

It is in the interest of healthy democracy that unhealthy precedents are not set. Parliamentary democracy can succeed only when rules of the game are followed honestly. Our politicians need to remember a home-truth: Public accountability is indispensable in a democratic set-up. With power comes responsibility. 

On hopes our leaders will now chart a new dimension in upholding the best tenets of Parliamentary morality and probity as elections draw near. Time for our leaders to wake up from their deep slumber of self conceit and deception of money hai to power hai! ---- INFA 

(Copyright, India News & Feature Alliance)

Economic Highlights

New Delhi, 4 March 2024

Core, Farm slip; Prices Up

CONSTRUCTION A BURDEN?

By Shivaji Sarkar 

India is experiencing a robust growth rate of 8.4 per cent, paralleled by rising inflationary trends, sparking concerns within the Reserve Bank of India (RBI). Projections of economic ease appear optimistic, prompting questions about whether inflation might impede growth or if capital expenditure (capex) could bolster it. 

However, key concerns linger, including a dip in core sector growth and a contraction of the farm sector by 0.8 per cent, compared to the previous expansion of 5.2 per cent in the third quarter of 2022-23. Despite a notable rise in manufacturing by 11.6 per cent, following a contraction of 4.8 per cent in the preceding year, challenges persist. Despite substantial government capex, consumption growth remains feeble, private investment continues to lag, and constructions may be a drag. 

India’s claim of growth is accompanied by decadal cumulative inflation of 55 per cent at 5.5 per cent a year. Rural inflation at 5.93 per cent is far higher than the urban at 5.69 per cent as in December 2023. And less noted vegetable inflation has touched 9.94 per cent. 

The RBI is cautious in its observations, but the International Monetary Fund (IMF) is blunt on high core inflation and stresses that central banks need to keep monetary policy tighter for longer than is current in markets. In its Global Financial Stability Report, it says “risks to global growth are skewed to the downside as the global credit cycle has started to turn as borrowers’ debt repayment capacity diminishes”. 

India needs to heed to the warning. Despite RBI remaining tight fisted, it notes at the Monetary Policy Committee report of this February that since February 2023 it has not succeeded in its effort to check prices. It means government has to be careful on burgeoning borrowings. The country’s allocation for debt repayment of Rs 10 lakh crore or almost 25 per cent of the central budget skews the economic focus. The quarterly GDP growth figures touching 8.4 per cent in third quarter against the Bloomberg estimates of 6.6 per cent, projected as fastest in 18 months, portrays one side of the picture as simultaneously the core sector growth slips to 3.6 per cent, a 15-month low in January. 

Latest data show eight core sectors grew slower than 4.9 per cent in December and 9.6 per cent in January 2023. The core sector consists of 41 per cent of the index for industrial growth. 

An increased government capital expenditure outlay may do little to change the overall investment situation as most of private firms remain reluctant to invest more. Margins for companies have plummeted despite high sales growth and it is apprehended that sales would decelerate. 

Compared to the 1980s when capex was high at 55 per cent, a study by Systematix group denotes, the present contribution is on the rise at 34 per cent. It is, however, concentrated on construction activities. It does not have multiplier effect on the industrial sector. This affects private investment growth, an aim of the higher public investments. A handful of companies with better liaison are pocketing the capex extravaganza. Actual demands remain low as core sector figures denote. 

The consumers may have to pay higher prices for natural gas after the elections adding to further inflationary trends. The government has raised natural gas prices to $8.2 per unit – million metric British thermal units. For consumers the cap remains at $6.5 in the current price mechanism when the Indian basket, was linked in April 2023. It is meant for international sale by domestic producers. 

Over Rs 10 lakh crore projects have been announced in election meetings by Prime Minister Narendra Modi in Uttar Pradesh and over a billion more for schemes in West Bengal, Chhattisgarh, Tamil Nadu, other states, schemes for railways and other areas. The rail projects are linked to construction of railway stations and similar other facilities. Faster trains fascinate but are concerns for connectivity in hinterlands. 

Promises are encouraging. Overall investments have grown on heavy borrowings of Rs 172.37 lakh crore as on March 2024, estimated to rise to Rs 187.35 lakh crore on March 31, 2025. This has a cost push effect. The RBI notes that over the past decade until 2022, consumer price inflation in India averaged 5.5 per cent a year or 55 per cent in a decade. This was above the Asia-Pacific’s figure of 2.1 per cent. 

The Indian Institute of Management, Ahmedabad, which conducted Business Inflations Survey (BIES) in December 2023, mainly among the manufacturing companies, reports a significant increase in one-year unit cost-based expected headline inflation. It reports an increase of 4.96 per cent in December 2023 from 4.73 per cent October 2023. 

The latest MPC notes that with elevated levels of food inflation, there is need to remain focussed on achieving the inflation target in a sustained way. It also observed that it could not achieve its target set in February 2023, implying the central bank could not contain prices. Prices of vegetables, including tomato, garlic, lemon and ginger and food grain have shot up. It affects overall costing of all the government estimates. Overall, it dampens the growth efforts. 

Promising investments to the people that is unsustainable have deleterious effect on the economy. Debt pushed investments raise money circulation further spiking prices. The populism may cause euphoria but gains to the economy are uncertain. It could, as the RBI indicates, be deceptive. Revival of growth in consumption demand is the key and “would require improved employment and household income conditions. 

The consumer optimism, increased spending, as per RBI urban household survey 2-11 January 2024 is yet to reach “pre-covid19 period”.  The RBI stresses that jobs and household income rise are key to the growth of the country whatever might be the euphoric figures of it being the fifth or third world economy. The consumer is constrained by the gap in discretionary spending that is the freedom of purchasing goods of their choice. 

This is also reflected in foreign direct investment (FDI) as a percentage of GDP being restricted to 2-2.5 per cent of GDP, which is hardly sufficient as also hot volatile money. This could be an indication that foreign companies are circumspect. 

The country has to check inflation as it diminishes the purchasing power of individuals that can’t cope up with unaffordable goods, services or essential items as also constructions that could add to post-poll prices. Prudent economic policies are necessary for sustaining growth and job creation. Supposed global standings epaulets hardly help.---INFA 

(Copyright, India News & Feature Alliance)

Spotlight

New Delhi, 2 March 2024

The MSP Demand

STATES MUST AID CENTRE

By Dr. S.S Chhina

(Senior Fellow, Institute of Social Sciences, New Delhi)         

Albeit the longest-ever protest from the farming community, especially in Punjab and Haryana, which continued for about a year to repeal the three farm laws and ultimately culminated in their withdrawal, the demand for Minimum Support Prices (MSP) continues to simmer. Looking at the recent ongoing protest, it is amply clear that agriculture in India needs an overhaul right from policy to reforms in the agri-market. 

An MSP is the minimum price set by the Government at which farmers can expect to sell their produce for the season. When market prices fall below the announced MSPs, procurement agencies step in to procure the crop and ‘support’ the prices. The main point of scepticism in those laws then was about the withdrawal of the government rule to procure the products of farmers. 

Even though these are only wheat and paddy, which are the popular crops of Northern India, no other product is being procured, though the prices for 23 crops are announced every year. Such assurance of marketing can be given in contract farming, but the previous experience has been dismal compared to the very successful involvement of state procurement. 

Looking at the scenario of marketing in different countries, it can be observed that neither the MSP is prevailing, nor the government procuring any crop. But at same time, be it either small or big, or developed or backward country, the government is very conscious about the price and production of the farm products. 

Even in those countries which have vast natural sources such as Canada and Australia etc., private companies are making contracts with farmers to mitigate any volatility either in price or in output as well as for the quantity to be supplied and the price to be charged. But the government is monitoring the situation in the interest of the consumer as well as of the producer to protect both in the harvest and in off-season. 

Unfortunately, the situation in India is altogether different than those countries having vast natural sources. Indian agriculture is overburdened with population, but it happens to be the profession of 60% of the population. Additionally, 95% of the holdings have less than two hectares of land, therefore making those neither economically viable nor providing full employment. Such holdings cannot take any risks for the sale of products, produced by putting in hard labour. 

While analysing farming in India, it can be said that though the country was facing food shortage, the initial three ‘Five Year Plans’ couldn’t solve the problem. As a result, the country was compelled to import food with several political strings attached and tapping precious foreign exchange. The green revolution, which was ushered in the late 60s, was the concatenation of number of factors such as new varieties of seeds, more use of chemicals, installation of tube-wells, easy and cheap loans and road connectivity, but foremost of all these was the MSP along with state procurement that proved a boon. 

Consequently, the perpetual rise in area and output of wheat and paddy, which are covered under the umbrella of assured marketing with MSP, was witnessed. By the early 70s the country became an exporting country from its position as a food importing nation. Even the stores fell short of preserving the produced wheat and paddy. It is to be noted that while area and output of wheat and paddy thrived, the output of other crops either remained stagnant or dived to a low level because of the lack of assured marketing. 

Over the past few years, concerted efforts have been made to realign the MSP in favour of oilseeds, pulses and coarse cereals to encourage farmers to shift larger area under these crops and adopt best technologies and farm practices, to correct the demand-supply imbalance. It was very much desirable to bring other crops under the cover of state procurement at MSP, but the glitches that resonated gains of this paradigm could not be reaped. The simple announcement of MSP for 23 crops could not yield the desired results because it couldn’t be dove tailed with state procurement of those crops. 

The MSP, as a tool with state procurement had delivered the desirable results, the production of wheat and paddy rose exponentially where a number of crops in which the country was self sufficient have to be imported and the bill for such crops thrived profusely as edible oils were being imported worth one lakh crore rupees every year. 

It would be ludicrous to assume that the Central Government can purchase every single product throughout the country. India has 15 different agro-climatic zones, and each zone is producing different crops. Even in a state there are different zones suitable for different crops. Twenty-three crops for which the MSP is announced or the popular crops of different states and even of different districts in the same state. The popular crops of each zone must have assured marketing. 

The State Government must collaborate with Central Government for the popular crops of the state. This is never a losing proposition. The farmers must be given incentives to produce more and more yield and the consumers should be protected with stable prices in the off-season. 

At the time of Independence, the population of the country was 340 million but that thrived to 1380 million in 2020 or rose by 4.1 times, but in comparison to that wheat rose to 1090 million tonnes from 70 million tonnes or by 15.5 times. Similarly, the production of paddy rose to 1220 million tonnes from 260 million tonnes or by 4.8 times. However, it was possible because of the miracle of MSP, whereas other products fell short in production as well as area because of the lack of MSP. 

While following the model of developed countries where the Government is monitoring farm production, it is not just staple products but even other products like potatoes, tomatoes, milk, eggs and fruits which are being procured adequately both for the interest of producers as well as consumers. Such a model must be adopted in all the states and also the Kerala model of interference in vegetables prices. 

The farmers producing different crops must be registered for specific areas or quantity, to realise the diversification. The states and even the districts should be divided in zones based on the yield of the respective crops. Only the suitable crops of the area should be procured at MSP. It has been observed that even the crops not suitable to an area are being grown only because of MSP. For example, in Punjab paddy is grown in sandy areas of Bhatinda and Fazilka only because of state procurement. 

Once such a policy is adopted for different crops, the results will definitely be very encouraging. However, it will be more practical and beneficial if the State Governments share the responsibility with the Central Government for the interests of the producers as well as consumers.---INFA 

(Copyright, India News & Feature Alliance)