13

The Hindu Editorial Analysis | 13th May’20 | PDF Download

Perilous state

  • State finances are in a shambles.
  • Their own revenue sources — mainly from liquor sales, stamp duty from property transactions and sales tax on petroleum products — that account for half their total revenues, have collapsed.
  • And their expenditure such as on interest payments, social sector schemes and staff salaries remains unchanged.
  • Worse, they are now called upon to spend more on beefing up their health infrastructure and on COVID-19 measures, including testing, treatment and quarantining.
  • States are now pleading for funding support from the Centre and relaxation in borrowing rules by the RBI.
  • The Centre is itself not in a happy place financially.
  • It recently announced an increase in its borrowing by half for this fiscal.
  • it appropriated almost all of the benefit of falling oil prices through increase in duties — ₹13 a litre on petrol and ₹16 a litre on diesel — in two tranches in March and again, last week.
  • It should seriously consider relaxing the fiscal deficit levels of the States from the current 3% level to at least 4.5%, just as it should relax its own level too.
  • The States should at least be able to borrow more.
  • The Centre should also give States the freedom to restart economic activity based on their own assessment.
  • Not all States are in the same virus-spread position and within each State, not all districts are the same

Indelicate imbalance

  • The Supreme Court has failed to discharge a judicial duty it was called upon to perform.
  • The mandate that the Court enjoys under Article 32 of the Constitution — to enforce fundamental rights — cannot be transferred to the executive.
  • The Court has not even pursued the attempt it made in Anuradha Bhasin, to lay down a set of rules by which authorities seeking to impose restrictions on fundamental rights must adhere to the doctrine of proportionality.
  • However, it held that repeated resort to Section 144 of the CrPC to impose wide restrictions without territorial or temporal limits was unacceptable.
  • The Court acknowledges that it might be better and convenient to have better Internet facilities during a global pandemic and a national lockdown.
  • Two claims by the government
  1. To prevent terrorists misusing it to disturb peace and tranquillity
  2. There has been a spike in incidents of terrorism — 108 incidents, in fact, between August 5, 2019 and April 25, 2020 — in the area
  • The Court also considered recent incidents including the encounter at Handwara.
  • A question that it failed to ask was how these incidents could be linked to Internet speed when all of them took place while severe restrictions were in place.
  • Italy, India and a common thread in partnership
  • May 4 is a date that unites Italy and India in the current COVID-19 scenario.
  • What in India is commonly known as Lockdown 3.0 has been defined “Phase 2” in Italy.
  • First, we needed to put our economies and societies on hold to contain the virus.
  • Second, we need to be able to look forward and give our citizens and our businesses a positive outlook in the immediate future.
  • Like India, Italy is also a country whose economy has a solid manufacturing base.
  • Digital Embassy” project will allow us to create many tools and processes to virtually interact and support our nationals, our businesses and our Indian counterparts.
  • Wearing of face covers; thermal scanning; frequent sanitisation; adequate distancing.
  • Italian government has already provided guarantees up to €500 billion to make sure that Italian businesses can have access to the necessary liquidity.
  • It has also adopted measures to support families and small and medium enterprises through grants, loans, debt rescheduling and other form of financial support.
  • Italy and India will have an extraordinary chance to closely cooperate in the next months, since they will be holding the consecutive Presidencies (Italy in 2021 and India in 2022) of the G20, one of the world’s main fora for global governance.
  • This will prove a unique opportunity to shape the international discourse around priorities that both countries hold dear:
  • Taking advantage of our economic complementarity
  • Strengthening our partnership based on shared values
  • Thriving creating industries
  • Scientific knowledge
  • Technological prowess
  • Development of a rules-based international system to the promotion of just trade, inclusive growth
  • Realisation of the 2030 Agenda
  • In a nutshell, at both bilateral and multilateral levels, our dialogue will be based on the main tenets of innovation and sustainability.
  • Innovation because this crisis has transformed the urge to develop new ideas, methods, processes and devices into the “new normal”.
  • Sustainability because, paraphrasing a popular saying: “we did not inherit the earth from our ancestors; we borrowed it from our children”.

Getting cash transfers out of a JAM

  • JAM trinity (Jan Dhan-Aadhaar-Mobile) has been propounded as a dream cash-transfer infrastructure for India.
  • Amitabh Kant: “… in the next two-and-a-half years, India will make all its debit cards, credit cards, all ATM machines all POS machines totally irrelevant… because every Indian will be doing his transaction just by using his thumb in thirty seconds …”
  • In the early days of the crisis, JAM was often invoked as a possible tool of emergency relief.
  • Compare women’s JDY accounts with NREGA job card.
  • JDY accounts are a mighty mess — the NREGA job-cards list is far more transparent and well-organised.
  • During the frantic initial JDY wave, in 2014-15, banks opened JDY accounts en masse to meet the targets.
  • Banking norms went for a toss.
  • Many accounts were opened without informed consent
  • Duplicate accounts flourished
  • Aadhaar numbers were seeded without any safeguards
  • Later on, a large proportion of JDY accounts (40% in March 2017, down to 19% in January 2020) went “dormant” as customers were unable or unwilling to use them.
  • Other accounts were blocked because the account holders were unable to complete timely ex-post biometric authentication (“eKYC”) of the Aadhaar numbers that had been seeded into their accounts.
  • It is not clear what proportion of JDY accounts are operational today, in the sense that a bank transfer to these accounts will actually reach the recipient in good time.
  • Cash transfers to women’s JDY accounts are likely to involve large exclusion errors.
  • According to a recent Yale study, less than half of poor adult women have a JDY account.
  • Consistent with this, a Dalberg study for 10 States finds that the proportion of poor households where at least one adult woman has a JDY account is just 57%.
  • The NREGA job-card list is likely to have much better coverage of poor households.
  • The natural complementarity between NREGA and social security pensions (covering more than four crore persons under the National Social Assistance Programme alone) would further help to reduce exclusion errors.
  • Job cards are meant for rural workers, JDY accounts are for everyone.
  • Some of our middle-class female friends have already received SMS alerts informing them that their JDY account has been credited with ₹500 of relief money.
  • Cash-in-hand may seem like the antithesis of JAM, but this option may become important in the near future if the banking system comes under further stress.
  • There are precedents of effective use of the cashin-hand method, notably in Odisha for pension payments and in various States for NREGA wage payments.
  • Several States (including Andhra Pradesh, Odisha and Tamil Nadu) have already resorted to cash-inhand for relief payments during the lockdown.

COVID-19 and the path ahead

It is not yet clear why such geographical differences exist; they cannot be explained by healthcare facilities alone.

  • India had reported its first case on January 30, 2020; as of May 12, it has reported over 71,000 cases and more than 2,300 deaths.
  • In comparison, the U.S. and the U.K., which also reported their first cases around the same time, recorded over 13,47,930 cases and over 2,24,330 cases, and over 80,600 deaths and over 32,100 deaths, respectively.
  • The relatively young population of India has been suggested as a possible factor for this stark difference.
  • However, while older people are at highest risk from the more severe consequences of COVID-19, there is no evidence to suggest that younger people are immune to the infection.
  • Low temperature and low absolute humidity have been suggested as factors influencing transmission.
  • But this theory needs further proof.
  • Genetic variations may be a possible explanation.
  • During the 2003 SARS epidemic, specific genetic variants that provided resistance or susceptibility to infection were identified in different populations.
  • Population-specific differences such as ACE2 (which permits virus to enter the body) may partly explain the differential infection rates of COVID19.
  • The SARS epidemic did not affect South Asian and African countries significantly.
  • Early adoption of countrywide preventive measures may have also played an important role.
  • A decentralised approach is required to manage the large rural population, and the success in Kerala may serve as a useful model.
  • Governments may consider mobilising and training a range of healthcare providers (including providers of primary care, and traditional healthcare systems) in responding to this situation.
  • Crucially, the current practice of isolating all cases in hospital settings is not sustainable if cases increase.
  • If cases cannot be managed at home, community centres may be deployed for isolation.
  • This approach will ensure that hospitals are available to those who really need them.
  • One approach would be to ensure that the vulnerable (such as the elderly and the immunocompromised) are protected beyond initial lockdown periods, while restrictions are lifted for the majority of the healthy population.
  • They require not only awareness, but also resources as these are largely middle-class concepts and not easy to practice in crowded areas where there is no running water.

 Riding roughshod over State governments

  • The Central government has so far followed a mostly top-down approach in tackling the COVID-19 pandemic.
  • During lockdowns 1.0, 2.0 and 3.0, the Centre has issued guidelines from time to time, ostensibly under the Disaster Management Act of 2005, containing varying restrictions on public activity and commerce which the States are expected to enforce.
  • The Centre directs the State governments to scrupulously enforce every new set of guidelines, with the States only being allowed to increase and not dilute the restrictions.
  • This centralised approach is counterproductive, has put the federal structure of India under strain, and is in fact beyond the powers of the Central government.
  • States: They pointed out that there was no need to keep economic activity on hold in an entire district when cases had been reported only from a small portion of that district.
  • Kerala, probably the best-performing State in terms of its response to COVID-19, was sent a missive by the Central government to refrain from relaxing restrictions in the State.
  • A study of the Disaster Management Act, 2005 as well as relevant provisions of the Constitution makes it clear that this practice of issuing guidelines and directions to the States is itself unconstitutional.
  • Parliament can legislate on matters under the Union List (List I)
  • Stage legislatures can legislate on matters under the State List (List II)
  • Both Parliament and State legislatures can legislate on matters under the Concurrent List (List III).
  • The residuary power to legislate on matters that are not mentioned in either List II or List III vests with Parliament under Article 248 of the Constitution read with Entry 97 of List I.
  • As per Articles 73 and 162, the executive power of the Centre and the States is co-extensive with their respective legislative powers, which means that the Central and State governments can only take executive actions in matters where Parliament and State legislatures, respectively, have powers to legislate.
  • Disaster management as a field of legislation does not find mention in either List II or List III, nor does any particular entry in List I specifically deal with this.
  • Thus, the Disaster Management Act could only have been enacted by Parliament in exercise of its residuary powers of legislation under Article 248 read with Entry 97 of List I.
  • Public health and sanitation is a specific field of legislation under Entry 6 of List II.
  • This would imply that States have the exclusive right to legislate and act on matters concerning public health.
  • Thus, the Centre’s guidelines and directions to the States for dealing with the pandemic trench upon a field of legislation and executive action that is exclusively assigned to the States — public health.
  • The Supreme Court has held time and again that federalism is a basic feature of the Constitution and although the Union enjoys many more powers than States, the States are sovereign.
  • In fact, a law on this exists — the Epidemic Diseases Act, 1897, which has the objective of preventing “…the spread of dangerous epidemic diseases.”
  • However, under this Act, it is the State governments which have the prerogative to take appropriate measures for arresting the outbreak or spread of a contagious or infectious disease in their respective States.
  • The Central government’s powers are limited to taking measures for inspecting and detaining persons travelling out of or into the country.

NEWS

  • PM announces ₹20 lakh crore economic stimulus package
  • Prime Minister Narendra Modi on Tuesday said a new-look Lockdown 4.0 beyond May 17 was in the offing, while announcing an economic stimulus package for ₹20 lakh crore (estimated at 10% of the GDP), with a clearly defined leap towards economic reforms that will, in his words, lead to Atmanirbhar Bharat, or a selfreliant, resilient India.
  • This amount includes packages already announced at the beginning of the lockdown, incorporating a slew of measures from the RBI and the payouts under the Pradhan Mantri Garib Kalyan Yojana.
  • “We have been hearing for many years that the 21st century will be India’s century and this crisis is, I believe, one that carries a message, that we have to move forward not just to combat the crisis but to prevail,” the Prime Minister said. “That can happen when we are self-reliant.”
  • He highlighted that India’s self reliance would be based on 5 pillars – Economy, Infrastructure, System, Demography and Demand.
  • He also said India’s initiatives such as the International Solar Alliance were a gift to the world.
  • Aarogya Setu app mandatory for returning NRIs, migrants
  • India’s case load jumps by 3,604; death toll touches 2,293
  • India caught in U.S.-China spat over Taiwan’s status at WHO
  • As tensions between the U.S. and China rise over the novel coronavirus pandemic, India, which is set to take over as the next Chairperson of the World Health Organization’s decision-making executive body in May, is faced with a major choice on whether to support a U.S. move to reinstate Taiwan’s observer status at the World Health Assembly (WHA) or to China’s opposition to it.
  • Industrial output shrank 16.7% in March
  • India’s factory output plummeted to record lows in March, with the Index of Industrial Production contracting 16.7%, reflecting the drastic impact of the countrywide lockdown that began on March 25.
  • This comes after a positive growth of 4.5% recorded in February.

 

 

Download Free PDF – Daily Hindu Editorial Analysis