Lecture on Accountability Reforms in India by Prashant Bhushan

SATTVIKA ASHOK

Noted activist and lawyer, Prashant Bhushan delivered an engaging lecture on the 9th of April at National Law School of India, University on ‘Accountability reforms through laws, institutions, and social movements’. Mr Bhushan has been closely associated with the Narmada Bachao Andolan, the Campaign for Judicial Accountability and Reform and the conceptualisation of the Jan Lokpal as a product of the India Against Corruption movement. According to Mr Bhushan, due to the absence of a strong citizen lobby, public policy in India has been serving vested commercial interests. 

Commenting on the realms of Public Interest Litigation and human rights, Mr Bhushan stressed the need for transparency, accountability and time bound delivery of service in the functioning of government institutions. To ensure so, the importance of grievance redressal by an appellate authority, independent of the government at both the Central and State level is critical. As a result, people’s groups have demanded the reintroduction of the ‘Right of Citizens for Time bound Delivery of Goods and Services and Redressal of their Grievances Bill, 2011‘ which had lapsed earlier in the assembly. Mr Bhushan also discussed the existing legal framework under the Right to Information Act, 2005 to access information under the control of public authorities. While the legal provision for seeking information has been revolutionary, proactive disclosure has been largely missing. In addition, the Central Information Commission set up under the RTI Act was perceived to be incompetent where appointments have been based on political considerations without transparency. The Central Vigilance Commission, an apex Indian governmental body created in 1964 to address governmental corruption, reported that corruption complaints against various government departments jumped by a whopping 67 percent in 2016 over the previous year. (India 2017) The CVC that has a supervisory jurisdiction over the Central Bureau of Investigation has been criticised for its lack of effectiveness and investigative machinery. Therefore, Mr Bhushan believed there is a need for strong robust institutions, reforms, and laws to maintain transparency in governance, including the most important institution, the judiciary.  

Prashant Bhushan is also known for his association in the public interest domain with Transparency International, People’s Union for Civil Liberties and his stance the withdrawal of Armed Forces Special Powers Act (AFSPA) in Kashmir and other areas. When asked what keeps him going, he replied, “when there is a huge injustice, you cannot close your eyes and walk away.” Given the role of media in politics today, where the mainstream media is showing signs of fascism, on asked whether a movement like Indian Against Corruption is possible, while Mr Bhushan agrees that citizen activism is harder, the new media and social media are increasingly able to capture the voice of the public.

References:

India, Press Trust of, ed. 2017. 67% jump in corruption complaints; railways tops: CVC. New Delhi, April 13.

Image source:

Image Reference: http://indianexpress.com/article/india/krishna-remark-prashant-bhushan-apologises-says-unintentionally-hurt-sentiments-of-many/

(Sattvika is pursuing Master’s Programme in Public Policy at the National Law School of India University. She can be reached at sattvikaashok@nls.ac.in )

The Changing Face of Economic Federalism

DWIJARAJ BHATTACHARYA
GST
With the Goods and Services Tax (GST) almost set to roll out by Q2, 2017-18, an inquiry into the ramifications, not in terms of the politics surrounding the change but in terms of changes in the political institutions and norms, is of utmost importance. Apart from a radical shift in the tax code, GST has the potential to alter the federal character of India. To completely grasp the disruption potential of The Constitution (101st Amendment) Act, 2016, it is important to first revisit the journey of federalism in India before analysing the provisions of the said legislation.
The genesis of federalism in India lies in the Simon Commission Report, 1930 which advocated for the concept of Federalism for the first time in formal channels. Thereafter, following the Round Table Conferences and deliberations with stakeholders, the formalisation of the federal structure occurred with the Government of India Act, 1935 wherein the powers of the federal government, governor’s provinces and chief commissioners’ provinces were separated. However, the emerged federal arrangement was just in name and not in spirit, since the governor was ultimately only unanswerable to the viceroy and not the legislature. Furthermore, the act also ensured that the Governor had executive outreach to cripple any legislative move.
Upon Independence, when the constituent assembly had the power to shape India’s future and its federal character, one would expect a radical shift from the existing then position. However, the intermittent developments especially the fear of partition and subsequent partition of India and the then West and East Pakistan, the reluctance of few princely states to join independent India and major linguistic and ethnic clashes resulted in minor improvements in the Indian federal character. The present day understanding of the structure of the political and economic federation in India originates subsequent to The Constitution (7th Amendment) Act,1956. Though certain states were elevated in status, thus granting them certain extra political and executive powers the Parliament and the Union executive could still override the states’ decisions (under Articles 352, 356 and 360).
The polar character of the constitution where the centre had more power compared to the states is well noted in jurisprudence as well, especially highlighted in the cases of State of Rajasthan v Union of India, 1977, S.R. Bommai v Union of India,1994 and in the case of The State of West Bengal V. Union of India, 1963 where the court highlighted a few reason to not consider the Indian state as a typical federation since there is no provision of separate Constitutions for states. Secondly, the amendment of the Constitution can be done only by the Parliament and the states have no power to amend it by themselves. A state can be stripped off its legislative powers without its consent, unlike the US Constitution where every state must ratify any constitutional amendment. Finally, the distribution of powers is such that it allows for local governance by the states, while national policies to be crafted by the Centre.
The degree of handicap that the states face in terms of political federalism is undoubtedly higher than that in the case of economic (also called financial or fiscal) federalism. Since, the finances of the union and the states are derived predominantly from taxes and given such matters are enumerated in the Seventh Schedule of the Constitution of India, which is somewhat protected from any unilateral action by the centre by Article 368(2) which mandates the assent of half of state’s legislature for any alteration to the Seventh Schedule.
The initial view held was that the state doesn’t have taxing powers over goods that are interstate in character further substantiated by Atiabari Tea Co., Ltd. v State of Assam and Ors.,1961 where the court held that a state cannot exercise its power of taxation over interstate goods. The aforementioned judgment was however overturned within a year with Automobile Transport Rajasthan Ltd., Etc. v State of Rajasthan and Ors., 1962  the court shifted the balance of power, in terms of taxation to the state and from the center even if goods were interstate in character.
The idea of a pan-national Goods and Services Tax (GST) became a dominant discourse in Public Finance circles of India upon publication of the report of the Task Force on Goods and Services Tax under the Thirteenth Finance Commission, 2009 which claimed that the GST will bring about a form of federalism with the balance of power shifting away from the centre since the state will end up having a wider gamut of goods and services to tax. This claim has seen excessive criticism from various quarters claiming that it attempts to further distort the balance of power in favor of the center. The claim rests upon a reading of Clause 7 and 9 of Section 12 of The Constitution (101st Amendment) Act, 2016. The clauses stipulate that for a decision to be passed there should be  75 percent of the votes in favor of it and the center shall control 33.3 percent of the votes.
It is thus impossible for the States in the GST council to pass any proposed changes to the GST structure without the center’s approval. While the understanding is indeed true, one must read the Section 12 (4) of the Act alongside which reads “The Goods and Services Tax Council shall make recommendations to the Union and the States on”. Thus, the fact of the matter is GST Council is not empowered to make any rules and thus can’t violate the constitutional framework all by itself, even though the center practically enjoys a veto as per Section 12(9) of the Act.
The lack of a clear definition of the nature of federalism in India becomes more pronounced once the political federal structure is compared with the economic federal structure. The claim that GST constitutes a gross violation of federalism, a basic feature of the constitution, seems unsubstantiated. Thus, the 101st Amendment can be said to act as an instrument harmonizing the diverging notions of federalism and not necessarily diluting federalism completely. The impact of GST indeed goes beyond the political institutions of the country, however, it is important to focus on these institutions because the fragility of mainstream economic wisdom is transient at best, while these the political institutions are supposed to be resilient.
Image Source: 
http: indiatoday.intoday.in/story/gst-bill-all-you-need-to-know-about-good-and-services-tax/1/916196.html
(Dwijaraj is pursuing Master’s Programme in Public Policy at the National Law School of India University. He can be reached at dwijaraj@nls.ac.in )

Book Launch: WHEN CRIME PAYS by Milan Vaishnav

TRISROTA DUTTA

when crime pays

“When Crime Pays” lays down the relationship between power and crime in the Indian polity. India being the largest democracy in the world often makes crime committed in the struggle for power appear legitimate. It raises a complex question on the symbiotic relationship between crime and politics. It highlights the importance of empirical research in interpreting political actions. There are a considerable number of politicians running for state/district election who have criminal cases running against them in the court. These men not only contest the election but also win the seats. The book thus raises the question of what is the exact relationship between voters and party leaders that sustain protection of those with criminal cases ticking? The book by Milan Vaishnav is a thorough research on the intricacies of such a relation which dominates political affair not only in India but also in the rest of the world.

The author widely dwells over empirics and data collected mainly in India. The hypothesis which he seems to have drawn is based on statistics collected on the field. It reflects the trend of politics over the years. The thought that political affair is more inclined towards success and away from moral high ground finds basis through his words. A brief run through of statistics while he introduces the audience to his book is not only fascinating but also reflected the abuse of power taking place in political endeavours.

WhatsApp Image 2017-03-18 at 1.18.38 PM (2)The guest speaker Mr Yogendra Yadav pointed towards a shift in the nature of criminality, where crime is hidden beneath the white collar sophistication. According to him, the high rate of crime is due to the fallout of democracy. Therefore one needs to go out to the field and make the voters aware of this. They must be aware to not vote for a candidate if they do not deserve it, as formal qualification is not an empirical sanction behind good and bad.

The event was moderated by Ms Anubha Bhosle who is the Executive Editor for CNN-IBN. She laid focus on identity politics playing a dominant role in the election and the never-ending dilemma faced by common people with regard to whom to vote for. The dilemma, as pointed out by both the author and the guest speaker is permanent as voters are nuanced when they analyse performances. They would generally choose from those who can be occasionally depended on since politics shall always remain the art of choosing between the disastrous and the unpalatable.

(Trisrota is pursuing Master’s Programme in Public Policy at the National Law School of India University. She can be reached at trisrotadutta@nls.ac.in)

The Dilemma of Land Acquisition

MANAGING THE INTERESTS OF CONFLICTING STAKEHOLDERS WITHIN THE NEOLIBERAL MODEL OF DEVELOPMENT

– DIVYA DUA

For a developing country like India, managing the interests of a heterogeneous population at home, whilst simultaneously accommodating the interests of the global capital was a challenge posed at the dawn of the new century. The Indian experiment with the changing processes of production and the changing nature of the factors of the production is a unique one. The most crucial factor of production, land, is a resource that is both valuable and scarce. This resource becomes the harbinger of growth and development in the economic sense of the term, but also holds deep cultural and social value in rural hinterlands of India, that are largely untouched by discourses of development. The neoliberal model of development is dependent upon the clear definition of property rights and places a great deal of importance on private property. (Harvey 2005) For development i.e. taking up of infrastructure projects, building dams and laying down of national highways, the state often has to step into the realm of private property of the individual and take it over for the larger interest of the public. This is essentially the eminent domain principle. The property taken often belongs to farmers, tribal communities or hamlets of fishermen (if the land under question is near a water source) etc. These henceforth will be referred to as the ‘marginalised landed communities’. However, the land acquisition legislations can and do impact them differently. These communities are often unwilling to give up rights to their land and move to newer pastures to pave way for developmental projects. This unwillingness is often traced back to their backwardness and lack of faith in the developmental initiatives, however, it has got far more to do with the unfair compensation packages they are offered in return for their land and less with the neoliberal model initiating the project.

It is essential to understand the conflict over land as a consequence of the inefficient management of the interests of the marginalised landed communities by the State. It probes the possible position of a developing neoliberal state in negotiating with various stakeholders, reconstructing concepts like private property rights and continuing on the path of development not necessarily set at home but abroad.

MAINSTREAM DEVELOPMENT AND DIVERGENT INTERESTS

One of the most recent successful examples of land acquisition has been in the state of Andhra Pradesh, with a mass of land being bought from farmers and other occupants alike for the ambitious capital city of Amravati. Some 33,000 acres of land have been sourced for various developmental projects without much protest, in the post-bifurcation state of Andhra Pradesh. The land has been acquired based on a land pooling system in which the farmers will get back entirely developed “residential and commercial plots ranging from 900 to 1700 square yards for every one acre (4840 square yards) of land surrendered. Farmers will further receive an annual compensation of Rs 30,000 to 50,000 per acre — with a 10% yearly increase —for a ten-year period.” (Express 2015). Under this system, the agencies of the government develop the city by laying down electricity connections and sewage lines, building roads etc. and once that is done a substantial portion of the land is returned to the original inhabitants. The new portion is smaller than the portion initially handed over by the farmer, but the justification of it lies in the provision of amenities and a subsequent rise in the value of the plot of land. The Chandrababu Naidu government managed to not only get on board investors and industrialists for starting developmental projects in Amravati but also brought on board farmers by accruing due importance to their interest and identifying them as participants in the mainstream development paradigm. Similarly, farmers in other parts of the country, such as Punjab, Maharashtra and Haryana have been willing to part with their land when offered lucrative compensatory packages from the government. (Sathe 2016)

Land acquition

The example of Amravati and others helps ascertain a fundamental idea that the resolution or minimization of conflicts around land lies in the assessment of stakeholders’ interests and a reasonable negotiation of those by the state. This can be done by exercising the eminent domain principle, but by also recognising private property rights of even the marginalised landed communities. This not only guarantees limited intervention by the neoliberal state in the market exchange but also ensures a participatory framework for the development of the neoliberal kind.

MODEL (OF DEVELOPMENT) SPECIFIC INTERPRETATION OF RULE OF LAW

Rule of law and components therein must be understood as per the state’s development model for conceptual relevance in contemporary times. In this regard, private property as a means and component of rule of law is one of the principal tenets of neo-liberalist theory. The protection of it is therefore one of the primary duties of the neoliberal state. The rule of law with a clear understanding of property rights ensures development for stakeholders across the board. The property rights of the marginalised landed communities need to be recognised and compensation packages given to them should be in tune with the market value of land.

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (also Land Acquisition Act, 2013) is a move in this direction. One of the key provisions that the act lays down is that the consent of 80 percent landowners is required for private projects and the consent of 70% land owners is required in Public Private Partnership projects. This gives communities a chance to negotiate with the government and the industry their demands for a compensatory package. The act however exempts five categories of land use namely: (i) defence, (ii) rural infrastructure, (iii) affordable housing, (iv) industrial corridors, and (v) infrastructure projects including Public Private Partnership (PPP) projects where the government owns the land. The two provisions when read in consonance with each other reflect a protection of the state’s interest, consideration of the interests of the industry and a fair view of the concerns of the marginalised landed communities. (PRS legislative research 2015)

CONCLUSION

The model of development debate from liberal, to neoliberal, to socialist-liberal to other combinations of political colours and ideologies cannot deny the shift in the world order towards a more market-friendly view of development and societal organisation. Now, neoliberal states juggle to accommodate the interest of all sorts of classes in the developmental agenda and when they fail to do so, it leads to societal backlash and uproar. The neoliberal state, therefore, needs to ensure a better management of interests of its various stakeholders through minimalist government interventions and progressive legislations to ensure participatory development.

(Divya is pursuing Master’s Programme in Public Policy at the National Law School of India University. She can be reached at divyadua@nls.ac.in)

 

References

Express, Indian. 2015. “Land acquisition: A new capital city in farmland.” Indian Express. December 25.

Harvey, David. 2005. A brief History of neoliberalism. Oxford University Press.

PRS legislative research. December 2015.

http://www.prsindia.org/billtrack/the-right-to-fair-compensation-and-transparency-in-land-acquisition-rehabilitation-and-resettlement-amendment-bill-2015-3649/

Sathe, Dhanmanjiri. 2016. “Land Acquisition: A need for a shift in discourse .” Economic and Political Weekly 1-7.

Featured Image Source: http://www.indino.in/the-right-to-fair-compensation-and-transparency-in-land-acquisition-rehabilitation-and-resettlement-amendment-ordinance-2015/

Minimum Wages Policy in Karnataka

AN ANALYSIS OF KARNATAKA’S MINIMUM WAGES POLICY: HOW THEY ARE NOTIFIED, CONTESTED AND UPHELD

 

-SMITA MUTT

 

Various Theories for the determination of wages

 

The procedure of setting minimum wages in India is a balance between legislative statute and policy regulation, the understanding of which requires vigilance and careful study from the lawyers, academics, activists and union leaders who are actively engaged in contemporary labour questions. These wages build a paradoxical economic issue – while the interests of workers and their unions seem antithetically opposed to those of their managers and company owners, they are actually more closely intertwined. To appreciate the current situation, one must follow two trends: tracing the history of the minimum wage as a political and judicial issue and understanding the statutory procedure by which administrative notifications are prepared. But it is also necessary to lay focus on the fact that it is through institutions such as courts, labour departments and civil society groups that the beneficiaries of minimum wage policy are served amidst corruption or administrative negligence.

History of the Minimum Wage Policy

In any discussion of the legislative and policy implications of the minimum wage in India, 1948 is a crucial year. It involved the passage of the Minimum Wages Act and the appointment of the Tripartite Committee on Fair Wages, which drew distinctions between three conceptual levels of wages – the living wage, the fair wage and the minimum wage. Of these, the first is arrived at on the basis of meeting basic needs, the second is calculated with regards to the industry’s ‘Capacity to Pay’ and the third is the statutory mandate.

As these dimensions were laid out and efforts were made to navigate the tensions between them, the 15th Annual Labour conference was held in 1957. In this conference, it was argued that minimum wage should be fixed in a scientific and needs-based manner – an idea that became hugely influential within the minimum wage discourse. They recommended that the minimum wage should sustain a family (estimated at three consumption units – one man, one woman and two children) for their requirements of food, clothing, rent, fuel and miscellaneous expenses.

The events discussed so far are negotiating processes, where administrative and political actors gathered to establish a legal infrastructure for minimum wages. However, their policy recommendations were not easily accepted by industries, which challenged them through an array of cases:

  • Bijay Cotton Mills Ltd vs. State of Ajmer, 1954

This petition was filed by the Mill owners challenging the right for the “appropriate government” to mandate a minimum wage, citing the Fundamental Right to freedom of trade or business (Art. 19(1)(g) and was dismissed.

  • Crown Aluminium vs their Workmen, 1957

Crown Aluminium Works was dissatisfied with the verdict of an Industrial Tribunal set up to adjudicate a dispute between them and their workmen. After a wage was agreed upon, Crown filed an appeal and then this petition, arguing that certain “economy measures” had to be taken. Since the revision of the fixed wage structure was due to the employer’s financial difficulties, both filings were dismissed, recasting minimum wage as the market price of the factor. Industries could either hire workers at the wage or not at all.

  • U. Unichoy and Others vs. State of Kerala, 1961

A group of tile factory owners in Kerala argued that the minimum wage notification actually denoted a fair wage and was arrived at in an unfair (and non-procedural) manner. After examining the case, the court rejected their petition, showing that the wage was properly fixed through the procedure established by the Act.

In each of these cases, the legal institution of minimum wage and the established statutory process of notifying it were protected. However, in recent years, we have seen more successful challenges, both due to a dysfunction within the State Labour Departments and a shift towards more flexible labour regulations.

Procedure to Notify Minimum Wages and Contemporary Challenges

It is worth noting that since Minimum Wage is a labour issue that appears on the Concurrent List, it is the States that set the notifications according to areas of employment enumerated in the Central law’s Schedule. States are hesitant to revise minimum wages too high, fearing that employers will move to other states with more favourable wage regimes. This stress is only more acute for exporters, who put pressure on the State Labour Departments to loosen restrictions.

After considering all advice and representations, the Government must notify the new minimum wage by scheduled area of employment. Under the Article 3(1)b, wages must be reviewed and if necessary, revised every 5 years – a practice that most states do not keep up with.

Minimum Wage

In October 2015, the High Court rejected Karnataka Labour Department’s Minimum Wage notification for automobile and foundry workers, citing “glaring lapses and gross dereliction of duty.” Going on to attack public servants for their “carelessness and negligence”, the Court ordered an enquiry into the Department and for all those responsible for incurring penalties. After months of delays, when the case finally came before the court, the Labour Department could not show that their decision was based on recommendations from the Advisory Board, a major procedural lapse that forced Justice Venugopala Gowda to accept the petitions and quash the wage notifications. Lawyer-activists such as Clifton d’Rosario of Manthan Law Chambers, who routinely deal with the Labour Department maintained that this lacklustre work is its general culture. The Court additionally ordered the Government to issue proper notifications by the end of November and directed companies to pay 75 percent of the higher wages in the interim.

This push-and-pull of institutions that fight against and also for, set minimum wages is seen not just in Karnataka, but in other states with developed industries such as Tamil Nadu, Maharashtra and West Bengal. These occurrences are due to successful interactions of social justice actors, but it is just as important to remember that the minimum wage is a limited policy. It fails to cover workers in the unorganised sector as well as any sector not included in a particular State’s Schedule. Moreover, non-compliance of employers tends to increase due to intersectional identities of the workers – young, unmarried, lower caste women employed in the garment sector are some of the greatest victims of partially implemented minimum wage policies.

(Smita is pursuing Master’s Programme in Public Policy at the National Law School of India University. She can be reached at smitamutt@nls.ac.in)

References

Eastern Book Company. 2016. Minimum Wages Act, 1948 [Act 11 of 1948]. 28th . Lucknow: EBC Publishing (P) Ltd.

Express News Service. 2016. “Revise auto, foundry workers’ wages by November 30: Karnataka HC to the government.” The New Indian Express Online. October 29. Accessed December 2016. http://www.newindianexpress.com/cities/bengaluru/2016/oct/29/revise-auto-foundry-workers-wages-by-november-30–karnataka-hc-to-government-1532986.html.

Sampath, G. 2016. “Do we need a minimum wage law?” The Hindu Online. September 1. Accessed December 7, 2016. http://www.thehindu.com/opinion/op-ed/Do-we-need-a-minimum-wage-law/article14616002.ece.

Supreme Court of India. 1954. “THE EDWARD MILLS CO. LTD., BEAWAR, AND OTHERS Vs. THE STATE OF AJMER AND ANOTHER.” Judgment Information System (JUDIS). Accessed December 2016. http://judis.nic.in/supremecourt/imgs1.aspx?filename=889.

Featured images source

http://thinkhrm.blogspot.in/2015/10/minimum-wages-revised-in-haryana-wef-01.html

http://zeenews.india.com/tags/minimum-wages.html

A conspiracy of silence

APOORVA SRINIVAS

The Protection of Children from Sexual Offences Act (POCSO) 2012 recognises the need to create a sensitive and vigilant legal regime to protect children who are the victims of sexual assault, however, its implementation has been patchy and relied on a vast and uncoordinated network of actors who bear responsibility towards the victims.

The Centre for Child and the Law (CCL) in National Law School of India University recently conducted a two-day consultation on the law which looked at how its provisions were being carried out within the Indian court system and whether the rights and interests of children were truly being protected. The participants were stakeholders drawn from various spheres of policy making such as the researchers, journalists, advocates and judges of city civil courts, Member of Parliament, Member of NCPCR, Joint Secretary of Women and Child Development Ministry, CWC Chairperson, social workers, police and public prosecutors. They discussed various facets of the legal regime including perspectives from the judiciary on POCSO, recommendations based on empirical studies, implementation and bottlenecks in the Act, intersectionality and vulnerability to child sexual abuse, efforts of National Commission and State Commission for Protection Child Rights, rehabilitation and shelter homes, studies on best practices and expectations of lawyers from each other while discharging the role of defence, prosecutor, or the lawyer of the victim.

Recently, Kripa Alva, the Chairperson of the Child Rights body in Karnataka (Karnataka State Commission for Protection of Child Rights or KSCPCR) who was also present at the consultation, reprimanded the print and social media for violating Section 23 of the POCSO Act. This provision specifies that no reports shall disclose the identity of a child, including name, address, photograph, family details, school, neighbourhood or any other particulars which may lead to the disclosure of the identity of the child. Such action would attract a minimum of six months of imprisonment. This onslaught came after the public in Bangalore protested in the streets to demand a complete investigation and filing of the charge sheet within 30 days, recording the statement of the sexually abused minor victim at the playschool within next four days in front of a magistrate and charging the school management under Section 16 of the POCSO Act.

The deliberations of the consultation on POCSO highlighted how disorganised activities of the police, courts and the prosecutors can amplify the mental agony of the child rather than acting in tandem to bring about justice. Sexual abuse can scar the psyche of the affected child for their entire life and possibly lead to suicidal tendencies. In many cases, the offender is a family member or a known acquaintance. A better understanding of the overlapping vulnerabilities that put children in danger is needed as well as broader awareness of child protection laws and more stringent implementation of Child Protection policy in schools. The lack of awareness coupled with institutional apathy is a deadly combination. There is also an inbuilt ‘conspiracy of silence’, accepted as a norm, that may be seen from the families of economically weaker backgrounds. The rape of tribal children and Dalit children are often handled in a discriminatory fashion. The victims are antagonised, denied fair trial and dignity, and carry the risk of character assessment if the offender hails from an influential background. One of the critical reasons for the conspiracy of silence is the courtroom ordeal the victim dreads to face. Hence, the conviction rate itself is dismally low.  It is strongly expressed that the weakest link in the chain of the judicial trial is the role of the prosecutor who needs to be trained in child specific issues in bringing the evidence to the court. Sensitization of Sakshi guidelines, protection of the child from the perpetrator, the creation of a child-friendly environment, the presence of psychologists during the pre-trial and trial, frequent breaks during the trial are yet to be enacted. Convergence of laws and holding the enforcement authorities accountable is the most important recommendation of the POCSO consultation.

The state of Goa has implemented the Criminal Justice Victim Assistance Unit, wherein a victim appearing at the center as a witness of a murder, crime, sexual abuse or verbal abuse, etc the victim is immediately provided with Social Legal Support and Counseling as well as Medical Examination and Statement Documentation in front of an advocate. The VAU in Goa is not financially supported by the government but is the result of the higher Court’s intervention that led to its creation.

The consultation, therefore, emphasised the need for such VAU’s in every State, strengthening the role of District Trauma team with all the support staff and enforcing the NALSA Scheme that provides for a child welfare person at every police station. Most importantly, the anarchism of media must be put in check. The Media must be encouraged to act as a responsible platform for mass sensitization and sustained social responsibility. The victims that POCSO caters to are among the most vulnerable members of society and we must ensure the system works to deliver the justice they deserve.

(Apoorva is pursuing Master’s Programme in Public Policy at the National Law School of India University. She can be reached at apoorvas@nls.ac.in)

Featured image source:

http://teacherverification.com/2015/02/11/teacher-accused-of-sexually-assaulting-a-female-student/

The voice for change

The  discourse on violence against women and marital rape

TRISROTA DUTTA

Centuries ago, in a much more conservative world driven by monarchy and totalitarianism the British Chief Justice Sir Matthew Hale said, “The husband cannot be guilty of a rape committed by himself upon his lawful wife, for by their mutual matrimonial consent and contract, the wife hath given herself in kind unto the husband, whom she cannot retract” (Rath n.d.). In the same context, in 2015 Maneka Gandhi who is the Indian Union Cabinet Minister for Women and Child Development while answering a question at the Rajya Sabha said, “It is considered that the concept of marital rape, as understood internationally, cannot be suitably applied in the Indian context due to various factors like level of education/illiteracy, poverty, myriad social customs and values, religious beliefs, mindset of the society to treat the marriage as a sacrament, etc” (Roy 2016). After years, of being conditioned by modernisation in all spheres the deep-rooted patriarchal beliefs have remained unchanged. This statement has not only led to a considerable amount of disappointment but also validates the existing customs and beliefs which legitimise the rape of a spouse.  

Background to the controversy

Almost one out of two women falling within the age group of 15-49 have experienced domestic violence of mental and physical form at the hands of their husbands. It has been reported that almost 19 percent of women have faced lifelong episodes of sexual violence (Shagun Sabarwal n.d.). In the present day, studies indicate that between 10 and 14 percent of married women are raped by their husbands: the incidents of marital rape soars to 1/3rd to ½ among clinical samples of battered women. Sexual assault by one’s spouse accounts for approximately 25 percent of rapes committed. The UN Population Fund states that more than 2/3rds of married women in India, aged between 15 to 49 years have been beaten, raped or forced to provide sex. In 2005, 6787 cases were recorded of women murdered by their husbands or their husband’s families. 56 per cent of Indian women believed occasional wife-beating to be justified. The wife’s role has traditionally been understood as submissive, docile and that of a homemaker. Sex is an obligation in a marriage and a taboo in the society hence there is a chronic lack of awareness among the people as people do not talk about it. In a fast modernising society the one which is building by imitating the west, the idea of casual sex is a monopoly of the patriarch. Women engaged in casual sex are regarded as filthy and impure. The status of women is contentious to the norms set by the society which any woman should conform to in order to be accepted in society such has been the sermon of the existing patriarchy.

In India, the 2013 amendment to the Criminal Law increased the age of consent to 18 years which means that any sexual advances over a minor within or outside marriage, with or without consent will be considered as rape. It is true that in rural India girls get married in their early teens and this trajectory stems from the conception that a girl child is a curse on the family. Research in this area also indicates that the husband’s reaction towards dowry during marriage often lead to a situation of physical violence in the marriage. Three important characteristics of the husband which determine their character are years of schooling completed, alcohol use and reaction to the dowry (Shagun Sabarwal n.d.). In pockets where these indicators show less progress are the areas prone to accepting and practising social violence. In the case of women, it was found that factors like financial status, freedom of movement and level of autonomy in the household. Financial autonomy assessed whether or not the respondents was allowed to set aside money for their use or had the power to make decisions regarding household expenditure. Freedom of movement indicated whether or not the person had the liberty to travel on her own or needed permission in order to venture out. For household decision-making autonomy, three items were considered. Respondents were asked whether they took decisions on the following, seeking health care, purchasing, and visiting relatives and friends. In most cases the responses were negative. Sneha’s Crisis Counselling Centre, an NGO in Dharavi, Mumbai, recorded 664 cases of domestic violence in 2015, 159 women also reported among other issues, marital rape. At the counselling centres at KEM and Sion hospitals, among the 218 cases of domestic violence received in 2015, 64 women said that they faced marital rape (Srivastava 2016).

A study was conducted with eight states: Punjab, Haryana, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh and Orissa. It covered 9,205 men and 3158 women aged 18-49 and the sample was representative across caste, religious and income groups. The National Family Health Survey report showed that vast sexual violence was reported by women within their marriage. The trend of marital rape in India has been catastrophic and the worse has been since there is no law criminalising the act.

2.6-billion-women-live-in-countires-where-marital-rape-is-legal-1

Debate over Marital Rape

Marriage is still perceived as a carte blanche of sexual intercourse in India. Most marriages in both rural and urban India take place against the will of the two individuals. In a country like India which is a manifestation of diverse culture and religion, there is a constant clash between the uniformity induced by the state and the diversity generated by the various social groups. Despite being divided on customs and tradition, the status of women is derogatory across religious and caste/class boundaries. Except for certain tribal groups which are matriarchal societies and follow the matrilineal path of property transfer, the status of women is repressed. Thus in the main land mass of India, the story is different. Marriage in India is a sexual contract. It gives the man an implied consent to enter into such a contract with the woman engaged. Does the woman have a say in it? Is the woman’s right to reject sexual advances from the man accepted and respected? Is marriage a license to rape? The answers to above questions are in negative. Marriage, the way it is perceived in the Indian context is about giving ownership rights to the man over the woman and consequently over her body. The woman is treated as a property transferred from the house she was born in the house where she shall serve. And the act of dowry establishes the legitimacy of such a concept. This denies the woman any agency over her body, its sexuality and its reproductive function (Roy 2016). In a very conservative society like India where sex outside marriage is penalised and sex, in general, is a tabooed word, people are less aware of it and barely comfortable to express their woes of any kind related to sex. The taboo revolving around sex often forces men to enter into a bond of marriage for free access to physical consummation which puts women under threat. There is also a constant need by our society to induce within our minds an elevated value system which we should subscribe to. This elevated value system is far from reality, internalises moral policing, and disregards healthy interaction between opposite sexes. These factors contribute to the repression of feelings and emotions which further culminates in violence in the cruellest form.

Marital-Rape-Law-India-2Refusing to criminalise marital rape is to accept that the sexual coercion against a woman, so long as it is within a marriage will be endorsed by both the Government and society. If women are to wrest control of their lives they have to have the right to say no their husbands without being socially penalised for it. The myth of the ‘wifely duty’ and the ‘conjugal right’ must end because marital sex as all sex must be with mutual consent.  

Our religion is not only conservative but also regressive. It does not allow women to visit a place of worship (especially mosques and temples) or be involved in any sacred rituals while she is menstruating, which demeans the status of women. These acts of disgrace propagate the power of masculinity and ownership by the male over society. In Islam women are not allowed to step inside a mosque, men are allowed to engage in a polygamous way of life which puts women from the first marriage at a vulnerable position with negative security in terms of finance and shelter. In Hindu religion, a woman is considered impure if widowed, she is forced to wear a number of symbols to prove to the world that she is married and the fact that she is another man’s property comes candidly, very well hidden under ‘marriage’. The constitution provides for equality before the law but there is a clash between the provisions of the constitution and the oppression of the religious fanatics. The existence of right-wing politics and the newly elected extreme right-wing political party legitimises the sanction of the religious fanatics.

The fate of Draupadi in Mahabharata as a woman who was never asked for her consent but married to the five brothers is narrated as an illustrious example of marital rape. The heroic act of winning the battle rinses the Pandavas off of the heinous crime they committed over their own wife because marriage is considered a sacred sanctity of love and respect. A society which draws from such myths is in itself the manifestation of patriarchy. The woman is supposed to understand and accept and play a limited role. Any woman who raises her voice and puts across her opinion is rebuked by the society till she has lost her voice or her ability to raise it.

Rape law reforms in India

 In 1972, a 16-year-old tribal girl named Mathura was allegedly raped in a police station. Mathura’s family lodged a criminal complaint against two officers. The Supreme Court eventually threw out the case, saying Mathura’s body bore no outward signs of rape. The ruling sparked protests by women’s groups across the country. The movement led to amendments, in 1983, to the criminal law that dealt with rape. The changes included a new category of rape for offences committed when a victim is in custody of the state. In such a situation, the law said a court should presume a woman who says she did not consent is telling the truth. Previously the law was silent on the matter of rape in detention. The amendments also ruled that rape trials should be conducted as closed proceedings and banned the publication of victims’ identity. After the Nirbhaya incident in New Delhi, the rape laws became strict but marital law exemption has still not been abolished by the State.

The Indian State passed the Protection of Women from Domestic Violence Act in 2005. The definition of ‘domestic relationship’ is broad enough to cover all sorts of household structures. For example, live-in relationships when the couple is not married. The inclusion of this, as well as relationships which fall under categories of fraudulent or bigamous, has increased the ambit of the act extending protection to all those who are victims of sexual violence. In the twenty-first century, the definition of relationship has undergone a change, every relationship does not snowball into marriage. The fact that a piece of paper which declares two individuals married in front of the society cannot be the sanction behind providing immunity against sexual assault and rape. With regard to live-in relationships itself, in a distinctive judgement passed in the case of Bharata Matha & Ors v. R. Vijaya Renganathan & Ors on 17th May 2010it was decided that a child born out of a live-in relationship is entitled to property (the property owned by the parents, but not ancestral property) (Ravi 2016). Although this has more relevance to property ownership and the Hindu Marriage Act, it is gratifying to know that children born out relationships which are not akin to marriage can also have property rights. Furthermore, the Act also provides relief to domestic violence committed by both male and female relatives of the husband. This extensive reform in the laws for protection of women against domestic violence does not extend protection to particular victims of marital rape per se because not criminalising marital rape specifically means extending sanction to the concept that husbands have the ownership right over their wives and thus are at liberty to consummate conjugal relationship at their own discretion without the wife’s consent and on return the wife is expected to accept.

An attempt to reduce the suffering of women and relieve her from the painful environment is given under chapter XX-A of Indian Penal Code, 1860. Chapter XX-A of Indian Penal Code, 1860, refers to ‘cruelty by husband or relatives of husband’ and includes section 498-A. (Sharma n.d.) It states that if the husband or relative of the husband, subjects the woman to cruelty, it shall be punished with the imprisonment for a term extendable to three years and also be liable to fine.

Is Section 498 a shield or weapon? Explanation- For the purpose of this section, “cruelty” means-

(a) Any wilful conduct which is of such nature as is likely to drive the woman to commit suicide or to cause grave injury or danger to life, limb or health (whether mental or physical) of the woman; or

(b) Harassment of the woman where such harassment is with view to coercing her or any person related to her meet any unlawful demand for any person related to her to meet such demand” (Sharma n.d.)

This section was enacted to combat the menace of dowry deaths. It was introduced in the code by the Criminal Law Amendment Act, 1983 (Act 46 of 1983). The main objective of section 498-A of I.P.C is to protect a woman who is being harassed by her husband or relatives of husband but it still fails to draw a clear distinction between consensual sex in marriage and rape in marriage.

After the Delhi gang rape, petitions on the safety of women were made. These petitions established the need to make marital rape a criminal offence. It was recommended that forced sexual intercourse within marriage should be brought within the ambit of rape under Section 375 I.P.C. by deleting Exception 2. Similar reforms have been suggested but have been in the pipe for too long. (Srivastava 2016)

Conclusion

The law which gives immunity to women against harassment have become stronger then why is it still that the woman has to prove her innocence in order to find the guilty? The law definitely provides legal immunity to the victims but is helpless in front of the society. In this context the urban society might have undergone a change but the women in the rural part of the country live in darkness and despair. They need more economic power and political power. One way of giving them economic power is to legalise the dowry money and transform it from being an excessive amount paid to the groom’s family for marrying the girl to the girl’s security money which shall be used by her in times of need. Women, especially in the rural area need economic power not only because that will give them security against violence but because economic power is the right of every citizen. It is true that marriage is a bond built on trust and affection it is a social institution which provides legitimacy to the existing structure of society because society is built on institutions of family and marriage and to deny the existence of any of the institution would violate social norms. But that is not an explanation for a society to fail to look through the atrocities caused by these institutions. A social institution like marriage is not the end to the means. It is only a mean to provide a structure where law and order can function properly and the law is responsible for protecting its people. By not recognising marital rape as a crime the rule of law fails to protect the people and thus lose its legitimacy. Unless a crime like marital rape is criminalised under the Indian administration, development is marred by the iniquity of the society.

(Trisrota is pursuing Master’s Programme in Public Policy at the National Law School of India University. She can be reached at trisrotadutta@nls.ac.in)

References

Rath, Priyanka. “India Law Journal.” India Law Journal. n.d. http://www.indialawjournal.org/archives/volume2/issue_2/article_by_priyanka.html.

Ravi, Malavika. The Protection Against Domestic Violence Act, 2005. Blog, Feminism in India, 2016.

Roy, Vaishna. The Hindu. March 19, 2016. http://www.thehindu.com/features/metroplus/woman-uninterrupted-the-marital-rape-debate/article8370439.ece (accessed January 4, 2017).

Shagun Sabarwal, K.G Santhya, Shireen J Jejeebhoy. “Economic Political Weekly.” Determinants of Marital violence, n.d.

Sharma, Richa. Section 148 IPC. Online Law Journal, Legal Service India, n.d.

Srivastava, Roli. Marital rape: the statistics show how real it is. Newspaper report, Mumbai: The Hindu, 2016.

 

Featured image source:

https://www.internationalwomensday.com/Resources

http://mychoicesfoundation.org/peacemaker/2016/05/16/why-its-time-india-criminalised-marital-rape/

 

A peek into the mise en scène of climate diplomacy

APOORVA SRINIVAS

“Paris Agreement is not ambitious enough since it has only given effect to soft obligations,” says Mr. Raman Mehta, an expert on climate change. 

In his special lecture with Public Policy students, the batch of 2016-18, he spoke on “The Science of Climate Change: Feeding into the politics of Climate Change and Paris Agreement” on 10th and 11th of January 2017. He gives a glimpse into the seriousness of India in integrating climate change concerns into development strategies, plans, and programs. In the past, Mr. Raman Mehta has worked on the issues of forests and wildlife at The Indian Institute of Public Administration, Department of International Development at the British High Commission, on conservation and management of protected areas at World Wide Fund for Nature – India, on developmental issues, climate change, social inclusion and public policy at ActionAid – India. He is currently the Policy head at Vasudha Foundation. He works on demystifying the different facets of sustainable development and climate change through an umpteen number of research work and presence at international conferences.

The design of Climate pledge

Paris Accord glorifies the bottom-to-top approach giving the freedom for all the countries to design their own INDC’s (Intended Nationally Determined Contributions) justifying on how the contribution is fair and ambitious towards achieving the objective of the UN’s climate convention and the approach regarding the calculation of the Green House Gas emissions. This means each country can show a different base year from which emissions will be reduced which obliterates the historical responsibility of largest producers of industrial carbon emissions from leading the cause. The developing countries feel this is the cheating point. The Agreement will have the legal force when countries accounting for 55 per cent of global GHG emissions deposit their instrument of ratification, the threshold which was achieved on 5th October 2016. Even though large emitters like US, China, EU, India have ratified the accord, the challenge is to see how strong and full-flavored the countries walk the talk apart from their announcements to move ahead. Speaking on this, Mr. Raman Mehta observed that only the clauses which deal with the reporting of GHG emissions are legally binding. Hence, except for the progressive nature of INDC’s, there seem to be no other pressure points.

The call for Climate Justice

Food security is a common sensitive challenge. Deficit rainfall and natural disasters worsen poverty and hunger as vulnerable economies are bearing the brunt of climate change rapidly. More socio-economic issues directly related to the climate changes are encountered on a day-to-day basis which is irrevocable in nature. India reformulated the concept of ‘common but differentiated responsibilities’ by adding ‘respective capabilities’ (CBDR – RC) calling it the bedrock of collective enterprise. This is to clearly indicate that equitable carbon and development space are straightforward requirements of developing countries. Therefore, the commitment to combat climate change is purely under the capacity of such countries whose development is invariably tied to a proportional increase in GHG emissions as history shows. However, in certain sectors like transport, China and India are decoupling by building metro rails in their busiest cities. Affordable and zero carbon emissions in the mass public transport sector of low and middle-income countries is the need for millions of low-income families who can save time and money.

Unattained Climate migration and environmental refugees

The Paris Agreement missed the crucial aspect of providing relief and alternative to those who are affected by climate change induced migration, which is expanding every day. The section on climate-refugees
‘Loss and Damage’ makes recommendations for setting up a task force for addressing climate migration. However, the task force has no binding authority and its operations, functions, funding sources are not clear because of which the problem of migration will not be considered as the first priority. The ‘Loss and Damage’ is, therefore, a mere deliberation process under the Warsaw Conference of 2013. Furthermore, the draft of Paris Agreement which contained provisions for Climate Change Displacement Coordination Facility intended to secure emergency relief, target organised migration and planned relocation of displaced people, compensating for those displaced does not feature in the final text of the Accord.

Concern regarding the Climate Finance

The most contentious issue of the climate change agreement is regarding the investment. Mainly the funding and disbursement processes for efficient technology transfer to enable green transition and carbon peaking of developing economies. The developed countries are hesitant with this responsibility and are often unclear and silent on the ways to enable the processes like sources of funding, terms of funding, purpose of funding, the agencies (public sector or private sector) of funding and the kind of funding. Most often the use of political ambiguous language of financial compensation and the rehabilitation is spoken about extensively. Mr. Raman Mehta reflects on the fact that ‘compensation paradigm’ of the Paris Agreement has caused immense pressure and anxiousness among the developed countries which is inhibiting the cooperation for seamless flow of finance from the developed to the developing countries. This diluted mindset is a threat and a menace as it can stall the process of implementation of clean energy systems, which are undoubtedly expensive, leading to disproportionate burden on the developing countries.

The common thread for the all the countries

Helvetas06So far as the extreme weather changes are concerned and maintaining the balance between inclusive economic growth and social development, the policy matrix in developing countries is stratified with priorities of Sustainable Development Goals, which seeks to eradicate poverty and ‘leave no one behind’.

India’s two major international efforts in launching the International Solar Alliance to form a group of 107 sunshine countries to enable them to switch to a low-carbon path by solar power utilization and ratifying the Paris Agreement on 2nd October 2016, on the International Non-Violence Day expresses its aspiration to tackle climate change with a forethought to internalize the principles of Mahatma Gandhi in all its endeavours. However, the local urban environment in India tells a different story in the efforts to switch to low-carbon path. In the year 2000, New Delhi mandated the use of CNG in all public vehicles to mitigate vehicular air pollution showing improvement in air quality, yet in the past two years Delhi is among the top cities in the world highly affected by air pollution. The lack of constant innovation, increased urban sprawl, growth of personal vehicles, biomass burning, lack of pollution checks on the industries in rapidly growing cities have negated the gains of focused policies on curbing sectoral air pollution. India must therefore invest in comprehensive planning, legislation and finance the grassroots level of governance on recycling, renewable energy sector, integrate critical infrastructure with technology, engage in community centric territorial planning that control rural-urban continuum. 

        Mr. Raman Mehta explained how the process of climate change leads to dangerous feedback loops – increased number of warm and cold days accompanied by extreme weather fluctuations, heavy precipitation and submergence of deltaic regions and islands, mass displacement of ice sheet and melting of glaciers such as the recent breaking of massive ice block in Antarctica and the rift that grew by 18 kilometers. He further said, this has put a focus on the need to look for innovative mitigation measures more intensely than the adaptation measures, as the latter is finite and limited.

It is often understood that climate change is only part of the problem, there are other factors like human led land use changes and deforestation that pose immediate and deeper problems affecting daily life. Humanitarian crisis related to civil unrest like migration and military conflict influenced by climate change are becoming more prominent, such as the ongoing Syrian crisis which illustrates the culmination of agricultural drought, with political failure and willpower to mitigate the challenges of dwindling resources. Therefore wide-spread negotiations continue to be focused on climate change on the principle of equity and shared vision. These have in the past lead to formulation of initiatives like international emissions trading, clean development mechanism, joint implementation. More recently, carbon capture sequestration has emerged as a niche effort in energy sustainability. The cornerstone is to invoke global solidarity in action plans without the vested business and diplomacy of trying to pressurize the finance receiving nations to manipulate their national economic policies. Policy decisions which require adequate assessment of nature’s resilience capacity, conserving forest wealth, disaster management and rural livelihood security are immediately required to be chartered out with expertise and institutional capacities indigenous to each economy.

(Apoorva is pursuing Master’s Programme in Public Policy at the National Law School of India University. She can be reached at apoorvas@nls.ac.in)

Featured image source:

https://climate.nasa.gov/effects/

http://science.howstuffworks.com/environmental/green-science/climate-refugee.htm

http://www.welthungerhilfe.de/en/sustainable-development-goals.html

Anti-dumping and Trade

AN INTRODUCTION TO ANTI-DUMPING AND ORDINARY COURSE OF TRADE

– Srijeet Bhattacharya (Indian School of Business) and Devarchan Banerjee (National Law School of India University)

anti-dumping

That trade is the cornerstone of global GDP is hardly a secret. Apart from a handful of countries, most have embraced the increased choices, economic opportunities and interconnectivity that must inevitably follow globalisation and trade. Consumers enjoy options which would not have existed had only domestic producers functioned in the economy, that too at lower prices. Producers have the option to relocate parts of their supply chain to countries where lower wages and the cheaper factor of productions could lead to greater productivity and profitability. In a sense, it is only natural that this wide variety of benefits would bring with it’s own set of problems. Workers from industries that have been shifted abroad have suffered from economic hardship due to an inability to shift to alternate lines of work. The emergence of China as an export giant has led to manufacturing jobs in other parts of the world to go down as a whole. Freer borders and increased labour mobility, which are part and parcel of globalisation, has led to fears of average wages being driven down by immigrants who are not only taking away jobs from ordinary citizens but also doing them for far less monetary compensation. While such viewpoints are controversial in the wake of several studies which find immigration a net positive to the economy, what matters is that these perceptions persist. We have already witnessed an American President being elected on the back of protectionist promises and the repudiation of NAFTA, in an election where both candidates rejected the Trans-Pacific Partnership Agreement. Concerns about exchange rate manipulation by China in order to keep exports cheap and attractive brings with it the prospect of a war of currency devaluation. The point remains that with trade occupying such a central role in national and international narratives, sufficient safeguards need to be put in place to keep these concerns in check.

Dumping is a practice by which items are sold in the importing country at a lower price than in the domestic market, thereby causing material harm to the industry in the importing country which is producing the same or similar product. There can be various reasons for doing so. Let us assume there are two countries A and B with X being a company in country A which is producing a good that is sold in the domestic market A and also exported to country B. Now X might want to drive away competitors in country B offering the same product, and therefore it sells its product at a lower price than what the competitors are. This is a charge levelled against companies with deep pockets and therefore loss bearing capabilities. A lower price could also be offered in order to enter a nascent market or gain a larger market share, or simply to generate profits through sale of higher quantities rather than higher prices. The thing to be noted here is that the motivations are not relevant when it is being decided whether dumping has occurred or not. What needs to be seen is whether it is being sold at a lower price than in the home market and whether this is leading to material harm to the producers of the importing country. Another point is that the Anti-Dumping Agreement covers only goods. Therefore, services which form such a large part of global interactions (financial services, telecommunication services, etc) are not covered, nor are other forms of dumping not involving material goods. If it is found that the product is being dumped and sold at a lower price than what persists in the domestic market, then the company is asked to pay a dumping margin, which is the difference between the normal price and the actual price.

It can be seen almost immediately, that domestic industries have an incentive to prove that dumping is taking place in order to compete with foreign producers. The political establishment therefore also has an incentive, due to lobbying or the desire to portray the image of saving domestic jobs, to find exporting countries guilty of dumping. As expected, the WTO is regularly requested to look into cases where dumping is suspected. For the Anti-Dumping Agreement to be effective and followed by countries around the world, it needs to be fair and has provisions to address all exigency and concerns. The disproportionate amount of power handed to the importing country in the investigation of dumping needs to be checked through adequate mechanisms. All investigations are therefore conducted under the conditions of the ordinary course of trade, which is to say that the company has acted in the manner befitting a profit-seeking firm under normal conditions.

Article 2.1 of the Anti-Dumping Agreement (ADA) talks about the standard case where a product is sold both in the exporting country as well as the importing country. If after accounting for the transportation and other relevant fees, it is found that the product is being sold at a lower price in the importing country, then it could be considered whether the product is being dumped. This is fairly straightforward. A note here is that the company may not want to add the additional export charges (transportation, taxation, etc) since that would drive up the price or normal value of the product and increase the dumping margin if any.

The Anti-Dumping Agreement does not explicitly define the term ordinary course of trade, but it provides one example of sales which are not in the ordinary course of trade. Article 2.2.1 Anti-Dumping provides that

“Sales made below per unit fixed and variable cost of production plus selling, general and administrative expenses (SG&A) may under certain circumstances, be considered as not in the ordinary course of trade. This provision provides that this is so, only if such sales were made within an extended period of time (normally one year but in no case less than six months), in substantial quantities (if the weighted average selling price of the transactions under consideration is below the weighted average per unit costs, or if the volume of sales at a loss represents at least 20 percent of the volume of transactions), and at prices which do not allow for the recovery of all costs within a reasonable period of time. Sales made at prices which are below per unit costs at the time of sale, but above weighted average per unit costs for the period of investigation, shall be considered to provide for the recovery of costs within a reasonable period of time” (Mavroidis)

In Article 2.2, the discussion is how to come to the normal price should the product not be sold in the domestic market or sold in insufficient quantities for proper comparisons. If for example, the product is not sold in the domestic market at all, due to insufficient demand, prohibitive costs, or other factors then the investigating authority could consider the price in another like country where the product is also sold. If such a comparison is not possible or does not exist, then the normal value of the product can be constructed by adding the cost of production, a reasonable amount for administrative, selling and general costs, and a reasonable amount of profits. This is also the case when the product is sold in the domestic market in insufficient quantities (The 5 percent rule says that for the prices to be comparable, the volume of sales in the domestic market must be at least 5 percent of the volume of sales in the importing country). To come to what can be considered a reasonable amount, the cost and price data for other players in the industry of the exporting country could be considered and a weighted average used. However, this is only possible if the products are in reality sufficiently similar, and the WTO is extremely strict when it comes to this definition. Another case is when products could be sold in the domestic market of the exporting country at a price below cost for taxation or market share or other purposes which do not fall under the ordinary course of trade. Further, it could so happen that the producer in the exporting country and the distributor in the importing country are related. In such a case the price could be artificially increased to avoid or lower the dumping margin. In such a case, the value at which the product is sold to the first independent customer, after adjusting for resale costs, is considered for the construction of the normal value.

We see in Article 2.2 especially, the emphasis placed on the ordinary course of trade. Every reasonable precaution is taken to ensure that when the normal value is being constructed, the process is as fair as possible. In the absence of comparable data, or when the data available would not be able to provide the accurate picture, alternative mechanisms are put in place. This can be further seen in Article 2.7 which talks about non-market economies. When market economies do not exist in certain countries, i.e, some or all industries are State regulated, there may not exist reliable price and cost data, and secondly, the prices themselves can not be considered as existing under the ordinary course of trade. This is because, governments may keep prices artificially low or high in certain industries for a variety of reasons, thereby distorting the market. In such a case, the investigating authority would consider the prices and costs of the same or sufficiently similar product in a surrogate country, i.e, a country which is similar with regards to the particular industry to the non-market economy, but where market economy conditions prevail.

antidumping

Another case where ordinary course of trade tests are important is the decision on the duration of the investigation and a process known as zeroing. Suppose that for six months in the year the product is sold in the importing country for x amount less than the normal price, and for x amount more than the normal price for the remaining six months. Then, over the course of a year, one could say that the two have cancelled each other out and no dumping margin needs to be imposed. However many countries only consider the situation where the price is below the normal value and assign a value of zero if the price exceeds the normal value. The principle is that any dumping should be considered. However, efforts are on to put an end to zeroing, as well as the use of mathematical methods which can be manipulated to show evidence of dumping by changing the investigating period or in other ways ( using a weighted average instead of considering each transaction for example). The goal is to present the entire picture, as it occurs in the ordinary course of trade, and not just the parts which are convenient to the investigating country.

It is fairly obvious, that when jobs and incomes and livelihoods are in question, this will always be a contentious issue. For the WTO to maintain credibility and inspire faith in its member countries, the mechanisms used to determine whether dumping has occurred and if so, the amount of injury done, must always be fair and transparent. While existing loopholes and shortcomings must be resolved through multilateral discussions, the ordinary course of trade (OCT) test is at present an essential step towards achieving these goals and must be respected and recognised as such.

 

(Devarchan Banerjee is pursuing Master’s Programme in Public Policy at the National Law School of India University. He can be reached at devarchan@nls.ac.in)

 

 

Featured image source:

http://skanomics.blogspot.in/2011/10/i-dont-think-its-that-free-here-we-have.html

http://behindthelines.moadoph.gov.au/2012/the-economy/cartoons/102

 

 

 

Diminishing Ratnas in India

AN ANALYSIS OF THE PRIVATIZATION POLICY ADVOCATED BY GOVERNMENTS SINCE 1991 ECONOMIC REFORMS

ROHITH C.H.

rohiths-article

After attaining independence in the year 1947, it was all left to the national leaders like Jawaharlal Nehru, Sardar Vallabhai Patel and a few others, to frame an economic roadmap for the development of India. Nehru, who is undisputedly the architect of the economy after independence, always advocated industrialisation of the economy.

Even though agriculture was given importance in the initial few five-year plans, the Industrial Policy Resolution (IPR) of 1956 changed it and induction of public sector units was advocated. Hence, Nehru decided to incorporate a number of PSUs (Public Sector Units) in order to provide employment and economic growth with the major sectors of the economy mainly held by the government until 1991.

Why are we taking the particular time frame of 1991? The answer to that would be that the process of privatisation in India was a result of a worldwide movement towards privatisation as a result of Reagan-Thatcher policy of minimal State control on the economy. The fall of USSR was inferred as a big defeat of socialism and also of the policy of increased State control on the economic drivers in the form of PSUs. This article tries to look at the political and the economic dimension of the policy of privatisation and how each passing government since 1991 has dealt with it.

The year 1991-92: Budget speech by Chandra Shekhar government (1990-91)

The initial stage of privatisation was started in the year 1991-92 by the Chandra Shekhar government. Chandra Shekhar Singh joined politics through Praja Socialist Party and has always been an avid advocate of socialism. In a desperate attempt to fill up the government coffers during his term, the economic condition then made privatisation inevitable. Therefore, a socialist PM like Chandra Shekhar had to announce the first string of privatisation of several public manufacturing units.

The year 1991-96: PV Narasimha Rao government (1991-96)

After the fall of the Chandra Shekhar government, the general election which followed it saw INC (Indian National Congress) winning most seats. It formed a minority government, with PV Narasimha Rao being elected as the PM. Rao’s policy from the start itself saw a major shift from the mixed economy of Nehru to a market driven one.

Then in the historic financial budget by then Finance Minister Dr Manmohan Singh announced the privatisation of PSEs, but with a few changes from the earlier Industrial Statement. There was a cap of twenty per cent imposed to the extent of disinvestment and the umbrella of investors was also restricted to only mutual funds and other institutional investors.

The year 1996-1998: United Front Government

The United Front Alliance headed by Janata Dal party was a self-proclaimed socialist party. So, under the United Front government, led by HD Deve Gowda and then later by IK Gujral, and with the support of other left-leaning parties like CPI (M), privatisation took a big hit. The left parties have a few apprehensions about the process of privatisation as they feel that the transfer of ownership and management rights to private players would lead to a monopolisation of market, and instead of competition in the market it would lead to concentration of market power. As a result of the concentration of market power, there would be an inefficient allocation of resources and this would result in a concentration of wealth and increase in inequality.

Total amount of privatisation during the period: Rs 1289.67 Crores

The year 1998-2004: BJP led NDA Government

The NDA (National Democratic Alliance) government was a pro-free market government. PM Atal Bihari Vajpayee appointed Yashwant Sinha as the Finance Minister. Mr Yashwant Sinha, a former IAS officer and a former Janata Party member, took several decisions to open up the markets. He is credited with opening up the telecommunication sector, and deregulation of petrochemicals.

It was considered a radical move by the political analysts then. It was proposed that the government share in almost all the Public Sector Enterprises be transferred. Major privatisation processes were undertaken during this time. VSNL was totally privatised and it led to the opening up of the telecommunication sector. The strategic sale of BALCO, a PSU which was a profit-making manufacturing unit, created several controversies. The sale of BALCO to Vedanta resources was questioned and protested by the employees and the anti-privatisation groups. In a challenge to the sale of a profitable PSU, BALCO to Sterlite, the Supreme Court in December 2002 handed down a landmark verdict against opponents of privatisation. The court legitimised the privatisation procedures and refused to second-guess the government with respect to its privatisation policy.

The major string of privatisation happened after the budget presented by Jaswant Singh for the year 2003-2004. A staggering amount of Rs 15,547.41 Crores was raised as a result of privatisation, an amount way higher than previous years.

Total amount of privatisation in this period: Rs 33,655.59 Crores

The year 2004-2009: UPA-I

In the general elections of 2004, INC was the single largest party with 145 seats. INC in alliance with other parties mostly left-leaning parties managed to form an alliance under the umbrella name of UPA (United Progressive Alliance). The second biggest party in the alliance was the Communist Party of India (Marxist). This was more of a Centre-Left alliance. Due to this alliance, many watershed schemes like MNREGA and acts like RTI were passed. The left-leaning policies had an impact on privatisation.

Total amount of privatisation in this period: Rs 8515.94 Crores

The year 2009-2014: UPA II

The exit of CPI (M) in 2008 saw a UPA-II in 2009 with INC winning 206 votes, and the major coalition party being DMK (Dravida Munnetra Kazhagam). This era saw a lot of privatisation happening and this also had the uncovering of many scams. 2G spectrum scam revealed the deep-rooted nepotism and corruption which ran in the government. The coal allocation scam later revealed the absence of fair allocation of the nation’s resources. CAG found a lot of misappropriations and irregularity in the auctioning of nation’s resources, including the public sector units.

Total amount of privatisation in this period: Rs 99,367.46 Crores

The year 2014-present: NDA government

BJP won the 2014 general elections with a thumping majority. BJP single-handedly won 282 seats and the coalition of NDA won 335 seats in total. Narendra Modi was elected as the leader of BJP. Modi, as evident from the policies he implemented as the Gujarat CM is pro-business and pro-market. As soon as they were elected, the NDA government discontinued the Planning Commission which was the backbone of the mixed planning economy and was replaced with NITI (National Institution for Transformation of India) Aayog. NITI Aayog is headed by the Prime Minister as its Chairman, with Arvind Panagaria (from Chicago University, a big proponent of Neo-Liberalism) as its Vice-Chairman. Arvind Subramanian is appointed as the Chief Economic advisor of India, who also is pro-market.

Total amount of privatisation in this period (2 years): Rs 59,680.33 Crores

Capture.JPG

The incorporation of Public Sector Enterprises was done with several objectives like providing employment, equitable development across all the regions and for the sustainable growth of the industrial sector in India. After the introduction of the economic reforms of 1991, the privatisation process got underway. Pre-economic reform, the government’s believed that the Public Sector Enterprises comprise and form the pillars of the economy and the government’s believed that it was of vital importance that PSEs be managed and controlled by the government. We could see that the INC only cautiously privatised after the economic reforms. But the same party, which claims to be pro-poor and one with a political alignment of centre-left, went ahead with outright privatisation of the PSEs in the late 2000s and early 2010s. This was clearly the result of the political parties’ shift towards neo-liberalism after the 1991 economic reforms. The process of privatisation has come under the scrutiny of CAG (Comptroller and Auditor General) and many financial irregularities were found in the CAG’s reports. Many instances of crony capitalism being practised were also seen, with the CAG reports stating instances of undervaluation and sale of PSUs which were performing well and were making a good margin of profits. The NDA which had publicly promoted privatisation in the year 1998 maintained its stance on it after coming back to power in 2014. The BJP led NDA has been the biggest implementers of privatisation and the principle of neo-liberalism which supports minimal governmental interference in the economy is clearly seen in their regime. The process of privatisation is a necessary step in the development of a nation and its economy, but it can turn out to be against the interests of the public when it is done without fairness and by pandering to vested interests.

(Rohith is pursuing Master’s Programme in Public Policy at the National Law School of India University. He can be reached at rohithch@nls.ac.in)

References

Bhattacharya, Dipankar. 1999. “Political Economy of Reforms in India”. Economic And Political Weekly 34 (23): 1408-1410.

Chandrashekar, C.P. 2014. “An Obsession To Sell”. Frontline. http://www.frontline.in/cover-story/an-obsession-to-sell/article6496179.ece.

“Government On A “Selling Spree” Of Profit-Making PSUs: CPI (M)”. 2016. The Financial Express. http://www.financialexpress.com/india-news/government-on-a-selling-spree-of-profit-making-psus-cpim/328162/.

“Home Page – DIPAM”. 2016. Dipam.Gov.In. http://dipam.gov.in/

Makhija, Anil. 2006. “Privatisation In India”. Economic And Political Weekly41 (20): 1947-1949.

Mathur, B.P. 2006. “Audit Reports On Disinvestment”. Economic And Political Weekly 41 (50): 5114-5118.

Mohan, T. T. Ram. 2005. Privatisation In India. London: RoutledgeCurzon.

R. Iyer, Ramaswamy. 1988. “The Privatisation Argument”. Economic And Political Weekly 23 (11): 554-555

 

 

Featured image source: http://www.frontline.in/cover-story/an-obsession-to-sell/article6496179.ece?homepage=true

 

Student Blog: Master of Public Policy, NLSIU, Bangalore