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RBI’s discussion paper on commercial banks

It is a well-known fact that the outcome of the board’s meeting is recorded in the minutes in accordance with Secretarial Standards. However, the paper suggests that the CEO needs to disclose the outcome of the board’s deliberations to the directors and the concerned personnel. Imposing such an obligation on the CEO is ignorant of the fact that the same is already captured in the minutes of the meeting and can be referred to by the directors and the like.

Eshvar Girish

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The growing size and frequent complexities in the banking sector posed grave threats to the corporate governance standards of banks in India. Further, there was a need for reforms to effectively regulate the role of the management and the promoters in banks to curb governance failures. Against this backdrop, RBI floated a discussion paper (paper) on June 11, 2020. At the outset, the paper is highly influenced by the reforms of the Basel Committee on Banking Supervision (BCBS) which is in consonance with global best practices. With this background, this article aims to analyze the reforms suggested by RBI to resolve the issues that exist in the governance of banks.

 Applicability of the provisions

 The paper states that the reforms suggested by it are not applicable to the banks where the government is the major shareholder or promoter i.e., where the government retains its instructions. This implies that whenever instructions are issued by the government, it will override the reforms which come into force based on the recommendations of the paper. Such a proposition put forth by RBI would be a major hindrance in the corporate governance of banks. The fact that the government is retaining its power to exercise control over banks where it has pecuniary interests is arbitrary and must be done away with. Further, this would give rise to a lopsided narrative wherein there is no level-playing field between the banks in which the government is not a major stakeholder and banks that are controlled by the government. Moreover, such a regressive measure suggested by RBI in favor of the government puts the rectitude of RBI’s reforms in peril.

Ambiguity in certain definitions

Corporate governance can be defined as a system of direction and control that mandates how a company’s board must conduct the operations of a company. However, it is necessary to point out that the paper has vaguely defined corporate governance as a set of relationships between the management, shareholders and other stakeholders of the company. While such a definition is adopted from the BCBS, it fails to effectively define the term. The author suggests that a much streamlined definition for corporate governance must be incorporated by the RBI in order to avoid any ambiguities in the interpretation of the same.

Further, it is evident that the term non-executive director (NED) is defined in an ambiguous manner as well since it has been defined as a member of the board who is devoid of responsibilities within the bank. This definition implies that NEDs have no responsibilities at all with respect to the management of the bank. Such a flawed implication about the role of the NEDs in banks must be revisited by RBI since such directors are obligated to perform non-executive functions within the bank. Essentially ruling out all the responsibilities of such directors who form a part of the board would be a major setback to the corporate governance of banks.

When it comes to the aspect of risks, the paper has laid down multiple definitions for the terms which are inextricably intertwined. For instance, ‘Risk Appetite’, ‘Risk Capacity’, ‘Risk Limits’ and ‘Risk Culture’ directly or indirectly deal with the same aspect, i.e., the amount of risk that a bank can take. Instead of delineating this definition into four different terms, an inclusive definition which encompasses all the four definitions can be brought under a single term to preclude any ambiguity. Similar treatment must be extended to to risk management as well, since it has unnecessarily been delineated into three different terms such as ‘Risk Management’, ‘Risk Governance Framework’ and ‘Risk Appetite Framework’ respectively. Including all the definitions under a single term would not only be easier to comprehend but also to implement for the banks.

Formation of board committees

The paper has suggested the formation of five different board committees. Firstly, an audit committee of the board (ACB) which shall be constituted only by NEDs. The meetings will be conducted with a quorum of three members of which two-thirds will comprise of independent directors. Further, the ACB will be chaired by an independent director who will not chair any other committee of the board. This is a sound reform since the paper also suggests that the chair will answer shareholder queries at the Annual General Meetings.

Secondly, a risk management committee of the board (RMCB) that shall be made up of three NEDs out of which two-thirds will be independent directors. Further, one of the independent directors needs to have risk management expertise. However, the author contends that it more desirable that all members of the board possess risk management expertise since it is the sole purpose of the committee. It is desirable that the chairperson and the chief executive officer are also members of the RMCB as their inputs on risk management can prove to be crucial for the risk management of the bank.

Thirdly, a nomination and remuneration committee (NRC) shall be made up of three non-executive directors of which atleast half will constitute independent directors. Further, one of the directors of the NRC needs to be a member of the RMCB. However, a clarification is needed on why such commonality of membership has been recommended only for the NRC and not for any other committees.

Fourthly, the stakeholders relationship committee for which the composition has not been mentioned in the paper. It is desirable that RBI provides suitable clarifications regarding the composition and the functions of this committee.

Fifthly, the committees of the board performing management function shall consist of directors who are not a part of any other committees. This board has been vested with the supervisory functions of the board and does not have anything to do with the management of the board.

 Disregarding the role of the CEO

It is a well-known fact that the outcome of the board’s meeting is recorded in the minutes in accordance with Secretarial Standards. However, the paper suggests that the CEO needs to disclose the outcome of the board’s deliberations to the directors and the concerned personnel. Imposing such an obligation on the CEO is ignorant of the fact that the same is already captured in the minutes of the meeting and can be referred to by the directors and the like.

Further, the CEO has been given the responsibility to prepare and circulate the agenda and the minutes of the meetings to the directors. This responsibility vests with the company secretary of the bank and equating the CEO’s responsibility to that of the company secretary is impractical as the CEO needs to look after other significant functions of the bank.

 Limit on the tenure of the CEO

The paper suggests that any major shareholder or promoter of the bank can hold the position of the CEO only for a term of 10 years whereas non promoters can hold the position for 15 years. Through this reform, RBI aims to put in place a robust governance framework for banks and ensures that ownership of the bank is separated from that of the management. The author contends that this is a sound reform suggested by RBI and can considerably improve the corporate governance structure of banks in India.

Less importance to company secretaries

The paper has failed to give significance to company secretaries as it provides for separate secretaries for each of the committees mentioned earlier. The author contends that the RBI must consider appointing the company secretary as the only secretary for all the committees owing to the similar compliance requirements and similar procedural mandates. Also, the expertise and experience of the company secretary in this regard must be taken into consideration by the RBI.

Moreover, the paper states that the company secretary needs to report to the chair of the board instead of the entire board. It is important to realize that the company secretary is a secretary to the entire board and not the chair alone. This suggestion by RBI is detached from the reality that the CEO is the head of the board and not the chair. Further, this also causes a disruption in the unity of command which vests with the CEO and not the chair. Therefore, it is advisable that the company secretary reports to the entire board as all members of the board play a significant role in the management of the bank.

Emphasis on the role of independent directors

 The paper suggests that independent directors must have an important role to play in the critical matters of the bank. This is evident from the fact that the majority of the bank’s board must consist of independent directors. Further, the paper also suggests that every meeting of the board must have a majority of independent directors. Also, the critical functions of the banks will now be handled by the sub-committees of the board that are headed by independent directors. Thus, this enables the independent directors to have an active role in the day to day operations of the bank.

 The author contends that RBI’s reform with respect to upholding the ‘independence’ of the independent directors is an essential reform for the good corporate governance of banks. The effective implementation of this reform will enable independent directors to voice their thoughts without being outshined by the higher management. Further, the independent directors can now play a key role in assisting the board to take informed and well-contemplated business decisions. Moreover, this reform can bring about a much needed change in the corporate governance of public sector banks where the nominee director’s actions is heavily dictated by the directions of the chairman, government nominee and the RBI representatives respectively.

Closing Remarks

 Overall, the discussion paper is well intended but suitable clarifications needs to be provided by RBI on certain aspects of the paper as pointed out by the author. Further, the ambiguity in certain reforms suggested by the RBI needs to be addressed adequately. The fact that the paper extends more responsibilities to the independent directors might create friction between them and the higher management and how this will play out in the banking sector remains to be seen.

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Policy & Politics

INDEX NUMBERS OF WHOLESALE PRICE IN INDIA FOR THE MONTH OF SEPTEMBER, 2021(BASE YEAR: 2011-12)

Tarun Nangia

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Note: P: Provisional, F: Final, * Annual rate of WPI inflation calculated over the corresponding month of previous year

The month over month change in WPI index for the month of September, 2021 (as compared to August, 2021) was 0.07 %. The monthly change in WPI index for last six-month is summarized below:

Annex-I

All India Wholesale Price Indices and Rates of Inflation (Base Year: 2011-12=100) for September, 2021

Annex-II

Note: * = Provisional, Mf/o = Manufacture of

Note: * = Provisional, Mf/o = Manufacture of

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Policy & Politics

One nation one election: From inception to constitutional/logistical issues

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‘The service of India means the service of the millions who suffer. It means the ending of poverty and ignorance and disease and inequality of opportunity.”

In the yesteryears, when Late Pt. Jawaharlal Nehru was injecting the idea that India will awake to life and freedom, he certainly would not have had any idea that the same speech, to the same public and with the same zeal will be delivered by dissecting few of the words and adding spice wrapped in polarized feelings. Those occasions were five yearly festival of Indian democracy- elections where such speeches jumbled every now and then – could be heard and read.

But one could never fathom of a situation where complex electoral processes does not go simultaneously for the centre and state and in fact, takes place at intervals of every few months in the diversified though unified country like India. And the saga of speech would start once again, every second, for months. It took 20 years of independence and 17 years of first general election to break the chain. 1967 was the last time when India had near simultaneous elections.

The Constituent Assembly had scholars like Dr. BR Ambedkar who raised the issue of deciding the status of election commission i.e. whether it has to be a permanent body or a temporary one, giving logic for his take on the issue. At the same time, the far-sightedness of ones like Prof. Shibban Lal Saxena, threw light on the issue that mid-term dissolution of assemblies would push us to a situation of having elections before completion of five years and hence we cannot have such a commission which sits free for five years after conducting one and waiting for other election, and hence we have Article 324 in our constitution.

Kerala Assembly made debut for the mid-term dissolution and elections were held in the year 1960, unlike for rest of the country which was held in 1962. Nagaland and Pondicherry should also be kept under exceptions because assemblies here were formed only after 1962. Like every beginning has an end, similarly every end has a beginning. The end of simultaneous election had its beginning in 1970 when, on the wishes of Indira Gandhi, there was a premature dissolution of Lok Sabha on December 27, 1970 and mid-term elections were held in February 1971. The next political event was declaration of National Emergency, 1975. General Elections were held in the year 1977 and the newly formed Janta Parivar started to focus on dissolution of assemblies of few states after the 1977 victory. Such attempts, both at centre and state level, were rusting the greased process of simultaneous elections. The 1998 and 1999 dissolution of Lok Sabha acted as a catalyst for such rusting of simultaneous elections and now only three to four states go for elections with the Lok Sabha polls for last few years. Thus, the Election Commission now conducts state elections once or twice every year and so we get to hear the saga of speeches discussed earlier every few months.

The Hurdles in the path

The Representation of People Act, 1951 is relevant to throw light on the legal aspect of the possibility and shortcomings faced by the authorities for conducting simultaneous elections. Section 14 and Section 15 talk about notification for general elections to House of People and State Assembly respectively. These provisions are empowering in nature and hence the Election Commission, by virtue of these provisions, can notify elections keeping a gap of six months from the end of tenure of the house and this gap period has to be strictly adhered to. Usually, the election schedule is announced a few days before the notification is issued so that the individuals and institutions involved in the process gear up. Hence we can surmise that for the present state of affairs regarding elections of different states and for those assemblies ending their tenure in the span of less than six months, simultaneous elections are legally possible. But, this is not the only changes that shall be required.

Our constitution’s basic structure not only includes parliamentary democracy but also federalism. Also, the tenured elected legislatures are equally important to sustain parliamentary democracy. By bringing the scheme of simultaneous elections, tampering of constitutional accountability shall take place. This shall further deteriorate the structure of federalism that we uphold.

As we have a quasi federal state, our President and Governor neither reigns nor governs unlike United States where the President both reigns and governs and England where the King reigns but does not govern. Thus, by bringing simultaneous elections, we shall be indirectly bringing Governor and President at the pedestal to govern and reign, as when the Lok Sabha or the State Assemblies would be dissolved, the President and Governor shall be appointed as head of the executive. This was even suggested as one of the proposals in The Niti Aayog discussion paper, 2017.

The Paper and the Draft Report of the Law Commission in 2018 also suggested to shorten the tenure of few legislative assemblies and to extend the same of the others in order to synchronize the cycles. This would lead to chaos as why would an elected assembly would want a tenure of two years in place of the earlier promised five years. Similarly, it was also proposed to conduct only two sets of election in a time span of five years. This action in itself is anti-democratic as it goes against the right of citizens to elect their leaders at regular intervals.

This anti-democratic action can be curved into a democratic one by bringing the necessary constitutional amendments. In order to sync the tenures and terms, amendments shall be needed in the following Articles of The Constitution of India, 1950

Article 83(Duration of Houses of Parliament) and 172(Duration of State Legislatures) – These article provides for fixed tenure of five years of the Lok Sabha and Legislative Assembly. It shall need to be amended to match the requirements of flexible tenures in case of synchronizing elections.

Article 85(Sessions of Parliament, prorogation and dissolution) and 174(Sessions of the State Legislature, prorogation and dissolution) – These sections empowers the President and governor to dissolve the Lok Sabha and Legislative assembly respectively. it shall need to be amended to include synchronization as a reason to dissolve.

Article 356(Provisions in case of failure of constitutional machinery in States) – This article provides for when president or governor can act as head. This shall need to be amended to include manual tampering of tenures so as to create a path to shorten the tenures and also provide for a way to president or governor to act in situations.

In addition to these constitutional issues, there are logistical issues too. The logistical issues which are of major economical value bring with itself the shortage of the number of Electronic Voting Machines (EVM). Presently, the complete set of single EVM including the voter-verifiable paper audit trial can be used for different elections taking place at different time and places for so long as is the recommended life of an EVM. One EVM can have the names of 16 candidates at maximum. Hence for those constituencies where candidates are even one more than 16, the second EVM has to be used. As a precautionary measure, few of the EVMs are kept as reserve and they are to be used in case the once installed earlier face issues. The number of polling stations in India is more than one million. Now the calculation has to start from providing every polling station with EVMs, that too double in number in case of simultaneous elections for centre and state. The procurement of such large number of EVMs does not limit the expenditure. Storage and security of the EVMs adds to the expenditure which undoubtedly counts to thousands of crores and this does not adds to decrease in the expenditure as is the view of proponents for simultaneous elections. As far as local body polls are concerned, the polling stations, the superintending authority and the judicial authority for taking cases of local elections are different from those of state or centre elections. Hence such issues only add to the logistical issues already faced by the election commission.

Conclusion

The idea of one nation one election is not alien to India. 1952, 1957, 1962 and 1967 pave way for the history of simultaneous elections. The synchronization shall definitely bring stability and strengthen nationalism. In long run, it might also help to cut expenditure and speed up development but the immediate expenses seem to be more than the cost benefit analysis. Moreover, the authors are of the opinion that one election might make the country more centralized and lead to tangential behavior towards local issues and regional parties. It might also transform our democracy to a managed democracy like in Russia. It might give the pretence of free and fair elections but the reality shall be far from it.

Thus, it is imperative that electoral reforms are needed but one nation one election is not the correct scheme to embrace under the ambit of electoral reforms.

The Constituent Assembly had scholars like Dr. BR Ambedkar who raised the issue of deciding the status of election commission i.e. whether it has to be a permanent body or a temporary one, giving logic for his take on the issue. At the same time, the far-sightedness of ones like Prof. Shibban Lal Saxena, threw light on the issue that mid-term dissolution of assemblies would push us to a situation of having elections before completion of five years and hence we cannot have such a commission which sits free for five years after conducting one and waiting for other election, and hence we have Article 324 in our constitution.

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Policy & Politics

MAKING IT HAPPEN: HIGH SCHOOL TRANSFORMATION IN GANJAM

Anil Swarup

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With the sole motto of ‘Desire for excellence in School Education’, the concept of transformation of high schools into Centre of Excellence (CoE) is based on the vision of Chief Minister of Odisha. The school transformation initiative aims to revolutionize the high school education paradigm of Odisha by upgrading the existing school infrastructure at par with the best of the private schools in the country. This has helped provide a highly conducive learning environment for the students from humble background and would also ensure the delivery of best quality education and training.

The major challenge of community participation and ownership was addressed through regular coordination meetings with PRI members, Block Administration, parents, alumni, School Management Committee (SMC), teachers and students. This also helped identify the needs and priorities of the school for imparting quality education. After several rounds of consultations, it was decided to bring about holistic changes in the existing infrastructure of the high school and re-establish it with Smart and Digital Class Rooms, e-Library-cum-Reading Room, Modern Science Laboratory, Hygienic Toilet, Safe & Pure Drinking Water and upgradation of Sports facilities.

After finalizing the above-mentioned priorities, the next challenge was to work out the finances to implement the said work. This is where the ‘Mo School’ initiative of the State Government played the role of a game changer. Under this programme, contributions were to be invited from alumni, donors and organizations for every school and the State Government would provide twice the matching grant against each donation received. For example, if a CSR contribution of Rs. 1 Lakh was received for a particular school, the State Government would provide Rs. 2 Lakhs for the said school and a total amount of Rs. 3 Lakhs would be made available for the development of the school.

In addition to the aforementioned, the local self-governing bodies such as Gram Panchayats and Blocks also earmarked their funds for transforming the local schools which would turn into an asset for capacity building of their children. The overall transformation work was closely monitored by the School Management Committee (SMC) in coordination with Block Technical Team in order to maintain a higher degree of transparency, accountability and timeline.

The main aim was to improve quality of education in high schools by using latest technology, upgrading infrastructure by means of smart class rooms and creation of interactive learning environment with audio-visual facilities. In order to inculcate the practice of reading and to develop soft skills among the students, a well-furnished Library-cum-Reading Room has been setup where students not only develop practice of reading books related to their syllabus but also various informative and motivational books.

To inculcate a sense of scientific temper among students, a modern integrated science laboratory has been setup. To facilitate easy understanding of various science concepts and theories, students will now get a first-hand learning experience by performing various experiments in the laboratory. The modern science laboratory will improve scientific reasoning abilities and practical skills of the students.

In addition to all the above, separate hygienic toilets for boys and girls were also ensured in the high schools. The idea is to ensure that students remain free from infection by developing good sanitation habits. The toilets are fitted with colored & designed tiles and with modern sanitary fittings to minimize wastage of water. Installation of napkin incinerators in girls’ toilet is also ensured to dispose the sanitary napkins in a hygienic way. It is also ensured that the teachers and students use the same toilet so that they take personal interest in maintaining cleanliness & hygiene. Special and dedicated toilet for students with special needs are also made an integral part of the new toilet pattern.

As a top priority, pure and safe drinking water facilities are being ensured in all schools under the ‘Nal Se Jal’ campaign of the State Government. Provision of water purifier is ensured in every high school for safe and pure drinking water. It has also been decided to upgrade the school playground with modern playing equipment in order to nurture young sporting talents.

An additional initiative called ‘Water Bell – The reminder’ has been launched by Ganjam Administration with a vision to inculcate the habit of drinking water at regular intervals among the students so that they stay hydrated and fit. As students spend most of the time in schools, water bell is a reminder for a strategic break for the students during the school hours to take a break and drink water in between the school sessions. Students are also encouraged to carry water bottle to schools

The efforts being made have the potential of transforming high school education in the entire state of Odisha, including Ganjam District . The idea of upgradation of Government high schools driven by 5T principles has not only resulted in the transformation of infrastructure but also developed self-confidence and motivation among students, teachers and parents coming from very humble background in rural areas. This ambitious initiative has become a reality only because of the concerted efforts of various stakeholders, especially the field level functionaries like BDOs, AEs, JEs, SMCs, Teachers, parents, students, etc. The success can be attributed to ‘Team Ganjam’ led by a young and dynamic Vijay Amruta Kulange. This team made it happen. All this could not have been achieved without political support from the top. The beauty of the model is that it is replicable, scalable and sustainable because all the stakeholders are on board.

Anil Swarup has served as the head of the Project Monitoring Group, which is currently under the Prime Minister’s Offic. He has also served as Secretary, Ministry of Coal and Secretary, Ministry of School Education.

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YES, KHAN SAHAB, INDIA CONTROLS INTERNATIONAL CRICKET

Ensconced in the lap of terror, a frustrated Pakistan trying to browbeat India for its own failure in cricket.

Vijay Darda

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Dear Imran Khan Sahab, I can understand your pain. Just before the match, if New Zealand returns to their country saying they cannot play because there is a threat of a terrorist attack, and if England refuses to come ahead of the tour, the embarrassment it causes to Pakistan is quite natural. It is certainly a matter of great shame. Besides, the profit that would have been made from the match, which would have filled the pockets, was also gone! It is an instance of misery worst confounded! Therefore, the discomfort and pain are natural.

When the New Zealand team was returning, I was thinking that you would say something about the terror situation in Pakistan. Pakistan, which is on the verge of ruin, will talk about reforming the Pakistan Cricket Board. Instead, your information minister Fawad Chaudhry did not know from where he came up with a bundle of lies stating that the device and email ID used to send threatening messages to the New Zealand cricket team are being operated from India. He even blamed someone called Omprakash Mishra from Mumbai! I could not understand how the information minister of a country could do such a stupid thing. As if this stupidity was not enough, the chairman of Pakistan Cricket Board Rameez Raja started saying that everything is a trick of the Board of Control for Cricket in India! The situation is worse in your country, your army and ISI are patronising terrorists and you are blaming India? Have some fear of God!

Now you are saying that India is controlling world cricket. Yes Khan Sahab! Of course, India has control over world cricket, for only those who are capable and whose players perform well for the nation wield control. I am specifically using the word ‘nation’ here. You may not understand this, so let me remind you of Kerry Packer. Between 1977 and 1979, when Kerry Packer had formed many of his teams, all the players of Pakistan had gone with him. Don’t you remember! You were among them too. Khan Sahab, not a single player from the Indian team went with Kerry Packer at the time because the pride of playing for the nation is more important to our players than money. As far as Pakistan is concerned, also think about how many of your players live in Pakistan and how many live abroad. You too used to spend more time abroad! Let me also remind you of the spirit of Indian cricket. We tasted our first Test cricket victory against England from whom we learned to play cricket. And yes, your forefathers of cricket must have told you that it was Pakistan against which India won its first Test series.

However, now let me tell you how the Board of Control for Cricket in India became so strong that world cricket came under its control while your country remained oblivious. First of all, the Board of Control for Cricket in India has been an independent organisation since its initial days. The way it was managed, especially in the last 30-40 years, is unimaginable. After winning the World Cup in 1983, money started coming to us. When the economy of our country improved, more money streamed in. We put this money to good use. Today, we have good stadiums in every state. Cricket is played from Kashmir to Kanyakumari. There are good sports facilities from school to university. The children who excel at that level join the state teams. After that players pass through levels like Duleep Trophy to Ranji Trophy. We groom players at every level. If our 11 players play, countless players are in the back rows who keep awaiting their turn. We have created a great structure of cricket in the form of the IPL. Opportunities have been made available to players around the world. It is a different matter that due to the antics of Pakistan, we do not give place to your players in this tournament.

You yourself have been saying that Pakistan should also have cricket infrastructure like India! Now you are the Prime Minister, so why don’t you do what you have been saying. Sir, you have government control over the Pakistan Cricket Board and the situation is chaotic. Politics has permeated everywhere. Your domestic cricket stands ruined. The players who are able to make it to the top, do so owing to their own hard work. There is no grooming. Forgive me if you feel bad, but there is a lot of arrogance in your cricket players too. Arbitrariness prevails. You must remember that you yourself retired thrice! You were a bowling superstar in 1992 but it is a mystery why you said that I will play as a batsman and that if I want, I will bowl! Khan Sahab, no player has ever shown such arrogance here.

We have no ego even at this point when we are running world cricket with our own money. We believe in promoting cricket. If the New Zealand team left just before the match and the England team did not turn up, it is not our fault. Pakistan has committed the sin of making itself the sanctuary of terrorists. Have you forgotten the dark wretched day of March 3, 2009 when the Sri Lankan team was attacked by terrorists in Lahore. Six players were injured and 8 people including 6 jawans of your security agencies were killed. So how can anyone trust you? Take a look at your own past, Khan Sahab! Who knows Indian cricket better than you? Still you are using incriminating language? Is this your political compulsion or are you under some political pressure? For, this cannot be the language of a player!

The author is the chairman, Editorial Board of Lokmat Media and former member of Rajya Sabha.

I fully agree with the statement of Imran Khan, the superstar cricketer of his time and now the Prime Minister of Pakistan, that world cricket is completely controlled by the Board of Control for Cricket in India. Khan Sahab, only one who is capable and whose players play dedicatedly for the game and for the nation wields control.

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Policy & Politics

India’s foreign trade: September 2021

Tarun Nangia

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India’s overall exports (Merchandise and Services combined) in September 2021* are estimated to be USD 54.06 Billion, exhibiting a positive growth of 21.44 per cent over the same period last year and a positive growth of 26.03 per cent over September 2019. Overall imports in September 2021* are estimated to be USD 68.49 Billion, exhibiting a positive growth of 70.00 per cent over the same period last year and a positivegrowth of 44.11 per cent over September 2019.

India’s overall exports (Merchandise and Services combined) in April-September 2021* are estimated to be USD 312.47 Billion, exhibiting a positive growth of 40.52 per cent over the same period last year and a positive growth of 18.30 per cent over April-September 2019. Overall imports in April-September2021* are estimated to be USD 341.10 Billion, exhibiting a positive growth of 64.91 per cent over the same period last year and a positive growth of 9.31 per cent over April-September2019.

* Note: The latest data for services sector released by RBI is for August 2021. The data for September 2021 is an estimation, which will be revised based on RBI’s subsequent release. (ii) Data for 2019, 2020 and April to June 2021 are revised on pro-rata basis using quarterlybalance of payments data.

* Note: The latest data for services sector released by RBI is for August 2021. The data for September 2021 is an estimation, which will be revised based on RBI’s subsequent release. (ii) Data for 2019, 2020 and April to June 2021 are revised on pro-rata basis using quarterly balance of payments data.

I. MERCHANDISE TRADE

EXPORTS (including re-exports)

• Exports in September 2021 were USD 33.79 Billion, as compared to USD 27.56 Billion in September 2020, exhibiting a positive growth of 22.63 per cent. In Rupee terms, exports were Rs. 2,48,605.74 Crore in September2021, as compared to Rs. 2,02,508.54 Crore in September2020, registering a positive growth of 22.76 per cent. As compared to September 2019, exports in September 2021 exhibited a positive growth of 29.86 per cent in Dollar terms and 33.92 per cent in Rupee terms.

• C The commodities/commodity groups which have recorded positive growth during September 2021 vis-à-vis September2020 are Coffee (62.55%), Cashew (49.4%), Petroleum products (47.91%), Cotton yarn/fabs./made-ups, handloom products etc. (40.5%), Engineering goods (36.83%), Organic & inorganic chemicals (29.65%), Man-made yarn/fabs./made-ups etc. (26.49%), Electronic goods (26.33%), Other cereals (21.18%), Fruits & vegetables (21.13%), Gems & jewellery (19.71%), Plastic & Linoleum (18.61%), Jute mfg. including floor covering (16.04%), Marine products (12.67%), RMG of all textiles (9.24%), Mica, Coal & other ores, minerals including processed minerals (8.82%), Leather & leather products (7.41%), Cereal preparations & miscellaneous processed items (5.64%), Rice (5.62%), Carpet (4.42%), Tea (3.2%) and Handicrafts excl. handmade Carpet (2.29%).

• The commodities/commodity groups which have recorded negative growth during September 2021 vis-à-vis September2020 are Iron ore (-72.77%), Oil meals (-39.05%), Oil seeds (-26.77%), Tobacco (-16.31%), Ceramic products & glassware (-14.15%), Spices (-13.56%), Meat, dairy & poultry products (-10.77%) and Drugs & pharmaceuticals (-8.45%).

• Cumulative value of exports for the period April-September2021 was USD 197.89 Billion (Rs. 14,63,048.24 Crore) as against USD 125.62 Billion (Rs. 9,41,358.09 Crore) during the period April-September 2020, registering a positivegrowth of 57.53 per cent in Dollar terms (positive growth of 55.42 per cent in Rupee terms). As compared to April-September 2019, exports in April-September 2021 exhibited a positive growth of 24.33 per cent in Dollar terms and 31.35per cent in Rupee terms.

• Non-petroleum and Non-Gems and Jewellery exports in September 2021 were USD 25.34 Billion, as compared to USD 21.33 Billion in September 2020, registering a positive growth of 18.82 per cent. As compared to September 2019, Non-petroleum and Non-Gems and Jewellery exports in September 2021 registered a positive growth of 33.39 per cent. Non-petroleum and Non-Gems and Jewellery exports in April-September 2021 were USD 149.89 Billion, as compared to USD 104.81 Billion for the corresponding period in 2020-21, which is an increase of 43.02 per cent. As compared to April-September 2019, Non-petroleum and Non-Gems and Jewellery exports in April-September 2021 registered a positive growth of 26.34 per cent.

IMPORTS

• Imports in September 2021 were USD 56.39 Billion (Rs.4,14,812.41 Crore), which is an increase of 84.77 per cent in Dollar terms and 84.97 per cent in Rupee terms over imports of USD 30.52 Billion (Rs 2,24,254.02 Crore) in September2020. Imports in September 2021 have registered a positivegrowth of 49.59 per cent in Dollar terms and 54.27 per cent in Rupee terms in comparison to September 2019. Cumulative value of imports for the period April-September 2021 was USD 276.02 Billion (Rs. 20,40,890.34 Crore), as against USD 151.94 Billion (Rs. 11,39,032.05 Crore) during the period April-September 2020, registering a positive growth of 81.67per cent in Dollar terms and a positive growth of 79.18 per cent in Rupee terms. Imports in April-September 2021 have registered a positive growth of 11.26 per cent in Dollar terms and positive growth of 17.59 per cent in Rupee terms in comparison to April-September 2019.

• Major commodity group of import showing negative growth in September 2021 over the corresponding month of last year is:

CRUDE OIL AND NON-OIL IMPORTS:

• Oil imports in September 2021 were USD 17.44 Billion (Rs. 1,28,268.20 Crore), which was 199.27 per cent higher in Dollar terms (199.60 per cent higher in Rupee terms), compared to USD 5.83 Billion (Rs. 42,812.53 Crore) in September 2020. As compared to September 2019, oil imports in September 2021 were 91.90 per cent higher in Dollar terms and 97.90 per cent higher in Rupee terms. Oil imports in April-September 2021 were USD 72.99 Billion (Rs. 5,39,582.43 Crore) which was 127.99 per cent higher in Dollar terms (124.67 per cent higher in Rupee terms) compared to USD 32.01 Billion (Rs. 2,40,166.21 Crore), over the same period last year. As compared to April-September2019, oil imports in April-September 2021 were 11.95 percent higher in Dollar terms and 18.30 per cent higher in Rupee terms.

• In this connection it is mentioned that the global Brent price ($/bbl) has increased by 81.55% in September 2021 vis-à-vis September 2020 as per data available from World Bank.

• Non-oil imports in September 2021 were estimated at USD 38.95 Billion (Rs. 2,86,544.21 Crore) which was 57.75 percent higher in Dollar terms (57.93 per cent higher in Rupee terms), compared to USD 24.69 Billion (Rs. 1,81,441.49Crore) in September 2020. As compared to September 2019, Non-oil imports in September 2021, were 36.16 per cent higher in Dollar terms and 40.41 per cent higher in Rupee terms. Non-oil imports in April-September 2021 were USD 203.03 Billion (Rs. 15, 01,307.91 Crore) which was 69.30 per cent higher in Dollar terms (67.02 per cent higher in Rupee terms), compared to USD 119.92 Billion (Rs. 8,98,865.84Crore) in April-September 2020. As compared to April-September 2019, Non-oil imports in April-September 2021 were 11.02 per cent higher in Dollar terms and 17.34 per cent higher in Rupee terms.

• Non-Oil and Non-Gold imports were USD 33.84 Billion in September 2021, recording a positive growth of 40.45 per cent, as compared to Non-Oil and Non-Gold imports of USD 24.09 Billion in September 2020. Non-Oil and Non-Gold imports in September 2021 recorded a positive growth of 23.79 per cent over September 2019. Non-Oil and Non-Gold imports were USD 179.07 Billion in April-September 2021, recording a positive growth of 58.26 per cent, as compared to Non-Oil and Non-Gold imports of USD 113.15 Billion in April-September 2020. Non-Oil and Non-Gold imports in April-September 2021 recorded a positive growth of 7.18 per cent over April-September 2019.

II. TRADE IN SERVICES

EXPORTS (Receipts)

• As per the latest press release by RBI dated 1st October 2021, exports in August 2021 were USD 19.57 Billion (Rs. 1,45,208.94 Crore) registering a positive growth of 21.36 per cent in Dollar terms, vis-à-vis August 2020. The estimated value of services export for September 2021* is USD 20.26 Billion, exhibiting a positive growth of 19.50 per cent vis-a-vis September 2020 (USD 16.96 Billion) and a positivegrowth of 20.13 per cent vis-à-vis September 2019 (USD 16.87 Billion).

IMPORTS (PAYMENTS)

• As per the latest press release by RBI dated 1st October 2021,imports in August 2021 were USD 11.52 Billion (Rs. 85,460.66 Crore) registering a positive growth of 24.52 per cent in Dollar terms, vis-à-vis August 2020. The estimated value of services import for September 2021* is USD 12.10 Billion exhibiting a positive growth of 23.86 per cent vis-à-vis September 2020 (USD 9.77 Billion) and a positivegrowth of 23.09 per cent vis-à-vis September 2019 (USD 9.83 Billion).

III.TRADE BALANCE

• MERCHANDISE: The trade balance for September 2021 was estimated at USD (-) 22.59 Billion as against USD (-) 2.96 Billion in September 2020, which is a decline of (-) 663.48per cent. As compared to September 2019 (USD (-) 11.67Billion), trade balance in September 2021 exhibited a negative growth of (-) 93.60 per cent.​

Concluding part is available on thedailyguardian.com

▪ SERVICES: As per RBI’s Press Release dated 1st October2021, the trade balance in Services (i.e. Net Services export) for August 2021 is USD 8.05 Billion. The estimated trade balance in September 2021* is USD 8.16 Billion, which is an increase of 13.58 per cent over September 2020 (USD 7.19 Billion) and an increase of 15.98 per cent over September2019 (USD 7.04 Billion).

• OVERALL TRADE BALANCE: Taking merchandise and services together, overall trade balance for September 2021*is estimated at USD (-) 14.43 Billion as compared to USD4.23 Billion in September 2020, a decline of (-) 441.40 per cent. In comparison to September 2019 (USD (-) 4.63 Billion), trade balance in September 2021 exhibited a negative growth of (-) 211.51 per cent.

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Policy & Politics

Analysis of the Medical Termination of Pregnancy (Amendment) Act, 2021

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INTRODUCTION

Abortion is an essential component of sexual and reproductive health care. It constitutes a reproductive choice of a woman to either continue with or terminate her pregnancy. But is it so easy to realize such freedom of choice? Amidst the age-old social stigma backed by poor legislation in India, women are often rendered helpless to access abortion care even in the worst of situations. Abortion remains stigmatised in India, even within the medical fraternity, as IndiaSpendreportedin September 2020. In such a scenario, the availability of safe abortion care to the vulnerable women becomes even far moredifficult.

The national rape-related pregnancy rate is5.0%per rape among victims of reproductive age (aged 12 to 45). Only 11.7% of these victims receive immediate medical attention after the assault, and 47.1% do not revieve any medical attention related to the rape. A total 32.4% of these victims do not discover their pregnancy until they have already entered the second trimester and only 50% are able to undergo abortion.

THE MEDICAL TERMINATION OF PREGNANCY (AMENDMENT) ACT, 2021

The MTP (Amendment) Act, 2021aims to ease the pain of such rape victims and facilitates the termination of the unwanted pregnancy upto a period of 24 weeks. The upper gestational limit has further been removed in case of pregnancies accompanied by substantial foetal abnormalities. The amendment is a welcome step in addressing the physical and mental health issues concerning pregnancy in ‘vulnerable’ women, including rape victims. For a better understanding, the amendments in the MTP Act have been summarisedbelow.

Amendments made via the MTP (Amendment) Act, 2021 Setting up of MedicalBoards Section 2 of the MTP Act, 1971 has been amended to provide for the definition of “Medical Board”. Subsection 2D of section 3 further provides that the Medical Board shall consist of a Gynaecologist, Paediatrician, radiologist and such other members as may be notified in theOfficial Gazette by the State Government or Union territory. The powers of such a medical board have been prescribed under subsection 2C of Section 3 of the MTP (Amendment) Act, 2021.

‘Termination of pregnancy’defined The ‘termination of pregnancy’ has been defined under Section 2 (e) of the MTP (Amendment) Act, 2021 as “a procedure to terminate a pregnancy by using medical or surgical methods”.

Single Registered Medical Practitioner’s opinion sufficient to terminate pregnancyofless than 20 weeks Earlier, the opinion of at least two registered medical practitioners was required to terminate a pregnancy between 12 – 20 weeks. Now, Section 3 (2) (a) of the MTP (Amendment) Act, 2021 has been amended and seeking a second medical opinion has been done away with for terminating a pregnancy of less than 20 weeks.

Upper Limit for Termination of Pregnancy Extended to 24weeks The prodigious change sought to be achieved by the recent amendment is to allow for the termination of pregnancy upto 24 weeks in case of rape victims. Section 3 (2) (b) of the MTP (Amendment) Act, 2021 aims to relieve such rape victims from the extended mental trauma of birthing a child conceived out of sexual abuse.

Medical Board to have the final say in case of substantial foetal abnormalitiesSection 3 (2B) has an overriding effect on subsection (2) of the MTP (Amendment) Act, 2021. VideSection3(2B),iftheMedicalBoardhasdiagnosedsubstantialfoetal abnormalities in a particular pregnancy, then the provisions of subsection (2) relating to the length of the pregnancy shall not apply to the termination of pregnancy by the medicalpractitioner. In other words, the upper gestational limit in such pregnancies have been removed subject to the diagnosis of the Medical Board.

Anonymity of the women undergoing abortion

Reinforcing Puttaswamy judgement, the right to privacy of the women undergoing abortion has also been recognized. Section 5A of the MTP (Amendment) Act, 2021 restrains the medical petitioner from revealing the particulars of any woman undergoing abortion except to a person prescribed by law.

CONCLUSION

The MTP (Amendment) Act, 2021 is no doubt, highly ambitious at streamlining the abortion laws in case of irregular pregnancies. However, the implementation of this Act can itself prove to be a challenge in the coming times. The formation of the Medical Boards in various states has been left at the hands of the State governments without any strict plan for action. Adding another layer of barrier for availing abortion care will only create further delay in terminating such pregnancies.

Furthermore,theamendmentsfailtoaddressthechallengesthatwereearliersoughttobe covered under the Medical Termination of Pregnancy Bill, 2014.The vulnerablewomen should have been given access to medical procedures from the earlier weeks of pregnancy for safer termination of such pregnancies. Since90%of such women seek abortion before 12 weeks gestation, training village-level healthworkers (auxiliary nurse midwives) and nurses to prescribe simple abortion pills could have helped to render safe services to the doorsteps of vulnerable women and, in case of complications, lead to timely referrals. Although the MTP (Amendment) Act, 2021 aims to do certain things right, the actual implementation of the amendments remains to be seen in future.

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