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Analysis

How the future was compromised

NPA crisis was accentuated by court judgments cancelling telecom licences and coal block allocations. An overzealous CAG, bloodthirsty media, myopic Opposition hurt India’s progress Presumptive loss is actionable.

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Kapil Sibal
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NPA crisis was accentuated by court judgments cancelling telecom licences and coal block allocations. An overzealous CAG, bloodthirsty media, myopic Opposition hurt India’s progress Presumptive loss is actionable. Actual loss is not. Ironic but true. It seems Rs 2,50,000 crore lost on account of demonetisation is not actionable because the Comptroller and Auditor General of India (CAG) says he cannot go after policy decisions. Also, no-one can be held responsible not just for over 100 lives lost of people forced to stand in queues, but also for the yet untold stories of those who lost loved ones for want of cash in medical emergencies. But his predecessor not only questioned the policy decision of not auctioning spectrum and coal blocks but also conjured up astronomical figures of alleged presumptive loss. I suppose institutional positions change with the change of CAG. Institutions don’t matter, people do. That is why we often witness the ugly spectacle of the National Investigation Agency and the CBI doing a U-turn, depending on the political masters they wish to please.

We lament the state of our economy, especially the increasing non-performing assets of banks. The credit for this, in no small measure, goes to the judiciary for its path-breaking judgements cancelling, with a flourish of the pen, all telecom licences and coal block allocations, oblivious of their disastrous economic consequences. Many investors, foreign and domestic, found their investments set to naught without establishing culpability. The government consequently had to put to auction spectrum and coal blocks, for any other method of dealing with such natural resources would have earned it the ire of the court. The CAG, donning the mantle of virtue personified, convinced himself that natural resources, if allocated without competitive bidding, will amount to shortchanging government coffers. Under the garb of a “performance audit”, he over-performed by evolving the concept of presumptive loss which cost the UPA its credibility. The result: Five mega hertz of 2G spectrum allocated at Rs 1,651 crore was auctioned at a base price of Rs 14,000 crore in 2012. Telecom operators starved of spectrum had to bid to survive. Capital required for investments in infrastructure went into discharging debt. Banks were not willing to lend to operators already heavily indebted and return on investment was inadequate to service mounting debt.

Eight years down the road, the sector is under a debt of around Rs 5 lakh crore (the banking sector pegs it at Rs 7.29 lakh crore). Telenor, Etisalat and Sistema bled and have exited. Vodafone and Idea intend to merge and Tata Telecom has been, in a sense, gifted to Airtel. Reliance is in deep trouble, the Aircel-Reliance deal having fallen through. Reliance has no choice except to exit. So we will be left with three players: Jio, Airtel and Vodafone/Idea. Vodafone might not wish to increase its exposure any more, given the nature of our regulatory juggernaut. Allocation of spectrum encouraged competition leaving surpluses for investments in infrastructure. Auctions soured that story.

Power, steel, cement and ferroalloys need coal. Coal India does not produce enough to meet domestic demand. States seek investments in these sectors but without firm and adequate supply of coal, stakeholders are hesitant to invest. All the allocations were cancelled by the Supreme Court which found fault with both extant procedures for allocations made on the recommendations of the screening committee set up by the Union, and in law, in the absence of amendments to the Coal Nationalisation Act. At the auction which followed, the results were disastrous. Many failed and some of those who succeeded were targeted; their bids were cancelled for obviously political reasons. Over a hundred coal blocks have yet to be put up for auction. The investment climate being, to say the least, tepid, there are hardly any takers. Qua some auctions, the bid parameters were sought to be changed midstream. Most of the auctions were mired in litigation for different reasons. Output suffered. Import, the only alternative source of coal, was at the time an expensive option, impacting competition. In an emerging economy, if there is no demand for power, the economy suffers from a development paralysis. Auction of coal blocks and its consequences contributed to the NPAs.

The media loves sensation. The CAG’s outlandish conclusions were a godsend. They wanted answers without listening. They bayed for blood and loved the sight of it being splashed on celluloid. They, in turn, were courted by the Opposition by paralysing Parliament. The contention that spectrum allocations were made on the basis of policy had no takers. To them, loss of revenue, even though presumptive, was unpardonable. Little did they realise that the objective of any policy prescription is affordable and quality service to the consumer which will elude him if resources are perceived as milch cows to enrich the government. That way both government and industry will suffer and the consumers will lose out in the long term. Only if industry prospers will the consumer benefit. The Opposition did not wish to see beyond its nose, for politics was above all else. No-one grasped the fundamental premise that low-cost allocation of resources will allow entrepreneurs to provide efficient affordable service and if industry prospers government too will benefit. In the telecom sector, it would have shared the profits of the operator. Government stood to profit in other ways: Increased private sector investment, greater FDI, if permissible, employment generation, increased revenues through our taxing regime etc.

Presumptive loss made good headlines but the proposed economic model was disastrous for the economy. The only economic model that will work is for the state to share in the prosperity of the private sector. An overzealous CAG, bloodthirsty media, myopic Opposition and Supreme Court judgements, which lacked vision and were short on the law, impacted India’s progress adversely. This was the beginning of the decline. The CAG, media, the Opposition and the Court need to realise that such mistakes can cost us our future.

The writer, a senior Congress leader, is a former Union minister.

Courtesy: Article is published on The Indian Express dated 28th October 2017

Analysis

Ministry says yoga is not sport, but DU colleges still reserve seats

Colleges have autonomy to choose the sports under which they wish to give admissions. University cannot tell a college to pick a specific sport. It is their discretion. These sports do not come under Sports Ministry, nor are they regulated by it.

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Delhi University

New Delhi, June 12 (IANS) Is yoga a sport? The Ministry of Youth Affairs and Sports (MYAS) says it is not. Yet, 11 Delhi University (DU) colleges have this year reserved seats for the discipline under their sports quota.

The university and the colleges, meanwhile, have been shifting responsibility back and forth.

After recognising it as a sport in 2015, the MYAS reversed its decision the next year. “After elaborate discussion, it was concluded that yoga has various dimensions/arms in which competitions are not possible. Hence, it was agreed that Yoga cannot be termed a sport. Consequently, it may not be appropriate to recognise any organisation as NSF (national sports federation) for yoga,” the Sports Ministry had said in a letter dated December 21, 2016, to all national sports federations and the Indian Olympic Assocation.

“It was also agreed that the entire matter relating to yoga will continue to be handled by the Ministry of AYUSH,” the letter said.

When IANS contacted the DU Sports Council for a clarification, it said that the colleges had requested the university to conduct yoga trials.

“Yes, Yoga has been under sports quota and it has been there in previous years also. Last year, 19 colleges had applied for trial for Yoga under sports quota. The decision, in which sports admissions are to be made, are taken by the colleges,” Anil Kalkal, Director of the varsity sports council which conducts the centralised trials for sports quota on behalf of colleges, told IANS.

“Colleges have autonomy to choose the sports under which they wish to give admissions. University cannot tell a college to pick a specific sport. It is their discretion. These sports do not come under Sports Ministry, nor are they regulated by it,” he said.

Although colleges are entitled to choose a sport for trials and reserve seats under it, the list of sports from which they are to choose is compiled by the varsity.

Kalkal cited another factor in the form of inter-university competition, held by the Association of Indian Universities (AIU) — a non-governmental body listed under the Societies Act — as one of the reasons for considering Yoga as sport.

“If such was the thing (de-recognition) why would AIU conduct the yoga competition? The day AIU will tell us that Yoga is not a sport and stop conducting the competition, we will stop taking admission under it,” he said.

“If colleges are requesting to admit students under yoga, what can the university do? We have to conduct the trials. You should ask the colleges why they requested us to conduct yoga trials,” he said.

An official from one of the colleges which has reserved seats for Yoga this year, when contacted, passed the buck to the university.

“We consider Delhi University and AIU the governing bodies. If an activity is listed as sport by the university, we follow that. If DU tells us that it will not conduct trials in yoga then we will also give it up. Government doesn’t have a role in it,” M.P. Sharma, sports Convener at Hansraj College, told IANS.

Ambiguity on the legal sanction of quota for yoga got further worsened when an AIU official conceded that the association itself didn’t consider yoga as a sport.

“The competition is there because it helps in maintaining your body, mind and spirit. We do not consider it sport. This is not a sport. But we conduct the competition to improve the standard of performance,” said AIU Joint Secretary (Sports) Gurdeep Singh.

Singh also conceded that association’s decisions are not binding on the university.

“We have nothing to do with the DU sports quota. DU follows its own constitution. You talk to DU for this. A collective decision is made by our sports board. Whatever is in the larger interest of students, we do that. It’s not a sport but an activity, which helps strike a balance. The entire world has recognised the value of yoga, I don’t know why only here people have an issue with it,” he said.

However, in spite of what Singh said, the AIU website lists yoga as a sport in its “Calendar of Events” for 2017.

Although it is a thing which has been going on for years, some DU teachers, when apprised of the matter, called the decision (listing of yoga as sport by the university) as “arbitrary”, stating that it was never presented before the Academic or the Executive Council of the university.

“As far as reservation of seats under sports quota is concerned, we have an understanding of reserving them for only those sports which are recognised in Olympics. On what basis can they include yoga in it? asks Rajesh Jha, a DU professor and Executive Council member.

“This will end up undermining the chances of admission of those who are trained in genuine sports. This seems like a completely arbitrary decision,” he added.

Trials for yoga are scheduled to be conducted later this month.

Apart from Hansraj, Gargi College, Deshbandhu College, College of Vocational studies, and Kalindi College are few of those which have given their names for yoga trials and have reserved seats under the activity.

(Vishal Narayan can be contacted at [email protected])

— IANS

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Analysis

Global cues, inflation to dictate equity indices trend

The Central Statistics Office (CSO) is slated to release the macro-economic data points of IIP and CPI (Consumer Price Index) on June 12.

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Sensex Nifty Equity

Mumbai, June 10 : Monetary policy announcements by global central banks coupled with the upcoming release of major macro-economic data points on industrial production and inflation are expected to set the trend for the domestic equity indices.

According to market observers, other key factors such as rupee’s movements against the US dollar and fluctuations in crude oil prices as well as developments on monsoon’s progress will impact investors’ risk-taking appetite.

“Next week will have a flurry of economic data for India,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.

“A negative surprise in inflation data would reinforce the hawkish stance of RBI. A weaker external sector data would have an impact on INR, especially during a negative EM (emerging markets) sentiment. IIP (Index of Industrial Production) would be watched closely for an ongoing economic expansion.”

The Central Statistics Office (CSO) is slated to release the macro-economic data points of IIP and CPI (Consumer Price Index) on June 12.

Subsequently, other major macro-economic data points such as WPI (Wholesale Price Index), Current Account Deficit and Balance of Trade figures will be released.

On the global front, monetary policy announcements by the US Federal Reserve, ECB (European Central Bank) and the Bank of Japan (BoJ) will form major themes for the upcoming week.

“The US Fed rate move and language will set the tone for sentiment in EM as well Indian markets. The key is whether the US Fed pays attention to the vulnerable EM situation,” Nevgi said.

Besides, the movement of Indian rupee against the US dollar and fluctuations in global crude oil prices will also set the course for the key indices.

On a weekly basis, the Indian rupee weakened by 45 paise to close at 67.51 against the US dollar from its previous close of 67.06 per greenback.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors bought scrips worth Rs 1,367.22 crore during the week ended June 8, 2018.

Figures from the National Securities Depository Ltd (NSDL) revealed that foreign portfolio investors (FPIs) invested equities worth Rs 3,757.94 crore, or $560.40 million, in the last week.

Additionally, technical charts show that the National Stock Exchange (NSE)’s Nifty50 remains in an intermediate uptrend.

“Technically, with Nifty recovering from the lows of 10,552 points, the intermediate trend remains up,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

“Further upsides are likely in the coming week once the immediate resistances of 10,814 points are taken out. Crucial supports to watch for any weakness are at 10,618 points.”

Last week, the key Indian equity indices — the S&P BSE Sensex and the NSE Nifty50 — rose on the back of Reserve Bank of India’s “neutral” stance on a future rate hike trajectory, along with its reform measures for the realty, bond and banking sectors and value buying.

Consequently, the barometer 30-scrip Sensitive Index (Sensex) of the BSE rose by 216.41 points or 0.61 per cent to 35,443.67 points on a weekly basis.

Similarly, the wider Nifty50 of the NSE closed last week’s trade at 10,767.65 points — up 71.45 points or 0.67 per cent — from its previous close.

(Rohit Vaid can be contacted at [email protected])

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Analysis

CBDT says RTI replies on ‘write-off’ of IT arrears were ‘erroneously sent’

According to the RTI replies, the Pr-CCIT, Hyderabad had stated that it had written off a total of Rs 3002.20 crores in two financial years, 2016-2017 and 2017-2018.

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RTI ACT

Mumbai, June 1 (IANS) In an apparent volte-face, the Central Board of Direct Taxes has said that figures of ‘write-offs’ of Income Tax arrears furnished under right to information action were sent out in error.

Responding to an IANS report “Income Tax Department writes off huge arrears, show RTI replies” on May 28, 2018, the CBDT’s official spokesperson said that the the Principal Chief Commissioner of Income Tax (Pr-CCIT) Hyderabad had provided erroneous figures of ‘write-offs’ under an RTI application filed by Chandra Shekhar Gaur, a Neemuch (Madhya Pradesh) activist.

According to the RTI replies, the Pr-CCIT, Hyderabad had stated that it had written off a total of Rs 3002.20 crores in two financial years, 2016-2017 and 2017-2018.

The CBDT spokesperson, Surabhi Ahluwalia, Commissioner of Income Tax (Media & Technical Policy) now says that the information provided was “due to an inadvertent error made by the CPIO who reported the figures of ‘Cash Collection’ or recoveries made from arrears in these years as the figures of arrears written off.”

The correct amount of arrears written off in those two years for the Andhra Pradesh & Telangana by the Pr-CCIT Hyderabad, was actually zero (Nil), as no write-off orders were passed in these (two) years, he said, adding that the RTI applicant Gaur has been informed of the mistake.

Interestingly, the IANS had sent an email to the CBDT on May 16, with specific queries on the figures and the authorisation levels for the ‘write-offs’, which was ignored for nearly 13 days.

After the IANS story was published on May 28, the CBDT swung into action with a reply.

On the figures of tax arrears, totaling to over Rs 50,000 crore, including over Rs 33,157.97 crore from Pune alone, provided under RTI by various IT offices across India, the CBDT spokesperson said it had already collected Rs 44,633 crore during 2017-2018, which was 14.6 percent higher than Rs 38,944 crore collected in the previous fiscal.

Besides, the CBDT said of the current demands, Rs 52,537 crores was recovered by the ITD in 2017-2018.

The CBDT reiterated that ‘write-off’ of arrears was a detailed and long-drawn process and only initiated for arrears which become irrecoverable “after all avenues for recovery are exhausted.”

Besides, all proposals of ‘write-off’ of arrears above Rs 5,000 are examined by a committee at Zonal, Regional and Local levels, while any proposals for ‘write-off’ above Rs 25 lakh must “be approved by CBDT” and any such amount above Rs 50 lakh need approval “by the Finance Minister.”

For small value arrears upto Rs 10,000, there are relaxations in guidelines under a fast-track process, but the rigorous process remains in place and during 2017-2018 (upto December 31, 2017), a meager amount “of Rs 5.6 crore was written off in the entire country, the spokesperson said.

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