Collegium debate

The system of checks and balances shall ensure that none of the three pillars of democracy, namely, executive, legislative and judiciary, encroaches into the powers of others. But since the executive has a role in the appointment of top judicial positions, there is an apprehension of subversion of judicial independence. There has been criticisms over several years on the judicial appointments and the last word is yet to be pronounced. let us recollect the path traversed so far:

Indian constitution is silent on selection of judges though it is categorical on appointments! Since independence, a practice on appointment of judges is in vogue in which Chief Justice of India initiates the judicial appointment proposal, in consultation with his senior colleagues and his recommendation was considered by the President and, if agreed to, the appointment was made. The CJI is anyway appointed by the president on the recommendation of the executive: Mostly seniority was respected! This practice created rumblings of discontent especially in the aftermath of Indira Gandhi’s efforts to establish the executive’s primacy over the judiciary: For instance, the highly regarded justice H R Khanna on being superseded to the chief justice’s post in 1977.

To limit the interference of executive in the selection of judges, in 1993, SC on its own devised a collegium system that consists of a committee of five senior most judges headed by the CJI to make recommendation to the government for appointment of judges. The names are scrutinised by the law ministry and sent to the president. The president either approves the names or returns the names for reconsideration. If still the Supreme Court sends back the same names, president appoints the persons recommended. Though the revised procedure is in vogue, the Memorandum of Procedure(MoP) sent to the government by SC in 2017, is yet to be notified is another story!

Amid whispered criticism of the working of the collegium (which is never transparent) of favouritism, Parliament established the National Judicial Appointments Commission (NJAC), which was a proposed body that would have been responsible for the appointment and transfer of judges to the higher judiciary in India. The Commission was established by amending the Constitution of India in 2014. NJAC would be headed by the chief justice, and half its members are judges of the Supreme Court. Another third of its members are persons of eminence, selected by a panel consisting of the chief justice, the prime minister, and the leader of the largest opposition party. Thus, while introducing checks and balances, the NJAC nevertheless gives India’s judiciary the most say compared to any other country. In fact, the judiciary effectively still gets a veto over appointments. But In a collective order, in 2015 the Supreme Court by a majority of 4:1 struck down the NJAC Act as unconstitutional!

But all along, the practice of selection of CJI by the executive, which started the whole series of events, continues to remain the same since independence!

With the recent splurge of criticisms against the appointment of judges of SC on partisan lines, it appears that the Collegium has run its course! Whether a fresh look into the NJAC system needs to be revived? It is time for the highest court to loosen its grip a little, and let the pendulum, which had gone from one extreme to the other, swing back (closer) to the middle. Strangely, the critics of the collegium are the same as the ones who are against NJAC as well! It is india …….

Mind you, India is the only country which has the system of Outgoing judges having the exclusive rights in choice of the next generation of judges: in the selection, familiarity breeds liking (as it appears from the allegations) at least for this breeds, the arena has rights of inheritance, perhaps! Unfortunately any criticism in the public domain is being taken as a contempt rather than inputs for corrective measures?

Isn’t India a mature democracy, whose citizens deserve better especially since SC has anyway the final say in the interpretation of constitution? Does the spirit of ‘offended’ Justice H R Khanna loom large in the form of his nephew Sanjiv Khanna, whose appointment stoked the recent controversy?

BJP plays at last its trump card!

BJP plays at last its trump card! The 10% quota would at best be a launching pad for the ruling party to retain power. Whether this will stir the job market in favour of economically stressed population is doubtful as the job creation in the formal government sector itself is on the decline. But it might open up more seats in the educational sector to this group is a welcome point!

That the move is with desperation is evident from the fact that it would face a serious judicial scrutiny on two scores: breach of 50% quota ceiling and the constitutionality of defining “backwardness” on economic basis, even if it crosses the parliament.

To win elections, you have to enter the arena and play it big (at the last minute). BJP seems to have scored a point at this by pulling out the emotional card for Patels, Thakurs, kappus, kammas, jats, Bhumihars and Brahmins who felt alienated so far in the ‘quota’ system, in a single master stroke!

Now it remains to be seen how they would placate the agriculturists and middle class. Many are waiting for the ‘Modi deposits’ in their bank accounts. All along in the last four and half years, this government has resisted any popular action that might be detrimental to the larger national interest! But it looks like the time is running out to gather steam without gimmicks!

Anything is fair not only in ‘love and war’ but in election time as well!

அமெரிக்க நிறுவனங்களின் அலறல்

RUPAY Card பற்றி சமீபத்தில் அமெரிக்க நிறுவனங்களான Master Card மற்றும் VISA நிறுவனங்கள் புலம்பி இருக்கானுங்க இல்லையா… என்ன தான் பிரச்சனை அவர்களுக்கு?!

இந்திய CARD MARKET பரிவர்த்தனையின் அளவு இன்று சுமார் 9-10 லட்சம்கோடிகள். பொதுவாக பரித்தனைக்குகமிஷனாக இந்த அமெரிக்க நிறுவனங்கள் பெற்று வந்த தொகை சுமார் 3-3.25%. அதாவது குறைந்த அளவில் என கணக்கெடுத்தால் கூட சுமார் 30000 கோடிகள். பெரிதாக எந்த முயற்சியும் இல்லாமல், வங்கிக்கு கமிஷன் போன்றவை போக ஈசியாக 10000-15000 கோடிகளை ஆண்டாண்டாக அள்ளிச் சென்று கொண்டிருந்தன இந்த இரண்டு நிறுவனங்களும்…

இதற்கு ஆப்பு வைத்தார் மோடி. மளமளவென 30 கோடி RUPAY கார்டுகள் மக்களுக்கு வழங்கப்பட்டதன் விளைவாக இன்று 65% பரிவர்த்தனைகள் RUPAY மூலமாக நடக்கத் துவங்கியுள்ளன. RUPAY 2.5% பரிவர்த்தனை கட்டணமும், 0.75% பெட்ரோல்/டீசல் போடுவதற்கு திரும்ப பணம் கொடுப்பது போன்ற செயல்களால் மக்களை கவர்ந்தது.

நாட்டை விட்டு வெளியே சென்று கொண்டிருந்த பணம் உள்நாட்டிலேயே புரளுமாறு ஏற்பாடுகளை செய்தார் மோடி. விளைவு பல ஆண்டுகளாக நம்மை ஏமாற்றி சம்பாதித்து வந்த இரண்டு நிறுவனங்களும் இன்று புலம்பத் துவங்கியுள்ளன…

இந்த மனுஷனை எதிர்க்கறவர்களுக்கெல்லாம் இந்த பொருளாதாரம் கணக்கு தெரிந்தாலும் வெளியே சொல்ல மாட்டார்கள்…

தெரிந்த நாம ஏன் சொல்லாமல் இருக்கனும்…

GST – A game changer in Modi’s regime

The trials and tribulations of 18 months since GST has been rolled out, have been smothered to a large extent. The change over to the new taxation system, not unexpectedly, was not without hurdles and heartburns for the stakeholders. But now, By and large, the goods producer/retailer/service provider, consumer and the government, are a contended lot though there are still expectations. For Most of the items now the taxes are much lower than that in the original indirect multiple tax regime. It is to be noted that with lower tax rates in the new regime, the collection is largely revenue neutral, due to wider base and better compliance.

Those who proclaimed this as the ‘Gabbar Singh Tax’ at the peak of the troubled induction period, shamelessly have to eat their own words and profess that the ‘baby is after all theirs’ which they were about to introduce anyway in their term! Don’t you recall the same voice which once promised that ‘we would withdraw GST if we are voted back to power’!!

Politics apart, the country has benefitted due to this single taxation system with no interstate check points, steady raise in tax compliance, no frequent visits by the ever ‘milking’ famous local sales-taxmen!

Moral of the story: India is capable of bringing change in the way business is done even with its large landscape and a federal system run largely by hawkish and ‘starving’ politicians. It is a wonder that even the inertia of the bureaucracy can be converted to a well oiled machinery by the cyber technology! But, to enable this to happen, A strong visionary governance is required to implement policies that would bring prosperity to the people in the long run; but not by those who take populist knee-jerk decisions with a focus to corner the ‘vote bank’…

ESSAR Episode

Ruias desperately wants to retain the control os Essar Steel. The company which has been referred to resolution under the new Insolvency and Bankruptcy Code (IBC) has taken a new turn with the promoters submitting a proposal to the Committee of Creditors (CoC) under section 12A at the last minute just before voting on ArcelorMittal’s offer. The LN Mittal-company was earlier declared as the highest bidder in the auction for the steel company in the due process of IBC.

The Ruias’s present offer includes full settlement of the entire claims aggregating Rs 54,389 crore, ArcelorMittal’s offer stood at Rs 42,218 crore, which is Rs 12,187 crore less. In addition Ruias have promised Rs 8000 crore equity infusion! Should the lenders have to settle down for a lower recovery as per rules of the game, is debatable in the court of Law!

Ruias last ditch effort to retain control of the steel company is a clear indication of their desperation. But Section 12A says that the withdrawal of resolution application can happen only before the bidding process starts. Mittal contends that the section is thus not applicable and hence the Ruias offer not acceptable.

The development clearly demonstrates that Ruias are wilful defaulters; if they can pay now they could have paid before but treated the company and its creditors with casual disregard with the belief that they could get back the company at a significant haircut!

The new IBC regime is teaching the wilful defaulters a hard lesson! Let us breath ethical corporate environment in the days to come.

Ruias of ESSAR steels offered to pay the debt in full after the company has been referred to IBC and the final offer by Arcelor was accepted by CoC. Why should the offer be put up so late? To delay the take over by confusing the stake holders when the threat of loosing the control became real. They could have done this in the first place had there been real intent!

Mallya’s offer of settling the dues in Twitter has similar hues… now that the verdict on his extradition by the London court is scheduled to be pronounced this Monday and his fears of being handed over to india is looming large; he may be fearing similar fate of Christien Michel of ‘Augusta fame’. The possibility of the court ruling for his extradition must be frightening to him but even then given to a high-society lifestyle, flamboyance and entitlement, he is seeking special treatment for himself is a different story.

May be there is another sinister move: to weaken the prosecution by claiming vindictiveness as his ‘sincere’ offer to settle was not being considered. He fears that his Indian assets are under threat of being annexed, with him being declared ‘fugitive’ by the trial court.

Also one should note that Mallya has offered to pay the principal and not the accrued interest.! He calls it ‘paying back 100%’! Crooked , you may think.. who is his Indian lawyer adviser? another greater crook entwined himself in many embezzlement cases – our great financial wizard in the UPA cabinet and master of all Indian laws, P. chidambaram.

The new laws, IBC and fugitive economic offenders, enacted by the present regime, are becoming nightmares for these cheats who have been basking under the protection of Congis so far, who once believed that the long arm of law can never reach them in the indian context!

Is being ‘Right’, Wrong?

Scrapping the Planning Commission was a radical break from the Nehruvian legacy of centralised planning based not entirely on the Soviet model but on a ‘mixed economy’. It is not a mere ruse to get rid of the ‘Left baggage’. What we now have in its place for the last nearly four years, is a ‘Think Tank’, with the best of domain experts in a range of public policy issues, well meaning leaders of industry and academics, called the ‘National Institution for Transforming India’, ‘NITI Aayog’.

NITI is driving the new concepts, models and praxis for a ‘New India’, on technologies that are shaping the way government is designing and implementing programmes: Whether it is ‘Direct Benefit Transfer being implemented across 437 schemes and that has helped save Rs.83,000 crore, digitisation lowering tax collection costs, GST rollout increasing indirect taxpayers base by an amazing 50 per cent, focus on artificial intelligence applications in a range of areas from health to education, the new focus on “blockchain-based smart contracts which will reduce litigation, ot the land registry on the blockchain that will reduce corruption relating to land. As someone calls it, technologies everywhere, ‘from tilling to toilets’!

India is already a huge economy and growing, growing not at the modest ‘Hindu rate of growth’, but to ambitious targets of eight to 12 per cent!

NITI Ayog is changing patterns in a new political context where being ‘right’ may not be wrong!

Is NPA problem, a natural outcome of a growing economy?

Is the NPA problem, a natural outcome of a growing economy? It is but natural that one has to lend for earning in banking business; this entails risk…the present euphoria is due to the banking business in india being with the government; as long as you make profit no one would bother but the moment there is a loss, they would hunt for scapegoats… because the voter thinks he owns the bank: ridiculous case of authority without responsibility!

The Parliament’s Committee on Estimates had invited Rajan to brief it on the matter after former Chief Economic Advisor (CEA) Arvind Subramanian praised him for identifying the NPA crisis and trying to resolve it.

Rajan in his written response says, a larger number of bad loans were originated in the period 2006-2008 when economic growth was strong, and previous infrastructure projects such as power plants had been completed on time and within budget. Citing an example, he said “one promoter told me about how he was pursued then by banks waving chequebooks, asking him to name the amount he wanted”.

Unfortunately, he said, that growth does not always take place as expected and the years of strong global growth before the global financial crisis were followed by a slowdown, which extended even to India, showing how much more integrated the country had become with the world. He ascribes policy paralysis in resolving the issues plaguing the stranded projects; he is pained that even now, decision making has not picked up sufficient pace.

Rajan adds, “Undoubtedly, it is hard to tell banker exuberance, incompetence, and corruption apart”. His honest assessment (unlike that of MMS) clears the vision of the other side of the coin.

Bad business decisions are bound to pop up in the future as well and the government in chair on that day would have to face the music.

Why at all should there be so many government banks in the first place doing the same business competing with each other?

DeMo follow ups: Money laundering under scanner

DeMo follow ups: Two ‘smart’ acts of the government would soon bring the illegal activities of money laundering into scanner rather quickly.

One is geo-tagging. The Ministry of Corporate Affairs (MCA) might ask companies to geo-tag the location of their registered offices in the statutory filings with the RoC. Geo-tagging will help the government identify cases in which one building houses hundreds of shell companies. Remember 81 companies In a single room in Hyderabad?

The second one is LEI: The 20 digit global reference number which uniquely identifies a company. Across the world LEI is conceived as a key measure to improve the quality and accuracy of financial data through improved risk management. Money laundered through a web of companies located in different geographies, would be brought under scanner by making the companies with the Reserve Bank of India (RBI) introducing a Legal Entity Identifier or LEI for all the registered companies. Global Legal Entity Identifier Foundation (GLEIF) is the regulator of LEI.

So Gitanjali Niravs and Satyam Rajius would have to consult PC to find new ways of syphoning and laundering! He is the one who virtually challenged that it is impossible to weed out black money and prove it in the court of law as well!!! They can either approach him directly if he is out of power or consult BC if he is in power!!

“Only lawyers and painters can turn white to black.” – Japanese Proverb

NPA monster – UPA’s making?

How much of the following is true – pundits to ponder?

The biggest scam in the history of India is not the commonwealth scam (Rs 50,000 crore), 2G scam (Rs 1,76,000 crore) or Coal block allocation scam (Rs 1,86,000 crore) – it is the systematic creation of NPA (Non Performing Assets) of public banks that was created between 2008-2014.

❓ How did it unfold?

➤ In the period of 60 years between 1947 and 2007, the value of total amount of loans lent by the public banks was Rs. 18,00,000 Crore (18 lakh crore).

However, the total amount of loans lent by the banks in the next 6 years (2008-2014) was a whopping Rs 52,00,000 crore (52 lakh crore). The UPA2 started to distribute loans to its cronies despite the fact that most of them were wilfully defaulting on loans !!!! 😮 😮

❓What happened ?

➤ Banks were forced to lend loans to those industrialists, who were close to “the family”. A single phone call from 10JP would make sure the industrialists received as much loans as they wished!

Once the loan was granted, and the industrialist was not able to repay the loan, the banks were asked to again lend a loan of similar amount. This money was used to repay the previous loan, and this cycle kept going on.

For example, Banks lent Mr.X a loan of Rs.1000 crore. Mr.X would default on the loan and then approach the dynasty. A phone call would make sure banks lend another Rs.1000 crore to Mr.X. Now he would repay part of the previous loan with this amount and ask for more loan. The bad loans, would therefore, continue to accumulate.

❓ Was it all ?

➤ However things didn’t stop here. The UPA2 government continued to disburse the loans to those cronies who it knew are not going to repay the loans. This includes former Congress Rajya Sabha Member and businessman Vijay Mallya. All the loans on which Mallya wilfully defaulted were given to him under UPA rule.

The UPA government continued doing this at brazenly unabated pace and the amount of bad loans kept increasing with every passing year, and almost 10,00,000 CRORE (10 lakh crore) became Non-performing asset – the money which could NEVER be recovered….. The entire amount that were distributed to these cronies of 10 JP was our (taxpayers’) money.

❓ What was more to this scam ?

➤ The scam didnt stop at this point. The UPA2 government hid the real amount of NPAs and claimed the amount was Rs 2,00,000 crore (2 lakh crore), much less than the real amount of 10,00,000 crore. The UPA lied to the entire nation just so that it can continue distributing our hard-earned taxes to its cronies. This was the government of an “economist” cheating the entire nation, lying about the bad loans just so that it can continue giving loans to its cronies.

❓ How did the truth come out ?

➤ When Narendra Modi assumed office in 2014, the entire system was reeling under this volcano which was about to burst any time soon. The first thing Modi did was to order the banks to come clean on NPAs and declare every amount that had turned into a bad loan (loan which could not be recovered). As banks started to come clean, the amount turned out to be an unbelievable Rs 10,00,000 crore. The current government started taking concrete steps to solve the issue and strengthen the banking system.

❓ Why NPA is still increasing then ?

➤ As more and more banks started to declare the NPAs of 2008-2014 period, the value of NPAs started to increase. That is the reason why NPAs rose from 2 lakh crore in 2008 to 11 lakh crore in 2017. The truth is – NPA did not rise. It simply was made transparent and declared to public. NPA had already touched 10 lakh crore in 2013 but UPA government lied to the nation.

With every passing year, the interest on the loans keep accumulating (since banks continue to calculate interests on those loans even today), and hence the NPAs are still increasing every year. These are all the loans which were given by UPA in the period 2008-2014. After Narendra Modi Ji came to power, all these have been made public and investigations have started.

❓ What has Modi government done ?

➤ The Bankruptcy act and Economic Offenders act have made sure that the amount is being recovered from those who wilfully defaulted on loans and ran away. All the loans are being investigated, and from now onward, every loan of large amount will be provided only after securing passport details of the applicants so that they cannot run away in case of wilfully defaulting.

❓ Why did the government not tell about it in 2014/15 ?

➤ Had the government declared the entire truth right in 2014/15, it would have helped BJP politically, but it would have destroyed the economy of nation. The trust on banking system would have eroded completely and economic activities would have come to a grinding halt. The entire economy would all of a sudden go into a downward spiral and banks would have collapsed. Only after everything was strengthened did the government undertake the task to bring the truth out in the public.

Optimism in India’s growth

Modi has given optimism, enterprise and resilience to Indians through his 3 disruptive reforming measures namely, Demonetization, GST and IBC.

It forced discipline into the working of the economy. People have been nudged to pay tax and repay commercial loans. It is also true that pressure on large loan-defaulters consequent to IBC, has increased very much and 12 largest of them are facing full force of law.

Demonetization is held by most intellectuals to be a monumental failure: But, Indians with unaccounted cash, it now transpires, held their nerve and found more and more innovative ways to either deposit the cash in banks or exchange old notes for new notes. But, the cash deposits now have addresses and identities and their subsequent movements are all traceable since they happened within the banking networks. Rs. 23942 crores have already been seized by Income Tax authorities. At the same time, India’s tax departments, armed with new big data analytics and artificial intelligence software, is managing to track money movements far better than ever before. The new software has definitely made a difference in the way income tax systems work, and demonetization and GST have undoubtedly brought in more people into the tax fold.

Both demonetization and GST, while intended to make people follow rules, came at the expense of growth in that the economy slowed down from 7.11% in 16-17 to 6.74% in 17-18. It had slowed down to 5.7% for the 3 months before GST was to come into effect. If the tax structure is going to change in less than 3 months, any business would slow down and wait. But, once the new rules of GST came into effect, people got back to business immediately and there was a steady raise in GDP growth thereafter and now in the 1st quarter of 18-19, it touched 8.2%.

India is now the 6th largest economy in the world on GDP basis and 3rd largest on purchasing power parity. It should become 5th largest on GDP basis, next year. British parliamentarians are even questioning the aid programme to india as it is poised to overtake Great Britain’s GDP!!

Forget about the politics behind who is responsible for this scenario….it is to be accepted that Modi’s disruption has steadied the ailing Indian economy – any honest leadership can push it to enviable heights from now on….world is keenly watching the raise of PHOENIX…….