News Wrap


Farmer suicides in India, have increased by over 40% between 2014 and 2015. From figures available up to end September 2016, compared to 2015, farmer suicides have spiked by over 35%. While 2014 witnessed 5650 farmer suicides, the figures crossed 8,000 in 2015. Maharashtra has the highest number of farmer suicides. There was an 18% jump between 2014 and 2015, from 2568 to 3030, in Maharashtra. Farmer suicides in Telengana rose from 899 (2014) to 1350 (2015). Karnataka recorded a sharp jump from 321 (2014) to 1300 (2015). States that witnessed more than 100 farmer suicides in 2015 are Madhya Pradesh and Chattisgarh. States such as Bihar, Jharkhand, West Bengal and some North-eastern states did not witness any farmer suicides. India experienced severe drought in 2014 and 2015, with the Central Indian states the worse-hit. Between January to April 2016, Marathwada region (Maharashtra) witnessed more than 400 farmer suicides. The total number of suicides in all eight districts of Marathwa region, stood at roughly three suicides a day. Farmers in Marathwada region continue to depend on water-guzzling cash crops, such as sugar cane. Drought, mounting debts, and increase in compensation to the next of kin of farmers who commit suicide, have caused the spike in farmer suicide figures in Karnataka. In 2016, the Marathwada region has suffered a 19% deficiency in rainfall. Southern Karnataka and Kerala have suffered 30% deficiency in rains during the current years.

The Goods and Services Tax (GST) Bill was passed in India, by the Upper House of Parliament, in the first week of August 2016. The GST aims for one nation, one tax, and one market. A single tax code will replace the various 15 different codes at central and state levels. The World Bank ranks India at 157th of 189 countries, in the ease of paying taxes. The GST could improve the situation. It will also check tax evasion. The GST software will enable the matching of 3 billion to 5 billion invoices per month, identifying evaders. The matching of indirect tax payment with the payment (or failure to pay) income tax will be assisted. Currently, only 12.5 million of 1.3 billion Indians pay income tax correctly. Paper work, disputes, corruption and logistical costs are expected to be reduced. Estimates indicate that the tax could raise India’s GDP by 1 to 2%. Trucks in India travel 280 km a day, against about 800 km in western countries. The discrepancy is the result of hassles, delays and corruption at state and city border checkpoints. The GST introduces a single tax collected at the point of consumption, subsuming all existing state and city entry taxes into a single tax. Some check-points will continue to remain for dealing with criminal activity and vehicle registration.

Even after the GST is enacted, the Essential Commodities Act will continue to empower the states, to restrict the movement across state or district borders of items such as grain, vegetables, edible oil, alcohol and petroleum products. So corrupt border officials may still find ways to harass truckers and extort bribes. The GST Council comprising the central and state finance ministers will have to determine tax bands for different items. These rates will have to be passed by the central and state governments. Alcohol and petroleum products will not be covered by the GST. The states will be free to set their own rates for these high-revenue items. Big disagreements are possible in the GST Council on the number and coverage of the tax bands. Some states want the standard rate to be over 20%, which the Union Government of India opposes as inflationary. While the new law obliges the Central Government to compensate the states for all revenue losses from the switch to the GST for five years, there is no clarity on how these losses will be computed. India’s Finance Minister has set 01 April 2017, as the deadline for implementing the GST.

Kabul Today
Kabul, Afghanistan’s capital is a city bursting at the seams with cars clogging the streets, negotiating for space with street vendors and donkey carts. After the toppling of the Taliban in 2001, Afghan people displaced by fighting in the countryside, Afghan refugees returning from Pakistan and Iran, and hordes of labourers simply looking for a better life moved into Kabul. Estimated to be the fifth-fastest growing city in the world, Kabul’s population has increased from 1.5 million in 2001, to around 6 million today. The city was originally designed for around 700,000 people. 70% of Kabul’s residents live in informal or illegal settlements. A significant share of Kabul’s economy is driven by illicit businesses, such as the drug trade, facilitated by corruption. Economic growth slowed, jobs are scarce, and the vast majority of Kabul’s workers are either self-employed or casual labourers. The 2001 US-led invasion had given a boost to the economy. More than 90% of Afghanistan’s GDP derives from foreign military spending and aid. NATO has scaled down its troops presence to about 12,000 from a peak of 140,000. Foreign contractors are dwindling, and unemployment is at 40%.

Child Labour in Mexico
A record poppy crop covers Mexico’s Sierra Madre del Sur. Children are excellent opium harvesters in the mountain sides. 15-year-old children delicately slit the poppy buff and patiently scrape the gum. Each child earns in one day more than the parents do in a week. In the tiny mountain hamlet, children miss school for the poppy harvest. Income outweighs education, in the landscape of fallow opportunities. There are no opportunities in El Calvario city, and nearly all the village children work in the fields. A boom in opium trade is underway south of the border, as heroin addiction soars in the United States. Mexican opium production has increased an estimated 50% in 2014 alone, the result of a voracious American appetite, impoverished farmers in Mexico, and notorious drug cartels that straddle the border. Abusers of prescription pharmaceuticals in America are looking for cheaper highs, as a crackdown on painkiller abuse has made the habit highly expensive. The legalisation of marijuana in some US states has pushed down prices, leading many Mexican farmers to switch crops. Pressing out of urban centres into suburbs and rural communities, cartels have adapted, edging into American markets, once reserved for higher quality heroin, from south-east Asia. Farmers are increasingly opting to grow poppies in Guerrero, Mexico’s most violent state, where rival drug factions perpetrate a war of bloody competition, and silent disappearances, that has paralysed the region. Unlike Afghanistan, under the weight of three decades of conflict, Guerrero is not an all out war zone. The near absence of the state allows the opium cultivation industry to flourish. The steep grade and loamy earth on the mountains of Guerrero makes standing upright difficult for adults. The small size of the children is an advantage at opium harvest time.

Vol. 49, No.11, Sep 18 - 24, 2016