News Wrap


In the third week of January 2017, Bela Bhatia, an activist and researcher visited Pedagullur and Bellam Nendra in Bijapur (Chattisgarh State) with a National Human Rights Commission team, that recorded statements of women, who had allegedly been the victims of rape, physical and sexual assault by Security Personnel, between October 2015 and January 2016. At about the same time, the NHRC issued an interim order stating that 16 women were victims of such acts. Activist Bhatia had entered village deep inside Bijapur, facilitated the registration of FIRs, and brought the alleged incidents to public attention. Bhatia lives in Parpa village, on the outskirts of Jagdalpur, the Bastar district headquarters. On 23 January 2017, a group of around 30 men, barged into the home of Bhatia in Bastar, asked her to leave the region within 24 hours, and threatened to burn down the house she rents. Bhatia and her landlady were forced to sign an undertaking that Bhatia would vacate the house within a day. The attackers were residents of Pandripani and Parpa villages, who claim to be holding a ‘‘village pradarshan’’. A 15-member police team has been deployed for Bhatia’s security. There has reportedly been a conscious attempt to manufacture discord between Bhatia and the residents of the village. Earlier in March 2016, the Samajik Ekta Manch had called Bhatia a ‘‘Maoist’’, and asked her to leave the village.

Fiscal Action
The Union Government of India’s central budget has been helped in recent years by the sharp drop in crude oil prices, from the sky high levels they had reached in 2013-14. The government virtually eliminated the massive subsidies on petroleum products, and raised up taxes. The duties on petroleum products now account for over a half of all excise revenue, and have pushed the surge in excise collections in 2016-17, despite sluggish industrial growth. The revenue from spectrum auctions has been around 0.5% of GDP in 2016-17. However, the contra entry for the spectrum revenue has led to a massive debt pile-up by the telecom companies. Consumers have not enjoyed the full benefit of lower oil prices. Spectrum revenue has fallen in 2016-17 (to 0.2%) because of the failure to conduct an auction. Recovery in tax revenue could come from a raising of the service tax from 15% to 18%, and from rising corporate profit margins. The economy is slowing down, and may not gain much momentum in 2017-18. Budget bonanza, during the past three years, has travelled from the Centre to the States. Overly generous recommendations of the Finance Commission, resulted in central transfers to the state governments, increasing in 2014-15 by 60%. The states’ total revenue in 2014-15 grew by 32%, and was 11% in 2015-16, followed by 10% in 2016-17. The state budgets are now about a third bigger than the central budget. The system-wide deficit of Centre and States combined is now about 6.5% of GDP, with the state deficits around 2.9%. Debts amounting to around 75% are piled up by the power distribution entities, on account of a 20 to 25% gap between the cost of power and the price charged to consumers. The bulk of the subsidies are now in the domain of the states.

Digital Transaction
A cashless economy in India would require penetration of mobile phones and financial inclusion. Merely transporting cash to and from the villages in India had cost about Rs 2200 crore ($335 million) in 2015-16. This is an indirect subsidy that benefits the rich and the poor. A digital transaction would require a mobile phone, preferably a smart phone with internet connection, and a bank account. As per data released by the Telecom Regulatory Authority of India, there are about 105 crore mobile subscribers in India, of which 60 crore urban and 45 crore rural. Given the estimated population of 133.6 crore, about 90 crore (67%) are rural. Even if one assumes that most households have access to mobile phone, the distribution remains skewed between urban and rural subscribers. The number of mobile connections per 100 population, i.e. overall tele-density is 84. The Tele-density varies across the states, from 56 in Bihar to 119 in Tamil Nadu. Most of the rural population still remains unconnected to internet. There are only 46 crore internet connections, with more than 70% in urban areas. Bottlenecks extend to availability and realiability of connections, and supply of electricity in many rural  outposts. Mobile Wallets and United Payment Interface (UPI) demand internet connectivity and a smart phone, which may not be available to many Indians as yet. Internet connections grew by 30% in 2016-17. To enable seamless digital payments, the Unstructured Supplementary Service Data (USSD) requires a basic mobile feature phone handset, without internet connection, the IFSC code of the bank, and the Aadhaar card number. Around 83% of India’s population is now covered by Aadhaar. India has about 8.8 crore unique individual savings bank accounts. 90% of the informal economy is based on cash. About 85% of the net national income goes outside the tax net. Demonetisation has withdrawn about Rs 15 lac crore from the monetary system.

The Reserve Bank of India has informed a parliamentary panel that 08 November 2016 demonetisation of currency notes was an ‘‘advice’’ given by the Union Government of India, with less than 24 hours to implement. There are concerns over the eroding autonomy of the central bank. Earlier, America’s USAID had announced on 14 October 2016, the establishment of ‘‘Catalyst : Inclusive Cashless Payment Partnership’’, with a view to effecting a quantum leap in cashless payment in India.

Russian aircraft carrier group
Moscow had deployed the Admiral Kuznetsov, its only aircraft carrier, to the southern Mediterranean in mid-October 2016, when western officials were accusing Russia of being an accomplice to war crimes, because of its role in the bombardment of Aleppo. In January 2017, Russia has withdrawn its aircraft carrier group, with Russian SU-33 fighter jets on the flight deck, from the waters off Syria, as part of drawdown of its forces, involved in the Arab state’s civil war. The aircraft carrier group’s withdrawl was part of a Syrian cease-fire deal, brokered by Russia and Turkey in December 2016. The agreement was reached after Syrian president Bashar al Assad’s forces, backed by Russian war planes, took back control of Aleppo, a strategic northern city, that was the rebel’s last big urban stronghold. As a beginning to reduce Russian armed forces grouping in Syria, the aircraft carrier group, which includes three other warships, is the first to leave. In the near six-year-old conflict in Syria, Russian military support for Assad, played a key role in his regime’s recapture of Alleppo. Russia and Turkey, which has been a key backer of Syria’s opposition, brokered a deal that led to the evacuation of rebels from the east of the city. However, pro-Assad forces continue to advance around Damascus, the capital, and rebels retaliate by firing rockets at besieged pro-government towns in northern Syria. For the first time since the conflict broke out, people are returning to the valleys between Damascus and Lebanon, where communities had abandoned their lives to war. They have a different allegiance and faith from the pre-dominantly Sunni Muslim families who once lived there. Sent by Iran, they are a move to repopulate the area with Shia Muslims in Syria, but also from Lebanon and Iraq.

Vol. 49, No.37, Mar 19 - 25, 2017