News Wrap


There is mounting criticism in India, that the November 2016 disruptive cash ban failed to purge illicit cash from the economy. The Union Government of India is searching through millions of bank accounts, in a hunt for ‘‘black money’’. The Reserve Bank of India has revealed that nearly 99% of more than $240 billion in ‘‘high value’’ bank notes, abruptly cancelled by Prime Minister Narendra Modi in November 2016, were deposited within the banking system, before the notified date for return. The cash ban has failed to turn the illicit cash hoardings of corrupt individuals into ‘‘worthless pieces of paper’’. Cash dependent small enterprises reeled from the demonetisation move. The government forecast that up to a third of the high value notes in circulation would be destroyed or abandoned by individuals unwilling to expose their wealth, and purged from the economy, has not materialised. Most Indians managed to preserve their cash. The magnitude of illicit wealth held in cash was not as great as popularly imagined. The economy is growing at 5%, its lowest level since 2014. The costs the central bank incurred as a consequence of demonetisation, led to a 53% drop, in the RBI dividend to the government. India’s current inflation retail rate is around 4%.

Farm Insurance
Launched in April, 2016, the Union Government of India’s flagship farm insurance scheme, the Pradhan Mantri Fasal Bima Yojana (PMFBY) has been benefiting insurance companies instead of farmers, by allowing them to seize the bulk of the premium, along with hefty subsidies. By way of claims, the total payout has been just around one-fourth of the premium collected by the insurers. The lop-sided accrual of gains has failed to serve the much needed safety net for risk prone farmers. The scheme continues to operate without yielding any real outcome, even it is the only scheme that covers all hazards in farming, ranging from prevented sowing to post-harvest losses. In actual functioning the state governments are required to share 50% of the expenditure on its implementation. The states have been asked to conduct crop-cutting experiments to assess damage. The states have been showing a lukewarm response in the scheme. Many state governments tend to delay the payment of their share of costs. Expenses on crop-cutting experiments are avoided, and only visually assessed yield-loss data submitted. Modern technology, such as drones and smart phones, has not been applied to the desired extent, to expedite collection and dissemination of data. Farmers have little direct contact with insurance companies. Many farmers do not even receive the policy documents or receipts. Often, the compensation money is adjusted by the banks against farmers’ dues. The insurers lack detailed knowledge about land holdings and crop planting by their farmer-clients.

Recycled Cloth
Panipat in Haryana, has become a textile centre since 1947. After the Indian subcontinent’s partition in 1947, weavers from the province of Sindh and the districts of Jhang and Multan in Pakistan, moved to the ancient city of Panipat. Looms were set up to knit coarse, hand-spun cotton carpets, wall hangings and sofa covers (from new wool). The products were an instant hit abroad and in India. Panipat later emerged as a recycling hub. There was a slump in the late 1980s, in Prato, a small industrial town in Italy, with a 1000-year-old tradition in textiles. In the 1990s, Panipat mill owners purchased discarded Italian machinery from Prato, designed to make cheap shoddy yarn from recycled wool. Today, Panipat has 150 to 200 spinning mills, which take in discarded clothes from western countries, and turn them into recycled cloth. The industry employs around 20,000 people, fetching annual revenues of $62 million. The reclaimed fibre business is fragmented, poorly organised, and almost wholly unregulated. The mills did not invest much of their former large profits, into upgrading machinery or workers’ skills. There was no market customer research for high quality fabric from recycled yarn, which appeals to environmentalists. Almost all the workers are contract labourers, who earn a tenth of what those in the formal sector are paid. Sweatshop conditions for workers prevail, with rock bottom pay, use of child labour and lack of hygiene. Presently most of the factories in Panipat are working at half capacity. Wholesale buyers such as aid agencies, railways and hospitals, increasingly prefer cheaper and lighter polyster substitutes. Rising labour costs have squeezed margins. An erratic electricity supply and frequent machinery breakdowns cause work stoppages. In many of the workshops, clothes are shredded, spun into yarn, and woven by powerlooms into blankets.

Rohingyas in India
An estimated 10 million people in 1971, from what is Bangladesh (formerly East Pakistan), found temporary sanctuary in India, from the brutal violence during their country’s war to break away, from Pakistan. India opened its doors to Sri Lankan Tamils in the 1980s, fleeing civil war. About 63,000 Sri Lankan Tamils still live in camps in Tamil Nadu, where they receive extensive Indian government aid. Since 2012, when anti-Muslim violence erupted in Myanmar’s Rakhine state, an estimated 40,000 Rohingya refugees fled to India, via Bangladesh. Only around 16,500 Rohingya refugees in India have been formally registered by the United Nations Refugee Agency. The Union Government of India has instructed police across India to step up surveillance of Rohingya. The government considers the Rohingya refugees as illegal immigrants in India, and as per law, they stand to be deported. Many Rohingyas who had fled to India following violence targeting them in recent years, have settled in Jammu, Hyderabad, Haryana, Uttar Pradesh, Delhi and the National Capital Region and Rajasthan. In 2016, it emerged that a well trained group of Rohingya militants is led by Saudi Arabia-based emigres. New Delhi has linked the Rohingya crisis to the wave of small bombs that exploded in 2013, at the Bodhgaya temple complex in Bihar, which draws Buddhist pilgrims from Myanmar and across Asia. It now fears dispossessed Rohingya refugees could be easily radicalised, and used against India by its enemies in Pakistan. Over 400,000 Rohingya refugees are living in Bangladesh.

The Union Government of India has informed the Supreme Court that Myanmar’s Rohingya Muslims are ‘‘illegal’’ immigrants. The central government has informed the apex court that some of these Rohingyas were part of a ‘‘sinister’’ design of Pakistan’s ISI and terror groups such as the ISIS. India is not a signatory to the International Convention Relating to the Status of Refugees (1951) and the Protocol Relating to the Status of Refugees (1967). As evident from the constitutional guarantee following from Article 19 of the Constitution, the right to reside and settle in any part of the territory of India, is available to only Indian citizens.

Vol. 50, No.23, Dec 10 - 16, 2017