News Wrap


The Union Government of India led by Bharatiya Janata Party (BJP) has authorised 10 central agencies to intercept "any information" on computers, to monitor and decrypt any information, transmitted, received or stored in any computer. 10 agencies viz Intelligence Bureau, Central Bureau of Investigation and the Enforcement Directorate are authorised to intercept information on computers. The opposition led by the Congress Party and CPI(M) have described the measure as unconstitutional, undemocratic and an assault on fundamental rights. A similar order was issued in 2009 by the UPA government, led by Congress. The new authorisation specifies the ten agencies that can intercept information from any computer. Such cases will continue to require prior approval, and will be reviewed by a committee under the Cabinet Secretary or a state's Chief Secretary. With several companies using servers outside India, agencies will have to send requests through mutual legal assistance agreements, similar provisions and procedures already exist in the Telegraph Act, along with identical safeguards. The present notification is analogous to the authorisation issued under the Telegraph Act. Earlier there were standard operating procedures, the 2009 Procedures and Safeguards for Interception, Monitoring and Decryption of Information Rules, which has now been made into a statutory position. The other seven agencies are the Narcotics Control Bureau, the Central Board of Direct Taxes, the Directorate of Revenue Intelligence, the National Intelligence Agency, the Research and Analysis Wing, the Directorate of Signal Intelligence (in defence service areas of J and K, North East and Assam) and the Delhi Police Commissioner.

Farm Loan Waivers
Farm Loan Waivers in India, slow down credit supply to farmers, pushing a large majority of them to non-banking sources of loans. Anticipating relief, farmers start skipping repayments, adversely affecting bank finances. Banks go slow on fresh loans, under the state governments reimburse the amount written off, which often happens over several years. Farm related non-performing assets in Madhya Pradesh doubled to 10.6% of advances in a little over three years, between 2014-15 and June 2018. Between June 2017 and June 2018, non performing assets in Madhya Pradesh state, rose 24%, according to the state level bankers' committee. A similar trend is visible in Rajasthan, Chattisgarh and Assam, following announcement of farm loan waiver schemes. Borrowers stop paying once they anticipate relief. Poll promise of loan waivers creates spike in defaults. After loan waivers, the government delays reimbursement to banks. That prompts banks to go slow on fresh loans. NPAs in the farm loan segment were estimated at around 5.1%, at end March 2018. Tamil Nadu which announced a Rs 6041 crore scheme in 2016, will clear dues of Rs 3169 crore to co-operative institutions over five years. Karnataka has a Rs 5353 crore fall in outstanding agricultural loans, between March 2018 to June 2018. In Madhya Pradesh, the crop loan outstanding is Rs 62,000 crore, where the expected size of loan waiver is Rs 35,000 crore, and the number of crop loan accounts is Rs 82.5 lac. Rajasthan has Rs 78,000 crore crop loan outstanding, where the expected size of loan waiver is Rs 18,000 crore, and the number of crop loan accounts is Rs 50.5 lac. Chattisgarh has Rs 7000 crore crop loan outstanding, where the expected size of loan waiver is Rs 6100 crore, and the number of crop loan accounts is 11.2 lac. Loan waivers may clean balance sheets in the short term, but it may cause disincentives to banks from lending to agriculture, in the long term.

The central government will pump in Rs 83,000 crore in public sector banks, in the next few months, taking the recapitalisation amount in 2018-19, to over Rs 1 lac crore. The demand for fresh funds was part of the supplementary demand for grants, moved in parliament. Till end December 2018, Rs 23,000 crore has been released by the Union Finance Ministry. The fresh capital infusion of Rs 41,000 crore, is over and above the Rs 65,000 crore, budgeted for 2018-19. The additional spending is expected around Rs 86,000 crore, although the cash outflow would be limited to Rs 18,000 crore. It also includes fresh equity of Rs 2300 crore for Air India, which had received Rs 1630 crore earlier in 2018-19. Fund allocation would be linked to the ability of the banks to raise equity from the market, and also get rid of non-core assets. The additional cash spending plan is estimated for Civil Aviation (Rs 3097 crore), Highways (Rs 2785 crore), Social Justice Ministry (Rs 2213 crore), Prime Minister Rozgar Yojana (Rs 922 crore) and Food Subsidy (Rs 850 crore). The central government has infused about Rs 29,000 crore into seven public sector banks, through capitalisation bonds, by end December 2018.

Indian Aid for Maldives
India has promised the Maldives financial assistance of $1.4 billion, in the form of budgetary support, currency swap and concessional lines of credit, as the new regime of Maldivian President Ibrahim Mohamed Solih reaffirms its "India-first policy". Deepened co-operation between the two countries includes key areas like defence, security, capacity building, art and culture. India and the Maldives agreed to enhance maritime security co-operation in the Indian Ocean region through co-ordinated patrolling and aerial surveillance, exchange of information and capacity building. In the joint statement of India's prime minister Modi and the Maldivian president Solih, there was no mention of the contentious Free Trade Agreement (FTA) that the former authoritarian Maldivian ruler Abdulla Yameen had signed with China, and pushed through the Maldivian parliament.

The archipelagic nation, Maldives, was in a debt trap, primarily through the enticing lending Beijing offered to get countries in board its ambitious Belt and Road Initiative (BRI). The Indian assistance of $1.4 billion, is strikingly similar to the amount the atoll nation owes China. Maldives' external debt totalled $1.8 billion, of which $1.4 billion was from China alone. The Maldives is among the top eight countries highly vulnerable to debt distress, because of the BRI.

Protests in Budapest
Prime Minister Victor Orban of Hungary returned to power in 2010, bringing together all opposition parties, from greens to the far right, under the same banner. Since 16 December 2018, there were protests in Budapest, called by unions and opposition parties, outraged at reforms that hike the annual overtime hours that employees can demand from 250 to 400 hours, and allows payment to be delayed by upto three years. Protesters throw smoke grenades at police, who respond with tear gas. Thousands of people rallied against a "new slave law" passed by conservative government of Orban. The government says the changes are needed by employers short of manpower, and will benefit those wanting to work extra hours. Protesters on 16 December 2018 at Parliament Square, were led by two opposition law makers, who later marched to Hungary's public television headquarters, to read a petition, but were refused access. Dozens of protesters have been arrested, and at least 20 policemen injured. Dominated by Orban's ruling party, the parliament passed a bill, paving the way for new "administrative courts" to oversee public administration cases. The justice minister Laszlo Trocsanyi, a close Orban ally, would oversee the courts. The premier could have near total influence over the judicial system. Opposition parties accuse Orban and his ruling Fidesz party, of steering Hungary towards authoritarianism. Pro-government public and commercial media have portrayed the protesters as anarchists and "mercenaries of George Soros", the Hungarian-born US billionaire.

Vol. 51, No.36, Mar 10 - 16, 2019