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News Wrap

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The Economic Survey, presented on 31 January 2020 in India's parliament, projects a revival of economic growth to 6-6.5%, next fiscal 2020-21. For the current fiscal, 2019-20, it projected a GDP growth of 5%, the lowest in 11 years. The survey suggested that the government should relax the budget deficit target, to boost growth. It suggested a cut in food subsidy to create fiscal space at a time when tax revenues were falling. It observed that businessmen should be respected, as they create wealth and jobs. It also suggested reforms to make it easier to open new businesses, register property, pay taxes and enforce contracts. The survey called for boosting manufacturing with "assemble in India for the world" concept and underlined the need to spend US Dollars 1.4 trillions in infrastructure to nearly double the size of the economy to US Dollar 5 trillion. The survey's growth forecast is too optimistic as the recovery is likely to be slow and shallow, amid rising inflation and declining investment. The Economic Survey has failed to forecast growth in four out of the past five years. The Survey has sourced some data from Wikipedia, the free on line encyclopedia created and edited by volunteers around the world. A decline in out of pocket health care spending by households over a three year period has been underscored by the survey. The fall is likely linked to expanding private health insurance than to extra government spending. All patients who approach, public hospitals do not get free drugs or diagnostic services. If one takes the education expenditure to include the combined spending on education, sports, art and culture, then the education expenditure has increased from 2.8% (2014-15), to 3.1% (2019-20). The Survey has pitched for the scrapping of the Essential Commodities Act (1955) saying that the law is "anachronistic" that leads to harassment, and. is of no help in checking price volatility. At a time of spiraling prices of onion and other vegetables the Economic Survey notes the affordability of vegetarian "Thalis" (plate) has improved 29%, while that for non-vegetarian "thalis" by 18%, from 2006 -07 to 2019-20.

Union Budget 2020
The Government of India's budget 2020-21, has an estimated deficit of 3.5%. The budget offers lower personal Income Tax rates for those who forego existing exemptions and deductions; tax reliefs for foreign investments, cooperatives and start-ups; and ending the payment of dividend tax by companies. The new personal income tax regime ends the 70 of the existing 100 exemptions. The individual tax payers still had the choice to pay taxes according to the existing regime, taking advantage of various exemptions. The disinvestment target is Rs 2.1 lac—the highest ever. On this Rs 90,000 crore is expected to be raised from the sale of the government's stake in LIC and IDBI. The budget imposes a 5% tax on foreign travel packages bought from tour operators, with effect from 01 April 2020. Income Tax, PAN will be allotted instantly against Aadhaar card. The insurance coverage of bank deposits is raised from Rs 1 lac to Rs 5 lac. The tinkering with the tax rates and other concessions are in favouring large capital, including foreign portfolio investors, and richer individuals, within the country. The crucial need to do something immediately to revive mass consumption demand by significantly increasing public spending in areas like agriculture, rural development and food was simply ignored. The budget estimates tell nothing about what will actually be received or spent by the government. The official data on receipts and expenditures are only available until the end of December, 2019. The revenues and expenditures for the last quarter of 2019-20 are to be guessed at. The spending on agriculture has been only 60% of the 2019—20 budget amount, over nine months of the fiscal year. The same is true for health, education and other areas, where the government provides little money.

The outlay on food subsidy has been cut from the budget estimate of Rs 1.84 lac crore to Rs 1.08 lac crore. The states will not receive the required inputs to ensure food distribution. The Food Corporation of India will continue to suffer loses and have to take on debt because it is simply not getting paid by the central government. The crucial programme MGNREGA requires a budgetary allocation of Rs l lac crore. But this budget cuts the existing inadequate projected Spending of Rs 71,000 crore; by a further Rs 9500 crore for 2020-21. Not only has the central government not paid the Goods and Services Tax (GST) compensation fund to the states that is legally due to them but it has also announced that, henceforth, such payments will depend on what is raised from the cess for that purpose, rather than the agreed upon payments. There is a mini-fiscal crisis in the states, as the central government has not transferred even the regular share of GST payments due to the states. The Budget did not mention the economic slow own prevailing. Medical colleges are to be attached with district hospitals on public—private partnership (PPP) model, to tackle shortage of doctors. There is no indication of the share of the public funding committed. The budgetary support of Rs 70,000 crore for 2020-21 for the Railways covers a blue print of private trains, better connectivity to tourist sites, solar power to fuel the rail network, and transportation of perishables.

Rohingya Genocide
Buddhist majority Myanmar has long considered the Rohingyas to be "Bengalis" from Bangladesh, even though their families have lived in Myanmar for generations. Nearly all have been denied citizenship since 1982, effectively-rendering them stateless. They are also denied freedom of movement and other basic rights. In August 2017, Myanmar's military launched a clearance campaign in northern Rakhine state, in response to an attack by a Rohingya insurgent group. The campaign forced more than 7,00,000 Rohingyas to flee to neighbouring Bangladesh and led to accusations that security forces committed mass rapes, killings and burned thousands of homes. In a case brought by the African nation of Gambia on behalf of an organisation of Muslim nations that accuses Myanmar of genocide in its crackdown on the Rohingya, before the International Court of Justice in the Hague, the ICJ president Judge Abdulqawi Ahmed Yusuf ordered on 23 January, 2020 that Myanmar take all measures in its power to prevent genocide against the Rohingya people. The ICJ is of the opinion that the Rohingya in Myanmar remains extremely vulnerable. Its order for so-called provisional measures intended to protect the Rohingya is binding, and creates international legal obligations on Myanmar. In the Great Hall of Justice, the judges ordered Myanmar to report to them in four months on what measures Myanmar has taken to comply with the order, and then to report every six months as the case moves slowly through the World Court. Myanmar's former pro-democracy icon Aung San Suu Kyi defended the campaign by military forces that once held her under house arrest for fifteen years. She was present in the Court for the ICJ hearing, and urged judges to drop the genocide case, and allow Myanmar's military justice system to deal with any abuses.

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Frontier
Vol. 52, No. 34, Feb 23 - 29, 2020