The HINDU Notes 16th August 2019

The Kashmir discussion will be taken up under the closed consultations format at 7.30 p.m. IST.

•The United Nations Security Council (UNSC) will meet on August 16 morning to discuss Kashmir (India’s abrogation of Article 370), Poland’s mission to the UN confirmed to The Hindu. The Presidency of the UNSC is currently with Poland.

•The Kashmir discussion will be taken up under the closed consultations format at 10 a.m. local time (7.30 p.m. IST), press officer Bartłomiej Wybacz said.

•The consultations on Kashmir were scheduled on a request from China on August 14.

•Earlier this week, Pakistan’s Ambassador to the U.N., Maleeha Lodhi had handed over a letter from the country’s Foreign Minister, Shah Mahmood Qureshi to the UNSC President and Polish Ambassador to the U.N., Joanna Wronecka, requesting that the Council take up the issue. Mr. Qureshi also travelled to Beijing last week for consultations just days after India ended the special status of Jammu and Kashmir and bifurcated the State on August 5.

•India’s position has been that the abrogation of Article 370 is an internal matter.

•“China asked for closed consultations on the Security Council agenda item ‘India Pakistan Question’. The request was in reference to the Pakistani letter to Security Council President,” the U.N. diplomat told news agency PTI, indicating that the request was made recently.

•Pakistan has since launched an international campaign demanding an explanation for New Delhi’s decision, which has also drawn China’s displeasure with regard to the move creating a new Union Territory of Ladakh which remains relevant to the ongoing Special Representative-level dialogue on India-China Boundary Question.

•Diplomats in New Delhi have pointed out that China’s push to bring back Kashmir to the UNSC shows that Beijing remains committed to its ties with Pakistan. Diplomats said the presentation of the Indian case by External Affairs Minister S. Jaishankar earlier this week has not influenced Beijing’s decision makers.

•A former Indian representative to the U.N. said the body will have to first address how it can take up Kashmir under the “India-Pakistan Subjects”, which was relevant till 1971 but is known to have lapsed after U.N. recognised the Simla Agreement of 1972 between India and Pakistan. Since 1972 India has maintained that the agreement provides the guideline for dialogue on the contentious issue, though Pakistan been trying to bring it back to the high table of U.N.

•Maintaining the Pakistani approach, Mr. Qureshi told a TV channel on August 15, “The world needs to realise that it is the issue of humanity and not a piece of land between the two countries.”

•He said China and Pakistan had also nominated their focal persons at Director General levels for the purpose.

? Independence Day speech: Modi announces Chief of Defence Staff post, Jal Jeevan Mission

Prime Minister says removal of special status to Jammu and Kashmir will ensure justice and development to backward sections of society

•Prime Minister Narendra Modi’s Independence Day address from the ramparts of the Red Fort was not only a summing up of what his newly re-elected government had accomplished in the last 75 days but also unveiled a powerful social charter going forward, including raising concerns over population explosion, water conservation along with the big announcement of appointing a Chief of Defence Staff (CDS), a decision that had been pending for two decades since the Kargil War.

•Two major announcements marked Mr. Modi’s speech.

•The first dealt with the announcement that a Chief of Defence Staff (CDS) would be appointed, a demand that was raised after a review on the conduct of the Kargil War, during the time of late Prime Minister Atal Behari Vajpayee’s government. This would have far-reaching ramifications for defence preparedness and co-ordination between the three services.

•The second announcement pertained to the creation of Jal Jeevan Mission for water conservation and revival of water bodies, and an allocation of ₹3.5 lakh crores. “Just as I called upon the country to join the Swachchta Mission to make India Open Defecation Free, I ask that you join the Jal Jeevan Mission which cannot succeed unless people participate on a mass level,” he said.

75-day report card

•Mr. Modi explained the removal of special status of Jammu and Kashmir and the reorganisation of the State into two Union territories and the passage of the Triple Talaq Bill in great detail, stating that his government believed neither in “creating problems nor prolonging them” rather moving decisively ahead to find solutions.

•“India is asking those who supported Article 370, if this was so important and life-changing, why was this Article not made permanent? After all, those people had large mandates and could have removed the temporary status of Article 370,” he said.

•He added that the removal of special status to Jammu and Kashmir would ensure justice and development to backward sections of society in the State and lakhs of migrants who had moved to the State post partition of India. “Now we can say with pride, One Nation, One Constitution,” he said.

•He also made a forceful interjection on the Triple Talaq Bill saying that if social evils such as ‘Sati’ could be proscribed, “Muslim sisters were also deserving of justice by the removal of Triple Talaq.”

Population explosion

•Significantly, a large part of the Prime Minister’s speech was devoted to concerns related to the environment and behaviourial changes that should be affected at the societal level to achieve this.

•He made a strong pitch for population control terming those practising a small family norm as performing a form of patriotism. “Population explosion in the country will create various problems for the coming generations. Those who follow the policy of small family also contribute to the development it is also a form of patriotism,” he said.

•He also emphasised the goal of becoming free of single-use plastic starting October 2nd, Mahatma Gandhi’s birth anniversary. He urged shopkeepers to discourage the use of plastic bags in their stores and asked citizens to gift cloth bags to each other for use this Diwali.

•He made a special appeal to farmers to avoid the use of chemical based fertilizers and aim to keep at least 20-25% of their land holding free of these. “When we say ‘Bharat Mata ki Jai’ (hail to the motherland) we should care for the health of the motherland too,” he said. He also urged bureaucrats in his own government to find ways and means to reduce the presence of government in the every day life of the people.

•He made a special appeal to youngsters to travel to at least 15 destinations within India in the next year, not just to know the country better but to give a boost to the tourism sector.

Zero reference to Pakistan

•The Prime Minister’s speech had no reference to neighbouring Pakistan but did make common cause with other neighbours such as Bangladesh and Sri Lanka who had been, like India, at the receiving end of terror fomented from beyond their borders. He also wished Afghanistan on its upcoming centenary of independence.

•With economic numbers not in the optimistic zone, Mr. Modi, however, assured the country that the fundamentals of the economy were strong and that his government had earmarked ₹100 lakh crores in the next five years for investment in infrastructure which he said would lift the economy. “India does not want incremental progress. A high jump is needed, our thought process has to be expanded. We have to keep in mind global best practices and build good systems,” he said.

? Chief of Defence Staff will make defence forces more effective: PM Modi

The creation of the CDS will eventually lead to the formation of tri-service theatre commands intended to create vertical integration of the three forces

•In a major decision for higher level military reforms and tri-service integration, Prime Minister Narendra Modi on Thursday announced the appointment of a Chief of Defence Staff (CDS) who will be above the three Service Chiefs. The modalities are expected to be finalised in the next few months, defence sources said.

•“I announce that there will be a Chief of Defence Staff going into the future who would be above the three service chiefs. This is going to make the forces even more effective,” he announced in his Independence Day speech from the Red Fort. The creation of the CDS will eventually lead to the formation of tri-service theatre commands intended to create vertical integration of the three forces. However, it is not clear from the announcement if the CDS will be a four-star or a five-star officer.

•The CDS will be a single-point military adviser to the government and synergise long term planning, procurements, training and logistics of the three Services. This is expected to save money by avoiding duplication between the Services, at a time of shrinking capital expenditure within the defence budget. “The Defence Ministry will constitute an implementation committee which will finalise the modalities which is expected to take few months,” a defence source said.

•Given the time frame, Army Chief General Bipin Rawat could be the front runner to be the country’s fist CDS as he has tenure till December 31 and would be the seniormost officer after Air Chief Marshal B.S. Dhanoa, also the current Chairman of COSC, who retires on September 30.

Kargil panel

•The creation of a CDS to act as a single point military adviser to the Prime Minister on strategic issues was one of the key recommendations of the Kargil review committee on higher military reforms after the 1999 conflict. Despite much deliberation, the issue did not make progress due to lack of consensus and apprehensions from Services. In 2012, the Naresh Chandra committee recommended the appointment of a Permanent Chairman of Chiefs of Staff Committee (COSC) as a midway to allay apprehensions over the CDS. Currently, the seniormost of the three Chiefs functions as the Chairman of the COSC but it is an additional role and the tenures have been very short.

99 recommendations

•The CDS is also one of the 99 recommendations made by the Lt. General D.B. Shekatkar (retd.) Committee which submitted its report in December 2016 and had 34 recommendations pertaining to tri-service integration.

•Speaking to The Hindu on the announcement, Lt. Gen. Shekatkar said that with the fast changing security and defence environment this is the right moment for India to have a CDS. He said that during the Kargil conflict if India had a CDS it would not have suffered so many casualties in the initial stages as the Indian Air Force took time to come for support and “so it was felt there is need for a central point authority who can advise the government.”

•He further added, “There are three different agencies buying the same thing. You are wasting the resources. The accounting systems are different. All these have been looked into by the committee and recommended a CDS.”

Military diplomacy

•Another aspect Lt. Gen. Shekatkar stressed was the growing importance of military diplomacy in India’s strategic engagements. “Military diplomacy is today supporting the conventional diplomacy. That can’t be done by different Services. Each Service can’t play a different role,” he added.

Positive impact

•“The announcement of the institution of CDS by Prime Minister Modi has been made keeping in view of the much needed reform to streamline and further improve the coordination among the three forces and their functioning. CDS will have a long lasting and a positive impact on India’s security,” Defence Minister Rajnath Singh said in a post on Twitter.

•The issues of the single point military adviser and the creation of theatre commands have been on the agenda of the government in the previous term as well. This was emphasised by Mr. Modi during a discussion with the Combined Commanders Conference at Dehradun in 2017.

•A pointer to the impending announcement was made by Mr. Modi in his speech on Kargil Vijay Diwas last month where he stressed on “jointness” and said it was time to connect among three Services in terms of “action and system.”

? Is the removal of special status for J&K justified?

Article 370 marked a recognition of J&K’s history and the circumstances surrounding its accession

•On August 5, the Centre decided to end the special status given to Jammu and Kashmir (J&K) under Article 370. In addition, J&K also lost its statehood and was re-organised into two Union Territories. How do these moves change India’s relationship with J&K? More importantly, what do they mean for federalism, parliamentary democracy and diversity? In a conversation moderated by Varghese K. George, former J&K interlocutor Radha Kumar (RK) and journalist Sukumar Muralidharan (SM) look at the changed scenario. Edited excerpts:

The BJP has always argued that Article 370 led to separatism. However, the founding fathers of India had a different idea, believing instead that such provisions were essential to build unity among a diverse population. How do you see it?

•RK: A look at the history of Kashmir reveals that the conflict always intensified in response to dilution of Article 370. Empirical evidence also shows that [it is] the periodic erosion of Article 370 that gave strength to separatist elements.

•SM: I would agree. It is necessary to understand that J&K is unique among Indian States; it is an amalgam of three cultural regions and finding the proper power balance has been a tricky affair. Since the beginning, there was a conflict between Jammu, which insisted on closer integration, and Kashmir, which believed that autonomy would safeguard the integrity of the State. Article 370 was a compromise between these two demands.

•Unfortunately, this difference in political perception has become communalised. The BJP sees the political dividend to be harvested from the rest of India by cracking down on what it has successfully portrayed to be the ‘special status’ of Kashmir which is but a recognition of the historical realities and circumstances surrounding Kashmir’s accession to India.

We could then argue that for both camps — those who believe India is a secular, pluralist country and the other who see it as a Hindu nation — Kashmir holds a demonstrative value. Would that be the right characterisation?

•RK: I’m afraid so. J&K has been instrumentalised by the rest of India. I’d add a proviso: in a ‘quasi-federation’ of States like India, it is inevitable that what happens in one State will impact what happens in other States and resonate at the national level too. People in J&K, and particularly in the Valley, are aware of this but do not know how to engage with the political views of the whole of India. Early political leaders like Sheikh Abdullah, G.M. Sadiq, D.P. Dhar and others knew how to engage with Indian political leaders but it was an unfortunate time for democracy in J&K. This is a key element we often forget to consider: in India, the most successful States are those where democracy has grown unimpeded, whereas States where democracy has been interjected are in trouble, tense or volatile. Kashmir is a prime example of it.

Would you then agree that the question of autonomy has been central to the debate on Kashmir? The binary always used in this debate is autonomy vs. integration. Can we argue that relative autonomy in the earlier decades helped development in Kashmir?

•SM: In the early years after Independence, J&K recorded some of the best land reforms in India. Landlordism and large feudal estates that flourished were dismantled and land was redistributed. A new Kashmiri middle class was created which was significant in underwriting early phases of stability. [But] subsequently, when they sought a voice, democracy was throttled. The reason is that the operative principle in J&K was not accountability to the people, but to New Delhi. J&K was not allowed to function like any other State in the Union.

•The political geography of southern India reflects numerous changes since Independence. The linguistic re-organisation of States gave stability to the region. [However] due to constraints owing to the complex history of J&K, it was not reorganised. Thus, a chronic state of instability was created over the [sharing] of power between the three regions, further compounded by New Delhi’s interference.

•After the 1971 War, India was confident of having diminished Pakistan’s status as the homeland of the subcontinent’s Muslims. Indira Gandhi was able to conclude a pact with Sheikh Abdullah. Bringing him back to the mainstream of politics might have shown a promise of integration of J&K. [But] in 1980s, when Abdullah’s son and successor Farooq Abdullah started functioning in national politics as an Opposition leader, he invited the wrath of Mrs. Gandhi, who dismissed him from office and started to meddle in the politics of the State. J&K has had a history of its democratic processes being impeded.

Radha, what is your view on the difference in terms by which various regions were folded into the Union of India? Is asymmetric federalism good for the regions involved and the idea of India?

•RK: First, on the issue of development, I’d like to add that integration is not a matter of pen on paper, but of hearts and minds, processes and sense of belonging. Development depends on stability, peace and efficient and corruption-free governance. However, J&K has had short periods of stability interspersed with long periods of instability and violence. The first thing should be to work towards a peace process that will establish stability on the ground. That has nothing to do with autonomy.

•Corruption, as we know, is a product of black economy in an unstable region. That is anyway a problem across the country. Transparency International would help us realise that J&K might not be the most corrupt. In fact, my State, Tamil Nadu, is probably the second or third-most corrupt and it does not have an ‘integration’ problem. So, development and integration have little to do with each other.

The government sought legitimacy by claiming that the majority of Parliament voted in its favour. In essence, that majority comes from five or six States. So, a majority of a handful of States has become the national majority and can be used as a tool to change the character, nature or composition of any State.

•SM: This is not majority but majoritarianism, wherein a brute majority imposes its will on a reluctant minority. The Constitution and Supreme Court have said that Article 370 cannot be revoked without consent from the Constituent Assembly, in the absence of which the J&K Legislative Assembly fulfils that role. President’s rule is, by definition, a transitory phase. He cannot assume the will of the people and allow Parliament to ratify a Bill following a highly questionable legislative procedure. Further, the celebration in [many parts of] the country while Kashmir is under lockdown goes to show how deeply alienated J&K is from the rest of India. The spectacle of last week has been a sorry commentary on our democratic morals and sense of loyalty to constitutional principles.

Radha, technically this move was democratic in that an elected government did it. Do you, however, fear that this kind of move may be repeated elsewhere in the country?

•RK: Before I go to the future, I want to underline that this [move] was completely undemocratic. The Governor and the President represent the Union in a State, not the will of the people of the State which rests in its Legislative Assembly and elected government. Parliament represents, on the other hand, the will of the entire country. Within Parliament, there are only a handful of representatives of J&K. Amongst them, the bulk was not present or displayed their opposition and only one spoke.

•Clearly, this parliamentary decision did not include the will of the people of J&K. In such far-reaching parliamentary changes, Parliament cannot substitute the will of the people unless there are compelling reasons (like an armed resistance). Besides, it is not clear how changing the status to a Union Territory would help maintain security since, under Article 370, it is anyway a Central subject.

•Due democratic process in the State was pre-empted and it was put under lockdown and its political leadership was arrested. No reason has been given for their arrest, no charges have been pressed and they have not been produced before a magistrate court. The worst is that this may be used as a precedent in other parts of the country.

Can judicial review make the move ineffectual?

•RK: I can only hope that a judicial review finds grave fault.

The Prime Minister, Home Minister and a lot of supporters say cultural autonomy and political aspirations are a small price to pay for development.

•SM: Since [the days of] Jawaharlal Nehru, there [has been] an aspiration that cultural particularities would be subsumed by modernisation but it has not worked that way. Instead, there is now a re-assertion of these particularities.

•The irony is that while claiming to solidify citizenship rights of Dalits and refugees from Pakistan in Kashmir, and enforcing uniform rights on all residents by taking away special rights of indigenous residents, the government is stripping people of their citizenship rights in Assam and, in Nagaland, has permitted granting separate rights to the State’s indigenous people. Playing two different games is creating a mosaic of great inconsistency.

•[T]he real tragedy is that the people of J&K are being victimised by our lack of ability to arrive at a principled and democratic solution.

Radha, do you think that the BJP’s view on cultural particularities has any continuity with the Nehruvian view on utopia?

•RK: In a single word, no. In the last five years, the BJP and RSS [Rashtriya Swayamsevak Sangh] have attacked Nehru with increasing virulence. They attack his secular principles and misrepresent his political moves. They pin [Article] 370 on him when we know perfectly well that it was a joint decision between Sardar Patel, Gopalaswami Ayyangar, Sheikh Abdullah and Nehru, not to mention other members of the Cabinet. With respect to development, some of the most developed countries have seen conflict. Countries like Ireland chose to give up development, knowing possibly that they will be [stuck in] a spiral where all institutions are disrupted. China has pushed development over culture and succeeded, but it is not a democracy.
? Taming Ebola in Democratic Republic of Congo
A randomised trial has shown two candidate drugs to be highly effective in curing the disease

•There is good news a year after Ebola struck the Democratic Republic of the Congo (DRC), making 2,619 people ill and killing 1,823. Assuming that the final test results are valid, the disease — which has had an overall fatality rate of about 67% in the current outbreak in DRC — can be treated with drugs, especially if treatment is started early.

•Earlier, Merck’s preventive Ebola vaccine (rVSV-ZEBOV-GP), which has had a 97.5% efficacy, helped slow the virus’s spread, but was not able to stop the disease in its tracks.

•Now, four candidate drugs — Zmapp, remdesivir, REGN-EB3 and mAb114 — have been tested in a randomised trial, which began in November last year and, as on August 9, had enrolled 681 of the target 725 patients. Preliminary results, of 499 of the participants, show that two of the candidates, REGN-EB3 and mAb114, were highly effective in treating people infected with the virus. While REGN-EB3 “crossed the efficacy threshold” set for the trial, the efficacy of mAb114 was also comparable, say the results.

Reduced mortality

•The overall mortality among patients randomly chosen to receive REGN-EB3 and mAb114 was 29% and 34% respectively. In the case of Zmapp and remdesivir, the overall mortality was way higher at 49% and 53% respectively.

•The striking difference in efficacy was in patients who were recently infected (and so had a low viral load). Further, REGN-EB3 cured the disease in 94% of such patients, while, in the case of mAb114, it was 89%.

•Taking into consideration the superiority of the two candidates, data and safety monitoring board recommended that all future patients be given either of the two, though they have not yet been licensed.

•REGN-EB3 is a cocktail of three antibodies generated by injecting Ebola virus into a mice model that has a human-like immune system, while mAb114’s development goes back to the Ebola outbreak in 1995 in Congo.

•The first step towards finding a cure was taken in 2005 by veteran Congolese microbiologist Jean Jacques Muyembe Tamfum, who helped discover Ebola virus in 1976 and is now tasked with bringing the current outbreak under control. Mr. Tamfum transfused blood of Ebola survivors into eight people with disease and though antibodies were not isolated, seven of the eight survived. In 2006, antibodies isolated from two survivors led to the development of mAb114.

Final analysis awaited

•While we will have to wait till end September or early October before final analysis of all the trial data is performed, there is a high possibility that the final results will be along the same lines as the preliminary results, which were based on the data of 499 patients — nearly 69% of the total number of participants.

•Vaccination strategies have so far faced huge challenges, including those relating to tracing primary contacts and contacts of contacts, and the mistrust among the infected people towards authorities and health-care workers. However, in all likelihood, the attitude of people will change, and they will become more willing to seek medical care without delay, once they know that Ebola is a curable disease.

•Trial of a new Ebola preventive vaccine from Johnson & Johnson has already begun in Uganda.

•While the interim analysis shows Merck’s vaccine to be highly effective, the durability of protection is not known. Further, a high coverage will be required to prevent outbreaks. And when outbreaks do occur, the availability of an approved treatment will be important for optimal responses.

•If the final results of Merck’s preventive vaccine trial and the two drugs to treat the disease do not spring any adverse surprise, Ebola, which has had a free run so far, is all set to be tamed.

? July 2019 was the hottest month ever recorded
Greenland’s ice sheet shed massive amounts of melted ice daily, totalling nearly 200 billion tonnes in July alone.

•July was the hottest month across the globe ever measured, and 2019 is on track to be one of the warmest years, according to data released last by the European Union’s Earth observation network.

•Searing heat waves saw records tumble across Europe last month, with unusually high temperatures around the Arctic Circle as well. Wildfires unprecedented in scope and intensity burned in Siberia and Alaska, releasing more than 100 million tonnes of CO2 into the atmosphere across June and July.

•At the same time, Greenland’s ice sheet shed massive amounts of melted ice daily, totalling nearly 200 billion tonnes in July alone, according to the Danish Meteorological Institute.

•”While July is usually the warmest month of the year for the globe, according to our data it also was the warmest month recorded globally, by a very small margin,” Jean-Noel Thepaut, head of the EU’s Copernicus Climate Change Service, said in a statement. “With continued greenhouse gas emissions and the resulting impact on global temperatures, records will continue to be broken in the future.”
? Microplastics in Arctic snow point to widespread air contamination
Scientists raise concern on the ill effects of inhaling particles

•Minute microplastic particles have been detected in the Arctic and the Alps, carried by the wind and later washed out in the snow, according to a study that called for urgent research to assess the health risks of inhalation.

•Every year, several million tonnes of plastic litter course through rivers and out to the oceans, where they are gradually broken down into smaller fragments through the motion of waves and the ultraviolet light of the sun.

•The new study, conducted by scientists at Germany’s Alfred Wegener Institute and Switzerland’s Institute for Snow and Avalanche Research, found that microplastic particles can be transported tremendous distances through the atmosphere.

•These particles, defined as shreds less than five millimeters in length, are later washed out of the air by precipitation, particularly snow.

•“It’s readily apparent that the majority of the microplastic in the snow comes from the air,” said Melanie Bergmann, lead author of the paper published in Science Advances.

•Ms. Bergmann and her colleagues used an infrared imaging technique to analyse samples collected between 2015 and 2017 from floating ice in the Fram Strait off Greenland, visiting five floes by helicopters or dinghies.

•They then compared these with samples taken from from remote Swiss Alps and Bremen in northwest Germany.

•Concentrations of the microparticles in the Arctic were significantly lower than in the European sites, but still substantial.

•The team’s hypothesis for airborne transportation builds on past research conducted on pollen, where experts confirmed that pollen from near the equator ends up in the Arctic.

•Similarly, dust from the Sahara desert can cover thousands of kilometres and end up in northeast Europe.

•Ms. Bergmann said little work had been done to determine the effects of exposure to these particles.

•“But once we’ve determined that large quantities of microplastic can also be transported by the air, it naturally raises the question as to whether and how much plastic we’re inhaling,” she said, stressing the need for urgent research into the effects on human and animal health.

? Plastics industry seeks export schemes, tax benefits for MSMEs
Sector wants 25% of land in industrial corridors allotted to small firms at discount

•Plastic manufacturers, who are finding the going tough amid environmental challenges have called for export promotion schemes for Micro, Small, Medium Enterprises (MSMEs) in the sector and removal of anti-dumping duty on machines not made in India.

•At a recent meeting with officials, they sought allocation of 25% of the land available at all industrial corridors for MSMEs at discounted rates.

•The industry also sought world-class infrastructure for MSMEs under the Public Private Partnership model comprising physical infrastructure, knowledge infrastructure, incubation centres, e-platforms, B2B access and technology and innovation support for MSME.

•Additionally, it appealed to the government to make lending to MSMEs more convenient. “There is a need to provide capital adequacy norms support through recognition of MSME credit ratings programme for plastic processing sector; rationalise interest rate and margin requirements for MSME who adopt credit rating programme,” Meela Jayadev, president, All India Plastics Manufacturers’ Association (AIPMA), said in a statement.

Help desk sought

•“There is a need for the establishment of a helpdesk for MSMEs at banks, and the current limits under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme needs to increase to ₹4 crore,” the statement added.

•It also demanded direct tax exemption on export income and income generated directly or indirectly from indigenisation as well as import substitution exemption for a period of five years.
? CBIC seeks inputs to combat ‘gift’ import duty loophole
Flat rate of tax and Integrated GST on all items imported from e-com firms mooted

•The Central Board of Indirect Tax and Customs (CBIC) has asked domestic industry players to come up with a detailed and long-term solution to combat the Customs duty evasion by foreign sellers who are currently exploiting a loophole in the law.

•Recently, the Mumbai Customs department clamped down on gift imports since it found that many foreign sellers were evading customs duty by categorising their products as gifts. According to the Foreign Trade Act, gift items of a value of up to ₹5,000 received from foreign countries to people residing in India are exempted from customs duty.

•Domestic industry players brought to the notice of the Customs Department that several e-commerce companies, especially from China, were delivering orders to their India-resident customers by disguising their products as gifts so as to evade the Customs duty that would normally be applicable on the products.

•In April, the Mumbai Customs Department banned the import of gifts, following which the courier import traffic at the Mumbai airport more than halved. The Delhi and Bengaluru Customs Departments have also taken note of this activity and are clamping down on the import of gifts. However, industry players say that these gift imports are still continuing in large numbers at other ports of entry.

•“However, they [gifts] are still entering India through other ports like Kolkata, Kochi, Chennai, Hyderabad, etc, and through the Indian postal channel,” Sachin Taparia, founder, chairman and CEO of LocalCircles wrote in a letter to the CBIC. “Also, the postal channel is not proactive about engaging Customs officials when gift shipments arrive.”

•The CBIC has now asked the domestic industry to come up with a detailed plan by the end of the month to plug these loopholes. One of the suggestions being mooted is the imposition of a flat rate of tax and Integrated Goods and Services Tax to be applied on all items imported from e-commerce companies. This way, gifts can be distinguished from e-commerce purchases.

•“The idea is not to curb the import of gifts, that is not the approach we want to take,” a member of the CBIC told The Hindu. “We want to stop the people illegitimately using the gift provision to bring in their goods, rather than the people legitimately sending gifts.”

•Another approach being favoured is to integrate the payment portals of the e-commerce companies with the CBIC so that when a payment is made for a product that has to enter India, the CBIC has the barcode and other details it can match with the product when it physically arrives at a port of entry.

? Global markets gripped by recession fears
Inverted bond yield curve in the U.S. seen as a precursor; inversion reversed marginally on Thursday but panic remained

•A relentless drop in global bond yields raised fears that the world economy was hurtling towards recession and weighed on global equities on Thursday.

•Expectations that the U.S. Federal Reserve and other central banks would respond robustly to the recession warning helped world stocks to steady earlier. But that recovery was cut short by the latest rhetoric from Beijing.

•China’s threat to impose counter-measures in retaliation for the latest U.S. tariffs knocked stocks sprawling on Thursday. Wall Street futures erased earlier losses and were trading in the positive territory

•“The only game in town is the central banks, hence the bond markets are rallying,” said Peter Schaffrik, global macro strategist at RBC Capital Markets.

•“We have regional bonfires in Hong Kong, Argentina, Japan against South Korea, and none of these are going away easily; each and every one is not necessarily strong enough to cause trouble.”

•Recession fears grew on Wednesday after yields on 10-year treasury bonds dropped to less than two-year rates for the first time in 12 years, when the same yield curve inversion presaged the 2008 recession.

•The curve has inverted before every recession in the past 50 years and sent a false signal just once.

Off lows

•The latest inversion has since reversed, albeit marginally, and yields on 30-year treasuries rose off the record 1.965% low reached in Asian trade. But they are still down 60 basis points in just 12 sessions.

•Markets appear to be pinning their hopes, yet again, on central banks, betting that scale of the scare would alarm policymakers, especially at the Fed. Money markets price in a growing chance the Fed will cut rates by half a point at its September meeting.

•“We have seen stocks trading very poorly as a result of the yield curve inversion, so that will be flashing some additional warning lights for the Fed that they have to do more,” said Andrea Iannelli, investment director at Fidelity International.

•“The only question is, can the Fed out-dove the market? At the very least, they will have to match market expectations in the short term.”

•The Chinese comments sent a pan-European equity index down more than 0.50% and markets in London and Frankfurt lost over 1%. Earlier, Asian shares fell 0.5%. Japan’s Nikkei shed 1.2% as a yen surge hit the export-heavy market.

•German 30-year yields are below minus 0.2% for the first time. Ten-year yields touched a record low of minus 0.67%.

•The growth worries come amid economic stress in Argentina and some other emerging markets, fears of Chinese military intervention in Hong Kong and trade tensions that show no sign of abating.

Safety plays

•As the Sino-U.S. trade war escalates, long-dated bond yields have fallen across the developed world, flattening yield curves in what is considered a clear signal of a worsening growth outlook.

•What sent the U.S. curve over the brink into inversion was German data on Wednesday that showed the economy had contracted in the quarter to June. That came on the heels of dire Chinese data for July.

•The British yield curve also inverted. The German curve is at its flattest since 2008.

•Oil prices plunged with Brent crude losing another 2% to $58.4 a barrel, after shedding 3% overnight.

•Safe-haven gold was up 0.3% to $1,520 per ounce, just off recent six-year highs.
? Lessons after the great deluge
Kerala needs to adopt watershed-based master planning and review building byelaws

•The unique geography of Kerala, with its steep climbdown from 900m high elevations of the Western Ghats to the coast of Malabar, has resulted in a land with a vast riverine network. There are no less than 44 fast flowing rivers that drain the rainwater Kerala is blessed with into the Arabian Sea. It is a lifeline that supports a very fertile land, some of the most singular flora, fauna and also a people and their lives in a symbiotic way.

Large-scale urbanisation

•However, this drainage basin has seen massive urbanisation over the last two decades with the erstwhile wisdom of coexistence with the State’s waterways beginning to fade away. This linear development which has been along major road networks, has completely ignored the varying and ecologically sensitive landscape. Substantial portions of revenue lands in the State are wetlands and forests, which has resulted in a shortage of buildable land parcels. This in turn is creating huge pressure on these ecologically fragile areas for conversion to government-supported infrastructure projects as well as private profit-making enterprises.

•Not surprisingly, all landslide and flood-affected areas in the State are in Ecologically Sensitive Zones (ESZ-1), as categorised by the Madhav Gadgil report. The Post Disaster Needs Assessment (PDNA) report that was prepared by the UN for Kerala following the massive flooding of 2018 looks at some of the gaps in law and policy. The State Action Plans on Climate Change elucidate measures for disaster-risk reduction in the wake of an increasing frequency of heavy rainfall in turn leading to more flooding and landslides. Though plans and laws such as Integrated Water Resources Management or Coastal Regulation Zone Notification hold key solutions to natural disasters that are linked to water management, most of them are not implemented or followed to the letter. A lack of holistic and coordinated measures within planning departments has resulted in further problems. Also missing are key pieces of legislation for housing and land use in fragile zones which allow buildability but with sensitive development.

Dilution of laws

•The need of the hour is for a review and revision of building bye-laws for urban and rural areas in accordance with bettering environmental sustainability. In 2017, a judgment of the High Court of Kerala mandating the inclusion of a clause in building rules, and which said that ‘natural drains and streams shall not be obstructed by this development/building permit’, has yet to come into effect. Further, the Kerala Conservation of Paddy Land and Wetland Act, 2008 — it has immense potential to preserve such land as natural watershed buffers — has suffered too many dilutions even as rampant reclamation of paddy lands continues. The absence of a databank on paddy lands and wetlands as mandated by the law, has only exacerbated the issue.

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