- Government must step up plans for asset recycling and monetisation for much-needed boost to investment:
Relevance: mains: G.S III: Indian Economy
An inter-ministerial committee of the central government is set to recommend a second list of public sector assets that could be monetised to raise resources which could then be ploughed back into fresh investments.
Reportedly, the proposal entails leasing out public sector assets such as gas pipelines of GAIL, mobile towers of public telecom operators like BSNL and MTNL, and ATMs of state-owned banks to private sector players. Ownership of these assets, though, would continue to vest with the PSUs/government.
Earlier, the first list of assets approved by the inter-ministerial committee included 12 sports stadiums, NTPC’s Badarpur plant, ITDC’s Ashoka hotel, among others. Coming at a time when private sector investments remain subdued, the move to monetise and recycle public sector assets is welcome. Fresh public investments could gradually help crowd-in private investments.
Over the past few years, despite several initiatives of the government, private sector investments have remained sluggish. As a result, the burden of driving investments has fallen on the public sector. But with limited fiscal space, the ability of the general government (Centre and states) to boost investments is severely limited.
In such circumstances, asset recycling and monetisation is an innovate way for the public sector to raise resources. At its core, the idea essentially involves giving funds back to the company by leasing an asset, brown-field projects where the process will be easier, to private players for a long term. The transactions could be structured in various ways – large upfront payments, with small or no annual payments, or a small upfront payment, and regular annual payments.
This, it is hoped, would be lapped up by pension and sovereign funds who are looking for a fixed income stream with limited execution risk. The National Highway Authority of India (NHAI) has been particularly successful in raising resources through this approach.
It has recently raised Rs 9,400 crore by transferring operation of assets to private entities for a specified time period. Such a mechanism allows PSUs to raise money for fresh investment without being dependent on budgetary support or borrowings. Revenue raised through this route, which should be ring-fenced lest it is squandered away, can be then ploughed back into roads, ports, airports, etc. At the current juncture, this would compensate for the inability of the private sector to fund infrastructure.
In her maiden budget, Finance Minister Nirmala Sitharaman had reiterated the government’s intention to invest Rs 100 lakh crore in infrastructure over the next five years. Central to achieving this is revival of the private investment cycle. But an over-leveraged private sector, at the current juncture, is unlikely to ramp up investments in the short term, leaving the burden on the public sector.
An increase in public sector investments could over time help revive the moribund investment cycle. This list of assets must be followed up by a more ambitious, structured programme that seeks to monetise land and other assets of the public sector.
(Source: Indian Express)
- Without adequate water, sanitation and hygiene amenities, infection control is severely compromised
Relevance: mains: G.S paper III: Health and sanitation
Healthcare facilities are many and varied. Some are primary, others are tertiary. Many are public, some are private. Some meet specific needs, whether dentistry or occupational therapy, and some are temporary, providing acute care when disaster strikes.
Whatever their differences, and wherever they’re located, adequate water, sanitation and hygiene (WASH) amenities, including waste management and environmental cleaning services, are critical to their safe functioning. When a healthcare facility lacks adequate WASH services, infection prevention and control are severely compromised. This has the potential to make patients and health workers sick from avoidable infections. As a result (and in addition), efforts to improve maternal, neonatal and child health are undermined. Lack of WASH facilities also results in unnecessary use of antibiotics, thereby spreading antimicrobial resistance.
As a joint report published earlier this year by the World Health Organization and the UN Children’s Fund (UNICEF) outlines, WASH services in many facilities across the world are missing or substandard. According to data from 2016, an estimated 896 million people globally had no water service at their healthcare facility. More than 1.5 billion had no sanitation service. One in every six healthcare facilities was estimated to have no hygiene service (meaning it lacked hand hygiene facilities at points of care, as well as soap and water at toilets), while data on waste management and environmental cleaning was inadequate across the board.
Enhancing primary healthcare
In WHO’s South-East Asia region, efforts to tackle the problem and achieve related Sustainable Development Goal (SDG) targets are being vigorously pursued. As outlined at a WHO-supported meeting in New Delhi in March, improving WASH services in healthcare facilities is crucial to accelerating progress towards each of the region’s ‘flagship priorities’, especially the achievement of universal health coverage. Notably, improving WASH services was deemed essential to enhancing the quality of primary healthcare services, increasing equity and bridging the rural-urban divide.
A World Health Assembly Resolution passed in May is hoping to catalyse domestic and external investments to help reach the global targets. These include ensuring at least 60% of all healthcare facilities have basic WASH services by 2022; at least 80% have the same by 2025; and 100% of all facilities provide basic WASH services by 2030.
For this, member states should implement each of the WHO- and UNICEF-recommended practical steps. First, health authorities should conduct in-depth assessments and establish national standards and accountability mechanisms. Across the region, and the world, a lack of quality baseline data limits authorities’ understanding of the problem. As this is done, and national road-maps to improve WASH services are developed, health authorities should create clear and measurable benchmarks that can be used to improve and maintain infrastructure and ensure that facilities are ‘fit to serve’.
Educating the health workers
Second, health authorities should increase engagement and work to instil a culture of cleanliness and safety in all healthcare facilities. Alongside information campaigns that target facility administrators, all workers in the health system — from doctors and nurses to midwives and cleaners — should be made aware of, and made to practise, current WASH and infection prevention and control procedures (IPC). To help do this, modules on WASH services and IPC should be included in pre-service training and as part of ongoing professional development. In addition, authorities should work more closely with communities, especially in rural areas, to promote demand for WASH services.
And third, authorities should ensure that collection of data on key WASH indicators becomes routine. Doing so will help accelerate progress by promoting continued action and accountability. It will also help spur innovation by documenting the links between policies and outcomes. To make that happen, WHO is working with member states as well as key partners to develop a data dashboard that brings together and tracks indicators on health facilities, including WASH services, with a focus on the primary care level.
As member states strive to achieve the ‘flagship priorities’ and work towards the SDG targets, that outcome is crucial. Indeed, whatever the healthcare facility, whoever the provider, and wherever it is located, securing safe health services is an objective member states must boldly pursue.
(Source: The Hindu)
- The challenges made to the 103rd constitutional amendment present a more difficult judicial examination than usual
- Relevance: mains: G.S paper II: Indian polity.
Constitutional challenges are often described as hard cases. This is, however, seldom true. Invariably, disputes possess a simple solution. We can debate over what theories of interpretation to apply and over whether the text of a clause needs to be read literally or in light of its historical background, but in most cases, the Supreme Court’s own precedent and commonly accepted legal theories provide an easy enough guide to finding a principled answer. The challenges made to the 103rd constitutional amendment, though, which a two-judge bench of the Supreme Court is slated to hear this month, present a rather more difficult test.
Here, the issues involved concern questions both over whether the amendment infringes the extant idea of equality, and over whether that idea is so intrinsic to the Constitution, that departing from it will somehow breach the document’s basic structure. The court’s answers to these questions will operate not merely within the realm of the law but will also likely have a deep political bearing — for at stake here is the very nature of justice that India’s democracy embodies.
The law, which was introduced in January this year, amends Articles 15 and 16 of the Constitution, and grants to government the power to provide for reservation in appointments to posts under the state and in admissions to educational institutions to “economically weaker sections of citizens [EWS]”. At first blush, this reservation, which can extend up to 10% of the total seats available, may not appear to impinge on the existing constitutional arrangement. But what it does mandate is a quota that will apply only to citizens other than the classes that are already eligible for reservation. Consequently, persons belonging to Scheduled Castes and Scheduled Tribes and persons who are not part of the creamy layer of the Other Backward Classes will not be eligible to the seats available under the quota.
According to the petitioners in the Supreme Court, the central hypothesis of the amendment, where reservation is predicated on individual economic status, violates the Constitution’s basic structure. In their belief, the law, by providing for affirmative action unmindful of the structural inequalities inherent in India’s society, overthrows the prevailing rationale for reservations. In doing so, they argue, the amendment destroys the Constitution’s idea of equal opportunity. The Union of India argues that while the Constitution demands equality, it does not confine Parliament to any singular vision. According to it, the power to amend the Constitution must necessarily include a power to decide how to guarantee equal status to all persons.
Meaning and purpose
In some senses, as sociologist Gail Omvedt wrote in these pages (“The purpose of reservation – I”, March 24, 2000), “the whole history of the struggle for reservation has also been a debate about its very meaning and purpose”. When reservations were first introduced by some of the princely states the policy was seen largely as an alleviative measure. For instance, in the princely State of Mysore, where privileged castes had cornered virtually every post available under the government, a system of reservations was introduced denominating communities as “Backward Classes”, and providing for them a larger share in the administration. By the time the Constitution was being drafted as a reading of the Constituent Assembly’s debates shows us, the rationale for reservations had broadened. The Constitution’s framers saw the measure as a promise against prejudice, as a tool to assimilate deprived groups into public life, and as a means of reparation, to compensate persons belonging to those groups for the reprehensible acts of discrimination wrought on them through history. Marc Galanter has called this a compensatory discrimination principle.
Yet, despite the expanded justification, the basic foundational logic for reservations was still predicated on a demand for a fairer and more representative share in political administration. This is demonstrated by R.M. Nalavade’s comment in the Constituent Assembly. “Our experience in the provinces, though there are provisions for reservation in the services, is bitter,” he said. “Even though the depressed classes are educated and qualified, they are not given chances of employment under the Provincial Governments. Now that we have provided for this in the Constitution itself, there is no fear for the Scheduled castes. According to this clause we can be adequately represented in the provincial as well as in the Central services.”
By providing for a more proportionate distribution of the share in administration, the programme of reservations, it was believed, would end at least some of caste-based domination of jobs, particularly of employment in the public sector — a domination that was built over thousands of years, where Dalits and Adivasis were denied access to equal status. As Ms. Omvedt has pointed out, the strategy behind reservations could, therefore, never have involved an attack on pure economic backwardness. The idea was always to disavow caste-monopoly in the public sector.
Theory of justice
Even when the Constitution’s first amendment was introduced in 1951, to allow the state to make special provisions beyond reservations in public employment for “the advancement of any socially and educationally backward classes of citizens, or for the Scheduled Castes and the Scheduled Tribes”, the rationale, as the lawyer Malavika Prasad has argued, remained constant. Attempts made at the time to categorise individuals on the basis of economic status were expressly rejected. Behind this thinking was a distinctive theory of justice: that by according a greater share in public life to historically disadvantaged groups the relative position of those groups would stand enhanced. No doubt such a policy would not, in and of itself, help eliminate the various inequalities produced by the caste system, but it was believed it would represent a resolute effort to eliminate at least some of the caste-based domination prevailing in society.
Indeed, the policy and the idea of justice that undergirds it have been seen as so indispensable to the Constitution’s aims and purposes that the Supreme Court in State of Kerala v. N.M. Thomas (1975) held that reservations based on social and educational backwardness, far from being an exception ought to be seen as an intrinsic facet of the idea of equality.
Unseating equality
It is in departing from this logic that the 103rd amendment unseats the Constitution’s code of equality. Pure financial ability is a transient criterion; it doesn’t place people into a definite group requiring special privileges. If anything, allowing for reservation on such a principle only further fortifies the ability of powerful castes to retain their positions of authority, by creating an even greater monopolisation of their share in administration. If such an end is indeed the vision, it’s difficult to see how the elementary conception of equality guaranteed by the Constitution can continue to survive.
Now, no doubt the Supreme Court may, on the face of things, consider Parliament as possessing the power to altogether dismantle the Constitution’s existing idea of equality without simultaneously demolishing the document’s basic structure. But, if nothing else, when the court hears the challenges made to the 103rd amendment, it must see the petitioners’ arguments as representing a credibly defensible view. The least the court ought to do, therefore, is to refer the case to a constitution bench, given that Article 145(3) mandates such an enquiry on any issue involving a substantial question of law concerning the Constitution’s interpretation, and, in the meantime, stay the operation of the amendment until such a bench hears the case fully. Should the court fail to do so the government will surely one day present to it a cruel fait accompli.
(Source: The Hindu)
- Local firms will be at a disadvantage if big tech companies are given plum roles:
Relevance: mains: G.S: paper III: Indian Economy
Since early last year, WhatsApp has busily piloted its payment system in India. WhatsApp Pay relies on the Indian government’s Unified Payments Interface (UPI) system to facilitate inter-bank transactions. Regulatory approval that would allow its nation-wide introduction is stuck on one point: the Indian government has asked WhatsApp to localise all data processing related to payment transactions in India and not on Facebook’s servers in the U.S. This is well in line with the government’s existing technology vision for the digital economy, which hinges on data localisation as the magic bullet to solve multiple problems ranging from prevention of personal data misuse to promotion of local enterprises. Unfortunately, it misses a number of other issues and hidden costs of this current deal and raises broader issues on big tech’s foray into financial services, especially payments.
The case of WhatsApp Pay
In the case of WhatsApp Pay, its parent company, Facebook, has come under scrutiny for harmful content, lack of privacy, and data misuse in recent years. The large amounts of social media data that Facebook sits on, its habit of using private user data to promote business, and its reluctance to adhere to policy have led to radical suggestions of breaking up big tech. Facebook, in response, has rolled out a new plan to reinvent its business, which is to build a new privacy-focused platform that integrates WhatsApp, Instagram and Messenger. This will provide end-to-end encryption for consumers and business services along with direct payment options. As The Economist recently noted, if this succeeds, it would make it more difficult to argue for big tech to be sliced up.
The only hitch in this new business plan is that Facebook is relatively new to the digital payments market and cannot gain a foothold in the U.S., where PayPal has the largest consumer base. This is where it becomes important to make WhatsApp Pay successful in India. India is WhatsApp’s largest market in the world with over 250 million monthly users. Once WhatsApp Pay catches on in India, Facebook intends to introduce it in other developing countries. Thus, the decision to allow WhatsApp Pay in India can catapult Facebook into the big league in the global digital payments market where companies like Alibaba’s Alipay and Tencent’s WeChat are making waves.
India’s digital vision talks about data sovereignty and giving domestic firms an advantage. The digital payments market, with 800 million mobile users in the country of which more than 430 million have Internet access, is estimated to grow to over $1 trillion by 2025. If India is serious about giving local firms an advantage, it should leverage this immense opportunity. With the right policy incentives, local firms could capture large shares of the digital payments market to become e-commerce players on a global scale, as China’s experience shows. In China, domestic enterprises were strategically enabled to use the local market to emerge as global champions. Today, WeChat combines the functional features of several online platforms including Facebook, WhatsApp, PayPal and Uber Eats. Over 300 million users worldwide use WeChat payments for everything, right from ordering food to paying hospital bills, a model that all firms want to emulate.
But giving WhatsApp Pay a plum role in the digital payments market achieves the opposite because if the deal goes ahead, it will automatically give WhatsApp Pay a large advantage over all other Indian firms that are currently operating without the advantage of relying on a large social media and messaging base as WhatsApp does. This creates a ‘winner-takes-most’ dynamic that competition authorities worldwide are becoming wary of: simply because WhatsApp already has the economies of scale and network externalities, it will manage to integrate it into an entirely new sector, with undue advantages that it should normally not benefit from. To top it all, Facebook will also receive a cut in all WhatsApp Pay transactions conducted in India. Similar concerns with market power can exist with allowing other large firms like Google Pay and Amazon Pay, but these will need to be assessed individually while making decisions for the national digital payments market. What matters most is that without a level playing field, even the most well-meaning policy incentives will not safeguard the expansion of local firms in the digital payments arena, thus severely limiting the capacity of local firms to benefit from the potential of India’s own digital payments market.
Fallouts for privacy
The largest fallouts of granting market approval to a global player will be in the area of privacy. In the particular instance of WhatsApp Pay, the deal will give Facebook access to data on how people across countries are spending their money. Even if WhatsApp agrees to set up data localisation in India, the localisation requirement of the government is limited to payments data only. As a result, Facebook will still have access to metadata on all payment transactions, which can be matched with the data that the company already has access to on Instagram, Messenger and WhatsApp for the same users. With all of that, Facebook will be able to match user profiles on its social media websites with the user profiles that are authenticated by the UPI system in India. This would not only make Facebook the second biggest identification issuer in India after the Indian government, it would also make Facebook the best repository of data covering all areas of life — social and financial — on all Indian users. This kind of data pooling would never be allowed in the U.S. where financial privacy laws protect against such an outcome, so why should this be allowed in India? Similar risks exist in the case of Google Pay or Amazon Pay, where payments data can be matched with other existing repositories with outcomes that are not desirable and may/may not be as drastic as in the case of WhatsApp Pay.
These examples of big tech and finance help illustrate some of the complexities of digital markets. To address safe digital transformation, we need a policy that focuses on the nitty-gritty of implementation and coordination. We need to be clear on how digital technologies will transform different sectors, especially finance and payments, with a view to promoting competition, enabling local firms, protecting consumer welfare and promoting data sovereignty. In the specific case of the digital payments market, we need the elaboration of clear guidelines that enable the development of a digital payments market, going beyond requirements for storing and processing payments. Data localisation is costly, and consumers not only need protection that these compliance costs will not be passed on to them by businesses, but they also need clarity on how their data will be stored, for how long, and what uses will be prohibited. Local firms will need much more space and support in the digital payments market to be able to create new jobs, new prospects and digital dividends. These are crucial to guarantee the rights of all Indians as we move from a cash-based to a cashless economy.
(Source: The Hindu)