The Hindu Editorial Analysis | 21st Nov ’19 | PDF Download

Scrap updated NRC, Assam govt. urges Centre.

• Monitored by SC, it was published on August 31
• Following Union Home Minister Amit Shah’s statement in the Rajya Sabha that the National Register of Citizens (NRC) exercise would be conducted across India and repeated in Assam, the State’s Finance Minister, Himanta Biswa Sarma, said Assam had asked the Centre to reject the updated final NRC in the State. The final NRC, monitored by the Supreme Court, was published on August 31. More than 19 lakh of the 3.29 crore applicants were left out of the register that took five years to compile and cost the exchequer ₹1,220 crore.
• The NRC in Assam was a culmination of the Assam Accord signed in 1985 after a six-year agitation, spearheaded by the All Assam Students’ Union (AASU) and the All Assam Gana Sangram Parishad (AAGSP) for detection, disenfranchisement and deportation of foreigners.

‘It will be catastrophic’

• According to human rights activist Harsh Mander, the NRC exercise, if conducted across the country, would be catastrophic for the social fabric and future of India as a secular, democratic republic. “I just returned from Assam and met families excluded from NRC. The enormous human suffering that this has entailed is hard to describe. If it is now imposed in the country after the Citizenship Amendment Bill, it means that only our Muslim brothers and sisters will have to prove their citizenship based on documents that most of us will not be able to produce as it is decades old. This is truly the destruction of the country based on the idea of equal citizenship,” he said.
•  The Citizenship Amendment Bill that seeks to grant citizenship to undocumented non-Muslims from Bangladesh, Afghanistan and Pakistan is likely to be taken up in the ongoing winter session of Parliament.

Senseless

• A nationwide extension of NRC is bizarre, and a repeat of it in Assam illogical Home Minister Amit Shah’s announcement of a proposal for a nationwide National Register of Citizens (NRC) is worrisome on several counts, not the least of which is the apparent inability to learn from the experience of carrying out the humongous exercise in Assam. The government, he said, would also re-introduce the Citizenship Amendment Bill (CAB) in Parliament that envisages the grant of Indian citizenship to all refugees from minority communities in Bangladesh, Pakistan and Afghanistan. In all three nations Muslims are in a majority, and therefore, the Bill effectively denies benefit to Muslim minorities from other neighbouring countries, including Myanmar where Rohingya Muslims face persecution. Along with the promised combination of the NRC and CAB, the Home Minister announced that the NRC process would “naturally” be conducted in Assam again with the rest of the country. Interestingly, this comes just days after Ranjan Gogoi, who supervised the NRC process, demitted office as Chief Justice of India. Clearly, the Assam proposal will be in defiance of the Supreme Court, which directed the entire NRC registration specific to Assam through all its tortuous details. There is still no clarity on what the end results mean for the 19 lakh plus people who find themselves outside the NRC, potentially stateless and at risk of “deportation” to Bangladesh, which refuses to acknowledge, let alone accept, them. Given that the NRC process in Assam was rooted in the specificities of the 1985 Assam Accord, and as the government never tires of saying, a court-mandated process, extending it to the entire country is both illogical and bizarre. Flawed it might have been, but the NRC exercise, overseen by the Supreme Court, involved the active participation of the Central and State governments. For the government to repeat the exercise merely because the numbers thrown up are politically inconvenient for the ruling BJP, makes no sense at all. If there is a lesson from Assam, it is that there is no right way of going through a process such as the NRC.
• Like the CAB, which pointedly discriminates against Muslims, and is loaded against the right to equality and equal protection before the law as enshrined in Article 14 of the Constitution, there are genuine fears that a nationwide NRC will target Muslims. Details of how such an exercise will be carried out are, of course, not yet known. In the case of Assam, there was a cut-off date — March 25, 1971 — after which all foreigners as per the Assam Accord were to be “detected, deleted and expelled in accordance with law”. Presumably, the Centre will come out with a cutoff for the nationwide NRC, but it will be an arbitrary one. Given the dangers that lurk within such exercises, the government would do well to abandon the nationwide NRC-CAB combination. Indians can certainly be spared this pain.

Common cut-off date

• A senior government official said that before the NRC exercise is conducted, the government will have to decide a common cut-off date.
• Under Article 6 of the Constitution, the cut-off date for migration to India from Pakistan is July 19, 1948 whereas in Assam, that borders Bangladesh, it is March 24, 1971.
• Mr. Sarma told a press conference in Guwahati that the the 1971 cut-off date should be applicable to all States.
• Assam-based lawyer Aman Wadud, who is providing legal help to those excluded from the NRC, said ideally there should not be any problem with a national register of citizens to issue identity cards. “But the government is using NRC to target a particular community, exclude them from citizenship and deny them all rights. What is more outrageous is that they want to reject NRC in Assam because it does not suit their purpose. This is brazen hypocrisy.”
• An official said laws existed to “detect, detain and deport illegal immigrants”, and the power to identify and deport the foreign nationals staying illegally had been delegated to the States.

No Aadhaar-social media link plan

• Government informs Lok Sabha that it has not received any proposal on the issue
• The government has no proposal to link Aadhaar with social media accounts of individuals, Minister of Electronics & Information Technology Ravi Shankar Prasad informed Parliament on Wednesday.
• “There is no such proposal with government for linking Aadhaar with social media accounts of individuals,” the Minister said in a written reply to the Lok Sabha. He was responding to a question on whether the government proposed to enact a law for linking Aadhaar with the social media accounts of individuals.
• Mr. Prasad said that as a matter of policy and by design, the Unique Identification Authority of India (UIDAI) precluded itself from aggregating information arising from the use of Aadhaar, tracking and profiling individuals.
• On a question about the government ordering removal of objectionable content posted on social media, the Minister said that in the current year (till October 31, 2019), 3,433 URLs were blocked on social media platforms. This is an increase from the 2,799 blocked in 2018, 1,385 in 2017 and 633 blocked in 2016.
• “Section 69A of the Information Technology Act, 2000, empowers Government to block any information generated, transmitted, received, stored or hosted in any computer resource in the interest of sovereignty and integrity of India, defence of India, security of the State, friendly relations with foreign states, public order, or for preventing incitement to the commission of any cognizable offence relating to above,” Mr. Prasad said.

Impact on exports

• First, do FTAs lead to an increase in exports? Few economists have argued that by not signing the RCEP, Indian exporters would miss on exporting to RCEP countries. They forget that India has FTAs with the Association of Southeast Asian Nations (ASEAN), Japan, South Korea, and three-fourths of the bilateral trade already happens zero duty. India also has a small preferential trade agreement with China.
• But the mere signing of an FTA does not guarantee an increase in exports. If import duty in the partner country is high, there is a likelihood of an increase in exports by 10% when this duty becomes zero. But chances of exports increasing are low if import duty of the partner country is low at 1-3%. From this count, FTAs are of no use for exporting to Singapore, Hong Kong, as regular (Most Favoured Nation) import duties are zero. FTAs with Malaysia, Japan, Australia, New Zealand, Brunei, etc. benefit few product groups only as more than 60% of imports into these countries happen at zero duty for all countries. There is little additional market access. Most critics have missed this detail.
• But even the high import duties coming down to zero through the FTAs do not guarantee exports. Japan reduced duty from 10% to zero for Indian apparels through an FTA in 2011. But India’s apparel exports to Japan have nosedived from $255 million in 2010 to $152 million in 2018. Blame it on Japanese non-tariff barriers to trade (NTBs) such as special sourcing requirements. But NTBs are generally not negotiated in FTAs. Countries have to resolve these bilaterally. To summarise, FTAs cut import duties, but this is only one of many factors that decide if exports will increase.
• Investment flow
• Does a lower import duty regime help in getting significant investments? Most experts have argued in its favour. Let us look at evidence from the automobile industry in Australia and India. Australia, in 1987, produced 89% of the cars it used. It protected the car industry through a high 45% import duty. But the share of locally produced vehicles came down as the duties were reduced. Today, Australia imports nearly all cars as tariffs came further down to a 5% level. Most manufacturers such as Nissan, Ford, General Motors, Toyota, Mitsubishi, etc. which produced cars in Australia shut shop.
• But, India could attract significant investments in the car sector on account of high import duties. This resulted in the development of an indigenous car and auto component industry. Now, with the car industry maturing, India can think of lowering import duties to promote competition.
• Most investments are a result of the package such as tax cuts, cheap land, power, etc. offered by the host country. If a country is not the most efficient economy, some level of an import wall helps in getting external investments. Without an import wall, many firms may shift production to the more efficient FTA partner countries for exporting back to the home market. But the quality of investments increases as a country moves towards becoming a more efficient economy. Such countries are in an ideal position to become manufacturing and services hubs.
• Third, do FTAs ease entry into GVCs? Most commentators have lamented that by not signing RCEP, India will miss becoming part of GVCs. It is not so simple. Actual value chain activities are time critical. And a country cannot become a significant part of such value chains unless it has efficient ports, customs, shipping, roads and a regulatory compliance infrastructure. GVC production also requires harmonisation of product and quality standards.
• For these reasons, FTAs alone do not make a country part of a value chain, which will be disrupted if a shipment is delayed or is of non-standard quality. ASEAN, Japan and Korea constitute the core of the Asian regional value chain. But despite FTAs with these countries, India has a weak presence in the electronics, machinery or apparels value chains.
• Four, is Indian industry protectionist? Consider the impact of reducing import duty on an engine from 20% to zero for an FTA partner. Cheaper imports may replace products from domestic industries. But, if the duty on a product is low at say 3%, the local industry may not care much about the duty elimination through any FTA. Countries that have reached this stage are comfortable doing FTAs with fewer worries.

Steps to have an effect

• An FTA’s possible impact on the economy or exports is subject to many caveats. The FTAs can ensure market access to only the right quality products made at competitive prices. Improvement in firm-level competitiveness is a must.
• The government can help by ensuring lower duties on raw materials and intermediates than on the concerned finished products. It can set up an elaborate quality and standards infrastructure for essential products. Most countries regulate imports through such requirements and not through tariffs.
• Finally, about India turning inward. India ranks higher than the U.S., Japan, and China in the trade openness ratio, the globally accepted measure. The ratio is the sum of all imports and exports as % of GDP — India (43) is more open than the United States (27), Japan (35), and China (38).

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