The Hindu Editorial Analysis | 29th April 19

Table of Contents

The RBI must set an example on transparency, and serve the national economic interest

The Reserve Bank of India has been given a “last opportunity” by the Supreme Court to stop being in “contempt” of the court’s clear and unambiguous order of December 2015.
Ruling on a batch of contempt petitions against the RBI, a two-judge bench directed it to furnish all information relating to inspection reports and other material sought by Right to Information (RTI) petitioners, save material exempted by the court’s earlier order particularly on the grounds that it had a bearing on the security of the state.
The bench made it clear that “any further violation shall be viewed seriously”. The banking regulator has repeatedly tried to stonewall multiple requests seeking information ranging from the names of wilful defaulters on bank loans worth hundreds of crores of rupees, to the bankwise breakup of mark-to-market (MTM) losses and the losses in foreign currency derivatives contract cases.

The Central Information Commission too had, in November, directed the then RBI Governor, Urjit Patel, to show cause “why maximum penalty should not be imposed on him” for the central bank’s “defiance” of Supreme Court orders on disclosing the names of wilful loan defaulters.
The RBI was ticked off by the CIC for failing to uphold the interest of the public and not fulfilling its statutory duty to depositors, the economy and the banking sector, by privileging individual banks’ interests over its obligation to ensure transparency.
At a time when the level of bad loans at commercial banks continues to remain worryingly high, worsening their combined capital to risk-weighted assets ratio(CRAR), it is inexcusable that the RBI continues to keep the largest lenders to banks, the depositors, and the public in the dark on the specific loan accounts that are endangering the banking system’s health and viability.
The RBI’s latest Financial Stability Report shows that the industry-wide CRAR slid to 13.7% in September 2018, from 13.8% in March 2018, with the ratio at the crucial public sector banks declining more sharply to 11.3%, from 11.7% over the same period.
For a banking regulator that never tires of stressing the need for greater accountability from the numerous public sector banks, the RBI’s reluctance to be more transparent is perplexing.
Even its latest Disclosure Policy, posted on its website on April 12 after the Division Bench had concluded hearings in the contempt case and reserved judgment, continues to direct its departments to withhold information that was expressly ordered to be shared by the December 2015 order.
As the CIC aptly observed last year, the central bank’s intransigence and repeated failure to honour the court’s orders ultimately undermines the very rule of law it seeks to enforce as a banking sector regulator empowered by Parliament. The CRAR is the capital needed for a bank measured in terms of the assets (mostly loans) disbursed by the banks. Higher the assets, higher should be the capital by the bank.
The CRAR is the capital needed for a bank measured in terms of the assets (mostly loans) disbursed by the banks. Higher the assets, higher should be the capital by the bank.

The government must be more proactive in shifting vehicles to cleaner fuels

The decision taken by Maruti Suzuki, India’s largest passenger vehicle manufacturer, to eliminate diesel models from April 1, 2020, when the Bharat Stage VI emission standard is introduced, mirrors emerging global trends.
Although diesel has powered India’s commercial transport segment for decades, its fortunes are declining for several reasons, beginning with the narrowing of the price differential with petrol.
It has lost its shine in Europe, the world’s biggest market for diesel cars where sales of even well-known marques have fallen during 2018 by 20%.
In a variety of mandated and suggestive ways, car-owners are being nudged towards petrol and alternative fuels. The diesel emissions data scandal involving carmaker Volkswagen dismayed many consumers.
Given the prevailing economics and diesel’s reputation as a dirty fuel that adds to pollution from cars, buses and freight vehicles, auto companies see a weak business case to upgrade them. Maruti Suzuki’s decision makes it clear that in spite of being a strong past performer, this fuel is riding into the sunset as far as the personal vehicle is concerned.
This outcome should be welcomed for the positive impact it will have on air quality and public health.
Automotive emissions, especially in congested cities, have risen due to steady economic growth, proliferation of vehicles and more vehicle kilometres travelled. In Delhi, for instance, the effect of shifting the three-wheeler and bus fleet to Compressed Natural Gas during a four-year period from 1998 improved air quality, but the gains were quickly negated by a rise in overall vehicle numbers, especially those run on diesel, besides a rise in other sources of pollution.
Marking the steady deterioration in air quality, one study found that people on the road in Delhi had 1.5 times greater exposure to the city’s average ambient air pollution level.
Diesel emissions pose hidden hazards, too. Besides the harmful fine and ultra fine particulates that they contain, the vehicular exhaust adds to ground-level ozone formed from nitrogen oxides and hydrocarbons combining in the presence of sunlight, seriously harming respiratory health.
The national plan to shift to higher quality BS VI grade fuels may offer some mitigation of pollution, but that can only be a respite. Improving air quality in the cities requires a transformative planning approach guided by the singular objective of reducing the use of polluting vehicles.
Such a policy would prioritise less-polluting and alternative fuels for vehicles, but more important, encourage walking, cycling and using public transport. This is the direction that many world cities are taking. Paris, Madrid and Athens have announced a prohibition on diesel vehicles by 2025, while London has made it more expensive for older vehicles to enter the city. India has to chart its own equitable and accessible green path.

An ineffectual angel

The judiciary’s rhetoric has little purpose if it evades cases that call for it to enforce the grand principles of democracy
The transition from a colonial regime to a democratic republic was one of the most singular achievements in Indian history. In her magisterial How India Became Democratic, Ornit Shani details the Herculean efforts that went into pulling off independent India’s first general election. By stipulating in the Constitution that elections must be conducted on the basis of universal adult suffrage, our framers transformed an entire population from subjects to citizens in one sweeping stroke. It was an achievement that many doubted would be possible, but one whose success should make us all proud.

Free and fair elections

At the heart of this achievement is the citizen’s right to vote. It is through the vote that the democratic legitimacy is periodically renewed and the foundations of the republic remain stable. But it is not simply the act of voting that is enough: rather, voting must take place as part of a free and fair election.
And for that, there must exist a number of institutional factors and conditions, all of which, taken together, culminate in that final act of the voter casting her ballot.
The Indian Supreme Court has recognized this basic principle. In many judgments over the years, the court has set out the enabling conditions that guarantee that voting remains a meaningful activity. These include, for example, the citizen’s right not to be arbitrarily denied the vote (the court has, therefore, held that voting is a fundamental freedom guaranteed under Article 19(1)(a) of the Constitution); the right to know (thus, requiring compulsory declaration of certain information by candidates); and the right to a secret ballot (that has prompted the court to order the inclusion of a NOTA, or None of the Above option). As the Supreme Court has reminded us many times, public faith in the electoral process is crucial to the continued survival of republican democracy, and it is these institutional safeguards that come together to ensure it.

Judicial inaction

Like with any other competitive process, the ground rules that constitute the framework of the competition must be enforced by an impartial umpire. It is here that the role of an independent judiciary is crucial. While in popular imagination, the primary role of the courts is to protect the fundamental rights of individuals against the state, another — equally critical — task of courts is to ensure that the ground rules of electoral competition, which are necessary to ensure free and fair elections, are maintained. For obvious reasons, this is not a task that can be left to political actors, and can, in essence, only be performed by the judiciary. This, therefore, is an arena where courts have to be even more vigilant than usual, because what is at stake is the foundational legitimacy of democracy itself.
In this context, the recent conduct of Indian courts reveals an unfortunate gap between judicial rhetoric and actual enforcement. First, the right to know: this much-vaunted principle, which has repeatedly been accorded pride of place by the Supreme Court, was flagrantly violated when the government introduced the electoral bond scheme early last year. The electoral bond scheme allows limitless, secret donations to political parties, including (and especially) by corporations. It strikes a dagger through the heart of the right to know, because it denies to voters the knowledge of who funds the people who ask for their vote. The electoral bonds scheme was challenged immediately after it came into force; the Supreme Court, however, held off on hearing the case until a few weeks ago, and then it postponed the case to after the elections, citing a paucity of time. In the meantime, significant sums of anonymous donations have come in through electoral bonds, and an overwhelming percentage of them have gone to the ruling party.
Second, the secret ballot. During this election season, Maneka Gandhi’s threat to Muslim voters to vote for her or else she would refuse to help them after she was elected, raised eyebrows across the country. However, as scholar Mukulika Banerjee had pointed out as early as 2017, and as journalist Ishita Trivedi demonstrated more recently, political parties are now able to determine voting outcomes at the level of individual booths. This destroys the very concept of the secret ballot, and makes threats like the ones Ms. Gandhi delivered extremely credible and capable of distorting the electoral process. However, when in 2018 a case was filed before the Supreme Court asking for the use of totalizer machines in elections — that would restore the secrecy of the ballot — the court dismissed it without even according it a hearing.
Voter complaints
Third, the freedom to vote itself. This election season has seen multiple complaints from voters who have found their names deleted from electoral rolls, without intimation or a chance to be heard. However, this is not new. The issue of voter deletions surfaced late last year, especially in the context of Assembly elections in Telangana, where the Election Commission of India (EC) itself admitted to the existence of the problem. It was alleged at the time — and has subsequently been established through detailed investigative reporting carried out by The Huffington Post — that the EC was using an un-audited de-duplication software, alongside (unauthorised) Aadhaar linking, to “cleanse” the electoral rolls, but the result, instead, was to remove a very large number of genuine voters. Accordingly, late last year, Srinivas Kodali, a Hyderabad-based technologist, filed a case before the High Court, asking that the EC be required to reveal the source code of the algorithm it was using, and open it up for auditing. Months have passed, the general election has come, but the High Court has failed to decide the petition.
And lastly, public faith in the electoral process: in mid-March, Opposition parties filed a petition before the Supreme Court that would have settled, once and for all, any qualms about the use of electronic voting machines (EVMs). The request was to verify 50% of the EVMs using the voterverifiable paper audit trail (VVPAT) machines. The EC’s only objection to this was that it would increase the time of counting by six days. One would imagine that a six-day increasing of the counting period, in the context of a seven-phase month-and-a-half-long general election, is a ridiculously small price to pay for maintaining public faith in the electoral process. However, with three phases of the election having come and gone, the court is yet to even decide upon the petition.
Just words?
On multiple occasions, over the course of many years, the Supreme Court has waxed eloquent about the glories of Indian democracy, the importance of free and fair elections, and the supreme sanctity of the vote. And indeed, our democracy is a genuine achievement, worthy of pride. Democracy, however, does not sustain itself. The court’s rhetoric has little purpose if, when it comes to the crunch, it evades deciding cases that call for it to descend from the commanding heights of eloquence, and into the weeds of actually enforcing the grand principles of democracy.
The voter’s right to know, the secret ballot, and the freedom to vote itself — all these have been undermined to various degrees in the last few years, throwing into serious doubt the freedom and fairness of elections. But on each occasion, when the courts have been called upon to address these problems, they have dodged and ducked the issues, instead of solving them.
The rhetoric is beautiful, but without enforcement, the judiciary remains, in the words of Mathew Arnold, “an ineffectual angel beating in the void [its] luminous wings in vain.”
Corruption
Autonomy of Institutions
Anti corruption ombudsman
Whistle blowers protection
Delivery of services
Electoral bonds
In 2015, the government proposed amendments to the Prevention of Corruption Act. The amendment Bill, which was later approved by Parliament, narrows down the definition of corruption, increases the burden of proof necessary for punishing the corrupt, and makes things more arduous for whistle-blowers.
strengthening of the shield available to officials accused of corruption.
Investigating agencies have been barred from even initiating an inquiry or investigation into allegations of corruption without prior approval from the government
The amendments have done away with the offence of abuse of position by a public servant, unless the element of bribery is established.
This frustrates peoples’ ability to fight corruption in cases which may not involve the payment of a bribe, as it may be done for other considerations like pleasing political masters for rewards. Also, cases involving gratification are often impossible to trace as they may be deferred in the form of postretirement benefits or paid through clandestine off-shore accounts.
The BJP government has failed to promulgate rules and operationalise the Whistle Blowers Protection Act, 2014. Whistle-blowers, who speak truth to power by exposing corruption and wrongdoing, continue to be denied protection. Many Right to Information (RTI) users who have exposed corruption have been killed.

Following are some important features of the Lokpal and Lokayuktas Bill, 2011, passed by Parliament.

Lokpal at the Centre and Lokayukta at the level of the states.
Lokpal will consist of a chairperson and a maximum of eight members, of which 50 per cent shall be judicial members.
50 per cent of members of Lokpal shall be from SC/ST/OBCs, minorities and women.
The selection of chairperson and members of Lokpal shall be through a selection committee consisting of Prime Minister, Speaker of Lok Sabha, Leader of Opposition in the Lok Sabha, Chief Justice of India or a sitting Supreme Court judge nominated by CJI, eminent jurist to be nominated by the President of India on the basis of recommendations of the first four members of the selection committee.
Prime Minister has been brought under the purview of the Lokpal.
Lokpal’s jurisdiction will cover all categories of public servants.
All entities receiving donations from foreign source in the context of the Foreign Contribution Regulation Act (FCRA) in excess of Rs 10 lakh per year are brought under the jurisdiction of Lokpal.
Provides adequate protection for honest and upright public servants.
Lokpal will have power of superintendence and direction over any investigation agency including CBI for cases referred to them by Lokpal.

A high powered committee chaired by the Prime Minister will recommend selection of the Director, CBI.
Directorate of Prosecution headed by a Director of Prosecution under the overall control of Director.
The appointment of the Director of Prosecution, CBI on the recommendation of the Central Vigilance Commission.
Transfer of officers of CBI investigating cases referred by Lokpal with the approval of Lokpal.
The bill also incorporates provisions for attachment and confiscation of property acquired by corrupt means, even while prosecution is pending.
The bill lays down clear time lines for preliminary enquiry and investigation and trial and towards this end, the bill provides for setting up of special courts.
A mandate for setting up of the institution of Lokayukta through enactment of a law by the State Legislature within a period of 365 days from the date of commencement of the Act.
Section 503 in The Indian Penal Code
503. Criminal intimidation.—Whoever threatens another with any injury to his person, reputation or property, or to the person or reputation of any one in whom that person is interested, with intent to cause alarm to that person, or to cause that person to do any act which he is not legally bound to do, or to omit to do any act which that person is legally entitled to do, as the means of avoiding the execution of such threat, commits criminal intimidation. Explanation.—A threat to injure the reputation of any deceased person in whom the person threatened is interested, is within this section. Illustration A, for the purpose of inducing B to desist from prosecuting a civil suit, threatens to burn B’s house. A is guilty of criminal intimidation.