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Banking on good faith

 More structural reforms are needed to maximise the bank recapitalisation effort
 1 lakh crore is expected to be pumped into India‟s 21 public sector banks by March, which
the Centre hopes will enable them to extend fresh credit lines worth over 5 lakh crore to
spur economic activity
 The •first half of ambitious •2.11-lakh crore recapitalisation programme for ailing public sector banks announced last October
 Encourage them to conserve capital and avoid risks
 Meet regulatory requirements under the Basel-III regime
 Going through the insolvency resolution process.
 State Bank of India, the country‟s largest,and the nine others will receive nearly •36,000
crore in order to strengthen their lending capacity.
 While announcing this package, the government has described each of the banks
as “an article of faith”- Its assertion that no public sector bank will fail.
 Moreover, while the government has repeatedly ruled out privatisation of these
banks.
 More structural reforms may well be on the anvil in the second half of this
recap plan, which RBI Governor Urjit Patel had described as providing
a real chance to meet the banking sector’s challenges for the •first time in a decade.

A vote for state funding

 Electoral bonds cannot clean up campaign •finance
 Indian elections are the world‟s biggest exercise in democracy but also among the most expensive.
 American presidential race, the world‟s most expensive election
 Parties…candidates need large sums of money for voter mobilisation, advertising, consulting,
transport, propaganda and printing of campaign materials to reach voters in constituencies.
 Corporate donations constitute the main source of election funding in India- Black money
 Public disclosure system that exists is limited.
 Only in 2008, using the provisions of the Right to Information (RTI) Act, the Central Information Commission allowed disclosure of income tax returns of political parties.
 Though it is an open secret that actual expenditure is much, much higher than what is disclosed.
 Absence of a level playing •field which has reduced the effectiveness of our democracy.
 2017 Budget speech, while emphasising the absence of transparency in funding.
 anybody can buy electoral bonds in form of bearer bonds from specified branches
of the State Bank of India and donate it anonymously to a political party of their
choice; the party must cash the bonds within 14 days.
 All donations given to a party will be accounted for in the balance sheets
but without exposing the donor details to the public.
 As a result,
• The Election Commission (EC),
• The Income Tax department and
• The voter would remain in the dark about it
 Most significant aspect of the electoral bonds scheme is that it will not carry the name of the payee
 Far from reducing the large scale corporate funding of elections, the introduction of electoral
bonds does not even address this issue.
 Aim is to reduce the role of unaccounted cash & not the corporate control of politics.
 Electoral bonds cannot address the problems that arise from the corporate control
over politics and corporate capture of government policies and decisions.
 Three steps back
 Electoral bonds must be seen in conjunction with:
 (1) lifting of the maximum limit of 7.5% on the proportion of the profits a company can donate
to a political party, thus opening up the possibility of shell companies being set up specifically
to fund parties;
 (2)Amendment of the Foreign Contribution (Regulation) Act (FCRA) opening the •floodgates of
foreign funding to political parties, especially those which have a foreign support base;and
 (3) Refusal of political parties to come under RTI Act in order to conceal their sources of funding.
 It goes against the position taken by various electoral reform committees.
 Staring at the solution- State funding of elections Potential solution
to this problem.
 Indrajit Gupta Committee on State Funding of Elections-1998, but the
lack of political will has prevented any serious discussion on this.
 The mechanics of this process need to be carefully worked out to establish the
allocation of money to national parties, State parties and independent candidates,
 Based on the experience of countries that have total or partial state funding of
elections, it will not be difficult to work out a formula that is both efficient and
equitable to ensure that democracy works for everyone and not just for the wealthy
few.

Red alert on the green index

 India’s poor ranking in the Environmental Performance Index should force a policy
appraisal
 late last year, on India‟s improved ranking in theWorld Bank‟s„Ease of Doing Business‟ Index
(from 130 to 100) have been cause for much celebration
 As a follow – up to this, the government announced additional reform measures to further
improve the ranking
 India ranks low in the Environmental Performance Index (EPI) 2018, slipping from rank 141
in 2016, to 177 in 2018(out of the 180 countries)
 EPI is produced jointly by
• 1)-Yale University and
• 2)-Columbia University in collaboration with theWorld Economic Forum
 Brazil and China, rank 69 and 120
 The EPI ranks countries on 24 performance indicators across 10 issue categories.
 No index is perfect.
 But if an improvement in an index for ease of doing business is cause for celebration,
then, equally, a drop in an index ranking environmental performance should be
cause for concern and used as a context to examine our policy measures.
 Look at recent initiatives government has set ambitious targets for environmental protection
• 1)-Strict environmental standards for coal-•red power plants, to be effective from January 2018.
• 2)-An aggressive target was set to implement Bharat StageVI emission norms from April 1,
2020, skipping StageV norms
• 3)-Road map was being prepared so that only electric vehicles would be produced and sold in
the country by 2030
• 4)-National Solar Mission, revised the target for setting up- 20 GW to 100 GW by 2021-22.
• 5)-highly polluted Ganga will be cleaned up by 2018.
 A gap- What are we missing then?
 Unfortunately, there appears to be a big gap between policy goals and action
 While we seem to be moving in the right direction on solar targets,
 We are seriously lagging behind in a number of other goals
 The automobile industry has categorically stated that based on current estimates, full conversion to
electric vehicles is realistically possible only by 2047.
 Poor utilisation of allocated funds in the clean-up of the Ganga
 Air pollution to be the cause of an estimated 1.4 million premature deaths in India,
 Which translated into a welfare loss equivalent around 8% of India‟s GDP in 2013
 The cost of lost labour productivity was 0.84% of its GDP
 The failure to implement these standards would be a step backwards.
 It is not possible to restore environmental quality overnight.
 However, we must ensure that we are moving forwards, not backwards, in meeting
our environmental targets.
 Being among the four worst countries in the world in terms of environmental performance should
hopefully serve as a wake-up call

Prelims Focus Facts-News Analysis

 Page-7-Plea to exclude SC/ST creamy layer from quota
 Supreme Court to hear the petition
 The Supreme Court will hear a petition to exclude the a•uent members, or the creamy layer, of the Scheduled Castes and ScheduledTribes from the benefits of reservation.
 Page-8-New book asserts Netaji died in 1945 crash
 Findings of two inquests accepted by Indian government, says author Ashis Ray
 Author Ashis Ray‟s •ndings in Laid to Rest: The Controversy over Subhash Chandra Bose’s Death