General Elections 2014: Country’s Biggest Ever Democratic Exercise Sees Five-Week Process

Chief Election Commissioner VS Sampath announced on March 5 that the 2014 Lok Sabha elections will be held in five weeks. Voting for the 543-member Parliament is set to take place in nine phases until May 12 with counting scheduled four days later on May 16.

The 2014 polls will see 814 million adults eligible to vote, from the remote Himalayas in the north to India's tropical southern tip -- 100 million more than last time in 2009. The coming country’s biggest ever democratic exercise is expected to be fought largely on a platform of economic revival.

Long-Ardent Process

Elections will be conducted in phases on April 7, April 9, April 10, April 12, April 17, April 24, April 30, May 7 and May 12. The biggest phase will be on April 17 when 122 constituencies across 13 states go to the elections.

With the exception of Jammu and Kashmir, states in North India will go to the polls in separate yet single phases. While April 30 will be election day in Punjab, people in Haryana, Chandigarh and the National Capital of Delhi will vote on April 10. The hill states of Himachal Pradesh and Uttarakhand will see voting on May 7.

In Jammu and Kashmir, the polls will be held in five phases on April 10 (Jammu), April 17 (Udhampur), April 24 (Anantnag), April 30 (Srinagar) and May 7 (Baramulla and Ladakh). It is believed that multi-phase polling was needed in Jammu and Kashmir due to security considerations. While Ladakh borders China and Gilgit-Baltistan in Pakistan occupied Kashmir (PoK), the constituencies of Jammu and Baramulla abut PoK. Andhra Pradesh will have both Lok Sabha and Assembly polls as an undivided state and candidates elected will automatically become legislators of their respective states after Telangana comes into being on June 2.

Sampath said the nine-phase polling and the entire process -- from today to counting of votes on May 16 -- will be over in 72 days, three days less than the previous election. The number of voters will be almost 10 crore more than the 2009 Lok Sabha election. More than 2.3 crore enlisted voters are in the 18-19 age group.

Model Code of Conduct

The model code of conduct, a set of legally binding dos and don’ts, became operational with immediate effect with the announcement of the 16th Lok Sabha election schedule.

The model code of conduct bars the government from using public money to announce new schemes and projects, came into force following the announcement of the schedule for elections to the 16th Lok Sabha and simultaneous Assembly elections in Andhra Pradesh, Sikkim, and Odisha.

The code bars ministers from combining official visits with electioneering work and bans the use of official machinery for electioneering and advertisements at the cost of the exchequer for partisan coverage of political news.

There can be no announcement of financial grants or promise of roads and water supply. Transfer of officials is banned.

Parties’ Efforts

The ruling Congress and main opposition Bharatiya Janata Party (BJP) are making efforts to woo host of smaller parties. Leaders of 11 regional parties have come together to form a Third Front against the Congress and BJP.

Arvind Kejriwal’s Aam Aadmi Party (AAP), which made a spectacular debut in the recent Delhi assembly polls, will also contest the Lok Sabha polls. Opinion polls tip Narendra Modi, BJP’s prime ministerial candidate, as frontrunner to be the country's prime minister. However, opinion polls show Modi, who was the chief minister of Gujarat when anti-Muslim riots left more than 1,000 dead in 2002, holds a large advantage over his bitter rival.

Highlights of the General Elections 2014

* The Election Commission is mandated to finish the election process before May 31
* 2014 Lok Sabha polls likely to be conducted in 9 phases
* Prime requisite of general polls is up to date electoral rolls, final rolls have been published
* People voting these general elections is 814 million; 10 crore more than 2009 elections
* Special camps will be set up across country to give electorate final chance to enroll
* There will be approx 9.3 lakh polling stations in country, an increase of 12 percent from last time
* EPIC distribution which was 82 percent last time has already reached 96 percent this time
* Model code of conduct comes into force with immediate effect
* Photo voter slips will be introduced these elections
* Use of money power matter of concern for poll panel; there will be sufficient checking mechanism
* First date of poll shall be on April 7, in 2 states
* Second election date is April 9, in 5 states
* Third election date: April 10, in 14 states
* Fourth election date: April 12, in 3 states
* Fifth election day: April 17, in 13 states and Union Territories
* Sixth election date: April 24, in 12 states
* Seventh election date: April 30, in 9 states
* Eighth election date: May 7, in 7 states
* Ninth election date: May 12, in 3 states
* Counting of general elections is in one day on May 16
* Polling in 543 constituencies to be covered in 9 election dates from April 7 to May 12

Naxal-Hit Areas

* All naxal-hit areas will be covered in a single day across India
* Andhra Pradesh: April 30 and  May 7
* Arunachal Pradesh: April 9
* Assam: April 7, 12, and 24
* Bihar: April 10, 17, 24, 30; May 7 and 12
* Chhattisgarh: April 10, 17, and 24
* Goa: April 17
* Gujarat: April 30
* Haryana: April 10
* Himachal Pradesh: May 7
* Jammu and Kashmir: April 10, 17, 24, 30; May 7
* Jharkhand: April 10, 17, and 24
* Karnataka: April 17
* Kerala: April 10
* Madhya Pradesh: April 10, 17, and 24
* Mahrashtra: April 24
* Manipur: April 9 and 17
* Meghalaya: April 9
* Mizoram: April 9
* Nagaland: April 9
* Odisha: April 10 and 17
* Punjab: April 30
* Rajasthan: April 17 and 24
* Sikkim: April 12

Assessment

To sum up, it can be said that the 2014 general elections will be remembered not for the logistic difficulties and the sheer size and magnitude of the exercise. After ten years of the Congress-led United Progressive Alliance (UPA), this election will see corruption and governance as major issues, along with livelihood and safety concerns. The BJP, by announcing Modi as its prime ministerial candidate, is seeking to turn this election into a vote for a strong, able government that does not waver in decision-making. Unmistakably, the UPA coalition, with many of the allies pulling in different directions, and some of the ministers caught in corruption cases, has come to be seen as weak and ineffectual.

The BJP holds an edge, if one were to go by the recent findings of various opinion surveys. The party's prime ministerial candidate, Modi, appears to be a firm favorite, as most young and first-time voters are said to be inclined to his brand of assertive governance and, therefore, to the BJP. However, the Congress is also hoping to garner the support of young voters on the strength of the party’s projection of Rahul Gandhi as its youth mascot.

What we can expect now is a renewed and frenzied attempt by the parties and their leaders to strike pre-poll alliances, finalize their candidates accordingly, and hit the ground running. There is no more time to lose. Every political party will be eyeing not just its traditional vote-bank but also the new voters, a substantial 10 crore in number, according to the poll panel. Poll pundits agree that the first-time voters hold the key, which is why parties are going overboard to woo them. In addition,  also tapping into the voter fatigue with the UPA would be the new entrant, the AAP, with its focus on institutionalized responses to ending corruption and delivering services.

Nevertheless, the 16th Lok Sabha elections will provide an opportunity for the people to discard the discredited and endorse the performers. However, Indian elections have been known to throw up surprises. Time will better tell the story.

Economic Survey 2012-13: Reflects India's Grim Reality, Cautions Against Growing Taxes

Finance Minister P. Chidambaram presented the pre-Budget Economic Survey for 2012-13 to Parliament on February 27. The Survey reflects the grim reality that India is facing a severe slowdown and must act fast to spur investment, restart stalled projects, cut interest rates and contain its fiscal deficit.

Growth Rate

The Survey made it clear that this fiscal’s five per cent growth, the slowest in the past decade, could no longer be blamed on external factors alone, and the government will have to act on the domestic front to come out of the slump.

The Economic Survey, while projecting an optimistic growth rate of 6.1-6.7 percent for 2013-14, stated that to contain the fiscal deficit the government should widen the tax base and cap subsidies, particularly through better targeting and plugging leakages. It also claimed the downturn was more or less over, and that the economy was looking up. Claiming that the downturn was “more or less over” and that the economy was looking up, the Survey projected a cautiously optimistic growth rate of 6.1-6.7 percent while conceding that the Gross Domestic Product (GDP) growth for the current fiscal was likely to slip to the decade’s low of five per cent — compared to the estimates by the Central Statistical Organisation (CSO) of 6.2 percent for 2011-12 and 9.3 percent the year before.

Fiscal Deficit

The Survey had pegged the fiscal deficit at 5.1 percent for the GDP for 2012-13, which the finance minister later revised to 5.3 in view of the rising expenditure and subdued revenue collection. For the new fiscal, the finance minister has committed to bring it down to 4.8 per- cent.

The 2012-13 Survey notes that the government needs to contain the fiscal deficit especially by shrinking wasteful and discretionary subsidies. The Survey said: "Controlling the expenditure on subsidies will be crucial. The domestic prices of petroleum products, particularly diesel and LPG need to be raised in line with their prices prevailing in the international market.

In addition, delays in getting permissions for projects need to be curbed so that investment can pick up. Implementation of GST, if approved, would create an integrated market and bring more producers in the tax net. Also, the direct benefit transfer scheme recently rolled out on the AADHAAR platform will target subsidies better.

Agriculture Reforms

Economic Survey states that with agriculture growth rate falling short of the four per cent target in the past five years, the country’s annual economic report card (the first since the beginning of the 12th Five-Year Plan period), calls for increase in yields and reforms like a suitable sustainable strategy to maximize agricultural income and make it a viable option.

The farm sector achieved 3.6 percent growth during the 11th Five year Plan (2007-12) – higher than growth of 2.5 and 2.4 percent during ninth and 10th Five-Year Plans but lower than expectations of 4 percent growth target.

Therefore, in the face of stiff challenge of feeding its growing population, the Survey has sought urgent reforms to boost crop yield and private investment in infrastructure to motivate farmers.

Economic Survey for 2012-13 has emphasized putting in place a strategy for farm development in the eastern and northeastern regions amid saturation in crop yields in Green Revolution belt, especially in the States of Punjab and Haryana.

Tax Rate

In what may bring cheer to the well-heeled in the wake of a raging pre-Budget debate over squeezing more out of the super-rich class, the Survey suggested the government’s efforts to raise additional revenue should be through widening of the tax base and not by increasing the rates. The Survey stated: “It is much better to achieve a higher tax-GDP ratio by broadening the base which is taxed rather than increasing marginal tax rates significantly — higher and higher tax rates impinge more and more on incentives to undertake taxable activity, while encouraging tax evasion.”

Several experts, including PMEAC Chairman C. Rangarajan, have pitched for higher rates of taxes on super-rich. The Survey, prepared by a group of economist led by Chief Economic Advisor Raghuram Rajan, said it is better to achieve fiscal consolidation partly through a higher tax-GDP ratio than merely through reduction in expenditure as it would only hurt development spending.

The Tax-GDP ratio touched a peak of 11.9 percent in 2007-08, but declined to 9.6 percent in 2009-10. It was 9.9 percent in 2011-12. “Raising the tax-GDP ratio to above the 11 percent level is critical for sustaining the process of fiscal consolidation in the long run,” it said.

Gross tax revenue in April-December 2012 has grown by 15 percent to over Rs. 6.81 lakh crore. However, the growth in tax collection was “significantly” short of the growth envisaged in Budget. The tax collection until December 2012, was 63.2 percent of Budget estimates, lower than the last five-year average of 69 percent.

Rate of Inflation

Predicting that headline inflation may fall to 6.2–6.6 percent by next month, the Survey stated that elevated food inflation would continue to remain an area of concern as it inched towards double digits in December 2012. While 2012, the inflation was driven by protein items, this year it has been due to increase in prices of cereals such as wheat, rice and maize.

Inflation which is one of the major areas of concern for the United Progressive Alliance (UPA) Government, has remained in the range of above seven per cent since December 2009, while to add to its woes food inflation, too, has remained on the higher side during the same period, and according to the Economic Survey for 2012-13, easy money policy of major developed and developing nations may further aggravate inflationary expectations in India.

The survey further added that inflation has remained muted in the current financial year and declined to a three year low of 6.62 percent in January 2013. The average wholesale prices-based inflation in 2012 (April-December) moderated to 7.55 percent from 8.94 percent in the corresponding period of 2011-12.

Industrial Production

With the spurt in factory output last October turning out to be an aberration in the wake of sharp downturns in the months after, the latest Economic Survey has sought to describe the industrial production scenario as a ‘mixed picture’ of sluggishness bottoming out as well as continuing for a little longer period.

What came as a surprise to the government while India Inc. maintained a ‘we said so’ stance to clamor for easing of interest rates, was that industrial growth, as measured by the Index of Industrial Production (IIP), witnessed a smart recovery with a robust 8.3 per cent expansion in October, 2012.

Despite the downward bias, the Survey has highlighted at least two factors which point to some optimism on the industrial front.

First is the data on frequency distribution of products/product groups within the IIP basket which indicates that the number of products with negative growth has declined from 182 in the fourth quarter of 2011-12 to 160 in October-November 2012.

The second positive factor is the Reserve Bank of India’s ‘Business expectation index’, which showed moderately positive growth during the third quarter of the current fiscal after posting persistent negative growth for the previous six quarters. Since the RBI business index tracks IIP growth fairly closely, the change in trend suggests a possible bottoming out of IIP growth moderation.

Foreign Direct Investment

According to the Economic Survey, Foreign Direct Investment (FDI) in India slumped by 43.3 percent at $15.85 billion in April-November period of the current financial year as compared to $27.93 billion in the corresponding period previous year. The overseas investment flows in top five services declined by 9.7 percent at $8.19 billion during the period under review.

The Survey stated that overall FDI inflows increased by 33.6 percent in 2011-12. Overseas investment inflows in services surged by 57.62 percent in the financial year ended March 31, 2012.

The document presented a day ahead of the Union Budget 2013-14 pointed out that the government has taken many policy initiatives to liberalize FDI policy for services sector. This includes increasing FDI limit from 49 percent to 74 percent in teleports and DTH and cable networks, permitting FDI up to 74 percent in mobile TV, up to 49 percent in scheduled and non-scheduled air transport services and up to 50 percent in multi-brand retail trading.

The Survey stated that the government has also amended the existing policy on FDI in single brand product retail trading.

Health Sector

The country’s spending on health remains abysmally low with the Survey revealing that the spending on health, as compared to the spending on the rest of social services, has actually been declining in the country. Raising alarm over the decline, the survey has called for increased focus on health and education if India's demographic dividend is to be used to its advantage. Between 2011 and 2016, as many as 63.5 million workers, mainly aged between 20 and 35 years, will join India's pool. For this segment to be productively engaged, spending on health and education must remain consistent, the survey says.

But the ground situation paints to a sorry picture. The combined central and state expenditure on social services as a proportion of total expenditure increased from 22.4 per cent in 2007-08 to 25.1 per cent in 2012-13 and the spending on education among all the social services also increased over this period from 43.9 to 46.6 per cent.

However, the combined general spending (federal and states) on health has fallen over the past five years from 21.5 per cent to 19.2 per cent.

Petroleum Subsidies

The 2012-13 Survey has called for addressing the key issues of petroleum subsidies, clarity on gas pricing policy, petroleum price distortion and concerns over various disputes pertaining to the New Exploration Licensing Policy (NELP). It stated that addressing the key fiscal risk of petroleum subsidies is critical in better fiscal marksmanship.

It stated further that the overall subsidy bill of the government, it said, was likely to overshoot the target of Rs.1.79 lakh crore this financial year due to higher crude oil prices. The government had put the petroleum products subsidy at Rs.43,580 crore, food subsidy at Rs.75,000 crore and fertilizer subsidy at Rs.60,974 crore, taking the total subsidy bill to Rs.1,79,554 crore for 2012-13.

Employment Rate

The 2012-13 Economic Survey stated that the employment rate between June 2011 and June 2012 went up by approximately 7 lakh led mainly by the IT and BPO sector which accounted for almost half of the increase. It stated that upward trend in employment since July 2009 continues despite the economic slowdown.

A sector wise analysis shows that the textiles sector including apparels saw 1.70 lakh job additions, followed by transport sector (0.45 lakh), metals (0.26 lakh), gems and jewelry (0.19 lakh) and automobiles (0.11 lakh) in June 2012 over June 2011.

The survey said that employment in handloom/power loom and leather sectors has marginally declined during this period.

It said that there has been a sustained and consecutive increase in employment in both the public and private sectors covered at overall level during the last eleven quarters with a total addition of 30.73 lakh employment during this recovery period.

According to the Survey, India is on the brink of a demographic revolution with the proportion of working-age population between 15 and 59 years likely to increase from approximately 58 per cent in 2001 to more than 64 per cent by 2021. Moreover around 63.5 million new entrants to the working age group between 2011 and 2016, the bulk of whom will be in the relatively younger age group of 20-35 years.

The Survey added that the annual growth rate of employment in the private sector in 2011 was 5.6 per cent whereas that in the public sector was negative.

CAG Reports on Allocation and Pricing of Coal-Bearing Areas, 2G Spectrum: Whither Growing Corruption in India?

Reactions to recent reports of the Comptroller and Auditor General (CAG) of India on the allocation and pricing of coal-bearing areas and second-generation telecommunications spectrum (2G Spectrum) are reminiscent of the well-known parable of the blind men and the elephant. Depending on the political persuasion and ideological inclination of the person concerned, the reports are either futile exercises in exaggeration or an important endeavor to hold those in power and authority accountable for their actions.

The reports are either consciously aimed at embarrassing the government using dubious data and specious assumptions or these are attempts to bring about greater transparency in public finance and curb corruption in high places. Everything depends on which side you are on. The CAG has repeatedly talked about “presumptive” or “notional” losses. The government, in turn, argues that the losses are not real but hypothetical and that the auditors of the constitutional body need more than a few basic lessons in mathematics and economics. So what if the coal has not been mined?

The fact is simply that the coal acreages no longer belong to the government. Forget local inhabitants or indigenous communities, the coal blocks now belong to particular privately controlled companies, some of whose promoters and directors have rather close links with relatives of certain Congress leaders. Coal, incidentally, is a subject of the federal government.

In both the “Coalgate” and the 2G scam reports, what the CAG has stated is that there was inaction by those at the top, including Prime Minister Dr Manmohan Singh and Finance Minister Palaniappan Chidambaram. Both predictably protest their innocence. Despite the clean chit given to the finance minister by the Supreme Court on August 24, what cannot be disputed is that he knew very well what the disgraced Former Communications Minister Andimuthu Raja had been doing (he, in fact, says that he did not approve of some of his actions).

In fact, it was Dr Singh’s own government’s ministers and bureaucrats (including those in his office) — and not just those representing the state governments of Rajasthan, Chhattisgarh, Jharkhand, West Bengal, and Orissa — who ensured that his advice to have competitive bidding for coal blocks was not operationalized for more than six years.

Dr Singh, Chidambaram and their supporters have provided long, detailed and convoluted explanations about why what should have happened — auction of coal blocks and spectrum — did not happen. In both instances, previous governments (especially those run by the NDA) have been blamed. Two wrongs do not make a right.

Prime Minister’s Reaction

Prime Minister Manmohan Singh took “full responsibility” for the coal allocations made under a policy in existence since 1993. Amid slogan-shouting by the Bharatiya Janata Party (BJP) the prime minister has told Parliament that there is no impropriety in coal allocations. The CAG report is “flawed” as the auditor’s methodology to calculate the loss is questionable, he says and argues that it is not the CAG’s job to suggest a change of policy from allocation to auction of natural resources and tell the government to overrule state objections in changing the law.

Speaking both inside and outside Parliament, Dr Singh said he was not running away from taking “full responsibility” for decisions taken by the coal ministry when he had held the portfolio himself. He, however, declared that the allegation of impropriety “is without any basis and is unsupported by facts”.

As the uproar by the BJP on the floor of the two Houses continued for the fifth day in a row, the Prime Minister read out his statement amid the din. After reading a few paragraphs, he laid the statement on the table. Daring the BJP to hold a debate in the House to let the country judge the truth, he declared: “We have a very strong and credible case as the CAG’s observations are clearly disputable.” As BJP continued to create a ruckus, both Houses saw repeated adjournments, and no legislative businesses could be transacted.

Unconvincing Remarks

The prime minister’s statement presented in the Parliament and the remarks he made to the media outside the Parliament on the controversial coal block allotments are as unconvincing as the stand that his party has adopted since the scam broke out in public few months ago.

In fact, it is because Dr Singh wants to gloss over the salient aspects of the charges that have been leveled against him that he has tried to present the image of a ‘combative' leader; he took on the comptroller and auditor general of India for alleging “impropriety” which was “without basis and unsupported by facts”. Well, that is not for Dr Singh to decide since there is the Public Accounts Committee (PAC) which will study CAG's observations and submit its report to the Parliament on the merits of those observations. 

The prime minister does refer to his government's resolve to ‘challenge' in the PAC the findings of the country's premier audit organization, but then we also know that the Congress has scant regard for what is one of Parliament's most important panels. The obnoxious manner in which members of the party, assisted by some of their allies, had conducted themselves when the PAC was hearing CAG's 2G Spectrum scam report, is still fresh in the minds of the people.

The prime minister pats his own back by saying that it was the UPA government which “for the first time conceived the idea of making allocations through the competitive bidding route in June 2004.” But that unfortunately is not the point here. What happened thereafter is. Dr Singh swiftly dumped the auction idea and cleared a proposal to dole out coal blocks to private parties at vastly under-priced rates. By the time the government returned to its original ‘concept' of putting in place a mechanism for competitive bidding — and it took the regime over two years to do so — more than 140 coal blocks located in various States had been sold down the river to private players, many of whom have not even till date begun mining the resource.

BJP's Flawed Reasoning

After disrupting the winter session, BJP is at it again, insisting that the prime minister must resign for the so-called Coalgate scam before the Parliament is allowed to function. Led by senior leaders like Arun Jaitley and Sushma Swaraj in the presence of LK Advani and cheered on by Nitin Gadkari from outside, it rejects a debate in Parliament as the matter will merely be talked. A non-confidence motion is, however, ruled out as the numbers do not favor them. Meanwhile, disruption of Parliament is being paraded as a national duty. The argument is that similar disruption alone forced the resignation of Raja and Maran following the CAG’s 2G Spectrum scam report. And if Raja could resign as Minister for Telcom, Dr Singh must resign as he held additional charge of the Coal Ministry during the years when Coalgate occurred.

In the Coalgate matter, four Opposition-led state governments (Chhattisgarh, Orissa, Rajasthan, and West Bengal) and Jharkhand had opposed coal auctions as proposed by the Centre and recommended allocations of coal blocks in their states for local power and cement manufacture. Taking federal sensitivities into account, the federal government did not press its case for open auctions, a factor indirectly noted with some approval by the chief justice of India in a lecture delivered in Delhi recently.

Instead of allowing the Parliament to debate the matter and send it to the Public Accounts Committee for detailed scrutiny before the House takes a final view on the matter, the Jaitley argument is that the party is entitled to trump the whole, thus enabling a strident minority in the House to impose its will on the majority, and that too without the requisite parliamentary debate and investigation, in violation of every rule and canon of democratic process and conscience. This is the kernel of the matter, not the bogus, political spiel spewed out by the BJP and other persons before TV channels looking for meaningless but high-TRP-rated gladiatorial fights night after night.

Jaitley says “Parliamentary obstructionism … is a weapon to be used in the rarest of the rare cases.” But, unfortunately, the BJP seems bent on disrupting the Parliament constantly.

Assessment

It can be said that the UPA government’s strategy to hold the ground until winter sets in is neither politically prudent nor morally defensible. If one were to accept the finance minister’s argument that there was no loss in the allocation of coal blocks as the coal has not been “taken out of mother earth,” then surely the proper course would be to ensure that the companies which benefited from the discretionary allocation of the blocks are not allowed to profit from the coal that still remains unmined.

Nevertheless, the problem is that the government’s defense of the allocation is varied, full of holes, and contradictory. On one hand, the UPA is trying to present a luminously clean picture of the whole scenario, on the other BJP is not a less known perpetrator of corruption. It is high time that the parties stopped fooling the public and appreciated the intelligence of the common people.

Mohammed Hamid Ansari Reelected Vice President of India: Becomes Second Person To Get Two Terms in Country’s Second Highest Office

United Progressive Alliance’s (UPA) candidate Mohammed Hamid Ansari was reelected vice president of India on August 7, defeating NDA’s candidate Jaswant Singh by a large margin of 252 votes. As expected, the election of Ansari for a second term as the vice president was noncontroversial and smooth. The surprise, if any, was not in the outcome, but in the political churning that overflowed from the presidential election. After the Bharatiya Janata Party (BJP) made an overambitious attempt to disrupt Pranab Mukherjee’s bid for the presidency, this was an occasion to recover lost ground. The party sought to first retain its old allies such as the Shiv Sena and the Janata Dal (United), and then win over non-Congress allies such as the All India Anna Dravida Munnetra Kazhagam, instead of looking to poach disgruntled elements within the UPA. The less ambitious strategy was not intended to win the election for its candidate, Jaswant Singh, but to keep the National Democratic Alliance (NDA) united and in fighting mode for the 2014 Lok Sabha polls.

Seventy-five-year old former IFS officer, Ansari becomes the second person after Dr Sarvapalli Radhakrishnan, India’s first vice president (and second president), to get two terms in the second highest office.

Ansari got 490 votes, against Singh’s 238, of the 736 votes polled. Eight votes were declared invalid. Altogether 787 members of two Houses of Parliament were eligible to vote.

Ansari, a Padma Shri recipient, was a surprise choice for vice president in 2007, proposed by the Left, then giving outside support to the UPA government. Congress president Sonia Gandhi had named Ansari as the second choice of her party for the presidential election after Pranab Mukherjee. The Left had no problem supporting him again.

Among those who did not vote were ailing Union minister Vilasrao Deshmukh, admitted to a Chennai hospital, and BJP’s Shatrughan Sinha, recovering from surgery, in addition to 21 BJD members, 11 from TDP and six from the Congress and supporting parties.

Others who did not vote included two nominated MPs, two each from the BJP, AGP, RSP and TRS and Y.S. Jagan Mohan Reddy, one of two YSR Congress members.

Ansari will once again be the chairman of the Rajya Sabha (upper house of the Parliament) by virtue of his election as vice president.

Career Profile

Born in Kolkata (Calcutta) on April 1, 1937, while his family hailed from Ghazipur, Uttar Pradesh, Ansari completed his schooling from St. Edwards High School in Shimla, attended the St. Xavier's College, University of Calcutta, and pursued MA in Political Science at the Aligarh Muslim University (AMU), where he also got his doctorate degree and worked as lecturer.

Ansari – the grand-nephew of former Congress President Mukhtar Ahmad Ansari, a leader of the Indian independence movement – is also a reputed West Asia scholar. He has authored a book-- Travelling Through Conflict. He has written books on Palestine, Iraq and Iran. Some of his views have run contrary to India's official position. He had questioned India's vote at the International Atomic Energy Agency (IAEA) on Iran's nuclear program where the country voted against Iran.

Ansari also upheld a decision as NCM Chairperson when in 2007 he agreed with the position taken by St. Stephens College, Delhi, to earmark seats for Dalit Christians.

Ansari was chairman of a working group on "Confidence building measures across segments of society in the State," established by the Second round Table Conference of the Prime Minister on Jammu and Kashmir in 2006. The report of the working group was adopted by the Third round Table in April 2007.

In the past, a suave and sober Ansari has served in many positions, including as Permanent Representative of India to the United Nations, Indian High Commissioner to Australia and Ambassador to the United Arab Emirates, Afghanistan, Iran and Saudi Arabia. He joined the Indian Foreign Service in 1961.

Ansari became vice chancellor of the AMU in May, 2000 and held the post until March, 2002. He is also known for his role in ensuring compensation to the victims of the Gujarat riots and pushing for a complete re-look into the relief and rehabilitation for riot victims since 1984. He is also known for his strong views on burning issues.

"The language used by the Pope sounds like that of his 12th-century counterpart who ordered the crusades... It surprises me because the Vatican has a very comprehensive relationship with the Muslim world," Ansari had said in 2006 as Chairman, Minorities Commission of India, in reaction to Pope Benedict XVI's comments on Islam.

As chairman of the Rajya Sabha, Ansari faced criticism when the Opposition parties expressed unhappiness at the manner in which he “abruptly” adjourned the House on the night of December 29, 2011 (Winter Session) during the debate on the Lokpal Bill.

Advantage UPA

The result of the election was a foregone conclusion as the numbers were stacked in favor of the ruling alliance. It managed to get the backing of its estranged ally Trinamool Congress and the parties extending it outside support. These include arch rivals, the Bahujan Samaj Party and the Samajwadi Party. The Left parties also supported Ansari.

Undoubtedly, the importance of the reelection of Ansari as the country's vice president lies not just in the United Progressive Alliance managing to get its candidate through with a convincing margin, after sending its presidential nominee Pranab Mukherjee to Rashtrapati Bhavan (President’s House).

Both these victories have undoubtedly come as a morale-booster for an otherwise beleaguered ruling combine, battered over the last two years by scams and crises. There was a time two months ago when the ability of the UPA to get its candidates elected as President and vice president was under serious doubt.

Nor does Ansari's import lie merely in him being able to successfully transit from being viewed as a nominee of the Left parties -- which had supported him for vice presidentship in 2007 and they had their way because of the clout they carried in UPA I -- to being adopted as the candidate of the Congress, and the UPA.

White Paper on Black Money: Opposition Terms Document Disappointing, Non-Paper

Finance Minister Pranab Mukherjee presented the White Paper on Black Money in the Parliament on May 21. The 108-page Paper trashed the huge figure of illegal wealth stashed away by Indians in Swiss banks and said much of the money may have already come back into India through illicit means. It did not disclose any names of Swiss account holders or provided any fresh estimate of black money in India.

Indian Black Money Issue

The Bharatiya Janata Party (BJP) has termed the government's White Paper on black money as "disappointing" and a "non-paper." The Opposition party said that it is "like a bikini" as it hides the essentials and reveals only the less significant details.

The issue of Indian black money stashed abroad has been raked by the Bharatiya Janata Party (BJP) time and again both inside and outside Parliament. Party veteran L K Advani had taken out a month long Jan Chetna yatra across the country to highlight the issue.

The White Paper has not revealed the quantum of Indian black money kept in tax havens abroad. Neither has the government shared details of steps it has taken to repatriate this wealth.

The bank deposits of Indians in Swiss banks have decreased from Rs 23,373 crore in 2006 to Rs 9,295 crore in 2010. The government has not disclosed where this money has gone. Has it come back to India? Or has it been transferred to some other tax haven? Or has it been invested somewhere?

The Opposition has been demanding that the government make all efforts to bring back this money as has been done by countries like the United States, Germany and Ireland, among others.

The White Paper is also silent on the black money made by illegal sale of arms and armaments, evasions on stamp duty especially in land transactions, and use of such funds in politics. This document has several shortcomings. It does not explicitly explain what has been done to deal with black money in arms and armaments.

The generation of black money through stamp duty evasion especially in land transactions has not been revealed. The black money made by corrupt politicians has also not been revealed.

Tax Immunity Scheme

On the possibility of any tax immunity scheme, especially gold deposit scheme, to deal with black money, the White Paper said, "The issue of complete tax immunity needs to be examined in the light of other policy objectives." The document seeks to dispel the impression that government was not doing enough to deal with black money and talks about various policy options and strategies it has been pursuing to address the issue of corruption in public life.

Referring to the issue of institutions like Lokpal and Lokayuktas, the Paper said, "(they) need to be put in place at the earliest, in the Centre and the states respectively, to expedite investigations into cases of corruption and bring the guilty to justice."

The government has not been able to push through the Lokpal Bill in Rajya Sabha (upper house of the Parliament), despite pressure from the civil society. The Bill was approved by the Lok Sabha.

Introduction of Goods and Services Tax

The introduction of Goods and Services Tax, the White Paper added, would be a major step in integrating the efforts of different agencies dealing with black money.

Referring to the misuse of corporate structure, the Paper stated, "The Vodafone tax case provides an instance of the misuse of corporate structure for avoiding the payment of taxes."

In this case, it said, the Hutchison Group had made investments in India from 1992 to 2006 through a number of subsidiaries having 'separate corporate personality' but which were essentially post box companies based in the Cayman Islands, British Virgin Islands, and Mauritius.

The Hutchison Group sold its entire business operation in India in February 2007 to the Vodafone Group for a total consideration of $11.2 billion and the same was effected through transfer of a solitary share of a Cayman Islands company.

Global Financial Integrity (GFI) has estimated that from 1948 to 2008 a total of $ 213.2 billion has been shifted out of India through illicit outflows and the adjusted gross transfer of illicit assets by residents of India amounts to $ 462 billion as of end-December 2008.

The White Paper’s view is that this money has at least partly already returned to India. This may have been happened through Foreign Direct Investment route and stock markets.

Four-Pronged Strategy

The Paper suggested four-pronged strategy to curb generation of black money. These include more incentives for voluntary compliance of tax laws, reforms in vulnerable sectors of economy and creation credible deterrence. It mentioned that reform of financial and real estate sectors would help in reducing generation of black money in long term as freeing of gold imports had helped in checking smuggling.

On the need to curb this menace in vulnerable sectors like real estate, the provision of deducting tax at source on payments made on real estate transactions and mandating it as a pre-condition for registering of the transacted property could be considered.

Large number of transactions in bullion and jewelry are unaccounted and there is also urgent need to improve the reporting and monitoring systems in this sector. On the informal sector and cash economy, the Paper states that there is a need to amend laws to check keeping very large amounts of cash. Another important measure could be the promotion of banking channels, including use of credit and debit cards through tax incentives, since they leave adequate audit trails and hence disincentivize black money generation. Levying tax at source at a low level on cash purchases may also be considered as a possible policy option.

The White Paper states that there does not seem to be much progress on repatriation of black money abroad. It says that the government has been working on bilateral treaties. However, these treaties do not have provisions for repatriation of undisclosed assets. Without international consensus on this issue it is difficult to implement domestic law on repatriation of assets located abroad.

Assessment

Undoubtedly, we now know that based on some recent international data, India is 15th in the world in terms of outgo of unaccounted or “black” money, namely money that has evaded the tax net and has been parked overseas.

The White Paper does not say anything that is not public knowledge but shifts the focus from foreign banks to domestic culprits and sources. Since the finance minister had refused to disclose the names of those holding illegal assets abroad in the Supreme Court as well as Parliament, it was futile to expect their mention in the White Paper. The government report talks of the possibility of one-time amnesty scheme for tax evaders to encourage disclosures and recover tax.

The Paper gives an idea of the generation of black money in the system, and calls for reforms in the financial sector, including taxation and in investment instruments such as participatory notes, as well as in real estate.

Some Facts

* To curb black money, a four-pronged strategy — reducing disincentives against voluntary compliance, reforms in vulnerable sectors of the economy, creating effective credible deterrence and supportive measures — is being worked out.

* The White Paper states that encouraging the use of credit and debit cards — as they leave adequate audit trails — could also help in preventing black money generation.

* It also proposes improved reporting and monitoring systems to track bullion and jewelry transactions and wants close tabs on real estate deals

Economic Survey 2011-12: Inflation Pegged at 6.5 Per Cent, Maintained GDP Growth at 6.9 Per Cent

Finance Minister Pranab Mukherjee presented the Economy Survey 2011-12– a report card of the Indian economic scenario for current fiscal– in the Lok Sabha (lower house of the Parliament) on March 15.
Inflation Rate
The Survey pegged inflation at 6.5-7 percent by end of March and projected a further moderation in the next fiscal. Inflation in the current fiscal has largely been driven by high food prices. It had slipped to a low of 6.6 percent in January, but rebounded to almost 7 percent in February. The survey, however, said that fiscal consolidation was the only way to keep inflation down.
The survey said that monetary measures by the Reserve Bank of India (RBI) and its impact on curbing inflation needed to be studied further to improve efficiency of such actions in the future. Incidentally, the RBI in its mid-quarter review of the monetary policy left key rates unchanged, citing upside risks to inflation.
Growth Rate
The Economic Survey has maintained Gross Domestic Product (GDP) growth at 6.9 per cent. The growth in the financial year 2012-13 growth is expected to come in at 7.6 per cent and the financial year 2013-14 growth is pegged at 8.6 per cent.
Indian along with Indonesia showed strong growth despite a global economic slowdown in the final quarter of 2011, according to the International Monetary Fund (IMF).
IMF in its latest provisional report has said the GDP growth of G20 – a grouping of leading economies of the world – slowed to 0.7 per cent in the October-December quarter, compared with 0.9 per cent in the third quarter.
In the United States, GDP growth increased to 0.7 per cent in the fourth quarter, compared with 0.5 per cent in third quarter.
The IMF stated that in India and Indonesia growth increased strongly, but slowed in China to 2 per cent, compared with 2. 3 per cent in the third quarter.
In Japan, economic growth decreased to (-)0.2 per cent, following the strong rebound (+1. 7 per cent) in third quarter.
The Survey states that GDP fell by (-)0.3 per cent in both the European Union and the euro area in the fourth quarter of 2011, the first fall since the second quarter of 2009.
Fiscal Deficit
The Survey states that the fiscal outcome in 2011-12 is likely to be affected by the macroeconomic setting which indicates sharp slowdown in industry and rising costs affecting profits. In the first nine months of the current fiscal, gross tax revenue has grown by 12.2 per cent as against the budget estimate target of 17.3 per cent, it said.
On the other hand, as against a target of 4.9 per cent for the whole year, growth in total expenditure in the first nine months of 2011-12 was 13.9 per cent, which comprised 15.4 per cent growth in non-Plan expenditure and 10.8 per cent growth in Plan expenditure, the survey added.
Per Capita Income
According to the Survey, the per capita income of India stood at $ 1,527 in 2011. The Survey says that this is perhaps the most visible challenge. Nevertheless, India has a diverse set of factors, domestic as well as external that could drive growth well into the future.
The Survey further says that between 1980 and 2010, India achieved a growth of 6.2 per cent, while the world as a whole registered a growth rate of 3.3 per cent. As a result, India’s share in global GDP more than doubled from 2.5 per cent in 1980 to 5.5 per cent in 2010.
Consequently, India’s rank in per capita GDP showed an improvement from 117 in 1990 to 101 in 2000 and further to 94 in 2009. China, however, improved its rank from 127 to 74 during the same period.
Highlights
* India's economic growth estimated at 6.9 per cent in the current fiscal; growth momentum to pick up in next two fiscals to 7.6 per cent 2012-13 and 8.6 per cent in 2013-14.
* RBI expected to lower policy interest rates, as inflationary pressures expected to ease in coming months; A low interest rate regime to encourage investment activity and push forward economic growth.
* Steps required for deepening of domestic financial markets, especially corporate bond market and attracting longer-term inflows from abroad; Efforts at attracting dedicated infrastructure funds have begun.
* The growth rate of investment in the economy is estimated to have declined significantly; borrowing costs up due to a sharp increase in interest rates.
* High borrowing costs and increase in other costs affecting profitability and internal accruals.
* Slowdown in Indian economy largely due to global factors, as also because of domestic factors like tightening of monetary policy, high inflation and slower investment and industrial activities.
* Inflation high, but showing clear signs of slowdown by the year-end; Whole-sale food inflation down to 1.6 per cent in January 2012 from 20.2 per cent in February 2010.
* India remains one of the fastest growing economies of the world; Country's sovereign credit rating rose by a substantial 2.98 per cent 2007-12
* Farm sector growth pegged at 2.5 percent for 2011-12.
* Services sector to grow at 9.4 percent.
* Services sector share in GDP to go up to 59 percent in the fiscal ending March 31.
* Industrial growth pegged at 4-5 percent, expected to improve as economic recovery resumes.
* Inflation on Wholesale Price Index (WPI) was high but showed clear slow down by the year-end. This is likely to spur investment activities leading to positive impact on growth.
* WPI food inflation dropped from 20.2 percent in February 2010 to 1.6 percent in January 2012.
* Calibrated steps initiated to rein-in inflation on top priority.
* India remains among the fastest growing economies of the world.
* Fiscal consolidation on track - savings and capital formation expected to rise.
* Exports grew by 40.5 percent in the first half of this fiscal and imports grew by 30.4 percent.
* Foreign trade performance to remain a key driver of growth.
* Forex reserves enhanced - covering nearly the entire external debt stock.
* Central spending on social services goes up to 18.5 percent this fiscal from 13.4 percent in 2006-07.

Rail Budget 2012-13: Hike in All Classes Fares

Railway Minister Dinesh Trivedi presented his maiden Railway Budget for 2012-13 in the Parliament on March 14. The annual plan outlay for Indian Railways for 2012-13 has been pegged at Rs 60,100 crore which provides Rs. 6,872 crore for new railway lines and significant funds for passengers safety, security and amenities. Of the total budget, Rs 24,000 crore will be in the form of gross budgetary support, Rs 2000 crore from railway safety fund (RSF) and Rs 18050 crore would be through internal accruals.
The railway minister has focused on five important fields, which are: safety; consolidation; decongestion and capacity augmentation; modernization; and to bring down the operating ratio from 95 per cent to 84.9 per cent in 2012-13.
Passengers Charged
The increase would be 2 paise per km for suburban trains; 3 paise per km for mail trains. Express train fare was up by 5 paise per km, 10aise p per km for a/c chaircar, 10 paise per km for a/c 3-tier, 15 paise per km for a/c 2-tier and 30 paise per km for a/c 1st class. Platform tickets would now cost Rs 5.
According to the railway minister, the attempt was to round off fares to eliminate the need for change.
According to the minister, Indian Railways will invest Rs.7.35 lakh crore during the 12th Five Year Plan (2012-17), against Rs.1.92 lakh crore in the current one. By then, it will double its contribution to India's gross domestic product to 2 percent.
The minister said the outlay of Rs.60,100 crore proposed for 2012-13 will be the highest ever and added that the network will require Rs.14 lakh crore over the next 10 years for modernization.
Coming to specific proposals, the railway minister said 85 new line projects would be taken up during the next fiscal year at a cost of Rs.6,870 crore, even as feasibility surveys would be conducted for another 114 lines.
Trivedi said an attempt will also be made to increase train speeds to 160 km per hour from around 90-100 km per hour. With that, he said, a journey from New Delhi to Kolkata will be brought down to 14 hours from 17 hours.
Budget At A Glance
* Passenger fares to be hiked by 2 paise per km for suburban and ordinary second class travel; 3 paise per km for mail/ express second class; 5 paise per km for sleeper class; 10 paise per km for AC chair car/AC 3-tier and First Class; 15 paise per km for AC 2-tier and 30 paise per km for AC 1-tier.
* Minimum fare and platform tickets to cost Rs 5.
* Seventy-five mew Express trains to be introduced, along with 21 new passenger services, nine DEMU services and 8 MEMU services trains.
* Route of 39 trains to be extended and frequency of 23 trains to be increased.
* Railways to hire more than one lakh employees in 2012-13; 80,000 persons hired last year.
* Indian Railways Stations Development Corp to be set up to re-develop stations and maintain them like airports.
* To set up an independent Railway Safety Authority as a statutory body.
* The open discharge toilets on trains to be replaced with green (bio) toilets.
* All unmanned level crossings to be abolished in next five years; To target zero deaths due to rail accidents.

Historic Breakthrough in Nepal: Beginning of New Era

Nepal's main political parties have signed a historic seven-point peace deal that includes an agreement on integrating former Maoist combatants into the security forces, to take a major step toward concluding the stalled peace process.
The four major political forces which represent more than 85 per cent strength of the 601 member Constituent Assembly reached an agreement to conclude the stalled peace process within a month and to prepare a draft constitution. Those who signed the deal at the end of a crucial meeting held at prime minister’s residence at Baluwatar include UCPN-Maoist chief Prachanda, Nepali Congress president Sushil Koirala, Jhala Nath Khanal, chairman of the Communist Party of Nepal (Unified Marxist-Leninist [CPN-UML]), and leader of Joint Democratic Madhesi Front and Deputy Prime Minister Bijaya Kumar Gachhadar.
The agreement removes the single biggest obstacle in the process of constitution writing, as non-Maoist parties had refused to resolve the constitutional issues until what they saw as a Maoist instrument of coercion was not disbanded.
An agreement on the contentious issue of integrating the former combatants was a major part of the deal which decided to integrate a maximum of 6,500 Maoist combatants into security forces and returning properties sezied during the civil conflict to their rightful owners.
Ending Political Quagmire
Now, Nepal has the opportunity to inaugurate a new era for itself. The country needs every encouragement and support as it tries to give the peace process substantive meaning by following through with the drafting of a post-monarchy constitution. Nepal’s neighbors might do well to avoid the temptation of seeking to interfere with the new systems being sought to be put in place.
The end of the monarchy and the 2008 national election failed to bring peace to Nepal. The Maoists, accustomed to authoritarian ways of running a guerrilla army, emerged as the largest party in Parliament, but found it difficult to conduct a dialogue with other parties aimed at bolstering a multi-party structure. They sought to dictate terms and take over institutions, particularly the Army, without considering their responsibility as the largest party in Parliament to forge the constitution in discussion with other parties. The November 2 agreement ends this disastrous three-year stalemate.
Road to Peace and Progress
Nepal has been finding it difficult to move ahead on the road to peace and progress. The political parties that have their members in the Constituent Assembly had to make a number of attempts to elect a leader to head the interim government. The Maoists who constitute the largest group in the assembly have been the main stumbling block.
However, their attitude may now change with the seven-point historic accord reached between Nepal’s principal political parties — the ruling groups led by the United CPN-Maoist and those in the opposition — on 1 November. Among the issues that have been sorted out is the one relating to the Maoist combatants, members of the militia that fought against the Royal Nepal Army for nearly a decade.
The agreement settles the future of combatants of the Maoist People's Liberation Army (PLA), who have been in cantonments across the country for over four years.
It seems both sides — the Maoists and the non-Maoists — have yielded substantial ground. Only 6,500 of the total 19,000 Maoist combatants will be inducted into the Nepal Army. The rest have been offered financial compensation — between Rs 600,000 and Rs 900,000 — under a rehabilitation deal. The other issues like completing the constitution by November-end when the term of the Constituent Assembly will end were not as tricky as the one concerning the Maoist armed fighters.
Advantage Political Forces
Undoubtedly, other parties deserve some credit too for staying the course and not letting themselves be rolled over by the Maoists in the early phase. After the rejection of maximalist positions proposed by the Maoists, the tricky question of integration of the guerrillas into the Nepal Army was resolved through a formula accepted to all in Parliament.
The Maoists also agreed to hand over all the arms in their possession, and return the lands confiscated from the people in an earlier phase. It is important that the other parties in the system — particularly the Nepali Congress, the CPN-UML, and the Madhesi Front — now reciprocate and make the system work, and proceed to be reasonable in constitution-making deliberations.
Major Challenges Ahead
There are two key challenges now. The first is implementing the agreement within the tight timelines that have been laid out. The parties have committed themselves to completing the regrouping of combatants into those to be integrated and rehabilitated by the third week of November, and preparing a draft constitution by November 30. This would enable another extension of the Constituent Assembly. The second is resolving constitutional issues, particularly the nature and shape of federalism. A longer term challenge is the democratization of the Nepal Army, meaning institutionalizing both civilian control and the respect for human rights.