1. The Competition (Amendment) Bill, 2022
Why is an amendment to the already existing Indian Competition Act necessary?
As the dynamics of the market changes due to technological advancements, artificial intelligence, and the increasing importance of factors other than price, amendments became necessary to sustain and promote market competition. The long-awaited Bill to amend the Competition Act, 2002, was finally tabled in the Lok Sabha recently.
Some of the major amendments include allowing the commission to give an additional waiver of penalties to an applicant who discloses the existence of another cartel in an unrelated market, giving the Commission authority to appoint the DG rather than the Central government etc.
By implementing these amendments, the Commission should be better equipped to handle certain aspects of the new-age market and transform its functioning to be more robust.
G.S. Bajpai Ankit Srivastava
The story so far: The Indian Competition Act was passed in 2002, but it came into effect only seven years later. The Competition Commission primarily pursues three issues of anti-competitive practices in the market: anti-competitive agreements, abuse of dominance and combinations. As the dynamics of the market changes rapidly due to technological advancements, artificial intelligence, and the increasing importance of factors other than price, amendments became necessary to sustain and promote market competition. Therefore, a review committee was established in 2019 which proposed several major amendments. The long-awaited Bill to amend the Competition Act, 2002, was finally tabled in the Lok Sabha recently.
What is the major change in dealing with new-age market combinations?
Any acquisition, merger or amalgamation may constitute a combination. Section 5 currently says parties indulging in merger, acquisition, or amalgamation need to notify the Commission of the combination only on the basis of ‘asset’ or ‘turnover’. The new Bill proposes to add a ‘deal value’ threshold. It will be mandatory to notify the Commission of any transaction with a deal value in excess of ₹2,000 crore and if either of the parties has ‘substantial business operations in India’. The Commission shall frame regulations to prescribe the requirements for assessing whether an enterprise has ‘substantial business operations in India’. This change will strengthen the Commission’s review mechanism, particularly in the digital and infrastructure space, a majority of which were not reported earlier, as the asset or turnover values did not meet the jurisdictional thresholds.
When business entities are willing to execute a combination, they must inform the Commission. The Commission may approve or disapprove the combination, keeping in mind the appreciable adverse effect on competition that is likely to be caused. The Commission earlier had 210 days to approve the combination, after which it is automatically approved. The new Bill seeks to accelerate the timeline from 210 working days to only 150 working days with a conservatory period of 30 days for extensions. This will speed up the clearance of combinations and increase the importance of pre-filing consultations with the Commission.
What is gun-jumping?
Parties should not go ahead with a combination prior to its approval. If the combining parties close a notified transaction before the approval, or have consummated a reportable transaction without bringing it to the Commission’s knowledge, it is seen as gun-jumping. The penalty for gun-jumping was a total of 1% of the asset or turnover. This is now proposed to be 1% of the deal value.
What challenge do combining parties face in open market purchases?
There have been several gun-jumping cases owing to the combining parties’ inability to defer the consummation of open market purchases. Many of them argue that acquisitions involving open market purchase of target shares must be completed quickly, lest the stock value and total consideration undergo a change. If parties wait for the Commission’s clearance, the transaction may become unaffordable.
Similar to the European Union merger regulations, the present amendment Bill also proposes to exempt open market purchases and stock market transactions from the requirement to notify them to the Commission in advance. This is subject to the condition that the acquirer does not exercise voting or ownership rights until the transaction is approved and the same is notified to the Commission subsequently.
Does the amendment Bill address the issue of Hub-and-Spoke Cartels?
A Hub-and-Spoke arrangement is a kind of cartelisation in which vertically related players act as a hub and place horizontal restrictions on suppliers or retailers (spokes). Currently, the prohibition on anti-competitive agreements only covers entities with similar trades that engage in anti-competitive practices. This ignores hub-and-spoke cartels operated at different levels of the vertical chain by distributors and suppliers. To combat this, the amendment broadens the scope of ‘anti-competitive agreements’ to catch entities that facilitate cartelisation even if they are not engaged in identical trade practices.
What is the amendment to the ‘settlements’ and ‘commitments’ mechanisms?
The new amendment proposes a framework for settlements and commitments for cases relating to vertical agreements and abuse of dominance. In the case of vertical agreements and abuse of dominance, the parties may apply for a ‘commitment’ before the Director General (DG) submits the report. ‘Settlement’ will be considered after the report is submitted and before the Commission decides. According to the amendment, the Commission’s decision regarding commitment or settlement will not be appealable after hearing all stakeholders in the case. The Commission will come out with regulations regarding procedural aspects.
What are the other major amendments?
In the amendment Bill, a provision called ‘Leniency Plus’ allows the commission to give an additional waiver of penalties to an applicant who discloses the existence of another cartel in an unrelated market, provided the information enables the Commission to form a prima facie opinion about the existence of the cartel. Other noteworthy amendments include the appointment of the DG by the Commission rather than the Central government, giving the Commission greater control. According to the Bill, the DG has the power to conduct investigations, including raids. The Commission will only consider information filed within three years of the occurrence of the cause of action. As part of the Bill, penalties and penalty guidelines are proposed to be amended. For any false information filed, a penalty of five crore will be imposed, and for failure to comply with the Commission directions, a penalty of ₹10 crore will be imposed. Additionally, the Commission will develop guidelines regarding the amount of penalties for various competition violations. For an appeal to be heard by the National Company Law Tribunal (NCLT) against the Commission’s order, the party will have to deposit 25% of the penalty amount.
By implementing these amendments, the Commission should be better equipped to handle certain aspects of the new-age market and transform its functioning to be more robust. The proposed amendments are undoubtedly needed; however, these are heavily dependent on regulations that will be notified by the Commission later. These regulations will influence the proposals. Also, the government needs to recognise that market dynamics change constantly, so it is necessary to update laws regularly.
2. The ‘tomato flu’ outbreak and the Centre’s advisory
What are the symptoms of the flu? Why are experts against calling the infection ‘tomato flu’?
In the article ‘Tomato flu outbreak in India’, published in The Lancet Respiratory Medicine journal on August 17, the authors define the infection as a “new virus” that has emerged in Kerala in children younger than five years.
In its communication on Tuesday, the Ministry of Health and Family Welfare stated that the illness is a clinical variant of the hand, foot and mouth disease.
Medical experts have taken strong exception to calling the infection as ‘tomato flu’, saying that the usage of such terms is unscientific and misleading. They also clarify that the infection is not related to the consumption of tomatoes in any way.
The story so far: Days after a paper in The Lancet journal raised concerns over the rise in cases of the “new virus known as tomato flu” among children in India, the Union Health Ministry on Tuesday issued an advisory, asking States to take measures to prevent its spread. In a set of guidelines, the Centre referred to the disease as a probable variant of the hand, foot and mouth disease, or HFMD, which commonly occurs in children under 10 years of age and can also infect adults. As per the Lancet paper, India recorded around 100 cases of ‘tomato flu’ in children below nine years of age in less than three months. The transmission of the “highly contagious” yet “non-life-threatening virus” could lead to serious consequences by spreading to adults as well, it adds.
What does The Lancet report say?
In the article ‘Tomato flu outbreak in India’, published in The Lancet Respiratory Medicine journal on August 17, the authors define the infection as a “new virus” that has emerged in Kerala in children younger than five years. The report, however, contradicts itself by also claiming the infection to be in an endemic state. ‘Endemic’is a term used to refer to a disease which has spread in a limited area but has been around for some time. The report further claims that ‘tomato flu’ was first identified in the Kollam district of Kerala on May 6 this year. However, a study published by the U.S. National Library of Medicine in its Immunity, Inflammation and Disease journal in July says that cases of ‘tomato fever’ have been reported in the past in 2007 as well.
The authors do not mention a specific origin, type or cause of the infection. They suggest that it may be an after-effect of chikungunya or dengue fever in children rather than a viral infection, or that the virus could also be a new variant of the HFMD — a common viral infection affecting young children that appears with fever, rashes or blisters on the skin and mouth sores.
What are experts saying?
As far as its etymology is concerned, the Lancet report claims that the ‘tomato flu’ is so named because of the “eruption of red and painful blisters throughout the body that gradually enlarge to the size of a tomato.” Medical experts have taken strong exception to this, saying that the usage of such terms is unscientific and misleading. They also clarify that the infection is not related to the consumption of tomatoes in any way.
“Tomato fever is a misleading colloquial name for hand, foot, and mouth disease. This is a mild viral illness commonly affecting young children typically below age 10. It is usually caused by a Coxsackie virus… It produces red spots on the skin, and hence someone called it ‘tomato fever’, and the name became popular. But using such terms is misleading because many people mistakenly believe it comes from tomatoes,” Indian Medical Association (IMA) member Dr. Rajeev Jayadevan was quoted as saying by news agency ANI.
Hyderabad-based paediatrician Dr. Suresh Kumar Panuganti shared a similar view with The Hindu. “‘Tomato flu’ is caused by Coxsackievirus A16. It belongs to the Enterovirus family. HFMD is a frequent febrile rash illness of childhood caused by enteroviruses (EV): Coxsackie A16 (CA16), EV A71, Coxsackie A6, Coxsackie B and Echo viruses.”
Another doctor said such reports cause panic. “The community is just recovering from COVID and therefore is very sensitive and receptive to new endemics. Additionally, this type of news creates panic,” Dr. Dhiren Gupta of Sir Ganga Ram Hospital told ANI.
Virologist Dr. Angela Rasmussen has also highlighted the lack of evidence in the report published by The Lancet. In a series of tweets, she said that the paper had failed to establish some crucial points related to ‘tomato flu’. She also pointed out that the paper was published in the ‘correspondence’ section of The Lancet. According to the medical journal’s website, ‘correspondence’ news or discussions are not normally externally peer-reviewed.
What did the advisory state?
In its communication on Tuesday, the Ministry of Health and Family Welfare stated that the illness is a clinical variant of the HFMD. The Ministry, however, also used the term ‘tomato flu’ in the advisory. The Ministry clarified that the virus causing ‘tomato flu’ is not related to SARS-CoV-2, monkeypox, dengue, or chikungunya despite symptoms similar to those in viral infections. “It seems the disease is a clinical variant of the so-called hand, foot and mouth disease (HFMD) that is common in school-going children. Infants and young children are also prone to this infection through the use of nappies, touching unclean surfaces as well as putting things directly into the mouth,” the Centre said. It is a self-limiting illness and no specific medication exists for its treatment yet, it said.
On symptoms, the Centre said a child infected with ‘tomato flu’ will have fever, rashes and pain in joints. The illness usually begins with a mild fever, poor appetite, malaise, and occasionally, a sore throat. Small red blisters appear one or two days after the fever and these sores are usually located on the tongue, gums, inside of the cheeks, palms and soles. In some cases, fatigue, nausea, vomiting, diarrhea, dehydration, swelling of joints, body ache, and common influenza-like symptoms have also been noted.
It advised isolation for five to seven days from the onset of any symptom to prevent the spread of infection. Other guidelines mentioned in the report include supportive therapy of paracetamol for fever and body ache as well as other symptomatic treatments, a nutrition-rich, balanced diet to boost immunity, rest, plenty of fluids and a hot water sponge to provide relief from irritation and rashes etc.
3. SC asks Centre to expand food security coverage
Bench takes decadal population hike till 2021 into account
The Supreme Court has directed the Centre to increase coverage under the National Food Security Act (NFSA) so that “more and more needy persons and citizens get the benefit” under the 2013 law which entitles rural and urban poor to subsidised foodgrains under the Targeted Public Distribution System.
The coverage under the NFSA is still decided by the population figures of the 2011 census.
In an eight-page order, a Bench of Justices M.R. Shah and B.V. Nagarathna ordered the Union government to re-determine the NFSA coverage in the States and Union Territories after considering the population increase between 2011 and 2021 so that benefits were not restricted to beneficiaries identified back in 2011.
“The right to food is a fundamental right available under Article 21 of the Constitution,” the Supreme Court noted. The Union, in its affidavit, had stated in court that the Act required coverage to be updated under the latest published census figures.
However, such coverage cannot be determined as the 2021 census has been postponed indefinitely and no date has been notified.
Advocate Prashant Bhushan, for petitioners Anjali Bhardwaj, Harsh Mander and Jagdeep Chhokar, had pointed out that due to the absence of the latest population figures, over 10 crore people were left outside the food security law’s protective umbrella without even ration cards.
Mr. Bhushan had urged the court to direct the government to use the official population projections published by the Health Ministry to expand the coverage.
The court found the petitioners’ concerns “genuine and justified”.
In the order, the court directed the States which were not able to register unorganised workers, including migrant labourers, in the e-Shram portal to do so within six weeks.
The Union Labour Ministry has developed a National Database of Unorganised Workers (NDUW) portal and the e-Shram portal for registration of labourers spread over 400 occupations including in constructions, agriculture, fishing, and dairy, those self-employed and even ASHA and anganwadi workers.
However, many States have achieved less than 50% registration, with Tamil Nadu being one of the lowest at only 34.84%.
National Food Security Act
The National Food Security Act (NFSA) 2013, which was passed on July 5, 2013, represents a paradigm shift in the aspect of food security, moving away from a welfare-based approach to one based on rights. Up to 75% of the rural population, as well as 50% of the urban population, are legally entitled to receive subsidised foodgrains through the Targeted Public Distribution System, according to the Act. Therefore, the Act covers almost two-thirds of the population in order to provide them with heavily subsidised foodgrains. The National Food Security Act of 2013 (NFSA) is being implemented throughout all of India’s States and UTs.
Beneficiaries under the National Food Security Act fall into two categories: Priority Households (PHH) and Antyodaya Anna Yojana (AAY) households, each of which is entitled to 35 kg of food grains each month (5 kg per person per month). Wheat costs Rs. 2 per kg, rice costs Rs. 3 per kg and coarse grains cost Rs. 1 per kg.
There has been no revision in the prices of the foodgrains in the Union Budget 2022. The PDS Issue prices of rice, wheat and coarse grains will continue to be sold at Rs. 3, Rs. 2 and Re. 1 per kg, respectively.
- The Act was signed into law on 12th September 2013 retroactive to 5th July 2013.
- The Act is in line with Goal Two of the Sustainable Development Goals set by the United Nations General Assembly.
- Goal 2 seeks sustainable solutions to end hunger in all its forms by 2030 and to achieve food security.
- The aim is to ensure that everyone everywhere has enough good-quality food to lead a healthy life.
- Schemes such as the Mid-Day Meal Scheme (MDMS), the Public Distribution System (PDS), and the Integrated Child Development Services (ICDS) are included under the Act.
- The Act is being implemented by all the States and the Union Territories.
Objectives of the National Food Security Act
The Act provides for food and nutritional security in the human life cycle approach, by ensuring access to an adequate quantity of quality food at affordable prices for people to live a life with dignity and for matters connected therewith or incidental thereto.
Salient Features of the NFSA
The major features of the Act are described below:
- Coverage: The state-wise coverage was determined by the NITI Aayog based on the 2011-12 Household Consumption Expenditure survey of NSSO.
- The Act legally entitled up to 75% of the rural population and 50% of the urban population to receive subsidized foodgrains under the Targeted Public Distribution System (TPDS).
- About two-thirds of the population, therefore, is covered under the Act to receive highly subsidized foodgrains.
- The food grains would be provided at highly subsidized prices under the Public Distribution System.
- The Act ensures nutritional support to women and children. Pregnant and lactating women would be entitled to nutritious meals, free of charge under the MDM and ICDS schemes.
- Children in the age group of 6-14 years would also be entitled to free nutritious meals under the MDM and ICDS schemes.
- Maternity benefit of not less than Rs.6000 is also provided to pregnant women and lactating mothers.
- The Act also empowers women by identifying the eldest woman of the household as the head of the household to issue ration cards.
- The Central Government aids the States to meet the expenditure incurred by them on transportation of foodgrains within the State and also handles the Fair Price Shop (FPS) dealers’ margins according to the norms.
- There is a provision of a food security allowance to the beneficiaries in the event of non-supply of food grains.
- Transparency: Provisions have been made to disclose the records related to the PDS to ensure transparency.
Beneficiaries of the National Food Security Act
The Act covers two-thirds of the entire population under two categories of beneficiaries:
- Antyodaya Anna Yojana (AAY) households
- Priority Households (PHH)
- AAY households encompass the households headed by widows or disabled persons or persons aged 60 years or more with no assured means of subsistence or societal support.
- It usually takes into account the households of those below the poverty line too.
- It also includes support for women and children.
- NFSA gives the right to receive food grains at subsidized prices to people belonging to eligible households, i.e., the PHH. A major section of the ration cardholders in the priority sector comes under this category. This is an effort to alleviate poverty.
- The work of identification of eligible households within the coverage under TPDS determined for each state is to be done by the states and the UTs.
Significance of Food Security
The concerns regarding food security in India can be traced back to the experience of the Bengal Famine in 1943 during the British Colonial Rule. Food security is of utmost importance to a nation as it will also have a positive influence on the other aspects determining the growth of a nation:
- It boosts the agricultural sector.
- It also aids the government to regulate food prices.
- A boost in the agricultural sector would result in more job opportunities, as agriculture is a labour-intensive sector. This would enhance economic growth and result in the reduction of poverty.
- Access to nutritious food would enhance the overall health of the public.
- Food security is also important for the global security and stability of the nation.
Significance of the National Food Security Act
The concept of food security at a global level indicates access to basic, nutritious food by all people, at all times. It is characterized by the availability, access, utilization, and stability of food.
- There is no explicit provision in the Indian Constitution for the right to food.
- Until the enactment of the NFSA, the fundamental right to life under Article 21 was interpreted to include the right to live with human dignity, which may include the right to food and other basic necessities.
Obligations under NFSA
The NFSA states in detail the obligations of the Central government, the state government, and the local authorities.
1. Obligations of the Central Government:
- The Central Government shall allocate the required food grains from the central pool to the State Governments under the TPDS.
- The Government would have to allocate the resources keeping in mind the number of persons in the eligible households.
- The Central Government would also provide for the transportation of food grains as per the allocation to the State Governments.
- Assist the State Governments in meeting the expenditures incurred by the State Government towards intra-state movement, handling of the food grains, and the FPS margins.
- Create and maintain storage facilities at various levels.
2. Obligations of the State Governments:
- The State Government shall be responsible for the implementation and monitoring of the various schemes.
- Organize intra-state allocations to deliver the allocated food grains to the beneficiaries.
- Determine the eligible households and the beneficiaries and ensure that they can avail themselves of the benefits of the schemes.
- Create and maintain scientific storage facilities at the district and block levels to store the allocated food grains.
- Establish institutionalized licensing arrangements for the FPS under the Public Distribution System (Control) Order, 2001.
3. Obligations of the local authorities:
- They shall be responsible for the effective implementation of the Act.
- They may be assigned additional responsibilities by the State Government for the implementation of the TPDS.
- The local authorities would be responsible for discharging the responsibilities allotted to them by the State Governments.
Challenges to Food Security
There are a plethora of challenges to battle food security, a few of them are:
- Climate Change: the increase in the global temperatures and the capricious rainfall makes farming difficult. A change in the temperatures not only impacts the crops but the other species which are reared for food such as fisheries, livestock, etc.
- Lack of Access: there is a lack of access to remote areas. The tribals and other communities living in remote areas do not get the opportunity to avail of the benefits of the schemes implemented for food security due to lack of access.
- Over-population: A substantial increase in the population when not accompanied by an increase in agricultural production results in a shortage of food.
- Non-food crops: crops grown for commercial purposes such as biofuels and dyes have reduced the area under cultivation for crops.
- Migration from Rural-Urban cities: This causes a problem as it leads to a lot of confusion as to which PDS shop to buy the subsidies from.
The effective implementation of the NFSA remains with the states/UTs and as governance differs from state to state, the effectiveness of the implementation would also differ in each state.
- Lack of Transparency: According to a Comptroller and Auditor General (CAG) audit conducted in 2016, the wrong people were benefiting from the NFSA.
- It accuses many states of implementing the NFSA despite owning the information that their beneficiaries list is spurious.
- Leakages in PDS: a leakage indicates that the food grains do not reach the intended beneficiaries. The leakages may be of three types:
- pilferage during transportation of food grains
- diversion at fair price shops to non-beneficiaries
- exclusion of entitled beneficiaries from the list.
- Storage: According to the CAG audit, the available storage space was inadequate for the allocated quantity of food grains.
- Quality of food grains: people often complain that the quality of the food grains is not up to the mark and that the grains sometimes have to be mixed with other grains to be edible. Complaints stating that the grains also consist of non-food particles such as pebbles have also been registered.
A critical point in the debate over NFSA is that it doesn’t guarantee a universal right to food.
4. Editorial-1: Heading the G20 and New Delhi’s choices
With geopolitical currents redefining geo-economics, India needs to be ready to emerge as the chief global diplomat
The clock is ticking. In about three months, India will assume for the first time the Group of 20 (G20) year-long presidency from December 1, 2022 to November 30, 2023, culminating with the G20 Summit in India in 2023.The subsequent months will witness India hosting over 200 meetings with hundreds of ministers, officials, diplomats, businessmen, non-governmental organisations, working groups, and engagement groups of the G20 composed of 19 powerful economies and the European Union (EU).
India has hosted large international conferences such as the Non-Aligned Movement (NAM) summit in 1983 and the Third India-Africa Forum summit in 2015. But nothing compares with hosting the G20. It is the world’s informal steering directorate on global economic issues; it entails the responsibility of shaping decision-making on key challenges facing the world today; and its summit is preceded by a large quantum of preparatory deliberations that feed into the final outcome.
It is essential to neither overstress nor underestimate the significance of the G20’s work. The G20 membership represents nearly 90% of the world’s GDP, 80% of global trade, and 67% of the planet’s population. It is an advisory body, not a treaty-based forum and, therefore, its decisions are recommendations to its own members.
The weight of this powerful membership carries enormous political and economic influence. The representation of the United Nations, the World Bank, the International Monetary Fund, the World Trade Organization, the World Health Organization, and other multilateral institutions in it makes the G20 an incomparable body.
The G20 has played a vital role in addressing financial and economic challenges such as the global financial crisis of 2008-09 and the Eurozone crisis of 2010. The forum was elevated from the finance ministers to the heads of government/state in 2008. This was the era of the G8 (up to 2014 when Russia was suspended), of the major powers — the United States, the EU, Russia, and also China, but they needed to work together with the emerging economies in defining global challenges and crafting their solutions.
However, in this second decade of the G20, the forum is faced with an existential crisis, where the major powers have fallen out. It makes the task of the presidency country much more complicated, as the current president ( Indonesia) is discovering.
The disastrous impact of the novel coronavirus pandemic, the war in Ukraine, India-China border tensions, EU/U.S.-Russia hostility, and deteriorating U.S.-China relations are already visible in the run-up to the 2022 Bali summit (in November) where all G20 leaders may not be sitting physically in the same room. The outcome in Bali will affect the Delhi summit. Indian officials are thus carefully planning their strategy as the burden and the prestige of the presidency are bestowed on India. They know well that the currents of geopolitics are redefining the contours of geo-economics today. Their mission will be not only to save the G20 but also the future of multilateral cooperation in diverse domains of the grouping’s multi-dimensional agenda.
Guided by the triple motivation of promoting India’s national interest, leaving its mark on the G20, and maintaining its primacy as an effective instrument of global governance, there are four different ideas have emerged in New Delhi.
First, the G20 presidency offers a unique branding opportunity for India’s recent achievements, including the ability to combat COVID-19 effectively at home and abroad through vaccine aid and diplomacy. Other major achievements are India’s digital revolution, its steady progress in switching to renewables, meeting its targets to counter climate change, and its push for self-reliance in manufacturing and reshaping global value chains. New trends in entrepreneurship, business innovation, the rise of many start-ups as unicorns, and gender progress too need to be showcased. A single-year presidency does not empower the host to change the world, but India can provide evidence of its domestic successes, tested at the continental scale, for global adoption. It can also be utilised to transform India’s sub-optimal physical infrastructure to create an attractive investment and tourism destination, especially as several important G20 meetings will be hosted outside Delhi.
Second, by a remarkable coincidence, four democracies on the path to becoming powerful economic players — Indonesia, India, Brazil, and South Africa — hold the presidency from December 2021 to November 2025. This offers a rare opportunity for synergy and solidarity to advance the interests of the developing world and to assert their combined leadership of the Global South.
Third, another exceptional coincidence is that all three members of IBSA — India, Brazil, and South Africa — will hold the G20 presidency consecutively in 2023, 2024, and 2025. This forum, insulated from the geopolitical pressures constraining the BRICS (where these three countries are required to work with Russia and China), can develop a cohesive plan to project the priority concerns of the Global South. IBSA needs an urgent rejuvenation by convening an informal meeting of its top leaders, perhaps on the sidelines of the Bali summit.
Four, India needs to get ready to emerge as the chief global diplomat. As the G20 president, India will be obliged to take a broader view of the G20 agenda to synthesise divergent interests of all constituents of the forum: five permanent members of the UN Security Council, the developed world united under the flag of the G7, five members of BRICS, and other G20 members such as Argentina and Mexico. More importantly, as the president and host, India should factor in the perspectives of countries not represented in the G20. India will advocate an inclusive approach, with pragmatic and human-centric solutions to global issues. An important aim should be to end Africa’s marginalisation by elevating the African Union (AU) from permanent observer to a full-fledged member of the G20, thus placing it on a par with the EU.
A parting thought
These four choices are not mutually exclusive. It is possible to weld them together to create a holistic and comprehensive approach for the Indian presidency of the G20. The challenge is to combine an India-focused view, promote the vital interests of the Global South, and demonstrate diplomatic acumen to communicate with and reconcile the viewpoints of rival and adversarial power centres such as the West, Russia, and China. India today is in the enviable position to deliver this unique package. It must rise to the occasion.
5. Editorial-2: Making out a case for the other UBI in India
There are good reasons why Universal Basic Insurance is a better proposition than Universal Basic Income
It took the COVID-19 pandemic to expose the precariousness of human society across the world. As the importance of social security came into focus after the major waves of the pandemic, the debate on universal basic income (UBI) began to resurface in policy circles across the globe. However, there is another UBI that needs to be examined in the Indian context, i.e., universal basic insurance. Before discussing the second UBI, or insurance, it is worthwhile looking at the design options for social security.
Types of security nets
Income shocks result in a free fall of those living on the line of basic living wages (say line 1) down towards the critical survival line (say line 2). In any case, a fall that is further below line 2 needs to be prevented as it can be catastrophic — a household can end up facing a poverty trap. Social security systems are like a safety net placed at line 2. These social security nets can be of three types. The first is a passive safety net which catches those falling from line 1 and prevents a fall below line 2. The second is an active safety net which works like a trampoline so that those who fall on it are able to bounce back to line 1. The third is a proactive safety net which acts like a launchpad so that those who fall on it will not only bounce back but will also move up beyond line 1.
The first type of safety net is basically a social assistance programme meant for the most income-deprived sections of society. The second type of safety net is a scheme with a higher outlay. The third type of social security net is the most desirable option but requires immense resources and institutional capacity. For social security, people on the south end of the income line need social assistance schemes. Those on the north end of the income line should have voluntary insurance.
Social security mainly encompasses food security, health security and income security. India operates the widest spectrum of social security schemes which cater to the largest number of people than any other country. The sheer scale of Indian social security programmes delivered to millions of households spread over a vast geography is mind-boggling.
The Indian food security programme, for example, has over 800 million beneficiaries being provided heavily subsidised food grain under the National Food Security Act (NFSA). The NFSA is the world’s largest food security programme. About 120 million children are provided free lunch under the Mid-Day Meal Scheme. In addition, some 50 million people benefit from the free meals programme run by a few State governments. Nevertheless, there are issues of financial sustainability and leakages in the food security programme.
For health and income
On the health security front, for the unorganised sector, there is the Ayushman Bharat Scheme of the central government with over 490 million beneficiaries. In the organised sector, the Central government runs the Employees State Insurance Corporation (ESIC) and Central Government Health Scheme (CGHS) catering to 130 million and four million beneficiaries, respectively. Health insurance schemes run by various State governments cover about 200 million people. Only about 110 million people in India have private health insurance. Despite these large-scale provisions, about 400 million Indians are not covered under any kind of health insurance.
Income security is the trickiest part to tackle in the social security basket. For the organised sector, there are three types of provident fund schemes: General Provident Fund (GPF) which is availed by about 20 million Central and State government employees in the country. The second is the Employees’ Provident Fund (EPF) which is availed by about 65 million workers in the other organised sector. The third is Public Provident Fund (PPF) that can be availed by any Indian citizen but has contributions from the organised sector mostly. There are about 53 million New Pension Scheme subscribers in the country (about 2.2 million in the Central government, 5.6 million in the State government and the rest in the private sector).
In the unorganised sector, the Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY) and the PM-KISAN scheme is availed by about 120 million farmers. Atal Pension Yojana (APY) benefits 40 million people. The Pradhan Mantri Shram Yogi Maandhan Yojana has about five million beneficiaries while there are about 50,000 beneficiaries under the National Pension Scheme for Traders and Self-Employed Persons (NPS-Traders) scheme. The largest unorganised sector income security programme is the scheme under the Mahatma Gandhi National Rural Employment Guarantee Act, which has about 60 million beneficiaries. Thus, out of 500 million workers in India, about 100 million have no income security (pension, gratuity or other income) coverage. Proponents of universal basic income cite the informality of the Indian economy as the hurdle in rolling out schemes such as unemployment insurance in the country. However, besides huge fiscal implications (around 4.5% of GDP), the proposal of universal basic income runs the risk of implementation failure due to large-scale beneficiary identification requirements.
The other UBI, i.e. universal basic insurance, is a better proposition for two reasons. One, the insurance penetration (premium as a percentage of GDP) in India has been hovering around 4% for many years compared to 17%, 9% and 6% in Taiwan, Japan and China, respectively. Two, though the economy largely remains informal, data of that informal sector are now available both for businesses (through GSTIN, or Goods and Services Tax Identification Number) and for unorganised workers (through e-Shram, which is the centralised database of all unorganised workers). As a result of the recent initiatives by the Government, the Goods and Services Tax (GST) portal has 13.5 million registrations and the e-Shram portal has over 280 million registrations. As a prototype of a social security portal based on such data, the social registry portal, ‘Kutumba’, developed by Karnataka is available as a blueprint. Till the Indian economy grows to have adequate voluntary insurance, social security can be boosted through the scheme of universal basic insurance.
6. Editorial-3: Keep it simple
Any mandatory linking of Aadhaar to the voter ID is problematic
One of the clear successes of Indian democracy has been the regular conduct of elections and the relatively high participation of electors in the voting process compared to other countries. Besides the fact that the process is relatively simple with the use of the electronic voting machine, high voter turnout has also been possible due to registration drives by the Election Commission of India (ECI). Periodically, the ECI does face the issue of a cleaning up of electoral rolls due to increases in migrant populations in urban sprawls, demographic changes due to the entry of more eligible voters, besides deaths of older people. But repeated cycles of elections have allowed for a cohesion in this process with voters allowed to register based on proofs of their age and current place of residence. With the increase in the school-educated population, and most Indian citizens living in houses whose addresses are to be mentioned in several identity documents, registering to vote is a relatively easy process. This begs the question as to why election authorities are coercing citizens to mandatorily link registration in voter rolls with their Aadhaar number, as recent reports have indicated. In December 2021, the Lok Sabha passed the Election Laws (Amendment) Bill seeking to link the voter identity card with the Aadhaar number in order to avoid errors such as voter duplication on the electoral roll. But the Government and later, ECI authorities, have insisted that this process would be voluntary.
The Aadhaar number is not a proof of citizenship and is meant to be issued to residents, while only adult citizens who are resident in India are eligible to vote. Instrumentally speaking, matching the Aadhaar number to the electoral roll in order to perform verifications is not a foolproof process. The Internet Freedom Foundation has cited data to show that self-reported errors in the Aadhaar database are higher than those in the electoral database. There is also evidence that Aadhaar-linkage with voter identity cards, as in the Assembly elections in Telangana and Andhra Pradesh recently, for example, led to the arbitrary deletion of eligible voters on a large scale. Besides, with the Aadhaar number now being used to access a variety of services, linking to voter IDs, when aggregated from booth level data, can possibly lead to misuse by agencies that can access them to profile voters based on harvested information. The absence of a data protection law heightens the risk of this possibility as well. Scholars studying elections in various countries have averred that simplicity of design and effectiveness of constitutional institutions such as the ECI have gone a long way in easing voting and setting India apart as an electoral democracy. The insistence on linking Aadhaar with the voter ID militates against these principles. The ECI should limit itself to utilising existing proofs for voter authentication and Aadhaar declaration should remain voluntary.
7. Editorial-4: Strangling Tunisia’s democracy
Kais Saied is a populist zealot who promises El Dorado even as he leads his country into a quagmire
On August 16, the results of the referendum on the amendments to the national constitution proposed by Tunisian president Kais Saied were formally endorsed by the election commission, effectively terminating the country’s brief encounter with a democratic order. Tunisia, the shining success story of the Arab Spring, now stares at autocracy and chaos.
It has taken a year to reach this nadir. Last year, on July 25, Mr. Saied had abruptly suspended parliament, dismissed the prime minister, deprived the assembly members of their immunity, and declared he would now rule by presidential decree. Members of parliament attempting to enter the assembly were blocked by the armed forces.
A well-known constitutional expert with no party or political affiliations, Mr. Saied came to power in 2019 in a landslide victory over several established politicians. Quickly thereafter, he began to express disdain for his country’s political class, refused to interact with political parties and civil society groups, and chaffed at the constitutional “locks” that prevented him from taking action to effect the economic reforms that were urgently demanded by the people. On July 25, 2021, he finally affected a “coup” against the very constitution that had empowered him.
The presidential coup initially enjoyed considerable popular support – it was estimated that Mr. Saied was backed by over 80% of his people, with support hovering between 70% and 80% over the next few months. This was largely because, while the country had given itself a democratic constitution in 2015, the assembly was deeply divided by diverse political groups, which made it impossible to pass the legislation to bring about the reforms the country needed. The assembly, instead, was seen as a corrupt and dysfunctional institution. The amnesty granted by parliament in 2017 to those from the former regime who were accused of corruption and criminal conduct thoroughly discredited the assembly and the democratic process itself.
In December 2021, Mr. Saied announced a “road map” for political change — online “consultations” on constitutional reform, a committee to propose amendments to the constitution, and finally a nationwide referendum on the proposed changes in July 2022. In April this year, the president dissolved the parliament, and initiated inquiries for “conspiracy” among prominent political leaders, including Rachid Ghannouchi, head of the Islamist Ennahda party.
But Mr. Saied had got his priorities wrong. While he dabbled in constitutional changes, Tunisia slid deeper into an economic malaise: inflation reached 8%, while unemployment was 16%, reaching 40% among the youth. As the currency depreciated by 60% and purchasing power fell by 40%, Tunisia’s credit rating was downgraded to ‘CCC’. Following the war in Ukraine, as wheat supplies from Russia and Ukraine got disrupted and prices shot up, Mr. Saied decreed that those spreading “fake news” about food shortages would be arrested.
Mr. Saied initiated a dialogue with the International Monetary Fund (IMF) to obtain $4 billion for economic support, but the IMF insisted on a sharp reduction in subsidies on goods and services, a freeze on public sector wages, and privatisation of public sector companies. These conditions alienated the country’s powerful trade union, the Tunisian General Labour Union (UGTT, in its French acronym) from the president.
The UGTT had played a major role in the Arab Spring uprisings that had ousted President Zine al-Abidine Ben Ali in 2011. It had then facilitated national reconciliation among feuding politicians that led to the nationally accepted constitution of 2015, an achievement that led to the UGTT joining three other Tunisian groups in winning the Nobel Peace Prize that year. Last year, the UGTT had initially backed Mr. Saied’s initiatives to strengthen the presidency, but, amidst the deteriorating economic conditions and the president’s misguided focus on constitutional changes, it became a sharp critic of the president. On June 16, it called a general strike to protest the economic situation and the conditions being proposed by the IMF for its loan. With its one million members in a country of 12 million, the UGTT is a formidable opponent, particularly with its ability to influence popular opinion against the president’s political and economic plans.
The constitutional amendments to obtain a “new republic” were prepared by an advisory committee appointed by the president. These amendments had just one purpose — to strengthen the president by removing all constraints on the exercise of untrammelled power by him. A commentator noted that the amendments provided for “an unbridled presidential system, with an omnipotent president, a powerless parliament, and a toothless judiciary”.
However, there is now a pervasive apathy among Tunisians about the president’s policies, which is reflected in the absence of active support for his initiatives in the shape of popular demonstrations or actual votes in his favour — the referendum attracted a turnout of just over 27%. With a 96% ‘yes’ vote, the election commission declared the amendments as having been approved.
Outlook for Tunisia
For several months, American senators, congressmen, diplomats and academics have been lamenting the demise of Tunisia’s democracy and calling on President Joe Biden to pressurise Mr. Saied to prevent the political backslide. But no magic formula has emerged to correct the situation, despite Mr. Biden’s avowed commitment to promote democracy globally.
The instrument of cutting off military or economic aid has been viewed as a non-starter: the Tunisian armed forces are major U.S. allies and central to the fight against extremist forces, while reduced economic assistance would make the Tunisians’ living conditions more miserable. Mr. Saied has the option to turn to Saudi Arabia and the UAE for political and economic support — both of them are believed to have backed Mr. Saied’s constitutional coup in order to subvert the Islamist Ennahda as a political player in the country.
As the euphoria of a decade ago turns to ashes, the Tunisian experience has exposed the daunting challenges in achieving political and economic change after an authoritarian order has been overthrown. Crony capitalism, in which economic power remains with a few business families, has remained in place and works closely with politicians who integrate themselves with the ‘deep state’ and prioritise personal interest over national well-being.
External players are of no help — the U.S. has neither interest in nor the capacity to promote democracy, while Saudi Arabia and the UAE work assiduously to upend the democratic order that provides a place for political Islam, however accommodative it might be. And as the nation sinks into an economic abyss, the IMF remains committed to policy approaches that indicate little sensitivity towards the privations the people are going through.