General Affairs
Devendra Fadanvis Welcomes Supreme Court Decision On Activists' Arrest
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Maharashtra Chief Minister Devendra Fadnavis today welcomed the Supreme Court's refusal to interfere with the probe by the state police against five Left-wing activists in connection with violence in Koregaon-Bhima in December last year.
Mr Fadnavis said the decision of the top court proved that there was no conspiracy behind action by the state police against Varavara Rao, Arun Ferreira, Vernon Gonsalves, Sudha Bharadwaj and Gautam Navlakha.
The five are under arrest at their respective homes since August 29.
Mr Fadnavis was reacting soon after the Supreme Court declined to appoint an SIT to probe the arrest of the five activists by the Pune police.
The court said the arrests were not because of dissent of activists but there was prima facie material to show their link with banned CPI (Maoist) organisation.
The three-judge bench headed by Chief Justice Dipak Misra, in a 2:1 verdict, refused the plea seeking the immediate release of the activists.
"The Supreme Court has vindicated the state of the government and the Pune police. The court has no doubt over the material evidence submitted," the chief minister told reporters here.
"A conspiracy against the nation has been unearthed by the police," he said on the arrest of the five activists.
According to the Supreme Court order, the government will go to the "appropriate forum" in the case, he said.
Mr Fadnavis also defended the state police for addressing a press conference after the arrest, which had been come in for criticism.
"A lot of things were said against the police after the arrest and an atmosphere was created by pseudo, so-called neo-liberals in the media that the arrests have been made without evidence. The police had to say that the arrests were not motivated but backed by real and powerful evidence," he said.
"We will look into the fine print of the order regarding the police press conference. The press conference is not important but the real issue of conspiracy against the nation is. If holding the press conference was wrong, we will improve it," he said.
Mr Fadnavis said political parties should not support the arrested persons for political reasons after the SC verdict, "otherwise the political parties will stand exposed."
Prominent Telugu poet Rao was arrested on August 28 from Hyderabad, while activists Gonsalves and Ferreira were nabbed from Mumbai, trade union activist Sudha Bharadwaj from Faridabad in Haryana and civil liberties activist Navlakha from Delhi.
The majority verdict by the Supreme Court said the protection of house arrest of the activists will remain in force for four more weeks to enable the accused to seek appropriate legal remedy at appropriate legal forum.
Mr Fadnavis said the decision of the top court proved that there was no conspiracy behind action by the state police against Varavara Rao, Arun Ferreira, Vernon Gonsalves, Sudha Bharadwaj and Gautam Navlakha.
The five are under arrest at their respective homes since August 29.
Mr Fadnavis was reacting soon after the Supreme Court declined to appoint an SIT to probe the arrest of the five activists by the Pune police.
The court said the arrests were not because of dissent of activists but there was prima facie material to show their link with banned CPI (Maoist) organisation.
The three-judge bench headed by Chief Justice Dipak Misra, in a 2:1 verdict, refused the plea seeking the immediate release of the activists.
"The Supreme Court has vindicated the state of the government and the Pune police. The court has no doubt over the material evidence submitted," the chief minister told reporters here.
"A conspiracy against the nation has been unearthed by the police," he said on the arrest of the five activists.
According to the Supreme Court order, the government will go to the "appropriate forum" in the case, he said.
Mr Fadnavis also defended the state police for addressing a press conference after the arrest, which had been come in for criticism.
"A lot of things were said against the police after the arrest and an atmosphere was created by pseudo, so-called neo-liberals in the media that the arrests have been made without evidence. The police had to say that the arrests were not motivated but backed by real and powerful evidence," he said.
"We will look into the fine print of the order regarding the police press conference. The press conference is not important but the real issue of conspiracy against the nation is. If holding the press conference was wrong, we will improve it," he said.
Mr Fadnavis said political parties should not support the arrested persons for political reasons after the SC verdict, "otherwise the political parties will stand exposed."
Prominent Telugu poet Rao was arrested on August 28 from Hyderabad, while activists Gonsalves and Ferreira were nabbed from Mumbai, trade union activist Sudha Bharadwaj from Faridabad in Haryana and civil liberties activist Navlakha from Delhi.
The majority verdict by the Supreme Court said the protection of house arrest of the activists will remain in force for four more weeks to enable the accused to seek appropriate legal remedy at appropriate legal forum.
Taking Photos Of ''Bharat Mata'' Doesn't Make One Patriotic: Vice President
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Merely taking photographs of 'Bharatmata' while at the same time discriminating on the basis of religion, region or language does not make one a patriot, Vice President M. Venkaiah Naidu said on Friday.
"Patriotism does not mean only taking Bharatmata's photograph and forgetting others, ill-treating others. You have to treat everybody with respect, with love, with affection. Then only you are a nationalist.
"If you discriminate people on the basis of religion or region or language, you are not a nationalist," Mr Naidu told students while speaking at a convocation ceremony at the National Institute of Technology.
"That is the specialty of India. Irrespective of caste, creed, sex, religion and region, India is one. One nation, one people, one country, that feeling should be there among all of you. That is patriotism," Mr Naidu added.
"Patriotism does not mean only taking Bharatmata's photograph and forgetting others, ill-treating others. You have to treat everybody with respect, with love, with affection. Then only you are a nationalist.
"If you discriminate people on the basis of religion or region or language, you are not a nationalist," Mr Naidu told students while speaking at a convocation ceremony at the National Institute of Technology.
"That is the specialty of India. Irrespective of caste, creed, sex, religion and region, India is one. One nation, one people, one country, that feeling should be there among all of you. That is patriotism," Mr Naidu added.
Solution To Korean Issue Must Address India's Concern: Sushma Swaraj
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Any solution to the Korean Peninsula issue must address India's concerns about the nuclear proliferation linkages in its neighbourhood, External Affairs Minister Sushma Swaraj has said, in a veiled reference to Pakistan.
In her address to the BRICS (Brazil, Russia, India, China and South Africa) Foreign Ministers' Meeting on Thursday, Ms Swaraj said India has been consistently supporting the efforts to bring about peace and stability in the Korean Peninsula.
"We have been consistently supportive of efforts to bring about peace and stability in the Korean Peninsula," she said in the meeting held on the margins of the 73rd session of the UN General Assembly.
"We believe that any solution to the issue of Korean Peninsula must address concerns about the proliferation linkages with India's neighbourhood," Ms Swaraj said, in an apparent reference to Pakistan which has close defence ties with North Korea.
Since the 1970s, Pakistan and North Korea have cooperated extensively on the development of ballistic missile and nuclear weapons technologies, according to defence analysts and media reports.
She said the world today was characterised by chronic armed-conflicts in different parts of the world, especially in West Asia.
These conflicts are of intra-state nature with the proliferation of non-state actors and terrorist-networks with global reach, she added.
Conflicts in Syria, Libya, Iraq and Yemen pose security challenges for the region and for global peace, Ms Swaraj said while expressing deep concern with continuing tensions on the border between Gaza Strip and Israel.
Ms Swaraj said India had recently considerably increased to $5 million its contribution to the UN agency for Palestinian refugees, UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).
"India firmly believes that the dialogue and country-led processes are the only viable options to effectively address the issues in that region," she added.
In her address to the BRICS (Brazil, Russia, India, China and South Africa) Foreign Ministers' Meeting on Thursday, Ms Swaraj said India has been consistently supporting the efforts to bring about peace and stability in the Korean Peninsula.
"We have been consistently supportive of efforts to bring about peace and stability in the Korean Peninsula," she said in the meeting held on the margins of the 73rd session of the UN General Assembly.
"We believe that any solution to the issue of Korean Peninsula must address concerns about the proliferation linkages with India's neighbourhood," Ms Swaraj said, in an apparent reference to Pakistan which has close defence ties with North Korea.
Since the 1970s, Pakistan and North Korea have cooperated extensively on the development of ballistic missile and nuclear weapons technologies, according to defence analysts and media reports.
She said the world today was characterised by chronic armed-conflicts in different parts of the world, especially in West Asia.
These conflicts are of intra-state nature with the proliferation of non-state actors and terrorist-networks with global reach, she added.
Conflicts in Syria, Libya, Iraq and Yemen pose security challenges for the region and for global peace, Ms Swaraj said while expressing deep concern with continuing tensions on the border between Gaza Strip and Israel.
Ms Swaraj said India had recently considerably increased to $5 million its contribution to the UN agency for Palestinian refugees, UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).
"India firmly believes that the dialogue and country-led processes are the only viable options to effectively address the issues in that region," she added.
Women Activists Welcome Top Court Judgement On Opening Sabarimala Temple
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Women activists on Friday hailed the Supreme Court judgement allowing women into the Ayyappa temple at Sabarimala in Kerala, but expressed concern over its acceptance at the ground level by people.
A five-judge constitution bench headed by Chief Justice Dipak Misra, in its 4:1 verdict, said that banning the entry of women into the shrine is gender discrimination and the practice violates rights of Hindu women.
Kavita Krishnan, women rights activist and Secretary of the All India Progressive Women's Association (AIPWA), said the decision was long overdue.
"In Instant Triple Talaq, Haji Ali, and Sabarimala cases courts have rightly held that women's equality can't be held hostage to religious practices. Just as it's unconstitutional and discriminatory to debar entry to temples based on caste, it's the same to debar entry based on gender. Also, we project our own values on our gods - and patriarchal values that put the burden of men's celibacy or sexual choices on women are deeply damaging to women in real life," Ms Krishnan said.
"If men - or gods - want to be celibate that's their own responsibility, they can't keep women out of their sight. If you're celibate only in a woman's absence, you're not really celibate are you? I hope the Sabarimala temple authorities and the Kerala Devaswom Board and Kerala government will not flout the SC order but will honour it," she said.
Mariam Dhawale, General Secretary of the The All India Democratic Women's Association, called it another step that would help in bringing equality.
"We welcome the judgement. Women have a constitutional right to be able to visit the temple and whoever wishes must be allowed to visit it whether it is a temple or a dargah," she said.
Chhavi Methi, a women rights activist welcomed the judgement, but said its acceptance remains to be seen.
"I am doubtful the temple authorities would take it in the right spirit. Women would accept it but its implementation might pose a problem," she said.
Annie Raja, General Secretary of National Federation of Indian Women, said not allowing women inside temples on the basis of a biological factor was "very wrong".
"Any social reform takes time for acceptance, this is another social reform that would require time for acceptance," Ms Raja said.
Another women rights activist Vani Subramaniam said the decision is an extension of various pro-equality judgements taken by the Supreme Court, but she too expressed concern over the community's reaction to it.
"Question remains to be seen how it is accepted in the community and by the people at the ground level," she said.
National Commission for Women Chairperson Rekha Sharma also welcomed the decision, saying it gives women the right to choose where to go.
Lauding the Supreme Court judgement, Delhi Commission for Women chairperson Swati Maliwal said the country has waited for very long for this judgement.
"We are living in a democratic country where the order the Supreme Court has to be followed. I appeal to all states to follow the order in letter and spirit," she said.
A five-judge constitution bench headed by Chief Justice Dipak Misra, in its 4:1 verdict, said that banning the entry of women into the shrine is gender discrimination and the practice violates rights of Hindu women.
Kavita Krishnan, women rights activist and Secretary of the All India Progressive Women's Association (AIPWA), said the decision was long overdue.
"In Instant Triple Talaq, Haji Ali, and Sabarimala cases courts have rightly held that women's equality can't be held hostage to religious practices. Just as it's unconstitutional and discriminatory to debar entry to temples based on caste, it's the same to debar entry based on gender. Also, we project our own values on our gods - and patriarchal values that put the burden of men's celibacy or sexual choices on women are deeply damaging to women in real life," Ms Krishnan said.
"If men - or gods - want to be celibate that's their own responsibility, they can't keep women out of their sight. If you're celibate only in a woman's absence, you're not really celibate are you? I hope the Sabarimala temple authorities and the Kerala Devaswom Board and Kerala government will not flout the SC order but will honour it," she said.
Mariam Dhawale, General Secretary of the The All India Democratic Women's Association, called it another step that would help in bringing equality.
"We welcome the judgement. Women have a constitutional right to be able to visit the temple and whoever wishes must be allowed to visit it whether it is a temple or a dargah," she said.
Chhavi Methi, a women rights activist welcomed the judgement, but said its acceptance remains to be seen.
"I am doubtful the temple authorities would take it in the right spirit. Women would accept it but its implementation might pose a problem," she said.
Annie Raja, General Secretary of National Federation of Indian Women, said not allowing women inside temples on the basis of a biological factor was "very wrong".
"Any social reform takes time for acceptance, this is another social reform that would require time for acceptance," Ms Raja said.
Another women rights activist Vani Subramaniam said the decision is an extension of various pro-equality judgements taken by the Supreme Court, but she too expressed concern over the community's reaction to it.
"Question remains to be seen how it is accepted in the community and by the people at the ground level," she said.
National Commission for Women Chairperson Rekha Sharma also welcomed the decision, saying it gives women the right to choose where to go.
Lauding the Supreme Court judgement, Delhi Commission for Women chairperson Swati Maliwal said the country has waited for very long for this judgement.
"We are living in a democratic country where the order the Supreme Court has to be followed. I appeal to all states to follow the order in letter and spirit," she said.
BRICS Shouldn't Be Divided On UN Security Council Reform: Sushma Swaraj
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The members of the BRICS grouping should speak with a stronger voice and not be divided among themselves on the critical issue of achieving the long-pending UN Security Council reform, External Affairs Minister Sushma Swaraj has said.
Addressing the BRICS Foreign Ministers' Meeting on Thursday, held on the margins of the 73rd session of the UN General Assembly, Ms Swaraj said the five-member grouping of Brazil, Russia, India, China and South Africa was started a decade ago to change the status quo in international organisations and correct distortions in multilateralism.
A decade later, the call for multilateralism cannot and should not be for reinforcing this status quo but rather to change it, she said.
"At a broader level, we need to develop greater understanding and convergence on issues of mutual concern in the coming years, if BRICS has to emerge stronger," Ms Swaraj said.
Referring to Prime Minister Narendra Modi's call for "reformed multilateralism", Ms Swaraj said the most significant unfinished agenda was the reform of the UN Security Council.
"The discussions on the UNSC reform cannot be an exercise in perpetuity, while the legitimacy and credibility of the Security Council continues to get eroded. We, in BRICS should speak with a stronger voice rather than be divided amongst ourselves on this critical area of international governance," she said.
With BRICS leaders giving a robust mandate on counter terrorism, Ms Swaraj said there was a call for a BRICS Counter-Terrorism Strategy for joint-action with a focus on money laundering, terrorist-finance, cyberspace and de-radicalisation.
"Dismantling terrorist outfits' support infrastructure would be the first step. Terror groups such as Lashkar e-Taiba, ISIS, al-Qaeda, Jaish e Muhammad, Taliban, and Haqqani Network are organised entities that thrive on State support," she said.
Ms Swaraj also urged that the BRICS nations must join hands to make United Nations' counter-terrorism mechanism efficient in listing terrorists and their outfits.
"Implementation of FATF (Financial Action Task Force) standards, across all jurisdictions, will strengthen international efforts in addressing terrorism," she said.
The meeting was attended by Brazilian Minister of Foreign Affairs Aloysio Nunes Ferreira Filho, Russin Foreign Minister Sergey Lavrov, Chinese Foreign Minister Wang Yi and South Africa's Minister of International Relations and Cooperation Lindiwe Sisulu.
Ms Swaraj said while BRICS had taken several impressive strides in the last decade, there was still a need to further consolidate the bloc among the five nations and take it forward.
She termed the establishment of the BRICS Credit Rating Agency as among the several unfinished agenda of the grouping.
"We must continue to work together to fight unilateralism. BRICS countries have been contributing positively to global stability and growth. With strong continuing growth and demand, most of future consumer-demands will emanate from the emerging economies," she said.
On strengthening people-to-people exchanges among the nations of the bloc, she said India hoped to hold the BRICS workshop on film technology and development.
She also suggested that BRICS and India could explore possibilities of a joint cooperation in peacekeeping training at the Centre for UN Peacekeeping in New Delhi.
"Peace building process, involving institutions and capacity building, should be nationally owned and rooted to ground realities while eliciting the participation of all relevant stakeholders," she said.
On South-South Cooperation, she said, there was a need to work together to reflect BRICS' position in the international discourse, and ensure "we do not get drawn into the North-South template and accounting".
Describing Sustainable Development and Poverty Eradication as major challenges in today's world, Ms Swaraj said the 2030 Agenda, with its overarching goal of poverty eradication and the 17 Sustainable Development Goals "is a matter of commitment for us to our people. Our aim is to achieve our development priorities in a sustainable manner by harnessing renewable energy and efficient use of resources".
Addressing the BRICS Foreign Ministers' Meeting on Thursday, held on the margins of the 73rd session of the UN General Assembly, Ms Swaraj said the five-member grouping of Brazil, Russia, India, China and South Africa was started a decade ago to change the status quo in international organisations and correct distortions in multilateralism.
A decade later, the call for multilateralism cannot and should not be for reinforcing this status quo but rather to change it, she said.
"At a broader level, we need to develop greater understanding and convergence on issues of mutual concern in the coming years, if BRICS has to emerge stronger," Ms Swaraj said.
Referring to Prime Minister Narendra Modi's call for "reformed multilateralism", Ms Swaraj said the most significant unfinished agenda was the reform of the UN Security Council.
"The discussions on the UNSC reform cannot be an exercise in perpetuity, while the legitimacy and credibility of the Security Council continues to get eroded. We, in BRICS should speak with a stronger voice rather than be divided amongst ourselves on this critical area of international governance," she said.
With BRICS leaders giving a robust mandate on counter terrorism, Ms Swaraj said there was a call for a BRICS Counter-Terrorism Strategy for joint-action with a focus on money laundering, terrorist-finance, cyberspace and de-radicalisation.
"Dismantling terrorist outfits' support infrastructure would be the first step. Terror groups such as Lashkar e-Taiba, ISIS, al-Qaeda, Jaish e Muhammad, Taliban, and Haqqani Network are organised entities that thrive on State support," she said.
Ms Swaraj also urged that the BRICS nations must join hands to make United Nations' counter-terrorism mechanism efficient in listing terrorists and their outfits.
"Implementation of FATF (Financial Action Task Force) standards, across all jurisdictions, will strengthen international efforts in addressing terrorism," she said.
The meeting was attended by Brazilian Minister of Foreign Affairs Aloysio Nunes Ferreira Filho, Russin Foreign Minister Sergey Lavrov, Chinese Foreign Minister Wang Yi and South Africa's Minister of International Relations and Cooperation Lindiwe Sisulu.
Ms Swaraj said while BRICS had taken several impressive strides in the last decade, there was still a need to further consolidate the bloc among the five nations and take it forward.
She termed the establishment of the BRICS Credit Rating Agency as among the several unfinished agenda of the grouping.
"We must continue to work together to fight unilateralism. BRICS countries have been contributing positively to global stability and growth. With strong continuing growth and demand, most of future consumer-demands will emanate from the emerging economies," she said.
On strengthening people-to-people exchanges among the nations of the bloc, she said India hoped to hold the BRICS workshop on film technology and development.
She also suggested that BRICS and India could explore possibilities of a joint cooperation in peacekeeping training at the Centre for UN Peacekeeping in New Delhi.
"Peace building process, involving institutions and capacity building, should be nationally owned and rooted to ground realities while eliciting the participation of all relevant stakeholders," she said.
On South-South Cooperation, she said, there was a need to work together to reflect BRICS' position in the international discourse, and ensure "we do not get drawn into the North-South template and accounting".
Describing Sustainable Development and Poverty Eradication as major challenges in today's world, Ms Swaraj said the 2030 Agenda, with its overarching goal of poverty eradication and the 17 Sustainable Development Goals "is a matter of commitment for us to our people. Our aim is to achieve our development priorities in a sustainable manner by harnessing renewable energy and efficient use of resources".
Business Affairs
Govt cuts market borrowing target by Rs 70,000 crore amid liquidity crunch
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Amid concerns over liquidity crunch, Economic Affairs Secretary S C Garg on Friday announced a whopping Rs 70,000 crore cut in government's gross borrowing estimate in H2 of the current fiscal. Garg added that the government will contain fiscal deficit target at 3.3 per cent.
The government's move to borrow lesser than earlier planned in the second half of the current financial year is likely to soothe bond markets.
Giving details about the borrowing programmes for the second half of the fiscal, he said the government would be borrowing Rs 2.47 lakh crore as compared to Rs 2.88 lakh crore during April-September of 2018-19.
The Centre will also be launching inflation-indexed bonds, the secretary said, adding one or two bond issues will come in the current fiscal.
The government had budgeted a gross borrowing programme of Rs 6.05 lakh crore, which now stands reduced by Rs 70,000 crore.
"Fiscal management (is) completely on track. We have reduced borrowing, as against Rs 2.88 lakh crore, we will be raising only Rs 2.47 lakh crore," Garg said.
The cut in borrowing will be matched by reduction in buyback of government securities and enhanced flow from small savings scheme.
The government resorts to market borrowings to bridge fiscal deficit.
Garg further said the government was confident of meeting the revenue collection as projected in the budget and there was no need to revise the fiscal deficit target of 3.3 per cent of the GDP.
The government's move to borrow lesser than earlier planned in the second half of the current financial year is likely to soothe bond markets.
Giving details about the borrowing programmes for the second half of the fiscal, he said the government would be borrowing Rs 2.47 lakh crore as compared to Rs 2.88 lakh crore during April-September of 2018-19.
The Centre will also be launching inflation-indexed bonds, the secretary said, adding one or two bond issues will come in the current fiscal.
The government had budgeted a gross borrowing programme of Rs 6.05 lakh crore, which now stands reduced by Rs 70,000 crore.
"Fiscal management (is) completely on track. We have reduced borrowing, as against Rs 2.88 lakh crore, we will be raising only Rs 2.47 lakh crore," Garg said.
The cut in borrowing will be matched by reduction in buyback of government securities and enhanced flow from small savings scheme.
The government resorts to market borrowings to bridge fiscal deficit.
Garg further said the government was confident of meeting the revenue collection as projected in the budget and there was no need to revise the fiscal deficit target of 3.3 per cent of the GDP.
These people predicted the 2008 recession and were laughed at!
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The economic recession in 2008 was predicted by many eminent personalities way in advance. Ignoring their timely warning led to the collapse of financial giant Lehman Brothers, while others such as Merrill Lynch, AIG, Freddie Mac, Fannie Mae, HBOS, Royal Bank of Scotland, Bradford & Bingley, Fortis, Hypo and Alliance & Leicester all came within a whisker of bankruptcy and had to be bailed out.
Many economists had expressed their fears over the impending crisis at public events, but they were not taken seriously. In fact some of these noted economists were called 'gloomy' and even laughed at:
Nouriel Roubini
In 2005, Roubini quoted home prices in the US were riding a speculative wave that would soon drown the economy. In 2006 he made an address to the IMF in which he predicted that, among other things, the US economy was at risk of a housing bust and deep recession that would have dire consequences for the rest of the world. Roubini's predictions were countered by economist Anirvan Banerji who said that Roubini's predictions did not factor in mathematical models and dismissed his hunches as those of a career naysayer.
Michael Mayo
In 1999, Mayo advised selling banks stocks, which cost him his job at Credit Suisse and friends on the Wall Street. He said banks relied too much on asset-backed securities, and that if home prices fell we would see "a self-fulfilling prophecy of lower home prices and lower collateral, not to mention unique political fallout."
William Poole, Former president, St. Louis Federal Reserve
He warned in 2002 that Fannie Mae and Freddie Mac didn't have the cash to weather a storm, and he's pessimistic about their future. "They can limp along because they are now explicitly backed by the government, but they should be wound down," he said.
He also believes the Fed's strategy of maintaining low interest rates to keep the economy humming will backfire: "To avoid a mild recession now, we're risking a much deeper recession later."
Raghuram Rajan
Through his paper, "Has financial development made the world riskier?" He argued that bigger incentives for bankers pushed them to take riskier decisions that can result in a catastrophic crash. He added financial instruments like mortgage-backed securities and credit default swaps had actually made the financial markets a lot riskier.
Economist Christopher Thornberg
Thornberg described housing in 2005 as a bubble and functionally a pyramid coming close to its last leg "resorting to crazier and crazier financial instruments to get these people in". Dr. Thornberg served on the advisory board of Wall Street hedge fund Paulson & Co. Inc.
Paul Singer
Singer warned about the imminent crash both in public and in private to global leaders. In a September 2006 speech titled "Complexity Made Simple," at a Grant's Interest Rate Observer conference he detailed the flaws in subprime-mortgage securitisations. Then in April of 2007, Paul Singer and Jim Chanos (Founder of Kynikos Associates, famous for profiting and predicting Enron's fall) advised the G7 finance ministers that a systemic financial collapse could happen because major banks were creating "radioactive" securitisations from things like sub-prime mortgages.
Janet Yellen
The former chief of the US Federal Reserve was also alarmed around mid 2007, Yellen said the biggest risk to economic growth was housing, which she called the "600-pound gorilla in the room" and "rising defaults in subprime could spread to other sectors of the mortgage market and could trigger a vicious cycle in which a further deceleration in house prices increases foreclosures." She was described as "gloomy" at a 2007 meeting.
Warren Buffett
The Oracle of Omaha was one of the cautionary voices in the years leading up to the crisis, both in terms of risks in derivatives and in real estate prices. The Berkshire 2002 Shareholder Letter quoted "Charlie and I are of one mind in how we feel about derivatives and the trading activities that go with them: We view them as time bombs, both for the parties that deal in them and the economic system." In a CNN interview in 2006, Buffett said, "We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments."
Andrew Redleaf
Redleaf wrote to investors in December 2006: "Sometime in the next 12 to 18 months, there is going to be a panic in credit markets . . . The driver in the credit market panic of 2007 or 2008 will be a sudden, profound and pervasive loss of faith in the alchemy of structured finance as currently practiced."
Many economists had expressed their fears over the impending crisis at public events, but they were not taken seriously. In fact some of these noted economists were called 'gloomy' and even laughed at:
Nouriel Roubini
In 2005, Roubini quoted home prices in the US were riding a speculative wave that would soon drown the economy. In 2006 he made an address to the IMF in which he predicted that, among other things, the US economy was at risk of a housing bust and deep recession that would have dire consequences for the rest of the world. Roubini's predictions were countered by economist Anirvan Banerji who said that Roubini's predictions did not factor in mathematical models and dismissed his hunches as those of a career naysayer.
Michael Mayo
In 1999, Mayo advised selling banks stocks, which cost him his job at Credit Suisse and friends on the Wall Street. He said banks relied too much on asset-backed securities, and that if home prices fell we would see "a self-fulfilling prophecy of lower home prices and lower collateral, not to mention unique political fallout."
William Poole, Former president, St. Louis Federal Reserve
He warned in 2002 that Fannie Mae and Freddie Mac didn't have the cash to weather a storm, and he's pessimistic about their future. "They can limp along because they are now explicitly backed by the government, but they should be wound down," he said.
He also believes the Fed's strategy of maintaining low interest rates to keep the economy humming will backfire: "To avoid a mild recession now, we're risking a much deeper recession later."
Raghuram Rajan
Through his paper, "Has financial development made the world riskier?" He argued that bigger incentives for bankers pushed them to take riskier decisions that can result in a catastrophic crash. He added financial instruments like mortgage-backed securities and credit default swaps had actually made the financial markets a lot riskier.
Economist Christopher Thornberg
Thornberg described housing in 2005 as a bubble and functionally a pyramid coming close to its last leg "resorting to crazier and crazier financial instruments to get these people in". Dr. Thornberg served on the advisory board of Wall Street hedge fund Paulson & Co. Inc.
Paul Singer
Singer warned about the imminent crash both in public and in private to global leaders. In a September 2006 speech titled "Complexity Made Simple," at a Grant's Interest Rate Observer conference he detailed the flaws in subprime-mortgage securitisations. Then in April of 2007, Paul Singer and Jim Chanos (Founder of Kynikos Associates, famous for profiting and predicting Enron's fall) advised the G7 finance ministers that a systemic financial collapse could happen because major banks were creating "radioactive" securitisations from things like sub-prime mortgages.
Janet Yellen
The former chief of the US Federal Reserve was also alarmed around mid 2007, Yellen said the biggest risk to economic growth was housing, which she called the "600-pound gorilla in the room" and "rising defaults in subprime could spread to other sectors of the mortgage market and could trigger a vicious cycle in which a further deceleration in house prices increases foreclosures." She was described as "gloomy" at a 2007 meeting.
Warren Buffett
The Oracle of Omaha was one of the cautionary voices in the years leading up to the crisis, both in terms of risks in derivatives and in real estate prices. The Berkshire 2002 Shareholder Letter quoted "Charlie and I are of one mind in how we feel about derivatives and the trading activities that go with them: We view them as time bombs, both for the parties that deal in them and the economic system." In a CNN interview in 2006, Buffett said, "We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments."
Andrew Redleaf
Redleaf wrote to investors in December 2006: "Sometime in the next 12 to 18 months, there is going to be a panic in credit markets . . . The driver in the credit market panic of 2007 or 2008 will be a sudden, profound and pervasive loss of faith in the alchemy of structured finance as currently practiced."
GST Council sets up GoM to explore Kerala's proposal of a cess to cover calamities
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Kerala, struggling to get back on its feet in the wake of the massive damage wrought by the worst floods in nearly a century, continues to scramble for financial assistance. Earlier this month, Kerala Finance Minister Thomas Issac met Union Finance Minister Arun Jaitley, demanding a 10% cess on State Goods and Services Tax (SGST) on all commodities consumed in the state, the proceeds of which would go into rebuilding itself.
Today, the GST Council decided to set up a seven-member Group of Ministers (GoM) to look into Kerala's demand for imposing an additional cess over GST, IANS reported. To be sure, Issac had not called for a nationwide cess to cover financial requirements in case of a natural calamity, but since there is no provision for a state-specific cess in the GST Act, the Council has to think along pan-India lines.
Briefing reporters after the 30th meeting of the GST Council, the Finance Minister (FM) said that the GoM would comprise members from the North Eastern, hill and coastal states, which are most vulnerable to natural calamities, apart from senior union ministers. He added that the panel would evaluate all possibilities and present its recommendations in the next few weeks. Thereafter, another meeting of the GST Council will be called.
Jaitley explained that a provision to have earmarked funds for natural calamities on state as well as national level already exists in the form of State Disaster Relief Fund (SDRF) and National Disaster Relief Fund (FDRF), which have nothing to do with taxes. The GoM would consider if this existing mechanism sufficiently addressed the issue or if more needed to be done.
According to him, although the GST Council members had different views on the concept of such a calamity cess, all states agreed that something must be done to address the devastating Kerala floods and similar calamities in future.
"One view expressed in the Council was 'Must the entire burden be borne by the people of the state suffering from natural calamities?' There was a counterview that this defies the one-nation, one-tax principle," said Jaitley, adding that members also questioned whether any such levy should be "confined only to some luxury and sin products" or on all products.
The Council reportedly also discussed whether the cess should be imposed in the case of all natural calamities or if there should be a distinction. "For example, if one or two districts of a state are affected, should there be a levy in that case?" Jaitley posed.
The FM also made it clear that it was important to have a mature view on the issue, deploying the best legal methodologies while keeping constitutional provisions in mind, instead of acting in haste. This is vital since any development along Kerala's proposal is bound to set precedence.
The Kerala government previously sent a detailed memorandum seeking a Rs 4,700 crore as compensation for the damage caused by the rains. On Wednesday, Chief Minister Pinarayi Vijayan met Home Minister Rajnath Singh and requested him to expedite the process of giving financial assistance. In the meantime, Kerala is staring at a long road to normalcy.
Today, the GST Council decided to set up a seven-member Group of Ministers (GoM) to look into Kerala's demand for imposing an additional cess over GST, IANS reported. To be sure, Issac had not called for a nationwide cess to cover financial requirements in case of a natural calamity, but since there is no provision for a state-specific cess in the GST Act, the Council has to think along pan-India lines.
Briefing reporters after the 30th meeting of the GST Council, the Finance Minister (FM) said that the GoM would comprise members from the North Eastern, hill and coastal states, which are most vulnerable to natural calamities, apart from senior union ministers. He added that the panel would evaluate all possibilities and present its recommendations in the next few weeks. Thereafter, another meeting of the GST Council will be called.
Jaitley explained that a provision to have earmarked funds for natural calamities on state as well as national level already exists in the form of State Disaster Relief Fund (SDRF) and National Disaster Relief Fund (FDRF), which have nothing to do with taxes. The GoM would consider if this existing mechanism sufficiently addressed the issue or if more needed to be done.
According to him, although the GST Council members had different views on the concept of such a calamity cess, all states agreed that something must be done to address the devastating Kerala floods and similar calamities in future.
"One view expressed in the Council was 'Must the entire burden be borne by the people of the state suffering from natural calamities?' There was a counterview that this defies the one-nation, one-tax principle," said Jaitley, adding that members also questioned whether any such levy should be "confined only to some luxury and sin products" or on all products.
The Council reportedly also discussed whether the cess should be imposed in the case of all natural calamities or if there should be a distinction. "For example, if one or two districts of a state are affected, should there be a levy in that case?" Jaitley posed.
The FM also made it clear that it was important to have a mature view on the issue, deploying the best legal methodologies while keeping constitutional provisions in mind, instead of acting in haste. This is vital since any development along Kerala's proposal is bound to set precedence.
The Kerala government previously sent a detailed memorandum seeking a Rs 4,700 crore as compensation for the damage caused by the rains. On Wednesday, Chief Minister Pinarayi Vijayan met Home Minister Rajnath Singh and requested him to expedite the process of giving financial assistance. In the meantime, Kerala is staring at a long road to normalcy.
State GST revenue deficit at 13%: Finance Minister Arun Jaitley
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The total state GST revenue in the first five months of 2018-19 saw a deficit of 13 per cent as against 16 per cent in 2017-18.
This was announced by Finance Minister Arun Jaitley in a press briefing after the 30th GST Council meeting in Delhi. Jaitley said that almost all states have shown improvement in the revenue collection in the past one year and have seen their deficit coming down.
As many as 6 states have shown a surplus collection. These include five states from North East and Andhra Pradesh. Mizoram has witnessed a 50 per cent revenue surplus while Andhra has seen 1 per cent revenue surplus.
Of the states which have witnessed deficit in GST revenue collection, seven states -- Telangana (2 per cent), Maharashtra (4per cent), UP and Tamil Nadu (5 per cent each), Assam (6 per cent), West Bengal (7 per cent) and Rajasthan (12 per cent) -- have seen a deficit lower than the national average. States like Gujarat (14 per cent), Haryana (15 per cent), Meghalaya (14 per cent), MP (16 per cent), Jharkhand, Kerala and Tripura (17 per cent each) and Delhi (19 per cent) have a deficit more than the national average but less than 20 per cent deficit, which was witnessed by 10 states. Uttarakhand, Himachal, Punjab and Pudducherry have seen over 35 per cent deficit in GST collection.
The deficit has been calculated based on 14 per cent annual revenue growth over the past two years with 2015-16 revenue as base. To find the reasons for deficit, Revenue Secretary was sent to six states showing large revenue deficit.
Sources said one of the reasons for some of the states showing large revenue deficit is their overdependence on certain state specific taxes which have now been subsumed in the GST. For example, in case of Punjab, 20 per cent of its 2015-16 revenue came from Agriculture Purchase tax and Infrastructure development tax. This got subsumed in GST and hence the wide difference in GST collection.
In Pudducherry, for example, they were over-reliant on central sales tax. While the average contribution of CST to state tax collection was 8 per cent, in case of Pudducherry it was 27 per cent.
A finance ministry source said that these states would have to come out with ways to narrow the deficit because for the first five year the central government would compensate for the deficit but after the fifth year they are on their own.
Meanwhile on the subject of the calamity cess, the GST Council has decided to constitute a group of minister to look into the issue.
This was announced by Finance Minister Arun Jaitley in a press briefing after the 30th GST Council meeting in Delhi. Jaitley said that almost all states have shown improvement in the revenue collection in the past one year and have seen their deficit coming down.
As many as 6 states have shown a surplus collection. These include five states from North East and Andhra Pradesh. Mizoram has witnessed a 50 per cent revenue surplus while Andhra has seen 1 per cent revenue surplus.
Of the states which have witnessed deficit in GST revenue collection, seven states -- Telangana (2 per cent), Maharashtra (4per cent), UP and Tamil Nadu (5 per cent each), Assam (6 per cent), West Bengal (7 per cent) and Rajasthan (12 per cent) -- have seen a deficit lower than the national average. States like Gujarat (14 per cent), Haryana (15 per cent), Meghalaya (14 per cent), MP (16 per cent), Jharkhand, Kerala and Tripura (17 per cent each) and Delhi (19 per cent) have a deficit more than the national average but less than 20 per cent deficit, which was witnessed by 10 states. Uttarakhand, Himachal, Punjab and Pudducherry have seen over 35 per cent deficit in GST collection.
The deficit has been calculated based on 14 per cent annual revenue growth over the past two years with 2015-16 revenue as base. To find the reasons for deficit, Revenue Secretary was sent to six states showing large revenue deficit.
Sources said one of the reasons for some of the states showing large revenue deficit is their overdependence on certain state specific taxes which have now been subsumed in the GST. For example, in case of Punjab, 20 per cent of its 2015-16 revenue came from Agriculture Purchase tax and Infrastructure development tax. This got subsumed in GST and hence the wide difference in GST collection.
In Pudducherry, for example, they were over-reliant on central sales tax. While the average contribution of CST to state tax collection was 8 per cent, in case of Pudducherry it was 27 per cent.
A finance ministry source said that these states would have to come out with ways to narrow the deficit because for the first five year the central government would compensate for the deficit but after the fifth year they are on their own.
Meanwhile on the subject of the calamity cess, the GST Council has decided to constitute a group of minister to look into the issue.
Bandhan Bank stopped from opening new branches, RBI freezes CEO's salary
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Banking regulator Reserve Bank of India (RBI) today stopped Bandhan Bank from opening new branches as it was not able to bring down the shareholding of Non Operative Financial Holding Company (NOFHC) to 40 per cent as required under RBI's licensing condition.
The central bank has also ordered freezing of Bandhan Bank CEO Chandra Shekhar Ghosh's salary over failure to stick to shareholding rules. The promoter stake in Bandhan Bank is currently at around 82.28 per cent.
"General permission to open new branches stands withdrawn and the Bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the Bank stands frozen at the existing level, till further notice," Bandhan Bank said in a regulatory filing.
"The Bank is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the Bank to 40 per cent and shall continue to engage with RBI in this behalf," it added.
The Kolkata-headquartered Bandhan Bank was incorporated on December 23, 2014 as a wholly-owned subsidiary of Bandhan Financial Holdings Limited.
The central bank has also ordered freezing of Bandhan Bank CEO Chandra Shekhar Ghosh's salary over failure to stick to shareholding rules. The promoter stake in Bandhan Bank is currently at around 82.28 per cent.
"General permission to open new branches stands withdrawn and the Bank can open branches with prior approval of RBI and the remuneration of the MD & CEO of the Bank stands frozen at the existing level, till further notice," Bandhan Bank said in a regulatory filing.
"The Bank is taking necessary steps to comply with the licensing condition to bring down the shareholding of NOFHC in the Bank to 40 per cent and shall continue to engage with RBI in this behalf," it added.
The Kolkata-headquartered Bandhan Bank was incorporated on December 23, 2014 as a wholly-owned subsidiary of Bandhan Financial Holdings Limited.
General Awareness
Aadhar verdict
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What to study?
For Prelims: Key features of Aadhar, Money Bill.
For Mains: Features and significance of the verdict, Security concerns and ways to address them.
Context: The Supreme Court has upheld the Aadhaar scheme as constitutionally valid. The court also upheld the passage of the Aadhaar Act as a Money Bill.
The court ruled that the Aadhaar programme served the “larger public interest” in ensuring that the poor have access to resources. It found that the programme eliminated any chance of duplication and that enrolment was foolproof.
However, the apex court’s five-judge constitution bench also struck down several provisions in the Aadhaar Act.
Where Aadhaar is not needed?
Children cannot be denied any benefit due to not having Aadhaar. Hence, Aadhaar is not needed for school admissions.
Compulsory linking of mobile phone numbers to Aadhaar.
Aadhaar is not needed for opening a bank account and banking services.
CBSE, NEET, UGC cannot make Aadhaar mandatory to appear in entrance examinations.
No private entity can avail Aadhaar data which includes telecom companies and mobile wallets.
Where Aadhaar is mandatory?
Linking of PAN with Aadhaar.
Mandatory for filing of IT returns and allotment of Permanent Account Number.
Aadhaar must for availing facilities of welfare schemes and government subsidies.
Section 57 of the Aadhaar Act struck down:
Section 57 was used by the government to compel private companies to demand Aadhaar verification for services.
The Court accepted the argument that no rationale exists for this power and declared it invalid.
Consequently, the Court has struck downlinking of Aadhaar with mobiles and bank accounts. It has further directed that the data collected shall be deleted within six months.
What was the contention against Aadhaar before the Supreme Court?
The main questions raised during the hearing on Aadhaar were:
Is the Aadhaar Act, 2016, constitutionally valid given that it was passed in Parliament as a Money Bill?
Why does every citizen need one identity proof — a unique identification number — to acquire government benefits? Can’t this be done using other documents, like ration card or passport?
Does Aadhaar take away our right to privacy — upheld as a fundamental right by a nine-judge Constitution bench of the court in August last year.
What happens if Aadhaar data becomes a tool for mass surveillance by the state, as the movement and activities of users can be tracked by collecting metadata?
What did the government argue in favour of Aadhaar?
During the hearing, the government argued that Aadhaar would help weed out ghost beneficiaries of welfare schemes. The government argued that is using Aadhaar as an enabler of various facets of the right to life of teeming millions of Indian residents including their right to food, the right to livelihood, the right to receive pensions and other social assistance benefits like scholarships etc. by the genuine beneficiaries.”
The Supreme Court’s Right to Privacy verdict:
On August 24, 2017, a nine-judge Bench ruled that the right to privacy is a fundamental right, a shot in the arm for the petitioners. However, the court had also ruled that “besides national security, the State may have justifiable reasons for the collection and storage of data. In a social welfare state, the government embarks upon programmes which provide benefits to impoverished and marginalised sections of society. There is a vital State interest in ensuring that scarce public resources are not dissipated by the diversion of resources to persons who do not qualify as recipients.”
Justice B N Srikrishna report:
The Justice B N Srikrishna panel was appointed to recommend a data protection framework to the government. It submitted its recommendations in July this year. The Srikrishna data protection report highlighted individuals’ constitutional rights over their data and said efforts need to be made to protect data at any cost. It recommended steps for protection of personal information, defining obligations of data processors as also rights of individuals, and mooting penalties for violation.
Way ahead:
Stating that Aadhaar empowers the marginalised sections of society and gave them an identity, the SC asked the Central government to introduce a robust data protection law as soon as possible.
Aadhaar will undoubtedly be a game changer for the poor and the country as a whole. Every technology has some risks. A mature society must take measures to mitigate risks and not abandon the technology.
What to study?
For Prelims: Key features of Aadhar, Money Bill.
For Mains: Features and significance of the verdict, Security concerns and ways to address them.
Context: The Supreme Court has upheld the Aadhaar scheme as constitutionally valid. The court also upheld the passage of the Aadhaar Act as a Money Bill.
The court ruled that the Aadhaar programme served the “larger public interest” in ensuring that the poor have access to resources. It found that the programme eliminated any chance of duplication and that enrolment was foolproof.
However, the apex court’s five-judge constitution bench also struck down several provisions in the Aadhaar Act.
Where Aadhaar is not needed?
Children cannot be denied any benefit due to not having Aadhaar. Hence, Aadhaar is not needed for school admissions.
Compulsory linking of mobile phone numbers to Aadhaar.
Aadhaar is not needed for opening a bank account and banking services.
CBSE, NEET, UGC cannot make Aadhaar mandatory to appear in entrance examinations.
No private entity can avail Aadhaar data which includes telecom companies and mobile wallets.
Where Aadhaar is mandatory?
Linking of PAN with Aadhaar.
Mandatory for filing of IT returns and allotment of Permanent Account Number.
Aadhaar must for availing facilities of welfare schemes and government subsidies.
Section 57 of the Aadhaar Act struck down:
Section 57 was used by the government to compel private companies to demand Aadhaar verification for services.
The Court accepted the argument that no rationale exists for this power and declared it invalid.
Consequently, the Court has struck downlinking of Aadhaar with mobiles and bank accounts. It has further directed that the data collected shall be deleted within six months.
What was the contention against Aadhaar before the Supreme Court?
The main questions raised during the hearing on Aadhaar were:
Is the Aadhaar Act, 2016, constitutionally valid given that it was passed in Parliament as a Money Bill?
Why does every citizen need one identity proof — a unique identification number — to acquire government benefits? Can’t this be done using other documents, like ration card or passport?
Does Aadhaar take away our right to privacy — upheld as a fundamental right by a nine-judge Constitution bench of the court in August last year.
What happens if Aadhaar data becomes a tool for mass surveillance by the state, as the movement and activities of users can be tracked by collecting metadata?
What did the government argue in favour of Aadhaar?
During the hearing, the government argued that Aadhaar would help weed out ghost beneficiaries of welfare schemes. The government argued that is using Aadhaar as an enabler of various facets of the right to life of teeming millions of Indian residents including their right to food, the right to livelihood, the right to receive pensions and other social assistance benefits like scholarships etc. by the genuine beneficiaries.”
The Supreme Court’s Right to Privacy verdict:
On August 24, 2017, a nine-judge Bench ruled that the right to privacy is a fundamental right, a shot in the arm for the petitioners. However, the court had also ruled that “besides national security, the State may have justifiable reasons for the collection and storage of data. In a social welfare state, the government embarks upon programmes which provide benefits to impoverished and marginalised sections of society. There is a vital State interest in ensuring that scarce public resources are not dissipated by the diversion of resources to persons who do not qualify as recipients.”
Justice B N Srikrishna report:
The Justice B N Srikrishna panel was appointed to recommend a data protection framework to the government. It submitted its recommendations in July this year. The Srikrishna data protection report highlighted individuals’ constitutional rights over their data and said efforts need to be made to protect data at any cost. It recommended steps for protection of personal information, defining obligations of data processors as also rights of individuals, and mooting penalties for violation.
Way ahead:
Stating that Aadhaar empowers the marginalised sections of society and gave them an identity, the SC asked the Central government to introduce a robust data protection law as soon as possible.
Aadhaar will undoubtedly be a game changer for the poor and the country as a whole. Every technology has some risks. A mature society must take measures to mitigate risks and not abandon the technology.
For Prelims: Key features of Aadhar, Money Bill.
For Mains: Features and significance of the verdict, Security concerns and ways to address them.
Context: The Supreme Court has upheld the Aadhaar scheme as constitutionally valid. The court also upheld the passage of the Aadhaar Act as a Money Bill.
The court ruled that the Aadhaar programme served the “larger public interest” in ensuring that the poor have access to resources. It found that the programme eliminated any chance of duplication and that enrolment was foolproof.
However, the apex court’s five-judge constitution bench also struck down several provisions in the Aadhaar Act.
Where Aadhaar is not needed?
Children cannot be denied any benefit due to not having Aadhaar. Hence, Aadhaar is not needed for school admissions.
Compulsory linking of mobile phone numbers to Aadhaar.
Aadhaar is not needed for opening a bank account and banking services.
CBSE, NEET, UGC cannot make Aadhaar mandatory to appear in entrance examinations.
No private entity can avail Aadhaar data which includes telecom companies and mobile wallets.
Where Aadhaar is mandatory?
Linking of PAN with Aadhaar.
Mandatory for filing of IT returns and allotment of Permanent Account Number.
Aadhaar must for availing facilities of welfare schemes and government subsidies.
Section 57 of the Aadhaar Act struck down:
Section 57 was used by the government to compel private companies to demand Aadhaar verification for services.
The Court accepted the argument that no rationale exists for this power and declared it invalid.
Consequently, the Court has struck downlinking of Aadhaar with mobiles and bank accounts. It has further directed that the data collected shall be deleted within six months.
What was the contention against Aadhaar before the Supreme Court?
The main questions raised during the hearing on Aadhaar were:
Is the Aadhaar Act, 2016, constitutionally valid given that it was passed in Parliament as a Money Bill?
Why does every citizen need one identity proof — a unique identification number — to acquire government benefits? Can’t this be done using other documents, like ration card or passport?
Does Aadhaar take away our right to privacy — upheld as a fundamental right by a nine-judge Constitution bench of the court in August last year.
What happens if Aadhaar data becomes a tool for mass surveillance by the state, as the movement and activities of users can be tracked by collecting metadata?
What did the government argue in favour of Aadhaar?
During the hearing, the government argued that Aadhaar would help weed out ghost beneficiaries of welfare schemes. The government argued that is using Aadhaar as an enabler of various facets of the right to life of teeming millions of Indian residents including their right to food, the right to livelihood, the right to receive pensions and other social assistance benefits like scholarships etc. by the genuine beneficiaries.”
The Supreme Court’s Right to Privacy verdict:
On August 24, 2017, a nine-judge Bench ruled that the right to privacy is a fundamental right, a shot in the arm for the petitioners. However, the court had also ruled that “besides national security, the State may have justifiable reasons for the collection and storage of data. In a social welfare state, the government embarks upon programmes which provide benefits to impoverished and marginalised sections of society. There is a vital State interest in ensuring that scarce public resources are not dissipated by the diversion of resources to persons who do not qualify as recipients.”
Justice B N Srikrishna report:
The Justice B N Srikrishna panel was appointed to recommend a data protection framework to the government. It submitted its recommendations in July this year. The Srikrishna data protection report highlighted individuals’ constitutional rights over their data and said efforts need to be made to protect data at any cost. It recommended steps for protection of personal information, defining obligations of data processors as also rights of individuals, and mooting penalties for violation.
Way ahead:
Stating that Aadhaar empowers the marginalised sections of society and gave them an identity, the SC asked the Central government to introduce a robust data protection law as soon as possible.
Aadhaar will undoubtedly be a game changer for the poor and the country as a whole. Every technology has some risks. A mature society must take measures to mitigate risks and not abandon the technology.
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