Rahul Gandhi Disqualified; 14 Parties Move SC Against Misuse Of Agencies; Following US Banking Crisis, India Faces Lower Foreign Investment, Tougher Foreign Loans

J&J to lose patent on TB drug, membership of banned organisation now an offence, HC says PMLA has inverted jurisprudence, anti-caste bill in California Senate, Indians’ foreign travel spending up 31%

Mar 24, 2023

A newsletter from The Wire | Contributors: MK Venu, Seema Chishti, Siddharth Varadarajan, Sidharth Bhatia and Sushant Singh | Editor: Pratik Kanjilal

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Snapshot of the day

March 24, 2023

Pratik Kanjilal

The Bharatiya Janata Party has moved in for the kill after a local court in Surat yesterday sentenced Congress leader Rahul Gandhi to two years imprisonment for the crime of criminal defamation. On Friday, the Lok Sabha speaker disqualified Gandhi as a member of parliament without giving him a chance to move a higher court for suspension of the conviction pending appeal. Gandhi will presumably still seek legal remedies but no one expects him to a smooth or speedy passage back to parliament. Unless the conviction is stayed, Gandhi will also be barred from contesting any election effective immediately and for six years after his sentence ends, which means for at least eight years from the day his two years in jail starts.

Fourteen political parties including the Congress, the Shiv Sena and Aam Aadmi Party approached the Supreme Court this morning, charging the government with misusing the CBI and Enforcement Directorate to arrest Opposition leaders. The other plaintiffs are the DMK, RJD, Bharat Rashtra Samithi, Trinamool Congress, NCP, JMM, JD(U), CPI(M), CPI, SP and National Conference. They seek guidelines for arrest, remand and bail. The Chief Justice of India has listed the matter for April 5.

The Supreme Court today overruled its 2011 judgment in Arup Bhuyan vs State of Assam, in which it had said that mere membership of a banned organisation, in the absence of a violent act, was not an offence. A three-judge bench comprising Justices MR Shah, CT Ravikumar and Sanjay Karol upheld a section of UAPA which makes membership of outlawed associations an offence. Gratefully, Solicitor General Tushar Mehta called it a “historic judgment to protect the sovereignty of the country”.

Fear of Beijing may be drawing Delhi and Tokyo closer together but The Economist reminds us that “in 2022 China accounted for 24% of Japan’s imports and 22% of its exports; India represented just 0.8% of Japan’s imports and 1.7% of its exports. In 2014, during Abe’s second term, he and Mr Modi vowed to double the number of Japanese companies in India within five years. But by 2019 the number had grown from 1,156 to only 1,454. (Over 13,000 Japanese companies were present in China that year.)”

Sushant Singh writes on the border crisis in Ladakh that India is up against. Aggravating the disparity in border infrastructure is the increasing power asymmetry between China and India, he says, in every domain, whether economic, diplomatic, technological or military. This gap has only widened since Narendra Modi became PM in 2014.

The Indian Patent Office has rejected pharma multinational Johnson and Johnson’s application to extend its patent on anti-TB drug Bedaquiline, which will expire in July and end its monopoly in India. Now, generic manufacturers can make their own versions at an affordable price.

At a meeting hosted by Nationalist Congress Party leader Sharad Pawar, Opposition parties decided to come together to draft a joint memorandum asking the Election Commission to resolve doubts about the credibility of Electronic Voting Machines. Eleven parties attended — the NCP, the Congress, the Samajwadi Party, the Bharat Rashtra Samithi, the Aam Aadmi Party, the Janata Dal (United), the Shiv Sena (Uddhav Thackeray), the CPI(M), the CPI, IUML and the Kerala Congress (Mani). The Trinamool Congress, the second largest Opposition party in Parliament, stayed away.

Jailed Delhi University associate professor Hany Babu MT has been awarded an honorary doctorate by Belgium’s Ghent University. Behind bars, he awaits trial in the Elgaar Parishad case. The brief citation on the university website says: “Professor Hany is a linguist from India who, in addition to his academic research in syntax and semantics, works on issues of language ideology, language policy and language politics. His focus is on equal opportunities and fair access to education for the speakers of marginalised languages.” Babu was active in the defence committee for GN Saibaba, a disabled Delhi University professor serving a life sentence in Nagpur since 2014 for alleged Maoist links. He was an activist for the implementation of OBC reservation in higher education. From prison, Babu has had to move court to obtain spectacles, and treatment for an eye infection.

A local court in UP’s Varanasi yesterday rejected a plea seeking an FIR against Congress MP Rahul Gandhi over his speech at Cambridge University during his recent visit to the UK. According to LiveLaw, the plea was moved by BJP leader Shashank Shekhar Tripathi, who said that Gandhi made statements that were “divisive and against the spirit of the Constitution of India”, and “against the unity and sovereignty of India”.

In the past six months, the WHO has issued four global advisories on medications made in India which were connected with the death, loss of sight or other negative events among children in other countries. Dinesh S Thakur and Prashant Reddy have the latest on the need for a global system for quality control and quick cross-border action.

A new bill in the California Senate proposes to give protection from harassment and discrimination on the basis of caste in issues like employment and housing. It’s exactly a month since Seattle became the first US city to enact a similar ordinance on February 22. The Democratic senator for the 10th district, Aisha Wahab, has taken the initiative in these efforts.

The Karnataka High Court has quashed the Enforcement Directorate’s order to block Amnesty International’s bank accounts. The court determined that the notices sent to the petitioners’ banks had lost their effectiveness because they were time-barred beyond 60 days.

Granting piecemeal extensions to chiefs of investigative agencies compromises their independence, Senior Advocate Gopal Sankaranarayanan told the Supreme Court. A three-judge bench of Justices BR Gavai, Vikram Nath, and Sanjay Karol was hearing a batch of petitions challenging the third extension given to Enforcement Directorate chief SK Mishra, and also the Central Vigilance Commission (Amendment) Act, 2021. Sankaranarayanan told the bench, “The problem of the carrot-and-stick policy of dangling extensions over the incumbent, and making the grant of further extensions contingent on their performance, is that the investigations presided over by the director cannot be independent.”

In a keenly-contested election, the ruling YSRCP in Andhra Pradesh, which was nursing its wounds after a jolt in recent Legislative Council polls for graduates’ constituencies, faced yet another setback on Thursday in the seven MLC polls under the MLA quota. The TDP sprang a surprise, winning the lone seat it contested. TDP candidate Panchumarthy Anuradha won the seat by securing 23 votes — one more than the required margin of 22. Her win established that at least four YSRCP MLAs cross-voted. It was expected that the YSRCP’s two rebel MLAs — Kotamreddy Sridhar Reddy from the Nellore Rural segment and Anam Ramanarayan Reddy from the Venkatagiri segment — would vote for the TDP candidate. In a shocker, two more ruling-party legislators cross-voted and delivered a bitter defeat to YS Jagan Mohan Reddy’s YSRCP.

Hindenburg Research dropped another report yesterday after it disclosed short positions in Block Inc (formerly Square Inc), the payments firm led by Twitter co-founder Jack Dorsey. It said Block had overstated its user numbers and understated its customer acquisition costs. Hindenburg Research also alleged that Block Inc’s finance chief Amrita Ahuja dumped stock worth millions of dollars. According to her LinkedIn profile, Ahuja is chief operating officer. She is the daughter of Indian immigrants who owned a day-care centre in a Cleveland suburb, according to the Wall Street Journal.

Amid calls for greater diversity and inclusion in the higher judiciary, the Supreme Court Gender Sensitisation and Internal Complaints Committee has received a representation on the need for infrastructural inclusivity in the top court and queer representation on the committee. In a letter to Supreme Court judge and chairperson of the gender sensitisation committee, Justice Hima Kohli, queer, non-binary lawyer Rohin Bhatt, said that more LGBTQIA+ people are joining the legal profession and emphasised the need to “revisit the modes of organisational and spatial development that successfully resist homophobia/transphobia and their intersections with misogyny, casteism, racism, cultural chauvinism, and xenophobia”. Bhatt wrote: “Having inclusive infrastructure in the courts is vital to weaving the fabric of complex social life led by those of us that form the queer bar, and those that exist outside of the networks of privilege and power that are afforded to our cisgendered, heterosexual counterparts.”

In a photo essay, Himal Southasian covers human-animal conflict in the Sundarbans, which is being exacerbated by the climate crisis. A few days ago, Deutsche Welle covered the potable water crisis in the same area.

With US crisis on, banks told to disclose bond portfolios

The government has asked major public sector banks, including State Bank of India, Punjab National Bank and Bank of Baroda to furnish data on bond investment portfolios following the US banking crisis, and ahead of a meeting with the Finance Ministry tomorrow. Sharp depreciation of bond portfolios of banks like Silicon Valley Bank had caused the crisis in the US, in which at least three regional US banks have collapsed.

Government, defence and institutional data breach found

A massive data breach with national security implications has been unearthed by Cyberabad Police in Hyderabad, who arrested seven people of a gang allegedly involved in the theft and sale of sensitive data of the government and important organisations, including details of defence personnel ― rank, email id, posting ― as well as the personal and confidential data of 16.8 crore citizens. The accused were found selling information in more than 140 categories including sensitive information such as details of defence personnel and the mobile numbers of citizens and NEET students, Cyberabad Police Commissioner M Stephen Raveendra told reporters.

Seven data brokers were arrested from Delhi, who operated through three call centres in Noida and other places. The accused sold data to at least 100 fraudsters, and investigations are continuing.

PMLA reverses burden of proof, ‘very, very dangerous’

The Kerala High Court has said that the controversial Prevention of Money Laundering Act has inverted the basis of Indian jurisprudence by reversing the burden of proof and dumping it on the accused. Bar & Bench reported that the judge orally remarked: “This seems to be very, very dangerous.” He pointed out that while similar provisions exist in other statutes like the Narcotic Drugs and Psychotropic Substances Act, the PMLA adds a further problematic provision under Section 45, which concerns bail. It lays down that if the public prosecutor opposes the bail application of an accused, a court can grant bail only if it is satisfied that there are grounds for believing that the accused is not guilty of the offence, and that he is not likely to commit any offence while on bail.

Amritpal Singh at large in the middle distance

Punjab Police’s search for Sikh hardliner and pro-Khalistan preacher Amritpal Singh received a major setback yesterday. The police say he could be anywhere now and have confirmed that he managed to slip out of Punjab a day after the crackdown began on him and his outfit Waris Punjab De.

The police offer vivid details of the runaway trail, and say they have issued an alert to all states as they have no idea where he went. He was last spotted in Haryana’s Kurukshetra district on the night of March 19 and left early in the morning of March 20, according to Punjab Police spokesperson Sukhchain Singh Gill.

The Long Cable

Following US banking crisis, India faces lower foreign investment, tougher foreign loans

MK Venu

Continuing stress in the US banking system following the collapse of three mid-size banks, while several others seek liquidity support, had prompted Goldman Sachs to forecast that the Federal Reserve might pause its relentless interest rate hikes to attack inflation. But the Fed on Thursday chose to raise the benchmark interest rate by another 25 basis points, clearly signalling that inflation control remains its top priority and maintaining market and financial stability was secondary.

A week earlier, the European Central Bank also aggressively raised the interest rate by 50 basis points in the backdrop of the collapse of Credit Suisse Bank and its imminent takeover by UBS Bank. Larry Summers hailed the decision to aggressively raise interest rates on the ground that financial market imperatives can’t be allowed to dominate the larger objective of taming inflation. Even Fed Chairman Jerome Powell suggested that the stress in the financial system can’t be allowed to dictate the essentials of monetary policy.

This means the stress in the banking system, caused largely by the scale and speed of interest rate hikes by the Fed over the last one year, will be allowed to play itself out and it will remain secondary to inflation targeting for now.

This has implications for global capital flows in the medium term and is bound to impact emerging economies like India. The era of cheap money is over and world economies will have to adjust to it. There will be no more scope for borrowing at nearly zero interest from Western or Japanese markets to invest in emerging economies like India for higher returns. This arbitrage game is over. So most experts agree that Indian stock markets will remain tepid during 2023 and the first half of 2024, as India prepares for general elections. If stock markets remain stagnant, the political economy ceases to afford politicians and big business the opportunity to generate extra funds in a rising market. In a rising interest rate regime globally, money creating more money becomes a more challenging proposition.

There are other ways in which India’s economy will have to brace itself as global money becomes more and more expensive. Through weaker trade and capital flows, India’s economy will be impacted as the global recession (hopefully mild) plays out.

With the tightening of global money as interest rates rise 5-6 percentage points, accompanied by continued stress in the Western financial system, many large Indian corporates with heavy borrowings from abroad will become vulnerable as the time comes for refinancing their borrowings from abroad at much higher rates. Big Indian infrastructure builders like the Adanis, Jindals, Vedanta, Bharti Airtel and the Birlas will be particularly vulnerable when they seek refinancing of their foreign debt.

Already, Indian businessmen have begun suggesting that RBI need not raise interest rates at the pace and scale followed by the Fed Reserve. There is also a suggestion that India can partially decouple from the global financial tightening. Past experience has shown that that such decoupling does not work. The bulk of funding of India’s infrastructure, which the Modi government seeks to boost, has to come from foreign savings. India does not have capital on the scale it needs to boost its infrastructure. There’s a reason why 70% of Adani Group’s total borrowings of $30 billion is from abroad. Indian banks or capital markets can’t possibly generate funds of that order. Similarly, other large infrastructure projects also have to depend heavily on foreign borrowings. This will be the biggest challenge for India amid the global tightening of money combined with a deepening stress in the global banking system.

Reportedly

The MEA is unusually guarded in its pronouncements on some issues, so naturally, it is apprehensive about the US reiterating, in a recent bipartisan Senate resolution, that the McMahon Line is the international border between Arunachal Pradesh and China. The resolution also denounced Chinese aggression and provocations, including China trying to use force to alter the status quo along the LAC. Prior to that, senior US State Department officials spoke similarly. It appears that the US is trying to nudge the Modi government into publicly acknowledging the crisis and being more assertive. MEA spokesperson Arindam Bagchi did not respond to the US move, claiming that the ministry had not “heard about the resolution yet”. The US is taking a deep interest in the issue as part of its broader policy to contain China, and we can expect more from Washington, whether the Modi government likes it or not.

Prime Number: $1.49 billion

In January, Indians spent nearly $1.49 billion on foreign travel, an increase of over 31% from the $1.13 billion spent in December 2022. It also marks an increase of over 50% from January 2022, when they spent $989 million on foreign travel. In FY2014-15, Indians spent a mere $11 million on foreign travel.

Deep Dives

Read about the work of Irfan Mehraj, a fearless journalist arrested by the NIA who offered fresh perspectives on Kashmir. His work always stood out for his attention to Kashmir’s politics, history, culture and most importantly, its people.

In the hills and forests of Palamau, in 1857, the brothers Nilamber and Pitamber led Adivasi insurgents against the British. However, the struggle for water, forests and land never stopped for their descendants. Fiftytwo.in has more.

Here is an excerpt from Dr N Sukumar’s book, Caste Discrimination and Exclusion in Indian Universities: A Critical Reflection.

Opeds you don’t want to miss

Neera Chandhoke writes that our future is at stake when once again the Indian society is held hostage to fundamentalism of any kind, whether by the merchants of Hindutva or those of Khalistan.

If free and fair elections are the backbone of a democracy, an independent audit system is crucial for a country’s financial hygiene and error-free welfare delivery. To ensure both, it is essential that the CAG is appointed in a free and fair manner, writes Anupam Kulshrestha.

Kalpana Sharma writes that it is evident that the BJP can confidently go ahead with its attack on Rahul Gandhi because it knows that his actual statements have been sparingly reported. Deliberately or otherwise, the Indian media has helped spread a lie.

Gideon Haigh writes that the sight of the allegedly pious and deeply spiritual Indian prime minister co-opting cricket for a giant ego trip in a stadium bearing his name, while the purportedly vibrant and independent Indian media joined in hosannahs of praise, was not for the weak-stomached.

TM Krishna writes that we must call out the big daddies of trolling who sit on top of the pyramid and conduct this hostile orchestra. They are the real violators of social ethics; the fountainheads of the troll factory.

The need is to focus on reviving worker incomes, particularly in the non-farm sector. This is essential, given not only the large contribution of domestic consumption and investment to output growth, but also the dominant role of the country’s non-farm economy in reducing poverty and vulnerability, writes Himanshu.

Many use Bhagat Singh’s name to get legitimacy for themselves without following his ideological understanding. Ram Puniyani writes on what he would have thought about that.

Irfan Habib reminds us of Vasudhaiva Kutumbakam, which was envisaged by Bhagat Singh way before its inclusion in the G20 themes.

S Irudaya Rajan, Rohit I and Varsha Joshi write that with increasing constraints on student migration by many foreign countries like the US and the UK, it is imperative for India, with a high number of student migrants, to invest more towards ensuring their safe and secure migration.

Anirudh Kanisetti on an Odia queen who became mediaeval Sri Lanka’s greatest politician: Queen Sundari’s husband had infuriated the Buddhist Sangha by appropriating their properties; she had to find a way to appease them.

Listen up

Listen to cricket writer and podcaster Peter Lalor on the recent India-Australia cricket tour. It has cricket, wit, lager and politics.

Watch out

Nani speaks to Anupama Chopra about Dasara and why it will be his most ‘vulnerable’ role yet. The actor talks about his process of selecting scripts, why he doesn’t work with superstar directors and why his team considers him a “terrible” producer.

Over and out

Gauri Datt’s 1870 book, often considered to be the first Hindi novel, is out in its first English translation. Read an excerpt here.

The Northeast is known for its rich biodiversity and unique cultural heritage, which is reflected in the region’s many sacred groves. Here are five.

That’s it for today. We’ll be back with you on Monday, on a device near you. If The India Cable was forwarded to you by a friend (perhaps a common friend!) book your own copy by SUBSCRIBING HERE