Supreme Court Questions UP on Kanwar Yatra and Covid; Ramdev Gets Tax Break

Plus: India-China trade soars, fermented rice triggers class war, where are fuel tax rupees going, don’t use terror laws to fill jails, says Justice Chandrachud, retiring judge speaks on Babri case

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

Snapshot of the day

July 14, 2021
Pratik Kanjilal

Cronyism and baba-log capitalism flourishes. Yoga guru and televangelist Ramdev has secured a major concession and a significant source of public revenue has been foregone. The Income Tax Department has notified a five-year tax exemption for contributions to Patanjali Research Foundation Trust of Haridwar, Uttarakhand. 

The BJP state government in Uttarakhand was forced to cancel the Kanwar Yatra in view of Covid-19 but the Supreme Court has taken suo motu cognizance of neighbouring UP allowing the religious event which involved lakhs of individuals walking in small groups over long distances. “Given the disparate political voices, all speaking at the same time, it is important that the relevant Secy, Union of India respond” to the news of the UP government’s green light, the bench of Justice RF Nariman said in the Supreme Court on Wednesday. The Uttarakhand and Union governments are reeling under the bad press and global opprobrium for advancing and promoting the Kumbh Mela. The Indian Medical Association also wrote to Uttarakhand Chief Minister Pushkar Singh Dhami, asking him to cancel the yatra. Yogi Adityanath never got the memo.

In UP, the latest BJP state to impose the controversial two-child norm, which penalises people with more than two children, The Times of India finds that more than half of the state’s BJP MLAs have more than two children and would stand to be disqualified if the law were to be applied retrospectively. The poor would stand to lose the most.

The Delhi High Court today received a sealed copy of the Union government's office memorandum pertaining to the deportation of undocumented migrants from Bangladesh but not without the judge registering her irritation. “What is so confidential? Just because you appear for the Union you have the habit of saying ‘confidential’,” she said. The court was hearing a petition by three people claiming to be Bangladeshi nationals who seek to be repatriated.

The Guardian reports that “India’s Covid vaccination rollout has continued to falter due to supply shortages and vaccine hesitancy, casting doubts on the government’s pledge to vaccinate the entire population by December.” Indeed, the Centre’s takeover of the vaccination drive has been disastrous, and India remains well below the rate required to achieve full vaccination by the end of the year. This report calculates that the weekly pace of vaccination has declined to nearly 60% of what was seen in the week after June 21, when the Centre entirely took over vaccine procurement from the states. The slackening has resulted in several states complaining of shortages. But vaccine hesitancy? This is the scene in Gopalganj, Bihar:

An article in The New Yorker’s latest issue on what comprises a cult has a long section on Puducherry’s Auroville, an “intentional community” founded in 1968. Auroville was the creation of Mirra Alfassa, a Frenchwoman known to her spiritual followers as the Mother. 

VICE covers India-Pakistan marriages in Kashmir. Caught between squabbling neighbours, hundreds of women are trapped in complicated cross-border marriages. 

The Modi government has been facing ire from a constituency it loves to champion, the OBCs. It has tried hard to shake off the RSS’ historical anti-reservation stance. There is now no OBC quota for state government medical institutes in the NEET exam. So far, it has dodged the question, and there is reservation for OBCs only in central medical institutes. Why? The RJD is asking blunt questions, which the government finds hard to deflect.

Seven undertrials broke out of a jail in Arunachal Pradesh, after attacking guards with just chilli powder and salt. They surprised their jailors with condiments when their cell in Pasighat jail in East Siang district was opened for dinner on Sunday.

The Bombay High Court has pondered an important point of law: is it all right to file pleas on A4 paper printed on both sides? To general relief, it turned out that such things are now possible. Does the nation anticipate a plea for injunction from manufacturers of legal size paper ― or perhaps a complaint of unfair trade practice?   

A food fight, and a class war, too: Masterchef Australia has closed with a very plain meal from rural Bengal and Bangladesh ― panta bhat (slightly fermented rice), prinked up mashed potatoes and fried fish ― and it’s polarised the internet. But then, consider hamburgers and French fries ― sometimes, the simplest dishes become global hits. 

Someone up there is carpet bombing Bengaluru and Delhi with Yo-Mo hoardings. This is nervousness writ large. Super large. 

Meanwhile, a Bangalore lawyer has been threatened with a criminal case by the UP policy cyber cell for tweeting a photo of a Yogi ad near Bangalore airport.


India’s trade with China skyrockets in 2021

Despite continuing military tensions across the Line of Actual Control in Ladakh, bilateral trade between India and China in the first half of the current year broke all records, growing 62.7% year-on-year, making China India’s biggest trading partner. At $57.48 billion, it is much higher than the pre-Covid level of $44.72 billion in the first half of 2019. 

According to China’s General Administration of Customs, India exported goods worth $14.7 billion to China and imported $42.6 billion worth from the neighbour. India had imported $35.8 billion worth of goods in the first half of 2019. India’s trade with China had declined 5.6% to a three-year low at $87.6 billion in 2020, but China still emerged as India’s biggest trading partner, surpassing the US.


Don’t misuse anti-terror laws to quell dissent, says Justice Chandrachud 

“While it is important that prisons are de-congested because they are highly susceptible to becoming hot spots for virus, it is equally important to examine why prisons are congested in the first place. The criminal law, including anti-terror legislation, should not be misused for quelling dissent or for the harassment of citizens,” Supreme Court Justice DY Chandrachud said while addressing an international seminar. He cited from his own judgment granting bail to Arnab Goswami: “Our courts must ensure that they continue to remain the first line of defence against the deprivation of liberty of citizens. Deprivation of liberty for even a single day is one too many. We must always be mindful of the deeper systemic issues of our decisions". 

“While some have termed these interventions of the Indian Supreme Court as ‘judicial activism’ or ‘judicial overreach’, the Court plays the role of a counter-majoritarian institution and it is its duty to protect the rights of socio-economic minorities. As the guardian of the Constitution, it has to put a brake where executive or legislative actions infringe fundamental human rights.”


High fuel prices slash home budgets

“With every 10% increase in petrol pump prices (Mumbai), SBI estimates that there is a 50 basis points increase in consumer price inflation.” Latest research by SBI Ecowrap suggests that high fuel prices have altered spending patterns of consumers, badly hitting non-discretionary spending. The share of non-discretionary spending on items like fuel, according to SBI's estimates, jumped to 75% in June 2021 from 62% in March 2021. 

High fuel costs are hurting as households across the country grapple with medical expenses and rising commodity prices are upsetting monthly budgets. “Our analysis of SBI card spends indicates that spend on non-discretionary health expenditure has been substantially reduced to accommodate increased expenditure on fuel,” the report stated. 


IMD makes heavy weather

More rough weather alerts over the Arabian Sea, of lower accuracy, have triggered resentment among fishermen in Kerala over man-days lost. The Indian Meteorological Department’s repeated miscalculations about monsoons, especially over the capital, were taken with a smile, but elsewhere, such errors wreak havoc on weather-dependent lives and livelihoods. Fishermen allege that forecasters were over-forecasting after criticism for inadequate alerts during the 2017 Ockhi cyclone that claimed over 140 lives. In the last two months, a fishing ban was imposed for at least 15 days, whereas it was rough only for five or six days. At the same time, there was no adequate warning of rough weather, in which three fishermen were killed at Vizhinjam in May.


The Long Cable

No infra in sight, taxpayers must ask where their fuel tax revenue is going

MK Venu

The Modi government has repeatedly claimed that the huge incremental revenues the Centre earns from petrol and diesel are necessary to fund infrastructure and other development projects. As per a reply by the government in the Lok Sabha in March, the Centre raised Rs 72,500 crore via excise duty on petrol and diesel in 2014-15. This increased by over 300% to over Rs 3 lakh crore in 2020-21. The Centre’s oil tax revenues  may be even higher this fiscal, going by current price trends, and the chief economic adviser does not foresee a reduction.

So while there is over 300% increase in tax revenues from petrol and diesel, the average annual growth in capital expenditure by the Centre has been less than 10% since 2014-15, after the Modi government came to power. Of course, the 2021-22 Union budget was a little more generous in providing an increase of 25% in capital expenditure in keeping with the Centre’s ambitions plans of funding the national infrastructure pipeline, which entails covering 7,400 projects at the cost of $1.5 trillion over five years.

However, there is no sign of actual spending this year to meet this ambitious target. 

After the second wave of the pandemic, the Centre has been justifying even bigger fuel price hikes, citing the need to fund infrastructure development. 

However, a report in The Hindu last week showed a 40% decline in overall public spending on infrastructure projects in the April-June quarter, compared with January-March. This has happened even though there has been no nationwide lockdown and the Centre has kept its big construction projects going, including the Central Vista!

So what explains the precipitous drop in public infrastructure funding, even as tax revenues from oil remain at all-time highs? The Centre must explain through a white paper how the 300%-plus increase in fuel tax revenues squares with the actual increase in spending on infrastructure projects. 

If the hapless consumer today is paying over Rs 100 per litre for petrol and diesel in many states, the poor taxpayer, whose real income is getting smashed, has the right to know how the Centre proposes to spend over Rs 3.5 lakh crore, which it is likely to collect as oil taxes in 2021-22. The taxpayer must insist on this hisab at the end of the fiscal year in March 2022.

Also, note that nearly 65% of the total petrol and diesel tax collected by the Centre is in the form of cess, which it does not share with the states.

This white paper on the link between the Centre’s oil taxes and infrastructure expenditure is critical because private investments are still insignificant. Only public spending has the capacity to drive growth and employment in the medium term. Besides, the Centre has repeatedly claimed that it is using infrastructure spending as a primary strategy to boost employment, income and demand instead of giving upfront cash stimulus to the poor, as most economists have suggested, and as most other countries are doing. 

If this is so, then the taxpayer has the right to know how oil taxes, the single largest source of revenue for the Centre, are actually being spent. There is a need for full transparency on this account.


Reportedly

Justice Ashok Bhushan, who has just retired from the Supreme Court, has formally spilled the beans on the anonymous ‘addendum’ to the Ayodhya Judgement of November 2019: he says he wrote it. In an interview with Bar & Bench, he has said “I had said it was important to write it, as it was about how the land was the birthplace of Lord Ram. But there was some dispute on whether it should be a part of the main judgment since I had quoted religious scriptures and some judges were of the view that it should not be a part of the main judgment.” The judge did not say why the addendum was unsigned. In a contrary view to this he has also gone on to assert that the Ayodhya matter was not one between faiths, but just “a land dispute”. Quite confusing, Milord.


Lowest investment grade for India

S&P Global Ratings has affirmed India’s sovereign rating at the lowest investment grade of ‘BBB-’ for the 14th year in a row. It has forecast that economic activity will begin to normalise throughout fiscal 2022, resulting in real GDP growth of about 9.5%. A significant proportion of this rebound will be due to the very weak base in the prior fiscal year, when the economy contracted by a record 7.3%. 


Mysteriously high Covaxin price due to government ‘capping’

Covaxin is one of the most expensive vaccines in India, sold at Rs 1,410 per dose in private hospitals (Rs 1,200 + 5% GST + Rs 150 service charge) due to its price being “capped” by the government, although the government is procuring it at Rs 150 + 5% GST per dose. In an RTI reply to Commodore Lokesh Batra (Retd), the Health Ministry has mentioned that the first order for 1 crore doses of Covaxin was procured at Rs 295 plus 5% GST per dose from Bharat Biotech. From the second order onwards, Bharat Biotech has been supplying Covaxin at Rs 150 plus 5% GST per dose – which means that the government did negotiate with the manufacturer to supply the vaccine at a cheaper price. 

But in private hospitals, purchase invoices accessed by The Quint reveal that in May 2021, a few were purchasing Covaxin at Rs 1,050 per dose – Rs 1,000 per dose plus Rs 50 GST. This shows the price was much lower before the government on June 8 “capped” the price at Rs 1,200 plus Rs 60 GST, pushing the total to Rs 1,260 per dose. As a result of the price cap, Bharat Biotech refused to sell Covaxin at Rs 1,000 to private companies, and started earning Rs 200 more on each vaccine dose.


Prime Number: Minus 3-4 million
Metro and A Circle cities saw a 3-4 million decline in active telecom subscribers, possibly due to rural migration. According to a report by equity research firm Jeffries, active subscriber addition also came down to 3.4 million in B and C Circles. Analysts say the Covid lockdown has likely curtailed the purchase of smartphones. 

Deep Dive

The State of Working India: Background paper 06 is about people whose lives have been turned upside down by the pandemic. Anumeha Yadav speaks to a security guard, scrap collector, temporary workers, apprentices, recent graduates of skilling programs, on changes in the nature and quality of work and workplaces. 


Border tensions between Assam and Mizoram

Tension remains on the “disputed” Assam-Mizoram border as security forces of both states exchanged allegations of “intrusion” following violence last Saturday. Officials in Assam’s Cachar district said 100 Mizo civilians backed by a company of Mizoram Police intruded into the “Constitutional territory” of the district and disrupted the work of the Assam Forest Department. Mizoram Home Minister Lalchamliana, however, alleged that crops of Mizo farmers were destroyed by intruding Assam police personnel. He demanded compensation for the farmers from the Assam government. He stated that additional Mizoram Police forces have been deployed in the affected areas to remove public fear.

The border dispute is an old problem. Assam says the boundary demarcated in a 1933 notification should be maintained while Mizoram insists on the line drawn in the Bengal Eastern Frontier Regulation, 1875. Violence broke out in October last year, and in February.


Not a Ghost of a chance: Court bars tax relief for Rolls 

Observing that actors should behave like real heroes, the Madras High Court came down heavily on actor Vijay’s plea seeking exemption of entry tax for his Rolls Royce Ghost, imported from the UK in 2012. Dismissing the plea, the court also imposed a cost of Rs 1 lakh to be paid to the Tamil Nadu Chief Minister’s Public Relief Fund.


Op-Eds you don’t want to miss

  • Trolls will enforce India’s new media censorship laws, writes Aman Sethi in Coda Story.

  • Modi is introducing draconian social media rules that may threaten freedom of speech and an open internet. But Silicon Valley is preparing for combat, writes Saritha Rai and Vlad Savov in The Independent.


Listen Up

Supreme Court advocate Shadan Farasat tells Sidharth Bhatia (a contributor to The India Cable) that there are many misconceptions about human rights, which affect every citizen.


Watch Out

TM Krishna talks about his journey from being a stage singer to something much more. He puts forth his understanding of Carnatic music, wonders if  KV Mahadevan’s or Ilaiyaraaja’s songs can be called Carnatic music and whether art is inherently political.


Over and Out

India is still mourning the loss of Dilip Kumar, and Yashpal Sharma, member of the 1983 cricket World Cup winning Indian side, died yesterday. The two had a strong bond which many do not know about. Kumar saw Sharma play in 1974-5 on the domestic circuit and recommended him to Raj Singh Dungarpur, who had a say in selection. The rest is history.

Ehsaan Noorani, Loy Mendosa and Shankar Mahadevan (Shankar-Ehsaan-Loy), the Amar-Akbar-Anthony of the music industry, discuss 25 years of working together and claim, “We showed that Bollywood music could be cool.”


That’s it for today. We’ll be back with you tomorrow, 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.