The India Cable: Budget Sale Divides Parivar, Agri Cess Cheats States

Plus: The border is now at Delhi, Twitter mysteriously withholds Indian accounts, PIO acting head of Nasa and Aamir Khan has switched off his mobile

From the founding editors of The Wire—MK Venu, Siddharth Varadarajan and Sidharth Bhatia—and journalists-writers Seema Chishti, Sushant Singh and Tanweer Alam. Editor: Pratik Kanjilal

Snapshot of the day

February 2, 2021

Pratik Kanjilal

While the usual suspects are talking up the budget in the opinion pages of the newspapers, as they are expected to, Punjab Chief Minister Amarinder Singh has said that it is focused on poll-bound states and has nothing for the middle class or farmers elsewhere. He notes that defence allocations have fallen while India is squared off against China, and health commitments have fallen in a pandemic year. Also, the numbers must be unpacked and the threads unentangled before the budget can be appraised. Last year, the government had pre-sold a Rs 20 lakh crore “fiscal stimulus”, most of which turned out to be extra liquidity. 

The Editors Guild of India has demanded the immediate release of arrested journalist Mandeep Punia and “Delhi Police [must] restore circumstances in which the media can report without fear or favour.” Farmers’ unions have announced a countrywide chakka jam on February 6, when they would block national and state highways from 11am to 3 pm in protest against the internet ban in areas near their agitation sites, the harassment allegedly meted out to them by authorities, and other issues. As before, they have chosen an off-peak time so that commuters are not inconvenienced. The Indian Newspaper Society, usually reticent, has also spoken up.

A Delhi Court has reserved for February 10 its verdict in former Union minister and newspaper editor MJ Akbar’s criminal defamation complaint against journalist Priya Ramani, who had accused him of sexual harassment.

The Indian farmers’ protest resonates in the US Midwest. Rural economies there that had been declining for decades were devastated by the farm crisis. Researchers see that the agitation in India has gone beyond opposition to three laws, and fear something similar could happen in India if New Delhi stubbornly persists in favouring corporate farming.

NASA has appointed Indian origin scientist and engineer Bhavya Lal as its new acting Chief of Staff. Dr Lal will also serve as senior advisor for budget and finance at NASA.

UK doctor says farmer had gunshot wound

Delhi Police have denied any involvement in the death of 25-year-old Navreet Singh during farmers’ protests in Delhi on January 26 and charged nine journalists for reporting the family’s version but as per The Guardian, Dr Basil Purdue, a pathologist registered with the UK Home Office who examined the video footage and postmortem, said: “To me this is one gunshot wound, possibly two, unless proved otherwise.” He added that it was extremely implausible that Singh died from an overturned tractor. “You cannot get these injuries from a fall,” he said.

Delhi Police claimed Singh, who was from the Indian state of Uttar Pradesh and was among those who had used a tractor to plough through police barriers, died in an accident when his vehicle overturned. However, photographic and video footage of Singh’s body, as well as the postmortem report, indicate he suffered an injury consistent with at least one fatal gunshot wound through the head, according to doctors who reviewed the evidence.

An Indian-American doctor has said that he and his team were “brutally beaten” by police as they tried to tend to those injured in violent clashes during protests against farming reforms in India. Dr Swaiman Singh from New Jersey said they were set upon by lathi-wielding officers, leaving three doctors with broken arms and a volunteer with a cracked skull. In disturbing footage of the attack, one of the medics in a first aid high visibility vest is chased by officers in full riot gear before being viciously battered as he falls to the floor. Dr Singh was also of the opinion that Navreet Singh suffered an injury which caused him to lose control of his tractor. 

If it’s the border, it must be Delhi

It looks like the China border, and there are enough images (here, here and here) to show that while Indian infrastructure is lacking in Ladakh and Arunachal Pradesh, the moats, concrete walls and other defences on the highways into the national capital are impressive. As part of psychological warfare ― which the Chinese are pursuing on another border ― Delhi Police are bombarding agitating farmers with loud Hindi film music, especially from Border. And they are sowing the highways with nails. The analogy is clear: farmers are the enemy of the Indian state under the current dispensation. Some are asking, will AFSPA be imposed in Delhi next?

Twitter withholds, retreats

Social media platforms move in mysterious ways, and the mystery deepened on Monday when around 250 Twitter accounts ― including that of Caravan magazine, former CPI(M) MP Mohd Salim and actor Sushant Singh ― which post updates in support of the agitating farmers were withheld in India “in response to a legal demand”. The owners of the accounts have denied using an inflammatory hashtag, as the government had claimed. Outrage followed, and the Modi government’s faithful news agency ANI reported, citing “sources”, that it was done on the orders of the Home Ministry (see this explanatory thread from the Internet Freedom Foundation). Twitter was largely silent, barring an off-the-record statement, and the accounts were restored late in the evening. Twitter publishes content withold requests to Lumen, a Harvard project that collects and analyzes legal complaints for removal of online material. But in this case, since the accounts have been unblocked, it says it would not publish this legal order to Lumen.The mystery thus remains unresolved. In the fog of war, the Prasar Bharati CEOs account was also withheld, to the voluble irritation of BJP MP Meenakshi lekhi, who chairs a Parliamentary committee on data protection. 

Meanwhile, the Supreme Court on Monday issued a notice to the Centre on a PIL seeking rules to regulate social media platforms to hold them to account for allegedly spreading fake news and hate speech. A bench led by Chief Justice of India SA Bobde asked the Centre to respond to the petition filed by advocate Vineet Jindal and clubbed it with a petition that demanded the setting up of an independent media tribunal to adjudicate on complaints against TV news channels. Jindal wanted the top court to direct the Centre to frame laws for prosecuting those involved in spreading hate speech and fake news through social media platforms and set up a mechanism for automatic removal within a short timeframe.

Farmers arrested by Delhi Police, names made public after Congress MP intervenes

Six senior citizens are in the list of 120 agitators taken into custody by the Delhi Police, in connection with the violence that broke out in the capital during the farmers’ tractor rally on Republic Day. It includes 80-year-old Gurmukh Singh from Fatehgarh, Punjab, and 70-year-old Jeet Singh from Sangrur. Delhi Police PRO Eish Singhal said 44 FIRs have been lodged and 122 people have been arrested. Two of the arrested persons’ names have not been released because they are minors. 

Congress MP Manish Tewari said that the list was released only after he, along with two Punjab ministers, requested Home Minister Amit Shah. Punjab Chief Minister Amarinder Singh has said that his government has dedicated a team of 70 lawyers to fight the cases of those arrested by Delhi Police. These farmers were arrested on January 26, and it is not clear how Delhi Police kept them incommunicado for five days while their families ran from pillar to post for information.  The law says that detainees must be produced before a magistrate within 24 hours.

Budget’s misplaced priorities and misleading spin

Finance Minister Nirmala Sitharaman claimed that they had “spent” a lot in the budget, but the government had done so to clear past dues and clean up budget accounting, and to give itself a long fiscal rope over the next few years. What went unsaid in the FM’s speech was also significant. The allocation for defence is up by the smallest proportion in years and the number went missing from the speech. The agriculture cess of Rs 2.50 per litre of petrol and Rs 4 per litre of diesel, has been instituted by slashing a portion of the excise. It is meant to take the money out of the revenue pool shared with the states and direct it fully to the central kitty. The agri cess would be 100% on alcoholic beverages, 17.5% on crude palm oil, 20% on crude soyabean and sunflower oil, 30% on kabuli chana, 10% on peas, 50% on Bengal gram, and 20% on lentil. It would be 5% on cotton, 2.5% on gold and silver bars, 35% on apples, 5% on specified fertilizers, and 1.5% on coal, lignite and peat. Meanwhile, spending on PM Kisan was slashed by Rs 10,000 crore. Kisan associations have slammed the government for the cuts at this time.

Several categories and schemes were shifted around to give the impression of huge increases, when in effect outlays decreased in some cases. The Centre has allocated Rs 73,000 crore to the rural employment guarantee programme MNREGA, for the next fiscal 2021-22, substantially lower than the actual expenditure of  Rs 1.11 lakh crore in the current fiscal. Health is mainly investments in water and the spending set aside for the long period of six years Rs 64,180 in the PM Atmanirbhar Swasth Bharat Yojna was announced with much fanfare. In effect, the expenditure this year is less than even the revised estimates and nutrition suffered a cut. Anganwadis and maternity benefits are down, too. There was no gender budget this year. In fact, compared to Rs 30,000 crore allocated to the Ministry of Women and Child Development in 2020-2021, this financial year, the allocation was slashed by 20%.

There were occasions for mirth too, ‘Atmanirbhar’ figured 13 times and there were gems like, “Ancient India was largely self-reliant, and equally, a business epicentre of the world.” Silver and gold prices fell as customs duty was brought down but there was no relief on stratospheric fuel prices, which are the highest in the region. Highway projects were announced for four states that go to polls this year. Why not pressure cookers, too?

The Long Cable

Budget sale of family jewels divides Parivar 

MK Venu

The most important assumption of the 2021-22 budget, which greatly enthused the stock markets, is already being questioned from within the Sangh Parivar. The budget seeks to raise massive resources via large-scale privatisation of profitable public sector units and government banks, and a sale of stake in the largest insurance company, LIC.

However, by late evening yesterday, the Sangh Parivar’s economic think tank Swadeshi Jagran Manch, which has worked closely with the Finance Minister on many key policies, issued a statement that “ strategic disinvestment of enterprises created by taxpayers’ money is not right.”

The SJM said the decision to privatise government banks and insurance companies “is also worrying”. It urged the government to reconsider these decisions. It also opposed the raising of the foreign investment limit in insurance companies to 74% from 49% at present, saying that “foreign dominance in the financial sector is not a prudent step”.

Considering that these core announcements by the Finance Minister were described as the boldest pro-growth reform by CII and stock market players, one doesn’t know how their implementation will play out over the next 12 months. Doubts have already begun to surface as the Finance Minister herself admitted in a late evening interview that she would have to work out a consensus among all stakeholders for the sale of stake in LIC and the privatisation of banks. 

If the stake sale is caught up in a political seesaw within the Sangh Parivar, it is unlikely to help raise the targeted resources over the year and will derail key budget numbers.

Other aspects of the budget statement do not stand up to scrutiny. The claim of 130% increase in the health budget ― to Rs 223,846 crore in 2021-22 from Rs 94,452  crore in 2020-21, includes some one-time items of expenditure like the big spend on Covid vaccines, a one-time Finance Commission grant and expenditure on water and sanitation. If these one-time items are removed, the health expenditure growth is flat. Former finance minister P Chidambaram has described this as a “conjurer’s trick… Shorn of these add-ons, the allocations for health were Rs 72,934 in 2020-21 and Rs 79,602 crore in 2021-22. Given inflation, the increase is practically nil.”

Rathin Roy, former member of the Prime Minister’s Economic Advisory Council, also questions the government’s premise that the big fiscal expansion is productive as capital expenditure has got a big boost of 34%. While this may sound impressive in absolute terms, the revenue deficit as a ratio of fiscal deficit hasn’t changed much, he argues. The revenue deficit as a ratio of fiscal deficit remains nearly as high for 2021-22 (Budget Estimate) at 76% compared to 77% (Budget Estimate) in 2020-21.

If this is the case, the big fiscal boost may turn out to be less productive and more inflationary. Too many ifs and buts remain in the macro picture of this borrow-and-spend budget. 

Finally, the timely and efficient implementation of many infrastructure projects will require the cooperation of state governments in matters like land acquisition. Given the huge trust deficit Modi has developed with regional leaders because of the Centre’s divisive politics, the smooth implementation of big physical and social infrastructure projects will always be in question.

Many imponderables are bound to affect growth. Note the way the Centre has imposed a cess in lieu of import duty on many imported items. This is to specifically fund agriculture infrastructure in states. The import duty was shared with the states but the cess is not. This goes against the spirit of federalism, at a time when the farmers’ protests are on, and a core issue is the violation of states’ rights in agri marketing. Growth needs political and social  stability, economists have always argued. 

Reportedly

Bollywood superstar Aamir Khan is going on a communication detox and has decided to turn off his phone completely, so that it doesn’t come in the way of his work and personal life. “Aamir feels that he is addicted to his cellphone and that’s impacting his personal and professional space. Hence, he has decided to go incognito and operate like in the olden days," says a news report. True, or another PR gimmick from the savvy actor, many are asking.

Saving provident fund? Pay tax

Hidden in the fine print of the budget is a blow for many salaried people – interest on employees’ contribution to provident fund beyond Rs 2.5 lakh a year, or a tad more than Rs 20,000 a month, will no longer be tax-free. Many salaried people prefer to save through contributions to the Employees’ Provident Fund Organisation because it was EEE or ‘Exempt, Exempt, Exempt’. Savings are exempt from taxes in all stages — when saved, when interest accumulates, and when withdrawn. Compulsorily, 12% of an employee’s basic salary and performance wages is deducted to the provident fund, while the employer contributes another 12%. Now, anyone who earns more than  Rs 20.83 lakh a year will have interest on EPF contribution taxed. 

Mumbai locals back on track

Mumbai’s trains, among the busiest in the world, have resumed services for the public after 10 months. They carry nearly eight million people every day, but were shut down to curb the spread of the coronavirus. They have now reopened with certain Covid restrictions.

Deep Dive

Of the 405 sedition cases filed for criticising politicians and governments over the last decade, 96% were registered after 2014. Of them, 149 have been accused of making “critical” and/or “derogatory” remarks against Prime Minister Modi and 144 againstUP Chief Minister Yogi Adityanath. A new database has been launched today on Article-14.com.

Finance Commission report

The 15th Finance Commission has recommended that states, along with Ladakh and J&K, be given 42% share in the divisible tax pool of the Centre from the financial year 2021-22 to 2025-26. The gross tax revenue for a five-year period is expected to be Rs 135.2 lakh crore. Out of that, the divisible pool is estimated to be Rs 103 lakh crore, as per the commission. The states’ share at 41% of the divisible pool is Rs 42.2 lakh crore for 2021-26. Apart from tax devolution, the commission was asked to recommend performance incentives for states in many areas like the power sector, adoption of direct benefit transfers and solid waste management, as well as a funding mechanism for defence and internal security.

Prime Number: 72%

A survey of 7,776 doctors and medical students across the UK found 72% of Black, Asian and minority ethnic (BAME) respondents only felt partly protected, or not protected at all from Covid-19, compared with 60% for white respondents. The pandemic has “exacerbated existing racial and cultural inequities within our health service,” the chairman of the British Medical Association (BMA) council said. 

Opeds you don’t want to miss

Listen up

The 2021 Grammy Awards were to be held on Sunday, but have been postponed to March. Priya Darshini is one of the three Indian-origin artists nominated for the album Periphery. It draws on multiple genres, but the Indian influence is unmissable.

Watch Out

Speaking at the inaugural session of the Kerala Looks Ahead conference on Monday, Joseph Stiglitz noted the contrast between the incompetence of India’s central government and the competence of Kerala’s state government, making a case for the unique Kerala way of doing things. He emphasised aspects of Kerala’s development that helped its Covid-19 response: competent governmental institutions, participatory democracy (decentralisation), reliance on science, and the continued importance given to planning.

(Jump to Prof Stiglitz’s part)

Narada online makes a point

Myanmar only has a coup. We have more

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