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From 100% of all grants, donations and contributions received by the Biju Janata Dal to about 10% of all declarable contributions to the Samajwadi Party in 2021-2022, electoral bonds contributed a large chunk of the income of regional parties in the last financial year.
According to the BJD’s annual audit report for 2021-2022, which was published by the Election Commission on its website, the party declared it received Rs 291 crore in the category of “grants, donations and contributions” and the entire amount was in the form of electoral bonds. The income from electoral bonds accounted for 94% of the total income of the BJD: Rs. 307.28 crore.
Similarly, the YSR Congress Party’s annual report showed the party received Rs 60 crore from electoral bonds in 2021-2022 and it accounted for 64% of its total income of Rs.93.72 crore and 75% of the income from grants, contributions and donations. The Telangana Rashtra Samithi, which recently changed its name to Bharat Rashtra Samithi, received Rs 153 crore in electoral bonds, accounting for 70% of its total income of Rs 218.11 crore and 79% of the income from grants, contributions and donations.
Almost 10% of the Samajwadi Party’s declarable donations in 2021-2022 came from electoral bonds received by the party in the mail, according to its contribution report submitted to the EC.
The SP’s annual contribution report showed that the party received a total of Rs 33,00,55,516 in donations from individuals, companies and electoral trusts.
Political parties are required to submit the details of all contributions in excess of Rs 20,000 each to the ECI in their annual reports as per the Representation of the People Act, 1951.
Political parties are required to submit details of all contributions in excess of Rs 20,000 each to the ECI in their annual reports. However, contributions from electoral bonds are exempt from the requirement and most prominent national and state parties do not include them in their contribution reports.
However, contributions from electoral bonds are exempt from the requirement and most prominent national and state parties do not include them in their contribution reports.
In Parliament
RS passes Maritime Anti-Piracy Bill (Page no. 7)
(GS Paper 2, Polity and Governance)
Rajya Sabha passed a Bill which the government said would provide an effective legal instrument to combat maritime piracy. The Bill provides for stringent punishment to those convicted of such crimes.
The Bill was passed by Lok Sabha earlier this week.
Moving The Maritime Anti-Piracy Bill, External Affairs Minister S Jaishankar said, “Ensuring maritime security is key to safeguarding India’s security and economic well-being.” He said the security of sea lanes of communication is critical as more than 90 per cent of India’s trade takes place by sea routes and more than 80 per cent of the country’s hydrocarbon requirements was sea-borne.
He said the Bill addresses the issue of death penalty as an “exceptional case” and the quantum of punishments envisaged are in line with the gravity of offences.
“In the absence of a specific law or a legal provision in the Indian Penal Code or the Criminal Procedure Code on piracy, this Bill would provide an effective legal instrument to combat maritime piracy. It would enable us to discharge our obligations under the UNCLOS which we had signed in 1982 and ratified in 1995,” he said.
He said between 2008 and 2011, there have been 27 maritime incidents in which 288 Indian nationals were involved. And between 2014 and 2022, there were 19 piracy cases in which 155 Indian crew members were involved and the numbers show why the country needs this bill so badly, he said.
Members cutting across party lines supported the Bill although some of them pointed out that a few provisions could be improved. Supporting the Bill, Congress member Vivek Tankha said India will be delighted to have this law but asked the government to look at some of the harsh provisions, including bail provisions for those arrested.
Some of the members called for removal of the death penalty provision in the Bill.
Regarding suggestions about having a standard operating procedure for better enforcement, the minister said the suggestion is well taken as it would help in its enforcement. He said designated courts will be set up in consultation with the Chief Justice of India.
Editorial
A different NPA (Page no. 12)
(GS Paper 3, Economy)
Data obtained under the Right to Information Act has thrown up some worrying trends about education loans in the country. As this newspaper reported, about 8 per cent of all education loans disbursed by 12 public sector banks (PSBs), where repayments have started, have turned into non-performing assets (NPAs or loans that never get repaid).
This level of NPAs is higher than the overall NPAs in the banking system. Worse, still, is the revelation that a bulk of the defaults in the education loan portfolio of banks comprises low-value education loans (that is, loans up to Rs 7.5 lakh).
There is a glaring gap between the default rate for loans disbursed to students in premier institutes — such as the IITs, IIMs, NITs and AIIMS — as compared to those in secondary institutes. If one takes into consideration just four PSBs — State Bank of India, Canara Bank, Union Bank of India and Indian Overseas Bank — that account for 65 per cent of the total loan portfolio among PSBs, the default rate for education loans to students in premier institutes is 0.45 per cent, while the overall average of defaults is more than ten-times of that at 4.7 per cent.
Far from being a mere statistic that is only of academic interest, this trend is already beginning to have real-world implications. Faced with a high rate of defaults in low-value education loans of PSBs, banks have started shying away from extending such loans.
In November, this paper reported that the education loan disbursal target for public-sector banks during the current financial year has been set at about 13.5 per cent lower than total disbursal by all scheduled commercial banks in FY22. PSBs typically account for 90 per cent of all study loans and data shows that the target for the country’s 12 PSBs for the current year is Rs 20,450 crore while loans worth a total Rs 23,640 crore were disbursed in the last financial year.
Simply put, the poorer students in India who need a loan the most are at risk of being excluded because it doesn’t make as much business sense for banks, even in the public sector, to provide education loans.
Ideas Page
The odds of Mass prosperity (Page no. 13)
(GS Paper 1, Population and Associated Issues)
Sometime in April 2023, we estimate that India’s 1.43 billion people will exceed China’s population. This milestone is bittersweet. Sweet because we have more than doubled the horrible 31-year life expectancy the British left us with in 1947, without brutal freedom-destroying state interventions (China’s one-child policy means it will lose workers equalling France’s population in the next decade).
Bitter because mass prosperity for massive populations is hard. India’s large remittances from a small population overseas reinforce that our mass prosperity strategy should be human capital and formal jobs.
A strong case for human capital-driven productivity is our software employment — 0.8 per cent of workers generate 8 per cent of GDP.
This case is reinforced by remittances from our overseas population of less than 2 per cent of our resident population crossing $100 billion last year.
A World Bank report suggests that the qualitative shift during the previous five years from low-skilled, informal employment in Gulf countries (the share of Saudi Arabia, the UAE, Kuwait, Oman, and Qatar dropped from 54 per cent to 28 per cent) to high-skilled formal jobs in high-income countries (the share of the US, UK, and Singapore increased from 26 per cent to 36 per cent) is significant.
Last year, the US replaced the UAE as the single biggest source country with 23 per cent of remittances. Our rich forex remittance harvest — roughly 25 per cent higher than FDI and 25 per cent less than software exports — is fruit from the tree of human capital and formal jobs.
A modern state is a welfare state, but this does not default to muscular fiscal and monetary policy. Monetary policy is, at best, a placebo, painkiller, or steroid especially since credit availability is a bigger problem in India than credit cost.
And if fiscal deficits could make countries rich, no country would be poor. The freebie rejection by Gujarat’s electorate is heartening but this generationally unfair policy will resurface in the 2024 national elections.
Stay with science, go slow on GM (Page no. 13)
(GS Paper 3, Biotechnology)
Those who oppose GM crops, and favour an agro-ecological or biosafety or precautionary approach, are repeatedly derided as “unscientific” and “Luddites”.
Transgenic technology, unlike other technologies, is uncontrollable and irreversible after environmental release. Living Modified Organisms (LMOs), as the Cartagena Protocol on Biosafety refers to Genetically Modified Organisms (GMOs), propagate themselves and proliferate.
This process cannot be reversed. Therefore, any deliberate environmental release has to be only after thorough, independent, peer-reviewed assessment of long-term implications.
The precautionary principle is a cornerstone because of the unpredictability and time lag of serious outcomes manifesting in highly complex living systems, and their irreversibility.
To draw a parallel, not a single one of 330 invasive species (for example, lantana, parthenium) in India has yet been eliminated, despite estimated damage of Rs 8.3 trillion by just 10 of them!
More than 25 years after their introduction, GM crops are still globally grown in just 29 out of 172 countries. Moreover, 91 per cent of GM crop area continues to be in just five countries (USA, Brazil, Argentina, Canada, India).
Most countries of Europe and Japan, Israel, Russia, Malaysia etc., do not grow GM crops. In China, a first adopter, Bt cotton area has been declining and non-GM hybrid technology is used for rapeseed/mustard.
Only two traits are present in over 85 per cent of GM crops grown — herbicide tolerance (HT, where crop plants are modified to withstand large amounts of toxic weed-killing chemicals), and/or insect resistance (pesticidal toxin, usually Bt, is produced inside the plant). In 2000, 761 scientists warned of adverse impacts. Scientific evidence shows that adverse impacts are expanding.
HT crops result in not only ecological damage, but human health impacts for consumers. Like tobacco, once declared safe, the effects take long to manifest. Beekeepers say that HT mustard will affect honey production and contaminated honey will damage exports.
Explained
Changes to the Co-operative Act (Page no. 15)
(GS Paper 2, Polity and Governance)
The Lok Sabha referred the Multi-State Co-operative Societies (Amendment) Bill 2022 to a joint committee of Parliament.
The Bill was introduced on December 7, when Opposition members argued that it seeks to “take away” state governments’ rights, and demanded that it be sent to the standing committee.The Bill is aimed at overhauling the existing law, which was enacted 20 years ago.
Cooperatives are organisations formed at the grassroots level by people to harness the power of collective bargaining in the marketplace.
This can mean different kinds of arrangements, such as using a common resource or sharing capital, to derive a common gain that would otherwise be difficult for an individual producer to get.
In agriculture, cooperative dairies, sugar mills, spinning mills etc. are formed with the pooled resources of farmers who wish to process their produce.
Cooperatives are a state subject under the Constitution, meaning they come under the state governments’ jurisdiction, but there are many societies whose members and areas of operation are spread across more than one state. For example, most sugar mills along the districts on the Karnataka-Maharashtra border procure cane from both states.
The existing law — the Multi-State Co-operative Societies Act (MSCS) of 2002 — was enacted by the then Atal Bihari Vajpayee government for managing them.
Cooperatives of more than one state are registered under the MSCS Act. Their board of directors has representation from all states they operate in.
Administrative and financial control of these societies is with the central registrar, with the law making it clear that no state government official can wield any control over them.
At that time, Cooperation was a department under the Ministry of Agriculture. However, on July 6, 2021, the government carved out a separate Cooperation Ministry and Shah became the first Cooperation Minister of the country. Soon after taking charge of the Ministry, he announced the bringing in of a new National Cooperative Policy.
BF.7 sub-variant (Page no. 15)
(GS Paper 2, Health)
The current surge in Covid-19 infections in China is believed to be driven by the BF.7 sub-variant of Omicron that is circulating in that country.
This isn’t the first time that BF.7 has made news — in October, it started to replace the variants that were then dominant in the United States and several European countries.
When viruses mutate, they create lineages and sub-lineages — like the main trunk of the SARS-CoV-2 tree sprouting branches and sub-branches. The BF.7 is the same as BA.5.2.1.7, which is a sub-lineage of the Omicron sub-lineage BA.5.
A study published in ‘Cell Host and Microbe’ journal earlier this month reported that the BF.7 sub-variant has a 4.4-fold higher neutralisation resistance than the original D614G variant — meaning that in a lab setting, antibodies from a vaccinated or infected individual were less likely to destroy BF.7 than the original Wuhan virus that spread worldwide in 2020.
But BF.7 is not the most resilient sub-variant — the same study reported a more than 10-fold higher neutralisation resistance in another Omicron sub-variant called BQ.1.
A higher neutralisation resistance means there is a higher likelihood of the variant spreading in a population and replacing other variants.
BF.7 accounted for more than 5% of US cases and 7.26% of UK cases in October. Scientists in the West were watching the variant closely; however, there was no dramatic increase in the number of cases or hospitalisations in these countries.
The January 2022 wave in India was driven by the BA.1 and BA.2 sub-variants of Omicron. The sub-variants BA.4 and BA.5 that followed were never as prevalent in India as they were in European countries; thus, India saw very few cases of BF.7 (which is an offshoot of BA.5).
As per data from India’s national SARS-CoV-2 genome sequencing network, BA.5 lineages accounted for only 2.5% of cases in November.
At present, a recombinant variant XBB is the most common variant in India, accounting for 65.6% of all cases in November.
Experts believe that it is not the higher transmissibility or immune evasiveness of the BF.7 variant that led to the increase in cases in China, rather an immune-naïve population drove the numbers.
Economy
Next crisis will come from private cryptos: RBI Governor (Page no. 17)
(GS Paper 3, Economy)
Reserve Bank of India Governor Shaktikanta Das warned that private cryptocurrencies, if allowed to grow, would lead to the ‘next financial crisis’ and reiterated his stance to prohibit them.
Das said the cryptocurrencies have certain huge inherent risks which could pose threat to the country’s macroeconomic and financial stability.
After all the developments over the last one year, including the latest episode on the built around FTX, I don’t think we need to say anything more about our stance (on crypto currencies).
Private cryptocurrencies owe their origin to bypassing and to breaking the system, the Governor said, adding that these currencies do not believe in the central bank currency and also in the regulated financial world.
The Governor said that according to some estimates, the total value of cryptocurrencies has currently shrunk to $140 billion from $180 billion or $188 billion.
“The change in value in any so-called product is the function of the market. But unlike any other asset or product, our main concern about crypto is that it doesn’t have any underlying, whatsoever.
Speaking on the economy, the Governor said despite the slowdown in global growth, the underlying economic activity in India continues to remain strong.
He said most of the 70 fast moving indicators of the economy, which the RBI monitors, are in the green zone, reflecting that they all are growing.
In its December monetary policy review, the RBI slashed the GDP forecast for fiscal 2023 to 6.8 per cent from an earlier estimate of 7 per cent. Das said the revision was done after considering the impact of the weak external factors and on the Indian economy.
The Governor said there has been a very coordinated approach between the RBI and the central government to control inflation.
Before easing to 5.88 per cent in November, the consumer price-based inflation (CPI) remained above 6 per cent, the upper band of the government mandated inflation target for RBI, for 10 months starting January 2022.