THE NATIONAL INVESTIGATION AGENCY

The Mumbai attack by international terrorist organisations shook the psyche of every Indian including the political leaders.The kind of public outcry which erupted was unprecedented both in terms of number and intensity. The Govt lost no time and threw away the wardrob boy, Home Minister quickly and undertook a number of measures. It included establishment of much talked and needed Federal Investigating Agency with more sharp incisors and canine in the Jaws. It is in this perspective, the Parliament has passed the NIA bill and thus the NIA came into being. Simultaneously the Unlawful Activities (Prevention) Amendment Bill was also passed. It gives extra leverage to the law enforcing agencies in dealing with the acts of terror and related organised crime and low intensitly war which is going on for more than decades after the Indo- Pakistan war of 1971. 

HERE IS THE TEXT OF THE ACT WHICH THE PARLIAMENT HAS PASSED-

THE NATIONAL INVESTIGATION AGENCY ACT, 2008

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the National Investigation Agency Act, 2008.

(2) It extends to the whole of India and it applies also—

(a) to citizens of India outside India;

(b) to persons in the service of the Government wherever they may be; and

(c) to persons on ships and aircrafts registered in India wherever they may be.

2. (1) In this Act, unless the context otherwise requires,—

(a) “Agency” means the National Investigation Agency constituted under section 3 ;

(b) “Code” means the Code of Criminal Procedure 1973;

(c) “High Court” means the High Court within whose jurisdiction the Special Court is situated;

(d) “prescribed” means prescribed by rules;

(e) “Public Prosecutor” means a Public Prosecutor or an Additional Public Prosecutor or a Special Public Prosecutor appointed under section 15;

(f) “Schedule” means Schedule to this Act;

(g) “Scheduled Offence” means an offence specified in the Schedule;

(h) “Special Court” means a Special Court constituted under section 11 or, as the

case may be, under section 21;

(i) words and expressions used but not defined in this Act and defined in the Code shall have the meanings respectively assigned to them in the Code.

(2) Any reference in this Act to any enactment or any provision thereof shall, in

relation to an area in which such enactment or such provision is not in force, be construed as a reference to the corresponding law or the relevant provision of the corresponding law, if any, in force in that area.

CHAPTER II

NATIONAL INVESTIGATION AGENCY

3. (1) Notwithstanding anything in the Police Act, 1861, the Central Government mayconstitute a special agency to be called the National Investigation Agency for investigation and prosecution of offences under the Acts specified in the Schedule.

(2) Subject to any orders which the Central Government may make in this behalf,officers of the Agency shall have throughout India in relation to the investigation of scheduled offences and arrest of persons concerned in such offences, all the powers, duties, privileges and liabilities which police officers have in connection with the investigation of offences committed therein.

(3) Any officer of the Agency of or above the rank of Sub-Inspector may, subject to any orders which the Central Government may make in this behalf, exercise throughout India, any of the powers of the officer-in-charge of a police station in the area in which he is present for the time being and when so exercising such powers shall, subject to any such orders as aforesaid, be deemed to be an officer-in-charge of a police station discharging the functions of such an officer within the limits of his station.

4. (1) The superintendence of the Agency shall vest in the Central Government.

(2) The administration of the Agency shall vest in an officer designated as the Director-General appointed in this behalf by the Central Government who shall exercise in respect of the Agency such of the powers exercisable by a Director-General of Police in respect of the police force in a State, as the Central Government may specify in this behalf.

5. Subject to the provisions of this Act, the Agency shall be constituted in such

manner as may be prescribed and the conditions of service of persons employed in the

Agency shall be such as may be prescribed.

Definitions.

Constitution of National Investigation Agency.

5 of 1861.

Superintendence of National investigation Agency.

Manner of constitution of Agency and conditions of service of members.

2 of 1974.

CHAPTER III

INVESTIGATION BY THE NATIONAL INVESTIGATION AGENCY

6. (1) On receipt of information and recording thereof under section 154 of the Code

relating to any Scheduled Offence the officer-in-charge of the police station shall forward the report to the State Government forthwith.

(2) On receipt of the report under sub-section (1), the State Government shall forward the report to the Central Government as expeditiously as possible.

(3) On receipt of report from the State Government, the Central Government shall

determine on the basis of information made available by the State Government or received from other sources, within fifteen days from the date of receipt of the report, whether the offence is a Scheduled Offence or not and also whether, having regard to the gravity of the offence and other relevant factors, it is a fit case to be investigated by the Agency.

(4) Where the Central Government is of the opinion that the offence is a Scheduled

Offence and it is a fit case to be investigated by the Agency, it shall direct the Agency to investigate the said offence.

(5) Notwithstanding anything contained in this section, if the Central Government is

of the opinion that a Scheduled Offence has been committed which is required to be

investigated under this Act, it may, suo motu, direct the Agency to investigate the said offence.

(6) Where any direction has been given under sub-section (4) or sub-section (5), the

State Government and any police officer of the State Government investigating the offence shall not proceed with the investigation and shall forthwith transmit the relevant documents and records to the Agency.

(7) For the removal of doubts, it is hereby declared that till the Agency takes up the investigation of the case it shall be the duty of the officer-in-charge of the police station to continue the investigation.

7. While investigating any offence under this Act, the Agency, having regard to the

gravity of the offence and other relevant factors, may—

(a) if it is expedient to do so, request the State Government to associate itself

with the investigation; or

(b) with the previous approval of the Central Government transfer the case to the

State Government for investigation and trial of the offence.

8. While investigating any Scheduled Offence the Agency may also investigate any

other offence which the accused is alleged to have committed if the offence is connected with the Scheduled Offence.

9. The State Government shall extend all assistance and co-operation to the Agency

for investigation of the Scheduled Offences.

10. Save as otherwise provided in this Act, nothing contained in this Act shall affect the powers of the State Government to investigate and prosecute any Scheduled Offence or other offences under any law for the time being in force.

Investigation of Scheduled Offences. Power to transfer investigation to State Government. Power to investigate connected offences. State Government to extend assistance to National Investigation Agency. Power of State Government to investigate Scheduled Offences.

CHAPTER IV

SPECIAL COURTS

11. (1) The Central Government shall by notification in the Official Gazette, for the trial of Scheduled Offences, constitute one or more Special Courts for such area or areas, or for such case or class or group of cases, as may be specified in the notification.

(2) Where any question arises as to the jurisdiction of any Special Court, it shall be referred to the Central Government whose decision in the matter shall be final.

(3) A Special Court shall be presided over by a judge to be appointed by the Central

Government on the recommendation of the Chief Justice of the High Court.

(4) The Agency may make an application to the Chief Justice of the High Court for

appointment of a Judge to preside over the Special Court .

(5) On receipt of an application under sub-section (4), the Chief Justice shall, as soon as possible and not later than seven days, recommend the name of a judge for being appointed to preside over the Special Court.

(6) The Central Government may, if required, appoint an additional judge or additional judges to the Special Court, on the recommendation of the Chief Justice of the High Court.

(7) A person shall not be qualified for appointment as a judge or an additional judge of a Special Court unless he is, immediately before such appointment, a Sessions Judge or an Additional Sessions Judge in any State.

(8) For the removal of doubts, it is hereby provided that the attainment by a person

appointed as a judge or an additional judge of a Special Court of the age of superannuation under the rules applicable to him in the service to which he belongs shall not affect his continuance as such judge or additional judge and the Central Government may by order direct that he shall continue as judge until a specified date or until completion of the trial of the case or cases before him as may be specified in that order.

(9) Where any additional judge or additional judges is or are appointed in a Special

Court, the judge of the Special Court may, from time to time, by general or special order, in writing, provide for the distribution of business of the Special Court among all judges including himself and the additional judge or additional judges and also for the disposal of urgent business in the event of his absence or the absence of any additional judge.

12. A Special Court may, on its own motion, or on an application made by the Public

Prosecutor and if it considers it expedient or desirable so to do, sit for any of its proceedings at any place other than its ordinary place of sitting.

13. (1) Notwithstanding anything contained in the Code, every Scheduled Offence

investigated by the Agency shall be tried only by the Special Court within whose local jurisdiction it was committed.

(2) If, having regard to the exigencies of the situation prevailing in a State if,—

(a) it is not possible to have a fair, impartial or speedy trial; or 

(b) it is not feasible to have the trial without occasioning the breach of peace or

grave risk to the safety of the accused, the witnesses, the Public Prosecutor or a judge of the Special Court or any of them; or

(c) it is not otherwise in the interests of justice,the Supreme Court may transfer any case pending before a Special Court to any other Special Court within that State or in any other State and the High Court may transfer any case pending before a Special Court situated in that State to any other Special Court within the State.

Power of Central Government to constitute Special Courts. Place of sitting. 

Jurisdiction of Special Courts.

(3) The Supreme Court or the High Court, as the case may be, may act under this

section either on the application of the Central Government or a party interested and any such application shall be made by motion, which shall, except when the applicant is the Attorney-General for India, be supported by an affidavit or affirmation.

14.(1) When trying any offence, a Special Court may also try any other offence with

which the accused may, under the Code, be charged at the same trial if the offence is connected with such other offence.

(2) If, in the course of any trial under this Act of any offence, it is found that the accused person has committed any other offence under this Act or under any other law, the Special Court may convict such person of such other offence and pass any sentence or award punishment authorised by this Act or, as the case may be, under such other law.

15.(1) The Central Government shall appoint a person to be the Public Prosecutor and

may appoint one or more persons to be the Additional Public Prosecutor or Additional 

Public Prosecutors:Provided that the Central Government may also appoint for any case or class or group of cases a Special Public Prosecutor.

(2) A person shall not be qualified to be appointed as a Public Prosecutor or an Additional Public Prosecutor or a Special Public Prosecutor under this section unless he has been in practice as an Advocate for not less than seven years or has held any post, for a period of not less than seven years, under the Union or a State, requiring special knowledge of law.

(3) Every person appointed as a Public Prosecutor or an Additional Public Prosecutor

or a Special Public Prosecutor under this section shall be deemed to be a Public Prosecutor within the meaning of clause (u) of section 2 of the Code, and the provisions of the Code shall have effect accordingly.

16. (1) A Special Court may take cognizance of any offence, without the accused being

committed to it for trial, upon receiving a complaint of facts that constitute such offence or upon a police report of such facts.

(2) Where an offence triable by a Special Court is punishable with imprisonment for a

term not exceeding three years or with fine or with both, the Special Court may, notwithstanding anything contained in sub-section (1) of section 260 or section 262 of the Code, try the offence in a summary way in accordance with the procedure prescribed in the Code and the provisions of sections 263 to 265 of the Code, shall so far as may be, apply to such trial: Provided that when, in the course of a summary trial under this sub-section, it appears to the Special Court that the nature of the case is such that it is not desirable to try it in a summary way, the Special Court shall recall any witnesses who may have been examined and proceed to re-hear the case in the manner provided by the provisions of the Code for the trial of such offence and the said provisions shall apply to and in relation to a Special Court as they apply to and in relation to a Magistrate: Provided further that in the case of any conviction in a summary trial under this section, it shall be lawful for a Special Court to pass a sentence of imprisonment for a term not exceeding one year and with fine which may extend to five lakh rupees. 

(3) Subject to the other provisions of this Act, a Special Court shall, for the purpose of trial of any offence, have all the powers of a Court of Session and shall try such offence as if it were a Court of Session so far as may be in accordance with the procedure prescribed in the Code for the trial before a Court of Session.

(4) Subject to the other provisions of this Act, every case transferred to a Special Court under sub-section (2) of section 13 shall be dealt with as if such case had been transferred under section 406 of the Code to such Special Court.Powers of Special Courts with respect to other offences.

Public Prosecutors.Procedure and powers of Special Courts.

(5) Notwithstanding anything contained in the Code, but subject to the provisions of

section 299 of the Code, a Special Court may, if it thinks fit and for reasons to be recorded by it, proceed with the trial in the absence of the accused or his pleader and record the evidence of any witness, subject to the right of the accused to recall the witness for cross-examination. 

17. (1) Notwithstanding anything contained in the Code, the proceedings under this

Act may, for reasons to be recorded in writing, be held in camera if the Special Court so desires. 

(2) On an application made by a witness in any proceeding before it or by the

Public Prosecutor in relation to such witness or on its own motion, if the Special Court is satisfied that the life of such witness is in danger, it may, for reasons to be recorded in writing, take such measures as it deems fit for keeping the identity and address of such witness secret.

(3) In particular, and without prejudice to the generality of the provisions of subsection 

(2), the measures which a Special Court may take under that sub-section may include—

(a) the holding of the proceedings at a place to be decided by the Special Court;

(b) the avoiding of the mention of the names and addresses of the witnesses in

its orders or judgments or in any records of the case accessible to public;

(c) the issuing of any directions for securing that the identity and address of the

witnesses are not disclosed; 

(d) a decision that it is in the public interest to order that all or any of the

proceedings pending before such a Court shall not be published in any manner.

(4) Any person who contravenes any decision or direction issued under sub-section(3) shall be punishable with imprisonment for a term which may extend to three years and

with fine which may extend to one thousand rupees.

18. The trial under this Act of any offence by a Special Court shall be held on day-today basis on all working days and have precedence over the trial of any other case against the accused in any other court (not being a Special Court) and shall be concluded in preference to the trial of such other case and accordingly the trial of such other case shall, if necessary, remain in abeyance.

19. Where, after taking cognizance of any offence, a Special Court is of the opinion

that the offence is not triable by it, it shall, notwithstanding that it has no jurisdiction to try such offence, transfer the case for the trial of such offence to any court having jurisdiction under the Code and the Court to which the case is ransferred may proceed with the trial of the offence as if it had taken cognizance of the offence.

20. (1) Notwithstanding anything contained in the Code, an appeal shall lie from any

judgment, sentence or order, not being an interlocutory order, of a Special Court to the High Court both on facts and on law.

(2) Every appeal under sub-section (1) shall be heard by a bench of two Judges of the

High Court and shall, as far as possible, be disposed of within a period of three months from the date of admission of the appeal.

(3) Except as aforesaid, no appeal or revision shall lie to any court from any judgment,sentence or order including an interlocutory order of a Special Court.

(4) Notwithstanding anything contained in sub-section (3) of section 378 of the Code,

an appeal shall lie to the High Court against an order of the Special Court granting or refusing bail.

(5) Every appeal under this section shall be preferred within a period of thirty days

from the date of the judgment, sentence or order appealed from:

Protection of witnesses. Trial by Special Court to have precedence.

Power to transfer cases to regular courts.

Appeals.

Provided that the High Court may entertain an appeal after the expiry of the said

period of thirty days if it is satisfied that the appellant had sufficient cause for not preferring the appeal within the period of thirty days:Provided further that no appeal shall be entertained after the expiry of ninety days.

21. (1) The State Government may constitute one or more Special Courts for the trial of offences under any or all the enactments specified in the Schedule.

(2) The provisions of this Chapter shall apply to the Special Courts constituted by the State Government under sub-section (1) and shall have effect subject to the following modifications, namely—

(i) references to “Central Government” in sections 11 and 15 shall be construed

as references to State Government;

(ii) reference to “Agency” in sub-section (1) of section 13 shall be construed as

a reference to the “investigation agency of the State Government”;

(iii) reference to “Attorney-General for India” in sub-section (3) of section 13

shall be construed as reference to “Advocate-General of the State”.

(3) The jurisdiction conferred by this Act on a Special Court shall, until a Special Court is constituted by the State Government under sub-section (1) in the case of any offence punishable under this Act, notwithstanding anything contained in the Code, be exercised by the Court of Session of the division in which such offence has been committed and it shall have all the powers and follow the procedure provided under this Chapter.

(4) On and from the date when the Special Court is constituted by the State Government the trial of any offence investigated by the State Government under the provisions of this Act, which would have been required to be held before the Special Court, shall stand transferred to that Court on the date on which it is constituted.

CHAPTER V

MISCELLANEOUS

22. The High Court may, by notification in the Official Gazette, make such rules, as it may deem necessary for carrying out the provisions of this Act relating to Special Courts within its territory.

23. (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette make such provisions, not inconsistent with the provisions of this Act, as may appear to it to be necessary or expedient for removing the difficulty:Provided that no order shall be made, under this section after the expiration of two years from the commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.

24. (1) The Central Government may, by notification in the official Gazette, make rules for carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality to the foregoing power, such rules may provide for all or any of the following matters, namely:—

(a) the manner of constitution of the Agency and the conditions of service of

persons employed in the Agency under section 5; Power of State Government to institute Special Courts. Power of High Courts to make rules.

Power to remove difficulties.

Power to make rules.

(b) any other matter which is required to be, or may be, prescribed.

25. Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agrees in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Laying of rules.

THE SCHEDULE

[See section 2(1)(f)]

1. The Atomic Energy Act 1962 (33 of 1962);

2. The Unlawful Activities (Prevention) Act, 1967 (37 of 1967);

3. The Anti-Hijacking Act, 1982 (65 of 1982);

4. The Suppression of Unlawful Acts Against Safety of Civil Aviation Act, 1982 (66 of

1982);

5. The SAARC Convention on (Suppression of Terrorism) Act 1993 (36 of 1993);

6. The Suppression of Unlawful Acts Against Safety of Maritime Navigation and Fixed

Platforms on Continental Shelf Act 2002 (69 of 2002);

7. The Weapons of Mass Destruction and Their Delivery Systems (Prohibition of

Unlawful Activities) Act, 2005 ( 21of 2005);

8. Offences under—

(a) Chapter VI of the Indian Penal Code [sections 121 to 130 (both inclusive)];

(b) Sections 489-A to 489-E (both inclusive) of the Indian Penal Code.

बिहार में स्ट्राइक; कितना उचित?

THE indefinite strike of Non-gazetted employees (NGE) of the state govt entered 7th day today. All efforts of the govt so far has failed to yield any positive results and all the govt offices right from state secretariat to block look deserted. Strike sponsored by Bihar State Non-Gazetted Employees Federation (BSNGEF),(BSNGEF) Gope group, Bihar State Secretariat Services Association (BSSA) and a host of similar organisations began on 7th January has brought the state’s machinery to a grinding halt.

Majority of the departments are already lagging behind the target in spending the ‘Plan head’ allotment. In fact, up to 31st October, average percentage of expenditure in ‘Plan head’ is only 31.91%. Some of the key departments like IT, Commercial taxes, sugar cane transport and Excise have failed to make any expenditure and it is hopelessly zero percent. The ongoing strike has made the task of achieving target by end of this fiscal, almost impossible.

Some people say that had the govt formed ‘fitment committee’ somewhere in sep-October of the previous month; this strike could have been averted. The outspoken ministers issued statements in the press that the govt is willing to announce 6th pay panel on the eve of dussehra but the govt did not announce anything even in the last week of December, therefore the employees got impatient.

On the other hand the govt is in tight financial position. According to the state govt’s budget estimate, state’s own revenue generation for current fiscal is 5680.71 crore, whereas; the state’s share in central taxes is 19094.31 crores. The govt’s plan expenditure is 135000 crore (it includes central grants and central sponsored schemes also). The govt has to make about Rs/-8000 crore expenditure on pay and 2000 crores on pension.

The govt has already accepted to pay the employees according to 6th pay panel report, which would add about 30% to the state’s coffer increasing the expenditure by about 3000 crore annually.

The present hitch is about the payment of arrears. The govt wants to give it from 1st April, 2007, whereas; the agitating employees demand it from 1st January, 2006. If the govt accepts this demand, it would have to make an additional about 2000 crore payment. Thus the govt will be left with a very meagre amount for the developmental as well as other plan and non-plan expenditure for the state.

Some senior officer on the condition of anonymity said that had IAS, IPS and IFS officers not taken their arrears from 1st January, 2006, the NGE unions would have not resorted to strikes, because the leaders of the NGE say that if the state’s coffer is not in a happy position, why did Babus take arrears from 1st January, 2006. They further say that if these babus refund the arrears, they would call off their strikes.

WHAT GOVERNMENT SHOULD DO

The government must come up with a transparent and lucid statement before the public at large and should tell them what the govt is doing. The IAS and IPS and other all India class I officer should voluntarily eschew their claim of arrears from January the 1st,2006, and tell the govt to re-fund back their payment. This would give a very good signal to the denizens of the state. It apparently looks discriminatory if they withdraw arrears from January 2006 and ask other to do the same from April,2007. We all know that the state is under tremendous financial constrainsts. On the one hand the millions of people are half fed and we demand for extra. Is it fair. We all should contribute to the economic development of the state. The CM is desperately trying to move things in good direction, we all , therefore should help him in this effort

नो मोरे हैप्पी ARRESTS

The Parliament passed Criminal Procedure Code (CrPC) amendment Bill,2008 in its last session and gave country an omnibus law. The Amendment seeks to amend section 41 of the CrPC of 1973 and added some commendable safeguards to it.

WHAT IS THE EXISTING LAW WITH RESPECT TO ARRESTS U/S 41-

41. When police may arrest without warrant

(1) Any police officer may without an order from a Magistrate and without a warrant, arrest any person— 

(a) who has been concerned in any cognizable offence, or against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists, of his having been so concerned; or 

(b) who has in his possession without lawful excuse, the burden of proving which excuse shall lie on such person, any implement of house-breaking; or 

(c) who has been proclaimed as an offender either under this Code or by order of the State Government; or 

(d) in whose possession anything is found which may reasonably be suspected to be stolen property and who may reasonably be suspected of having committed an offence with reference to such thing; or 

(e) who obstructs a police officer while in the execution of his duty, or who has escaped, or attempts to escape, from lawful custody; or 

(f) who is reasonable suspected of being a deserter from any of the Armed Forces of the Union; or 

(g) who has been concerned in, or against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists, of his having been concerned in, any act committed at any place out of India which, if committed in India, would have been punishable as an offence, and for which he is, under any law relating to extradition, or otherwise, liable to be apprehended or detained in custody in India; or 

(h) who, being a released convict, commits a breach of any rule made under sub-section (5) of section 365; or 

(i) for whose arrest any requisition, whether written or oral, has been received from another police officer, provided that the requisition specifies the person to be arrested and the offence or other cause for which the arrest is to be made and it appears therefrom that the person might lawfully be arrested without a warrant by the officer who issued the requisition 

(2) Any officer in charge of a police station may, in like manner, arrest or cause to be arrested any person, belonging to one or more of the categories of person specified in section 109 or section 110 

In fact, this is the section which provides ample scope to the police to misuse of

power to make arrests. Even the Police Commission has said that about 60% of the arrests made by the police are unnecessary and could be avoided. Such arrests not only infringes upon the fundamental rights of the citizen as enshrined in the Constitutions of India but also increases burden on Jails. According to an estimate such arrests increases the burden on jails up to 43%. Thus such arrests are not only creating legal but causing administrative inconvenience also. It is in this backdrop, The National Law commission in its 177th report had suggested certain changes in the provisions related to powers of arrests. This amendment has not only incorporated these suggestions but also has taken care of the detailed guidelines of Hon'ble Supreme Court given in the famous D.K.Basu vs State of West Bengal case.

WHAT WOULD BE THE SITUATION NOW?

Now, the Police cannot make arrest in an alleged offence for which minimum stipulated punishment is less than seven years and that too not merely on suspicion. Arrests can only be made on reasonable complaint and credible information. This amendment is likely to stop or at least check 'the Happy arrests' or 'whimsical arrests' by the Policemen. The police can use procedure to serve notice to the suspects to appear before it instead of outright arrests.

IS THIS SUFFICIENT TO STOP MISUSE OF POWER OR SOMETHING ELSE SHOULD BE DONE

It is not sufficient. In fact in normal alleged crime or suspicion of alleged crime, the accused should be heard and be given sufficient time to prove him or herself before arrests.Once the person gets arrested, his or her image gets tarnished no matter after few days he is released on bail or even acquitted. The arrest should be made only the person is not cooperating in the investigation or is likely to escape from the country.

SHOULD PUBLIC SECTORS BE ALLOWED TO INVEST IN MUTUAL FUNDS?

NAVARATNA; YOU HAVE STILL A VITAL ROLE TO PLAY

The Cabinet committee on economic affairs (CCEA) discussed and gave its nod for giving extension till further order on the scheme in which Navratana PSUs had been allowed to invest 30% of their profit in Mutual Funds. The decision to this effect had been taken in 2007 subject to annul review; the period had expired on 1st August, 2008 therefore required review.

This decision is said to have been taken in order to revive the MF field, which is in recession due to the global economic slowdown. Figure available with the ministry of finance suggests that the assets under management of MF has dwindled from Rs/ 5.50 lakh crore in 2007 to 4 lakh crore only in 2008.

IS THIS DECISION WISE?

The decision needs to be analysed in the present context of worldwide recession. If we look at the causes which led to failure of Banks in America and many parts of Europe, we can have an idea that why these banks failed and went bankrupt. American Banking as an institution is said to have started in 1865, when National Banking Act was passed in this year. It was initially based on British model, which prohibits banks from making investments in stock markets. There was another model, called German model which allowed Banks for making investment in the stock markets. 

As far as the present global economic crisis in American banking industries in concerned, its genesis was laid in 1999, when one Graham Leech Blibley Act was passed by Bill Clinton and allowed the banks to make investment in the stock markets. This marked the end of British model of banking and gave these financial institutions unfettered and excessive financial leverage. The infamous ‘housing bubble’ was created thereafter due to subprime lending, which ultimately culminated into burst of housing bubble and subsequently depression.

HOW ARE NAVARATNAS DIFFERENT FROM OTHER COMMERCIAL ESTABLISHMENTS-

The govt is going to commit the same kind of mistake by allowing the Navaratna to go for investment in MFs; which is not a safe business,as American did in allowing the banks to go for investments in stock markets after Graham leech blibley Act of 1999. Public Sector Undertakings (PSUs) are the ‘commanding heights’ of our economy, which Nehru used to boasts off. These PSUs are not typical business and industrial houses because they have been transfused with the bloods of billions of Indians. The value of their assets of lands, plants and machineries, govt budgetary supports etc cannot be calculated in terms of money. These assets are the repository of billions of Indians. The assets obviously are not of the board of directors or the management of these companies; but of the billions of the Indians. One can disagree on this on pretext of being too emotional, but it is not an emotional argument against this proposal; rather it is base on ‘pure economics’ also. The govt is committing the same set of mistakes which the Americans and a host of European countries did and are thereby facing the wrath of millions of their citizens.

How can a set of people sitting in board rooms, decide the fate of the assets of billions of tax payer Indians by allowing them to invest the profits in the MFs. The capital market, we know, are played into the hands of profiteers and speculators despite regulatory regime of SEBI and ministries. We have had experiences like this in the past and hence cannot deny the fowl game if played in future. If it happens, it would be disastrous and catastrophic both in terms of financially and sentimentally.

WHAT SHOULD BE DONE FOR THE PROFITS OF PSUs-

It is true that the profits earned by these PSUs have swelled over years. In fact some sort of insulated affects of global recession on Indian economy are also due the spectacular performances by these Navaratanas. If we look at the fiscal performances by these units in the fiscal year 2007-08, they are magnificent. For example following are the net profits of some of the navaratans in crores during the said financial years are as:

NTPC- 7,12,930 for 2006-07

ONGC- 167016 for 2006-07

BHEL- 2,859 for 2006-07

IOC- 6963 for 2007-08

SAIL - 7,536.78 for 2007-08

MTNL - 110 for 2007-08

GAIL - 2601 for 2007-08

BPCL - 121O.20 for 2007-08

HPCL - 13460 for 2007-08

The million dollar questions are that have the capital of govt of India been repaid? Have these PSUs paid back the values of govt lands which had been given to them free of cost when they were being constructed? Are we not exposing these PSUs to unhygienic financial speculative markets? These questions need answers before we go into this venture of investing into MFs.

Is it wise to invest 30% of these hard earned profits into MFs, which is a risk oriented investment? Can we not use these profits in a more safe and developmental areas?

The govt must use this profit in a wider perspective. The govt can create a separate fund called ‘public sector creation fund’ and use money from this fund for creating and construction new Public sector units. With the opening up of the economy in 1990s, the construction of new public sector units was almost stopped. Now when it has been proved beyond doubt that the PSUs have helped our nation achieve ‘growth with justice’ over a period of time, we can seriously think in terms of creating more PSUs on lines of navaratana. After all govt is not an organisation which is based on making profits only, rather it has to do business blended with social justice and economic equalities. These public sector had have helped a lot in achieving this goal. 

With the passage of time we are faced with a lot of new challenges. We need to have more energy based on non-conventional source. We can create National Solar Power Corporation like company and tap unlimited solar energy. There are other areas also where we can construct new companies. These huge profits can also be used in modernisation and diversification of these PSUs. After all every crisis led us to innovation; innovation led to betterment and subsequently prosperity.

TRAFFICKING IN WOMEN AND CHILD

  

   Historical Perspective –

Trafficking as such is not a modern day development. It existed during ancient and medieval period across the earth. We have heard the name of Amrapali, a famous dancer in the Lichhavi republic in the erstwhile republics in ancient India. During Budha and Jain period, we came across the word Ganika. It refers to prostitute. Thus, there is sufficient evidence during this period, that the trafficking in one form or the other did exist. In Mauryan period also, we came across the word Ganika. In Ashokan edicts and inscriptions, we find references which suggest that the institution of prostitution existed. The sale and purchase of woman during medieval period was very common. With the advent of Mongols, Afghans, Turks and Moguls, the conditions of woman in many part of India further deteriorated. Women were looted and distributed like Booty after the war. Thus, this was a common phenomenon during the ancient and medieval times. In many parts of the world also, the trafficking in women was present in form and the other. We have many references of slave trade in many parts of the world.

• IN THE MODERN PERIOD-

In this period, the nature, magnitude, intensity and character of trafficking underwent radical change. According to one estimate, about 7 Laks women and children are trafficked across the world. Trafficking is now considered as the third largest sources of profit for organized crime, behind only drugs and weapons. According to one estimate, the trafficking business’s annual turnover is about 5 to 7 billion dollars. Former Soviet Union is now believed to the largest source of trafficking for prostitution in the world. In nutshell, we can say that there is no country in the world, where trafficking is not found. This is a problem that affects virtually every country in the world. Generally, the flow of trafficking is from less developed country to an industrialized country.

DEFINITION-

Conventionally speaking, the meaning of trafficking is the trading into something which should not be traded in. For example, human trafficking, drug trafficking and human trafficking etc. So far as the definition of Trafficking is concerned, it is set out in article 1 and 2 of the 1949 convention for the suppression on the traffic in persons and of exploitation of the prostitution. It refers to all acts involved in the transport, harboring, or sale of persons within nation or across International borders through coercion, force, kidnapping, deception or fraud for purpose of placing persons in situation of forced labor of services such as forces prostitution domestic servitude, debt bondage or other slavery like practices. In case of minor, the term trafficking connotes a different meaning. Here the children even taken voluntarily and putting in aforesaid servitude comes under the purview of trafficking. 

VICTIMS OF TRAFFICKING-

1. Women and children in general, because they are comparatively more marginalized.

2. Women and Child living in slums in urban areas or working in farm, pretty trading etc. low income is the most important cause for this.According to report of an NGO, Naujawan Bharat Sabha and Bigul Mazdoor Dasta, which is based on the information retrieved from the competent authority under RTI, 7912 children went missing between January, 2007 to June 2008, but police registered only 765 cases. The report further suggests that about 80% of the missing children belong to poor families.

3. Ethnic minorities, illegal migrants, hill tribes and refugees.

4. Women working away from home as domestic servant or otherwise.

5. Children working in hotels, dhabas, restaurants, and homes are easy prey to this trafficking.

6. In hope getting a better life and salary, women and especially young girls fall prey to touts and pimps. 

7. Liberalization, Privatization and Globalization also in away has aggravated this problem.

REASONS FOR TRAFFICING-

1. Poverty is the root cause of this problem. With the advent of globalization, the population tend to move more freely across the border both legally and illegally and falling prey to the greedy criminals of organized crime across the world. With the erosion of the concept of a welfare state, the subjects are now left at the mercy of the market forces.

2. Subordination of women in the society.

3. Other social evils like dowry which sometimes force the fathers to sell off their daughters.

4. Social recognition in which son is preferred to girl.

5. The high demand, worldwide, for trafficked women and children for sex tourism, sex workers, cheap sweatshop, labor and domestic workers.

6. Sex Tourism is a newer concept and is becoming one of the major causes of trafficking. Countries like Australia, Thailand, Hong Kong, Singapore, Malaysia etc. have become heaven of sex tourism. This is attracting hundreds of thousands of women sex workers. The international criminal gangs are operating and earning billions of dollars in this industry.

7. Inadequate and non-stringent laws. Generally laws are such in which prostitutes are punished and the perpetrators got escape free. Although trafficking in children is an offence i.e. sale of child is an offence but abduction of children for begging is still not an offence. For instance if at all it is established that children who are on the traffic signal are being forced by some gang, we can book them in beggary Act, but the traffickers go unscathed. In India the figures of lost children is increasing at an alarming rate, but unfortunately the laws are not being given more incisors in order to see that the trafficker are punished more stringently.For instance, Delhi do not have a law of its own regarding beggars.The National capital still invoke Bombay Prevention of Begging Act, 1959, which lacks teeth to deter the trffickers.

8. Inter-personal, intra and inter regional economic disparities have also added new dimension into it. Large-scale immigration in search of better life and bread, the illegal immigrants are easily made prey to the trafficking.

9. The Child trafficking in India has increased alarmingly due a number of reasons some unrelated to poverty. Luring towards a better life force the children to run from their homes and therefore this should be tackled in a social perspective. No law can prevent it. The breaking of family relations, alcohlism in parents, frequent querreling among them are major causes of this problem. It has been seen in recent times that children of economically better families have also left their homes under above mentioned circumstances. The ultra-nuclear family concept in which the grand parents have lost their space has left the children dependent either on electronic entertainments or on web friendship. Unfortunately both means lack ethos and morality. Both are market oriented and centered on profiteering. The scences of violence, sex, high profile page-3 life styles lure the children of immature and growing minds of the children who sometimes fled from their homes in a hope of getting these things and are trafficked.

ACCORDING TO SURVEY CONDUCTED BY AN NGO ON THE DIRECTION OF SUPREME COURT FOLLOWING MECHANISMS HAVE COME TO LIGHT-

MECHANISMS AND TECHNIQUES OF TRAFFICKING-

REASONS AND PERCENTAGE

BEFRIENDING 16.4

PROMISE OF JOB AND MONEY 52.4

PROMISE OF MARRIAGE 4.5

ADOPTION 0.2

BLACKMAIL 2.8

USE OF FORCE 11.6

PERSUADING HUSBAND FOR 

UNDERGOING TRAFFICKING 0.2

FAMILY TRADITION 2.1

MISC 9.8

1. Women and Children are generally recruited from rural areas and transported to the destinations. In this process, they are handed over and taken over by a number of brokers and intermediaries. 

2. Local contacts.

3. Relatives and friends.

4. Direct sale.

5. Deceit.

6. Debt bondage.

7. Kidnapping.

8. Falsification of documents.

9. Bribes.

10. Transportations

11. Aspiration of better life and better career opportunities caused them to be allured by touts. 

12. Drug addiction.

13. Hotel industry.

STRATEGIES TO COMBAT TRAFFICKING:

1. Through legal and criminal justice system. Law enforcing agencies are required to be sensitized and made sensible by way of training and motivation.

2. Stringent penal provisions for the traffickers. Amendment to the IPSA is on anvil, it should be therefore passed by the parliament at the earliest. It provides for, among other things, non-re-victimisation of the victims. In the existing laws, the victims are placed at par with the offenders in terms of investigation and punishment.

3. Rescue and Rehabilitation system is to be strengthened.

4. Creating awareness among target groups.

5. Making economically self reliant to women.

6. Demand and Supply reduction through public awareness and creating job opportunities at village itself like NAREGA etc.

7. Promoting girl education and women empowerment.

8. Increase in the number of girl and women in security forces.

CONVENTIONS RELATED TO TRAFFICKING

1. INTERNATIONAL AGREEMENT OF 18 MAY 1904 FOR THE SUPPRESSION OF THE WHITE SLAVE TRAFFIC, AS AMENDED BY THE PROTOCOL APPROVED BY THE GENERAL ASSEMBLY OF THE UNITED NATIONS ON 3 DECEMBER 1948.

2. INTERNATIONAL CONVENTION OF 4 MAY 1910 FOR THE SUPPRESSION OF THE WHITE SLAVE TRAFFIC, AS AMENDED BY THE ABOVE-MENTIONED PROTOCOL,

3. INTERNATIONAL CONVENTION OF 30 SEPTEMBER 1921 FOR THE SUPPRESSION OF THE TRAFFIC IN WOMEN AND CHILDREN, AS AMENDED BY THE PROTOCOAL APPROVED BY THE GENERAL ASSEMBLY OF THE UNITED NATIONS ON 20 OCTOBER 1947,

4. SLAVERY CONVENTION,1926

5. FORCED LABOUR CONVENTION, ADOPTED IN 1930.

6. ABOLITION OF FORCED LABOUR CONVENTION ADOPTED IN 1957

7. INTERNATIONAL CONVENTION OF 11 OCTOBER 1933 FOR THE SUPPRESSION OF THE TRAFFIC IN WOMEN OF FULL AGE, AS AMENDED BY THE AFORESAID PROTOCOL. 

8. LEAGUE OF NATIONS DRAFT CONVENTION IN 1937 

9. UNIVERSAL DECLARATION ON HUMAN RIGHTS,1948. IT HAS BEEN TRANSLATED INTO 350 LANGUAGES ACROSS THE WORLD.

10. CONVENTION FOR THE SUPPRESSION OF THE TRAFFIC IN PERSONS AND OF THE EXPLOITATION OF THE PROTITUTION OF OTHERS APPROVED BY GENERAL ASSEMBLY RESOLUTION 317 (IV) OF 2 DECEMBER 1949 AND COME IN TO FORCE IN 1951

11. WORST FORM OF CHILD LABOUR CONVENTION, 1999.

12. PROTOCOL TO PREVENT, SUPRESS AND PUNISH TRAFFICKING IN PERSONS, ESPECIALLY WOMEN AND CHILDREN, SUPPLEMENTING THE UN CONVENTION AGAINST TRANSNATIONAL ORGANISED CRIME, 2000. 

13. SAARC CONVENTION ON PREVENTING AND COMBATING TRAFFICKING IN WOMEN AND CHILDREN FOR PROSTITUTION,2001

14. COUNCIL OF EUROPE CONVENTION ON ACTION AGAINST TRAFFICKING IN HUMAN BEINGS 2005

LAWS RELATED TO PREVENT TRAFFICKING IN INDIA:

Following are some of the legislations which provide protection against trafficking and also provide for punishment to those found involved in it.

1. The Constitution of India. The constitution itself guarantees the protection of women and child against any crime.

2. Immoral Traffic Prevention Act, 1956 popularly known as SITA or IPSA. It provides for stringent punishments to the convicts. It is being amended very soon to make it more stringent for the offenders.

3. Indian Penal Code, 1860.

4. Indian Evidence Act,1872

5. Code of Criminal Procedure, 1973.

6. Bombay police Act, 1951.

7. Delhi Police Act, 1978.

8. Juvenile Justice (Care and Protection of Children) Act, 2000.

9. Probation of Offender Act, 1958.

10. Indecent Representation of Women (prohibition) Act, 1986.

11. Goa Children Act, 2003. This law is considered to be a pioneer in the field of prevention of child trafficking. Law on national level is being mooted out so that it could be made applicable throughout the country.

12.Bombay Prevention of Begging Act, 1959

INITIATIVES TAKEN BY MINISTRY OF WOMEN AND CHILD IN ORDER TO COMBAT TRAFFICKING OF WOMEN AND CHILD:

1. NATIONAL PLAN OF ACTION PREPARED IN 1998.

2. ISSUED GUIDELINES TO ALL STATES TO IMPLEMENT IT.

3. CENTRAL ADVISORY COMMITTEE IN DWAC( DEPT OF WOMEN AND CHILD) SECRETARY OF THIS DEPT IS EX.OFFICIO CHAIRPERSON AND MEMBERS FROM ALL CONCERNED MINISTRIES AND OTHER LAW ENFORCING AGENCIES ARE MEMERS. MEETINGS ARE HELD TRI MONTHLY.

4. PROTOCOL FOR PRE RESCUE, RESCUE AND POST RESCUE HAS BEEN FORMULATED.

5. MWCD (MINISTRY OF WOMEN AND CHILD DEVELOPMENT) HAS FORMULATED THREE MANUALS FOR JUDICIAL OFFICERS, MEDICAL OFFICERS AND COUNSELLORS RESPECTIVELY.

6. MWCD IS PREPARING MANUAL FOR POLICE AND PROSECUTORS ALSO. ANTI HUMAN-TRAFFICKING UNITS TO BE SET UP IN POLICE DEPTT.

7. MWCD HAS SUGGESTED MINISTRY OF HOME AFFAIRS (MHA) TO ENSURE THAT ATLEAT 30% SEATS ARE FILLED BY WOMEN IN POLICE FORCE.

8. CERTAIN AMMENDMENTS ARE PROPOSED IN IMMORAL TRAFFIC (PREVENTION) ACT, 1956. SECTION 8 AND 20 ARE BEING DELETED. THESE SECTIONS REVICTIMISE THE COMMERCIAL SEX WORKERS (CSW).WHO ARE THEMSELVES VICTIM OF TRAFFICKING. THE ‘ TRAFFICKING IN PERSONS’ ON THE LINES OF DEFINITION OF TRAFFICKING OF UN IS BEING INSERTED IN THE PROPOSED BILL SO THAT IT CAN PROVIDE PUNISHMENT TO THE PERSON WHO VISITS A BROTHEL FOR PURPOSE OF SEXUAL EXPLOITATION. THE BILL TITLED ‘IMMORAL TRAFFIC (PREVENTION) BILL, 2006 IS UNDER CONSIDERATION OF THE PARLIAMENT.

9. SWADHAR HOMES SCHEMES FOR VICTIMS. AND SHORT STAY HOMES ARE BEING CONSTRUCTED IN MANY STATES.

10. ONE COMPEHENSIVE SCHEME IS UNDER FORMULATION. ONE IS FOR PREVENTIVE AND OTHER IS RESCUE AND REHABILITATION OF THE VICTIMS. VARIOUS STATE GOVT AND NGO ARE DELIBERATING UPON IT.

SOME STEPS TO CHECK CROSS BORDER TRAFFICKING-

• To set up internal task force to check and combat this menace

• UNICEF has under taken a task on behalf of MWCD to solve problems in identifying Bangladeshi victims and evolve mechanism to repatriate them easily.

• Sensitize the security personnel responsible for border patrolling.

• Create data base for pre rescue, rescue and post rescue operations.

• Participation of stakeholders in policy making formulations. 

INTERNATIONAL EFFORTS TO POPULARISE HUMAN RIGHTS.

1. EU SPENDS 140 MILLION POUND ON ‘EURPEAN INSTRUMENTS ON DEMOCRACY AND HR

2. THE DECLARATION HAS BEEN TRANSLATED INTO MORE THAN 350 NATIONAL AND LOCAL LANGUAGES.

3. TREATY OF ROME.

4. EU FOUNDING TREAY. WHICH ENSHRINES HUMAN RIGHTS AS PREREQUISITE FOR JOINING THIS UNION.

RECESSION IN INDIA; HAS IT REACHED?

THE SIGNS OF DISPAIR;WILL IT DISAPPEAR?

The global economic crisis has slowly been spreading its bloody tentacles over Indian Economy. There may be difference of opinion with respect to the magnitude of its effects in terms of percentage or odd figures, but there is no denying the fact that the contagion has started spreading gradually into the financial and economic health of the Nation.

TRENDS AND FIGURES-

Figures released by Index for Industrial Production (IIP) a week ago stated that the Industrial production has shown negative growth of 0.4%. The data suggested that in the same month of previous year, the growth in Industrial production had been 12.2%. The figures also suggested that except the coal, all other key infrastructure industries like cement, electricity, finished steel, crude oil and petroleum refinery products etc. showed growth in decline mode.

These data sounded alarm in the North Block and the then FM hurriedly reviewed the situation. Soon after this, one set of disagreement appeared in the some of the Newspapers refuting the figures on the basis of method of calculations in finding out the figures of Industrial growth. IIP also made some correction and clarified that the slowdown is not of that magnitude and the figures are a little bit miscalculated and thereby inflated.

Nonetheless, there is no denying the harsh reality that the slump has started making its jittery felt in many sectors of the economy. Kamal Nath, the Commerce Minister states that there is decline of 26% in FDI, which means less funds coming into the economy from outside. According to one estimate, the FDI had swelled over a period of time and has risen from a dismal 95,639 Crore in 2003-04 to rocketing 16,54,949 Crore in 2007-08. The external commercial borrowings (ECB) which had registered 30% increase during 2006 to 2007, suddenly showed nosedive in October, 2008, when it declined from 283.49 Crore in September 2008 to 112.52 Crore in October, 2008 showing a reversal trend of 30%.

If fact, the total FDI from US itself during 2000- 2008 is about 5.4 billion USD. The worst hit by this reverse cash flow is the software industries, which witnessed decline of 5.8% in FDI. This sector has been the fastest growing among all sectors registering 70-80% growth rate per annum over a period of time, contributing 8.4 billion USD in 2007-08 to the FOREX on the country. 

The swelled FOREX and spilling FDI have also been witnessed in increase of the share of Import-export to GDP, which has increased from 21.2% in 1997-98 to 42% in 2008-09. Undoubtedly, since the contraction in global trade, volume of export-import would now decrease resulting in cascading effect on the overall growth of the economy. In fact it has experienced 12% down fall in the month of October, 2008. 

COMPARATIVE EFFECTS ACCROSS THE GLOBE-

The US, UK, France, Germany, Italy, Canada, Japan and a host of other developed Nations have officially entered into Recession. Most of them have announced so-called bailout packages also for taking the ship out of the economic tsunami or at least to mitigate the effects of this contagion on their people. For instance USA, Russia, UK, Germany, Belgium, Ireland, Iceland, and France injected 990, 200, 876, 50, 16, 864,300, billion US dollars respectively in form of bailout packages. Indian and China however acted slightly differently. Instead of injecting money directly into market, China launched massive infrastructure construction by making available 586 billion USD and undertook massive construction in roadways and railways, whereas; India reduced CRR, SLR, Repo and reverse Repo rates and increased the diameter of pipes flowing money into the market through Banks. It is due to this paradigm shift in strategies of mitigating the crisis, India and China stand at slightly different stage. 

But in West and America, these monetary injections also could not act as anti-pyretic and the fever continues to run high except for transient respite in the economy. The growth rate of Japan has shrunk to less than one percent and rate of un-employment is rising unprecedentedly. Only few days ago, Sony, the electronic giant, has decided to cut the job by 80,000 and to shut 10% of its factories across the world. 

The US economy is worst hit leaving 5, 73,000 Americans jobless, in Britain it has dangerously reached 1 million, 75,000 increase from last month. Thousands of European and American citizens are left homeless now due to debt-fuelled housing bubble. 

The US labour department’s figure suggests that the rate of unemployment has increase to 6.7% in November, 2008. The GDP of USA in Q3 is dismally –0.5%. Federal Reserve estimation is that the US economy is expected to contract at an annual rate of 5% or so.

The commerce department is not letting loose hope and unenthusiastically suggests that the economy will grow up to 4%. Even if this figure is accepted, it is hopelessly poor in view of the past performance. Financial market is in shambles. The Federal Reserve has been continuously decreasing the rate of interest but in vain. The magnitude of fiscal leverage and financial deregulation are such that the treasury department has not yet been able to know that how much money actually is involved in ‘Toxic assets’ of the Banks in America facing closure, so that healing measures might be taken accordingly.

The other indicators in US are also not encouraging. For instance, the consumer spending has come down by 3.4% and consumer durable asset spending has fallen drastically by more than 14%, which would led to further cut in supply resulting in contraction in the economy. The Keynesian spending has so far not been able to bring the economy on tract. 

Russia could also not remain insulated and an ‘island of stability’ as referred by its Finance Minister Alexei Kudrin. Russian FOREX of 600 Billion USD is fast depleting and causing concern in top echelon including Putin. The manufacturing industries witnessed 15.3% plummet, whereas; production in core infrastructure like coke, cement, fertiliser and rolled metal fell by more than 30%.

Similar is the case in other parts of Europe also. The growth fell to -0.5% in Germany, to -0.3% in France and Italy and not surprisingly zero % in Netherland and Spain. It is said that friendship is tested in distress; the non-consensus among the 27 members of European Union (EU) has once again proved Shakespeare’s saying true that when sorrows come, they do not come in single species but in battalion. 

The ‘European Rescue Plan’ of EU has failed to take off owing to lack of consensus among member countries. Germany is reluctant to support Britain and France on most of the issues. There are several issues where disagreement is putting hurdles in progress. The confluence of disputes may be no coincidence. The disagreement is such that Ms Markel was not even invited to a ‘mini- European summit’ in Downing Street. Such disagreement at this crucial juncture will make European predicament more difficult and worsen the situation much more exponentially. The scramble for leadership in new global financial order has begun.

The much talked Washington Summit held previous month, has also failed to yield positive and healing results because elusive consensus could not be arrived at. The West’s frowning on capital control and their staunch penchant for laissez-faire have been allowing the situation going from bad to worse. 

World Bank has perceived the above situation and has recently forecasted that the Great Depression of 1930 is looming large and situation which followed thereafter is likely to be repeated again globally. 

INDIAN CONTEXT-

MONETARY AND FISCAL STEPS-

Indian economy, though in stress, has been doing fairly good, especially in view of prevailing economic malady all around. The growth rate is expected to be 6.5 to 7.5%, if not more. The rate of inflation has been witnessing downward trend in successive weeks and has come down to single digit number, it is expected to come down further, thanks to the bold and effective fiscal and monetary measures taken by RBI and Ministry of Finance.

The major contributors to the GDP like service and agriculture sectors have not hitherto affected as badly as other sectors. The flow of FDI in service sector which roughly contributes 45-50% to GDP has risen from 13,903 Crores in 2003 to 1, 43,776 Crores in 2007. In terms of percentage also, FDI in this sector has registered increase of 23.2% in 2008, which is 1.2% more than the previous year. 

Agriculture- it continues to play a vital role in growth of India contributing 20-24% to the GDP. As the financial market has very little to do with the agrarian economy, the financial crisis has not affected this sector to the extent it has affected other sectors of the economy. The ‘LOAN WAIVER’ of the Union govt announced in the budget this year has provided stimulus to this sector and is working as bailout package. Although it has failed to check the farmer’s suicide completely and according to National Crime Record Bureau (NCRB) 16,632 farmers have committed suicide in 2007 in which 4238 have lost their lives in Maharashtra only. This situation must change; let feeders of nation do not die for want of food. They actually constitute what we call ‘fundamentals of economy’.

RECIPE TO KEEP ECONOMY VACCINATED AGAINST EFFECT OF PANDEMIC OF ECONOMIC SLOW DOWN IN INDIA -

The economic policy of any country is not governed by the kind of people who govern the country; rather by the kind of people governed. Here lies the crux of the problem as well as solution. Instead of mimicking the west and US, we should think in terms of evolving strategies to mitigate the after effects of global contraction by increasing the domestic saving and domestic market demand. There are some steps which are urgently required to mitigate the effects of global recession-

1. MAKING AVAILABLE MONEY FOR PUBLIC SPENDING-

With the flight of foreign capital, the market is likely to contract leading to fall in production and demand. The consequential effect would be as expected, be discernible in rise in unemployment. This would create a vicious circle and if India gets trapped into it, would enter into recession. It is said that every cloud has a silver lining. The best way to get insulated from it is unearth capital and money from within, instead of begging from others. We need to have voluntary disclosure scheme (VDS) like measures to take the black money out of the shelves of millions of people in India. The volume of domestic saving in Banks and post-offices can further be increased by taking some specific monetary policies. This would ensure increase in availability of liquid in the market and help taking fiscal steps to tide over the crisis more effectively. Help from external source at this juncture when every nation, rich or poor are facing acute fiscal pain, is a futile and unwise venture.

2. NEED OF PARADIGM SHIFT IN LENDING PATTERN OF MAJORITY OF BANKS-

The fiscal and monetary steps taken so far by the RBI and Finance ministry have been not as unsuccessful, as many economists had thought. Unfortunately, all focus is converging on big industries and banks. The media hype have been diverting the govt’s attention from a very crucial sector, which is comprised of tiny and non-farm small units, which are about 5,80,0000 in number. This vast sector has been providing employment to about 105 million people in this country contributing about 30% of GDP. What a massive contribution. Ironically, these units get hardly only 4% of net Bank credit. What a neglect and what an unwise fiscal decision on part of Banks! The attitude of the Banks needs to be changed. The experiences suggest that a Bank Manger is more interested in disbursing loans to bigger entrepreneurs rather than small investors. It is perhaps due to the fact that they are interested in achieving financial targets and not physical. They feel it convenient to deal with less number of entrepreneurs for obvious reasons.

It the credit given to these units is increased only by 1%, it would bring about unbelievable change in the growth pattern of the economy. It would increase about 1, 00, 000, 00 employment and add further about 0.5% to the GDP. Merely injecting liquid into the market either directly or indirectly through cut in interest rates is not going to solve the situation for ever. The bailout packages across the world have failed to mitigate the throes of this economic ailment for many reasons, one being siphoning off the money by big banking and business tycoons. The FBI has already taken up investigation into ‘housing mortgage fraud’ and the role of Fannie Mae and Freddie Mac, the housing mortgage giants’ in the present crisis. In Russia also, about 160 billion USD has been pumped by the central Bank, but it failed to stop downslide of rouble. Many prominent citizens have written an open letter to Putin and Medvedev stating therein that the major chunk of the bailout package has been eaten up by large corporations and banks. We cannot rule out in totality, the possibility of such siphoning off incidents.

3. UNORGANISED SECTOR NEEDS STIMULUS-

The unorganised sector in this country has been hitherto one neglected area. Parliament has passed the ‘unorganised workers’ social security Bill, 2008’ only a couple of days ago. It is milestone in the economic history of this nation. At present, according to one estimate, there are as many as 30-34 Crores unorganised workers in this country. National Commission for Enterprises in the Unorganised Sector (NCEUS) has recommended for setting up of a NABARD like financial institution so that loans etc can be made available to them at comparatively lesser interest rates and more conveniently. We need to have a more generous policy towards them not because they are at the fence; rather they are contributing magnificently to the overall growth of the nation. Unfortunately even after successive robust growth, only 20-25% of the population have been dinning the slice of development and rest 75-80% are still longing for a loaf of dividend. This is not philanthropy; this is pure economics, the Keynesian theory, of which the West boasts off so frequently. Let the purchasing power be increased of majority of the population; or else the citadel of prosperity would crumble down like playing cards. This is what is happing globally. Shopaholic culture of west and unfettered financial institutions are not suitable for country like India.

4. FOOD, SOCIAL SECURITY AND RURAL DEVELOPMENT SCHEMES -

Many Western countries including America are now a little bit surprised to the see India get going with relatively more pace and throttle in this period also. The west’s frowning on laissez-faire now faces extremely rough weather. The American and European newspapers which usually used to be flooded with editorials and columns deploring and criticising slow pace of reform in India; now preach their own governance and financial system about the capitalism blended with social responsibilities. India has a well institutionalised chain of Public Distribution System (PDS) shops is roughly 4.78 lakh in number and which is catering to needs of 652.03 lakh BPL families i.e. about 30% of the population. There may be pilferage here and there in this chain of distribution of food grains, but one cannot deny the importance of these shops in terms of maintaining supply line strong enough to cater to the needs of billions of people in rural areas. It ensures actually at least enough food grains in the local market; otherwise the situation in the countryside would have been much more precarious. The availability of food grain helps stabilising the price of commodities also to an affordable level.

The social security schemes like old age pensions, family pension, widow pensions, poor students’ stipends and a host of other such schemes are like blood capillaries of the economy. Such measures are taken being taken by the west as crisis management steps; whereas here in our countries these are institutionalised but non-philanthropic schemes. These are the inherent and inalienable rights of our poor citizens, we believe. These are the measures which are proving very helpful in this hour of distress. It is not merely a chance that we are not hit as hard as the west and other Nations are; rather it is due to our socialistic and humane approach which is paying dividends. 

The National Rural Employment Guarantee Act, 2005 (NREGA) was a land mark in country. In 2008-09 budget 16,000 Crore rupees has been allocated and later on additional 10,500 Crore was made available to this innovative scheme. If all wage oriented rural developmental schemes are added, it comes roughly more than 60,000 Crore rupees. Many people may not be optimistic about the performance of these schemes on the pretext of reports of corruption and otherwise, but it is acting as a bailout package in this period of economic crisis. It has magnificently increased the purchasing power of millions of poor Indians, which according to Keynesian also mitigating the after-effects of economic slowdown.

We need to do much more because much is left to do. The figures of NSSO regarding poverty and spending pattern are not encouraging. We need to bridge the gap between ‘haves and ‘have nots’. 

5. REFORMS IN FINACIAL SECTOR AND MONETARY POLICIES- 

This crisis has all set to unleash forces of resurrection and drastic reform. When Asian crisis hit majority of countries like Malaysia, Indonesia, Hong Kong etc, America prescribed menu for their revival; which included three things. Firstly not to cut interest rates. Secondly let the Banks go bankrupt and thirdly encourage saving and cut public spending. Ironically, when America is hit this time, it is doing exactly the reverse. The toxic assets have been bought, interest rates have been drastically cut and finally the public spending is enhanced and public is being advised to spend more. How can be two prescriptions for same ailment? Hindsight is always better than foresight. We must ponder on the financial sector reforms, a reform not be benefit corporate sectors only, but for the poor people also. The CD ratio of many states has to be improved in order to bring parity in the development. The blind imitation of west in this sector is disastrous; it has been proved beyond doubt. Even the Americans have now started discussing the legitimacy of blind race of development based on excessive financial leverage. Cutting of CRR, SLR, REPO, REVERSE REPO rates etc are good to some extent, but it should also be ensured that money is used to ease out the effects, and not being siphoned off by unscrupulous speculators and corporate managers as was done in USA and Russia. This might have been done in many countries also, which only time would unravel the truth. How can the govt finance and buy the toxins of some rich people with the help of the money of billions of tax payers? The financial sector should be reformed in such a way which cares for all and not for those only who could go the FMs meeting to extend their so-called valuable advices at the eve of each budget. In fact Nobel Laureate Joseph Stiglitz while delivering the 10th D.T.Lakdawala Memorial Lecture on ‘ crises Today and the Future of Capitalism’ said that this US exported recession is caused due to crisis which is US in origin due to the policies based on ‘ privatising profits and socialising losses’. This is not the capitalism, he said. 

6. ENHANCE PUBLIC SPENDING-.

According to one estimate about 80% of the infrastructure is created by the public spending. It helps create infrastructure at the same time generate enormous employment opportunities. The SEZ policy, which has been borrowed from China, should be re-defined. This cannot be allowed to be used for real-estate developers. In fact present outcry by a section of farmers in different areas are said to be due to these reasons. It ought to be oriented for industrial ventures and creating infrastructures.

7. INDIA SHOULD STAKE CLAIM IN THE EMERGING NEW GLOBAL FINANCIAL ORDER-

The American dominance on global financial order is all set to come to an end. Zakaria has predicted Post-American global economy. The wheel has turned around and American economy is in desperate need of money from developing nations like China and India. Undoubtedly, China has emerged as the biggest player and largest bargainers in this present crisis. It’s huge FOREX of 600 Billion dollar and huge domestic saving has started paying dividends. Both India and China can use G-20 forum to press for change in the global financial architecture and also speak on behalf of 152 Nations which had not been invited in Washington Summit. Globalisation, after all means maximum good for maximum numbers and not for a few, who reaped the profits and distributing the losses to the poors. 

IMF Chief has set 2% growth rate for major countries and suggested that govt spending should increase and interest rates be further cut. The question is that from where the money would come? How can govt enhance public spending? India has still a huge potential of domestic borrowing. The govt will have to instil confidence in masses to encourage bank deposits. India has to come forward with renewed vigour and stake claim to be a major player in the new world order, because it is said no one gets anything if begged, one has to claim for this.

BIHAR TO HAVE RULE FOR KHAS MAHAL LAND AT LAST

GOLGHAR;THE VESTIGE OF LOST GLORY

The state govt has finally decided to frame Khas Mahal bylaws for managing about 7,000 Hectares of Khas Mahal land which spread over 38 districts of the state. Draft of this bylaw is already in its final stage and is likely to get cabinet’s nod within a couple of days from now.

Till date there is no law or rule with respect to Khas Mahal land in this state and it is being regulated by collection of circulars and adhoc procedures called Bihar Government Estates(Khas Mahal) manual.

Khas Mahal are those lands which were vested into the State after enactment of Bihar Land Reforms Act, 1950 and came directly under the management of the state govt.

All such lands are situated in towns and are very costly. The present manual is slanted towards lease holders and most of the land are held by the lease holders at a throw away price. The renewal process is so simple that even if the lease not renewed, the govt cannot claim the land. At present most of such lands are located in districts like Munger, west champaran, Patna, Bihar sharif, Sasaram and Arrah and are either encroached or have been transferred to different persons for which govt did not get any revenue whatsoever.

If the said Bylaw is approved by the cabinet, the govt will be in a position to reclaim majority of such land and lease out to other persons at market value. This would enable govt to use such land for commercial and other govt purposes also.

On the other hand some people are apprehensive about the real motive of the government. It is pertinent to mention here that most of the Khas Mahal lands are either under illegal possession of influential persons of political or bureaucratic circle.

If the provisions are not implemented in letter and spirit, the Khas Mahal land may discriminately leased out to the people who are close to the political establishement.

Another Singur in Making in Jharkhand

Is Aamgachi village of Kantikund P.S. under Dumka district of Jharkhand going to be the Singur of Jharkhand? Is the ground being prepared for another Nandi gram in making? These are million dollars questions, which every one aspires to enquire into.

The Police Firing on tribal people who were protesting against the proposed construction of a power plant by one Calcutta Electric Supply Corporation Ltd (CESC) of RPG (Goenka) group in Aamganchi revenue village of kantikund police station under Dumka district of Jharkhand on 6th of December which left six people dead and few injured, has once again raised the issue of displacement versus development in this tribal dominated newly created state of Jharkhand.

With the creation of this state on 14th November 2000, the hopes of paradigm shift in developmental strategies ran high across the millions of people in this State. The State got first tribal CM and wheels of change were set in. 

Several MOUs were signed and it seemed, at least apparently, that the fate of this poverty stricken state would catapult into prosperity, but the swelled hopes quickly deflated owing to nasty political games resulting in frequent changing of guards one by one causing political instability and rampant corruption on highest level.

As far as this crisis is concerned, the crux of the matter is that CESC limited proposed to set up a thermal power plant of installed capacity of 1000 MW in Aamgachi village in Katikund block. This region happened to be the Sibu soren’s home constituency.

The company required 700 acres of land, but it initially requested the govt for 328 acres of land only because this much land was required for plants and machinery in this village. The process of land acquisition started and notification to this effect were issued. Initially all went right at least apparently, but subsequently one lady named Munni Hansda came into picture and floated an ‘ulgulan manch’ to what she calls, ‘protect the tribal people from eviction and alienation’.

The thermal power plant requires two basic facilities, coal and water. The company was allotted captive coal mines near the proposed site at Aamgachi by Ministry of Coal govt of India on 9th January, 2008. The company sources say that the proposed plant would require 3.33 MCM of water per month which would be made available by Brahmni river during rainy season, but for the remaining season the plant would require storage facility for which they would require additional land. The locals were knowing the future plans of the company. 

In this backdrop, the agitation against eviction and land acquisition was progressing side by side. In the first week of December, the ‘Ulgulan Manch’ started ‘jail bharo agitation’ and accelerated pace of movement. The district authority seeing the mood of agitators promulgated prohibitory orders under section 144 of Criminal Procedure Code (CrPC) in the area.

On 6th December, 2008, the mob turned violent because the police wanted to stop them from violating the prohibitory orders. The mob suddenly went amok and there was heavy exchange of stone pelting resulting into injuries from both sides. The police later opened fire, to what they call; quell the unruly and violent mob resulting into six causalities and several injuries. The entire area turned into a battle field and it seemed that the situation which was witnessed in Singur is being replayed. 

Medha Patker, as usual, appeared on the scene thereafter; and it seems now that the grounds are being prepared for making it another Singur. She led a ‘pratirodh march’ to the Governor House in Ranchi and sought to nationalise the issue. Naturally, when personalities like Medha or Arundhati come to the scene, the media attention gets focussed and the real issue gets somewhat blurred.

Undoubtedly, such incidents of violence would adversely affect the investment prospect in the region and make situation unfriendly for investment and industrial ventures. In this case, the fate of construction naturally hanged in uncertainty. Few months back, in Khunti district of the state, officers of Arcelor-Mittal Steel giant were brutally beaten up and their faces were blackened when they had gone to inspect the proposed site for construction of 12 million ton steel plant. This company requires 11,000 acres of land for this. One Adivasi Mulvasi Astitva Raksha Manch(AMARM) led a agitation thereafter and the project is all set to be scrapped. Similarly Bhusan Steel faced vehement opposition in Patmada in Jamshedpur district of this state. Such vehement opposition has been experienced by a host of other companies also here. There is one more interesting thing about these companies that most of them are interested in mining lease rather than Green field projects. This may be one hidden reason why the tribal people cast doubt on their motives.

Any way these developments have raised questions that why are such incidents of violence happening and how to fix these problems?

We will have to see the entire gamut of problem in an anthropologic- constitutional perspective. States like Jharkhand (south Bihar of erstwhile united Bihar) had been brought in Scheduled Area Regulation Act of 1956 under Article 244 of Indian constitution in order to provide extra safeguards to the tribal inhabiting these areas vis-a-vis their alienation from land. The threat to their unwilful eviction from their ancestral land was sought to be further protected by enactment of Panchayats (extension to the scheduled areas) Act (PESA) in 1996. This law makes it mandatory on part of the govt as well as the companies to obtain the consent of the Gram Sabha before starting any land acquisition process or signing MOUs. But unfortunately most of the MOUs have been signed without obtaining the consent of Gram Sabha as enshrined in the law. 

The previous experience of tribal people with respect to benefits given to them in lieu of their land that have been taken or industries those have been set up, have never been happy. For instance, in a place called Kiriburu in Chaibasa district of Jharkhand, which is believed to be the largest deposit of iron ore in India, mining operation has been underway for the last ten decades. Today these mines are owned by Steel Authority of India Ltd (SAIL). The company has erected huge infrastructure including plants, machineries, guest houses and quarters but the surrounding area is poorly developed. In fact this area is one of the most neglected areas with dismal literacy rate and poor per capita income.

Nowamundi, another area in Chaibasa is a typical example of utter neglect. In this area, some iron ore mines are owned by TATA group. Mining operation is going on for years but the demography has not yet been benefitted to the extent it should have been. We have a number of examples in this mineral rich state in which poor people has not tasted the fruits of dividends of mineral excavation. The govt’s new mining policy attracted private companies in the state and several mining lease have been granted to them. But these lease and MOUs could not bring about any qualitative change in the life of common tribal.

In this backdrop, the perception of the common tribal people has become hostile to the investment in general resulting sometimes in unjustified opposition. The apathy of the govt towards the legal rights bestowed on the tribal is revealed in the MOUs which are signed by the govt with a host of companies without Gram Sabha’s consent.

On the other hand, there is no denying the fact that investment in sectors like power is a prerequisite for development of any state. If industrialisation as well as agriculture have to make progress, energy is required. This area has been opened for private sector and it is in this background this company decided to setup power plant in kantikund.

The questions which remained answer are why is this distrust? Why do the govt machinery and companies fail to make tribal understand that benefits of such investments would also go to them? Why are tribal people not being convinced about rehabilitation and other govt incentives that are likely to be given to them?

In fact, this communication gap between them is the crux of all these problems. The kind of involvement and association which are required at the outset in such projects are conspicuously absent from govt and company side. The tribal people have captured a stereotype image of govt officials, which they feel is of exploitative for them. This gap of communication gets metamorphosed into mistrust by the NGOs most of the times. The namby-pamby govt machinery fails to counter the misinformation campaign unleashed by the NGOs. They provide with very attractive and imaginary data regarding their dislocation and make the land acquisition process intractable. This was exactly what has happened in Singur and is happening in Kantikund also. The govt must come up with more participatory land acquisition policy in tune with the PESA and take the local people in confidence before launching any project. The role of NGOs vis-a-vis anti-acquisition agitation cannot be countered by legislations only. The civil society as well as the govt will have to think that how and why do suddenly the same kind of people appear on the scene and vitiate the prospects of developmental projects. It does not mean however that all such NGOs are putting stumbling blocks in the way of development, but the experiences which we had in Singur is not encouraging. After the exit of TATA from Singur, even the local people feel cheated by the so-called activists who had promised to them of more bargains, but all went in vain. Everything including their dreams is shattered now. Such nefarious design of these elements must be made known to all concerned and thereafter; make sure that unreasonable and unjustified opposition do not come in the way of the progress of the nation. For this the locals must be made active stakeholders in such projects. They should not only feel but should reap also the fruits of development. They should also taste the growth being achieved by the nation in economic field.

This is not philanthropy, but an economics also, because unless we enhance the purchasing power of billions of Indians, the graph of growth cannot move upward uninterrupted. We cannot afford to go on creating oasis in deserts. Let us make every commoners stakeholder in the development process or else we will continue to invite wrath of the common people. Timely intervention of govt in this episode with precision like a heart surgeon can prevent another collapse like what happened in Singur.

IS RECESSION COMING TO SOFTWARE INDUSTRIES?

SOFTWARE IS SOFT ENOUGH TO BE INFECTED

Software industries in India have been on boom owing to opening of up of socialistic pattern of erstwhile economy in 1990s. This sector (IT-BPO) has been experiencing a growth of more than 80% for the last decade except a few exceptions. Today IT giants like WIPRO, TCS, and INFOSYS etc have made a respectable place for themselves on the globe.

The robust growth of Indian economy at the rate of 8-9% per annum has changed ‘Hindu growth rate’ stereotype image of Indian economy in the west including America.

This changed perceptions resulted in massive inflow of Foreign Direct Investment (FDI) and External Commercial Borrowings (ECB) over a period of time. The boom in the Stock Markets pushed the Sensex from unimpressive 8,000 points to spectacular 21,000 points in recent years. Many savviest investors believe that the massive inflow of FDI has triggered the growth rate of many software and service sector industries to a sky soaring level.

But the recent report released by the RBI, has raised eye brows of many economic pundits. The impact of slowdown in world economy is slowly making its throes felt in India also.

The report suggests that the rate of inflow of FDI is fast decelerating in a couple of months. For instance it has reduced from 283 crores in September, 2008 to 112.52 crores in October, 2008 making a 30% decline.

In fact, the total FDI had risen from 95,639 crores in 2003 to a spectacular 6, 54,949 crores in 2007. This massive inflow of FDI has contributed a lot in accelerating the overall growth rate of economy.

But the slump in the bourses, which started in September, 2008 has started slowly but steadily spreading in the world market. Now when the USA, UK, France, Japan and many other G-8 nations have officially entered into recession, this contagion have started engulfing many Nations hitherto unaffected.

In India, two sectors which are likely to be affected most, are Software and service sectors. For instance, whereas; in 2007, the total FDI in software sector was 10,215 crores, it has reduced drastically to 5727 crores only (in seven months of 2008) registering a decline from 15.6% in 2007 to 5.8% in 2008.

The external commercial borrowings (ECB) are also likely to go down in a couple of months. This would manifest in the downward trend of export also which was 8.4 billion USD in 2007-08 in this sector. 

Many software industries have started giving PINK SLIPS to the GUYS ON BENCH. The exact figure of such retrenchment is no known, but this decline in inflow would definitely dwindle the job opportunities in IT sectors which has given direct employment to 5, 60,000 ‘Smart English speaking IT guys.’ 

The services sector however don’t show any sign of RECESSION right now, because the report of RBI suggests that flow of FDI in this sector has risen from 22% in 2007 to 23.2 % in 2008. This sector which contributes about 50% to the GDP has emerged as the saviour of giant economy of India. As a matter of fact, this sector has attracted 13,903 crores FDI in 2003 and has spectacularly swelled to 1, 43,776 crores in 2007 registering about 20-22% annual growth.

But it too would be affected by this down ward trend of FDI and ECB. Timely intervention of RBI and Ministry of Finance has so far been producing encouraging results, but these stop gap arrangements would have to be institutionalised financially. The heavy dependence on FDI and ECB would not help our economy protected from contagion for a long time.

Ugly faces of Terrorists

My new photographs

new photographs

Bihar convenes all party meet to review ARC report : iGovernment

Bihar convenes all party meet to review ARC report : iGovernment

Bihar plans Employment Melas to check mass exodus : iGovernment

Bihar plans Employment Melas to check mass exodus : iGovernment