Editorials - 01-04-2021

In the FC-15 proposals, the goal of fiscally empowering local governments to deliver territorial equity is still far away

This article is a brief critique of the recommendations of the Fifteenth Finance Commission with regard to local governments. The primary task of the Union Finance Commission is to rectify the vertical and horizontal imbalances in resources and expenditure responsibilities between Union and States, which after the 73rd and 74th Constitutional Amendments includes the third tier of local governments. This Commission is the fifth after the incorporation of Part IX and Part IX-A to the Constitution which mandate the Union Finance Commission to supplement the resources of panchayats and municipalities on the basis of the recommendations of the State Finance Commission (another institution created by the Amendments). Now, nearly 2.5 lakh local governments and over 3.4 million elected representatives form the real democratic base of the Indian federal polity. Unlike the previous Commissions, the Fifteenth Finance Commission was in the background of the COVID-19 pandemic which reinforced the significance of local governments,gram sabhaand other participatory institutions in containing the crisis and delivering social protection in India.

Higher vertical devolution

While there are some critical lacunae in its recommendations regarding local governments, the Fifteenth Finance Commission has several positive aspects to be said in its favour. For one, the vertical devolution recommended to local governments is raised remarkably high. From a measly share of 0.78% of the divisible pool with an absolute sum of Rs. 10,000 crore by the Eleventh Commission, the Fifteenth Finance Commission raised it to 4.23% with a reasonably estimated amount of Rs. 4,36,361 crore. Compared with the Fourteenth Finance Commission there is a 52% increase in the vertical share. Even if we deduct the grant of Rs. 70,051 crore earmarked for improving primary health centres, the share is still an all-time high of 4.19%.

Continuity and change should be the overarching salience of a transfer system, which is designed to build a viable third tier to Indian democracy. All the Commissions since the Eleventh Commission have tied specific items of expenditure to local grants and the Fifteenth Finance Commission has raised this share to 60% and linked them to drinking water, rainwater harvesting, sanitation and other national priorities in the spirit of cooperative federalism.

However, it reduced the performance-based grant to just Rs. 8,000 crore — and that too for building new cities, leaving out the Panchayati Raj Institutions (PRIs) altogether. The performance-linked grants thoughtfully introduced by the Thirteenth Finance Commission earmarked 35% of local grants specifying six conditions for panchayats and nine for urban local governments and covered a wide range of reforms: from the establishment of an independent ombudsman to notifying standards for service sectors such as drinking water and solid waste management.

The Fourteenth Finance Commission, however, cut the performance grant share to 10% forgrampanchayats and 20% to municipalities with the conditionality that all local governments will have to show improvements in own source revenue. Municipalities are additionally required to publish service level benchmarks for basic services. The transformative potential in designing performance-linked conditionalities for improving the quality of decentralised governance in the context of indifferent states is missed.

Entry-level criterion

An important recommendation of the the Fifteenth Finance Commission is the entry-level criterion to avail the union local grant (except health grant) by local governments (strictly speaking, it is performance-linked). For panchayats, the condition is online submission of annual accounts for the previous year and audited accounts for the year before. For urban local governments, two more conditions are specified: after 2021-22, fixation of minimum floor for property tax rates by the relevant State followed by consistent improvement in the collection of property taxes in tandem with the State’s own Gross State Domestic Product. It is not clear whygrampanchayats (especially the affluent and semi-urban categories) are left out from this. Although Finance Commissions, from the Eleventh to the Fourteenth, have recommended measures to standardise the accounting system and update the auditing of accounts, the progress made has been halting. Therefore, the entry-level criteria of the Fifteenth Finance Commission are timely. The moot question is, will this bring about substantive changes? The Eleventh Finance Commission published the fiscal data of all tiers of panchayats and municipalities in its report. But the data proved defective. The Twelfth Finance Commission did not publish any local fiscal data. The Thirteenth Finance Commission published data online and some researchers did use them. Unlike the previous Commissions, the Fourteenth Finance Commission conducted a sample survey covering 15%grampanchayats, 30% block panchayats and all district panchayats besides 30% municipalities, presumably to ensure quality in canvassing data. The results too were not published. Interestingly, neither the Fifteenth Finance Commission nor the earlier counterparts took pains to examine how and where the financial reporting system has failed. Without reliable data can you ensure good governance?

The Fifteenth Finance Commission, which generally takes care to go into details (see recommendations on health care, air pollution etc.) and is well aware of India’s regional heterogeneity, failed to carry policy choices forward systematically. Articles 243G, 243W and 243ZD read along with the functional decentralisation of basic services like drinking water, public health care, etc., mandated in the Eleventh and Twelfth schedules demand better public services and delivery of ‘economic development and social justice’ at the local level. While the grants to the primary health centres must be acknowledged as a great gesture, a good opportunity to ensure comparable minimum public services to every citizen irrespective of her choice of residential location has not been taken forward in an integrated manner.

Equalisation principle

It may be relevant to recall that the Alma-Ata declaration of the World Health Organization (1978) which outlined an integrated, local government-centric approach with simultaneous focus on access to water, sanitation, shelter and the like. The Fifteenth Finance Commission claims that it seeks to achieve the “desirable objective of evenly balancing the union and the states”. It is not clear why there is no recognition of the third tier in this balancing act. Although the Fifteenth Finance Commission outlines nine guiding principles as the basis of its recommendation to local governments, there is no integrated approach (in contrast to the recommendations of the Thirteenth Finance Commission). It is forgotten that public finance is an integrated whole. That the tasks of the Union Finance Commission were broadened as part of the decentralisation reforms (280(3) (bb) and (c)) is a firm recognition of the organic link of public finance with the development process at all tiers of government. Although the Fifteenth Finance Commission stresses the need to implement the equalisation principle, it is virtually silent when it comes to the local governments.

It is equally important to note that in the criteria used by the Fifteenth Finance Commission for determining the distribution of grant to States for local governments, it employed population (2011 Census) with 90% and area 10% weightage the same criteria followed by the Fourteenth Finance Commission. While this ensures continuity, equity and efficiency criteria are sidelined. Equity is the foundational rationale of a federation. Abandoning tax effort criterion incentivises dependency, inefficiency and non-accountability.

In sum, if decentralisation is meant to empower local people, the primary task is to fiscally empower local governments to deliver territorial equity. We are far from this goal.

M.A. Oommen is Honorary Fellow, Centre for Development Studies and Honorary Professor, Gulati Institute of Finance and Taxation, Thiruvananthapuram

The recent policy changes are flawed and take a myopic view of the interests of beneficiaries

Gene Roddenberry’s Star Trek had a wonderful concept, one called ‘Prime Directive’. It required outer space explorers from Earth to avoid interference with the affairs of civilisations they came across. This ensured natural progression instead of a nudged progression, biased by Earth sensibilities. Events over the past few years in the Employees’ Provident Fund programme can make one think that policymaking should take a ‘Prime Directive’ break in affairs related to the EPF.

Take, for instance, the recent amendments to tax regulation affecting EPF. For long, taxation surrounding the EPF was simple to understand and easy to execute. If one contributed more than the limit prescribed under Section 80C of the Income Tax Act, they did not get a tax break on the excess contribution. Earnings on contributions rarely suffered taxation since tax laws pegged tax-free earnings to rates higher than that of interest rate on the EPF. One paid tax on their corpus only if they withdrew it within five years of commencing contribution. Rightly so, since the EPF is a retirement product. This taxation framework incentivised employees to use the EPF as their primary retirement saving. Indeed, for many, the EPF remains the sole ‘risk-free’ retirement savings mode given its design, asset allocation and the ‘government-run’ tag.

‘HNI’ individuals

This will change for many because of the new tax regulation that, in effect, labels one “a high net worth individual (HNI) who is misusing EPF” if one contributes more than Rs. 2.5 lakh per annum to the EPF. The limit is Rs. 5 lakh in cases where employers do not make contributions to the provident fund. Indeed, the day after the announcement of this change, the media was filled with statistics of a staggering twenty members that had over Rs. 800 crore in their EPF accounts — just twenty out of the several crore accounts overseen by the Employees’ Provident Fund Organisation (EPFO). The move should be given a rethink because it is flawed in principle and difficult to administer.

Regressive view

The basis of this new tax law reeks of a 1970s’ Bollywood-style narrative where the affluent do only evil and need to be punished. The ‘rich man’s pension vs. poor man’s pension’ divide, that we have seen earlier in policymaking in case of superannuation plans (the Fringe Benefit Tax and the perquisite tax on superannuation contributions), and now in the case of EPF, is regressive. It assumes that the government knows what is adequate for an individual on retirement.

We live in an era of evolving post-retirement aspirations, medical cost inflation, volatile interest rate cycles, credit busts and minimal choices for post-retirement investments. The best bet for employees, then, is to maximise savings via statutory and voluntary contributions. Intuitively, most employees who start to contribute large sums of money to their retirement plan do so when there are surpluses — when mortgages have been paid off and children’s education is funded. This occurs closer to retirement. So, the need to catch up is significant.

While other investment products have grown in popularity, one does realise that for most working Indians, the EPF typifies safety with governance. For the government, therefore, to decide on a common threshold of adequacy is incorrect — it suffers the flaws of a one-size-fits-all approach.

Furthermore, the ‘misuse’ that was used to justify the imposition of the tax is difficult to comprehend. The EPF is solely a payroll deduction and cannot be contributed in any other manner. It, therefore, suffers taxation for amounts exceeding the limit prescribed in Section 80C of the Act. This last point makes the new clause bring the EPF to the borders of double taxation.

Further, close to 65% of EPF is invested in government securities, with the rest being invested largely in PSU bonds and the equity index. Earnings are made available to the employee via an interest credit mechanism. Despite the stickiness of these interest rate declarations and their often being higher than market rates, it is certain that the government does not subsidise this interest rate credit.

Unlike the Employees’ Pension Scheme (EPS), the EPF remains a subsidy-free, pay-what-is-earned retirement fund. The flaws it suffers are related to design and administration and are equally applicable to all segments of its members — the affluent and not-so-affluent. It is accessible to employees on permanent cessation of employment and, thanks to the Universal Account Number (UAN) regime, cannot be accessed easily before retirement. Given all this, the argument of misuse of the EPF by the higher-salaried segment is incorrect.

In addition to flaws in the principle, there can be difficulties in the administration of the new tax rule. Various interpretative inadequacies surrounding the applicability to EPF, especially in light of the changed threshold from Rs. 2.5 lakh to Rs. 5 lakh, remain. It is also unclear if the interest on such excess contributions is taxed once during the year of contribution or throughout the term of investment in EPF. The mechanism of tax communication from the EPFO to the member also remains uncertain. One assumes that the systems at the EPFO will need changes and such ongoing taxation of the annual interest rate credit is a first-time measure for the organisation.

The bigger picture

In a wider context, it is important that policymakers reflect on what the EPF has come to signify. While pension funds are seen by governments in myriad policy contexts, they should remain, foremost, the retirement funds of their beneficiaries.

Regulations governing contributions, taxation, investments, administration and benefits should be made in the interest of the beneficiary. But it may seem that other imperatives dominate the agenda in pension policymaking in India. Hence, the resultant outcomes are, at best, sub-optimal from a beneficiary point of view. An example of this is how regulation has obsessed over the coverage of lower-income employees, who have often preferred current compensation over deferred compensation such as retirement funds, while tax laws frown upon other segments of employees increasing voluntary provident fund.

Some of these re-looks are important to execute over time, but an immediate rollback of the tax rules will demonstrate the will of the policymakers to encourage retirement savings. And then, a period of ‘Prime Directive’ adoption will help ‘energise’ the vision of a pensioned society.

Amit Gopal leads Mercer's investment practice in India and has worked with retirement plan funds for over two decades

The amendments to the GNCTD Act define, without doubt, who represents the ‘Government’ in the unique case of Delhi

On January 17, 2017, the Lieutenant Governor of Delhi wrote to the Speaker of the Legislative Assembly of Delhi stating that the President of India had considered the Delhi Netaji Subhas University of Technology Bill, 2015 and directed that it be returned to the Legislative Assembly of Delhi.

One of the reasons stated for the return was the inconsistent definition of the term “Government.” In June 2015, when the Legislative Assembly of Delhi had passed the Delhi Netaji Subhas University of Technology Bill and sent it for the President’s assent, it had defined the term “Government” as the “Government of the National Capital Territory of Delhi.”

Formalises the definition

After the Bill was returned, the Delhi Assembly sent a modified version of the Bill for the President’s assent where the definition of “government” was described as: “Lieutenant Governor of NCT Delhi appointed by the President.”

Last week, both Houses of Parliament voted overwhelmingly in favour of the amendments to the Government of the National Capital Territory (NCT) of Delhi Act.

The aim of the amendments were to clear such ambiguities in the roles of various stakeholders and provide a constructive rule-based framework for stakeholders within the Government of Delhi to work in tandem with the Union Government. One of the changes made was to bring consistency in the definition of the term “Government”. In this instance, the government was only formalising the definition of a term that the Delhi Assembly itself had already accepted. This rule-based framework is especially important given that Delhi is also India’s national capital and the symbolism that comes with being the seat of the sovereign power.

Partners not adversaries

The National Democratic Alliance Government, under the leadership of the Prime Minister, has completely transformed Centre-State relationships. At the core of this transformation is the outlook that States — and by extension the Chief Ministers of the States — are partners in the national agenda, and hence must have platforms and frameworks available to work together.

In earlier governments we saw State Chief Ministers queuing up in front of unelected officials in the erstwhile Planning Commission supplicating for grants. The creation of NITI Aayog, the establishment of the Goods and Services Tax Council, the restructuring of central schemes and accepting the Fifteenth Finance Commission’s recommendations for greater devolution are clear examples of the Union Government viewing States as equal partners.

A legislative right

This partnership requires an environment of trust and mutual co-operation. A necessary condition for such an environment is the distinct delineation of roles and responsibilities, the removal of ambiguities, and the definition of a clear chain of command among stakeholders. In this regard, it was important to define, without doubt, who represents the Government in the unique case of Delhi.

On December 20, 1991, Home Minister S.B. Chavan tabled the Constitution Amendment Bill in the Lok Sabha to add Articles 239AA and 239AB into the Constitution that paved the way for the creation of a Legislative Assembly and a Council of Ministers for the National Capital Territory (NCT) of Delhi. This amendment passed in 1991 empowers Parliament to enact laws supplementing constitutional provisions. Similarly, the Government of NCT Delhi also has the power to enact laws regarding matters specified under the State list and Concurrent list, to the extent these are applicable to a Union Territory.

It becomes important to ensure there is complete synchronisation between the Union Government and the Government of NCT Delhi and that there is no encroachment in legislative matters. In the case of the Government of NCT Delhi, it has no legislative competence in matters pertaining to the police, public order, and land. The risk of incremental encroachments on these subjects in the legislative proposals under consideration of the Delhi Legislative Assembly can have severe ramifications for Delhi.

Thus, for the Opposition to portray a government exercising its constitutional responsibilities as an undemocratic act shows a wilful lack of understanding.

The national capital hosts the country’s legislature, the seat of the Union Government, the judiciary, diplomatic missions, and other institutions of national importance. It deserves smooth functioning and cannot be subject to misadventures arising from the ambiguities in the roles and responsibilities of its stakeholders.

A functioning relationship

While some in the Opposition have accused the government of undermining the federal structure of the country, others have painted an even darker picture proclaiming the death of democracy itself. Nothing can be farther from the truth. Making Delhi Assembly rules consistent with the rules of the Lok Sabha or ensuring that the opinion of the Lieutenant Governor is taken can only ensure clarity and foster an environment of co-operation. In no manner do these amendments dilute or affect the powers of the Delhi Legislative Assembly. Various court judgments have also observed the ambiguities and lack of clarity. The people of Delhi deserve a functioning government, and the amendments made aid in creating such an environment.

G. Kishan Reddy is Minister of State for Home Affairs and represents the Secunderabad Parliamentary constituency in the Lok Sabha

Key indicators for the State point to growing economicand social distress under the BJP government

It is vital to assess the performance of incumbent governments, especially those that claim to have ushered in development. Let us take the case of Assam and examine the Sarbananda Sonowal-led Bharatiya Janata Party (BJP) government’s performance on key indicators.

In 2015-16, before the BJP government had taken charge, Assam’s economy clocked the second-highest growth rate at 15.67%, and its per capita income was growing at 13.02%. A credible dialogue process was also initiated and taken forward over the 15 years of Tarun Gogoi-led Congress rule, which ushered in peace. In May 2016, the BJP assumed power and since then, the growth story has petered out and distress reigns supreme.

Alarming numbers

Assam’s economy had lost steam much before the COVID-19 pandemic impacted the State. In 2019-20, the economy grew at 6.30% and per capita income grew at a measly 3.46%. Within four years, Assam had gone from being ranked 2nd and 3rd on these counts to 20th and 26th respectively. Where Assam ranked highly was inflation — the fourth highest in the country.

A responsive government would have reacted to provide relief to those hurting from the loss of incomes and price rise. But that is not what the BJP government did. Taking a cue from the Narendra Modi-led Central government, the State raised Value Added Tax (VAT) on petrol and diesel in the middle of the pandemic. The price of LPG cylinders in Guwahati has risen by nearly Rs. 300 in the past ten months. Struggling with falling revenues, the government chose to burden the common people of Assam.

Development work has suffered since the BJP-led Central government scrapped the special category status for States, affecting Assam and other northeastern States. The 2020-21 Assam budget also saw massive cuts in several important departments like agriculture, rural development, education, healthcare, and flood control. The BJP promised a ‘double-engine’ government. Instead, Dispur and Delhi demolished the double-digit development.

The State is also facing a job crisis. The youth unemployment rate in urban areas for the January-March 2020 quarter was 29.3%. Only five years ago, the BJP had emphatically promised 25 lakh jobs. Earlier this year, it admitted that only 80,000 government jobs were provided. In contrast, the unemployment rate in April 2016, the last complete month when the Congress governed Assam, was 0.7%. This had increased to 7.6% by December 2020. Further, rapid development and robust job creation by the Tarun Gogoi-led Congress government had complemented its efforts towards ending insurgency. Between 2000 and 2015, major incidents of terrorism fell by 94%.

Years of progress has been undone in the past five years. The NITI Aayog’s Sustainable Development Goal Index points to Assam’s worsening state on the poverty index. The National Family Health Survey-5 also supports these findings. The prevalence of malnutrition and anaemia has risen in the population. The proportion of children aged 6-59 months who are anaemic nearly doubled; the proportion of women who are anaemic increased by over 40%.

In its manifesto, the BJP has promised a “brighter future” for Assam’s children. It ignores how it presided over a rise in drop-out rates in secondary schools. Incidences of crime against children more than doubled, increasing by 133% between 2015 and 2019.

Data from the National Crime Records Bureau suggests a complete breakdown of law and order in the State. Comparing the rate of crime, Assam leads other States in crimes against women, violent crimes, kidnapping and abduction of women, and procuration of minor girls.

Assam’s people bear the brunt of floods and the State has a multitude of issues to resolve. Even then, the BJP government’s campaign has communal and xenophobic overtones that seek to divide and pit one person against the other. How the BJP has failed Assam is best highlighted by its promise to review the National Register of Citizens (NRC), a process the party oversaw. The BJP plays up the controversial Citizenship (Amendment) Act in West Bengal, but refuses to discuss its implementation in Assam, which has seen huge protests against the law.

Overall, the BJP’s five years in Assam have reversed economic growth in tangible and measurable ways. But it is the damage and division that it has unleashed in this sensitive, diverse State, which has caused immeasurable harm to the harmonious and inclusive development of Assam.

Rajeev Gowda is Chairman and Akash Satyawali is National Coordinator at the Research Department,

All India Congress Committee

The removal of the governor of the Central Bank has thrown up fears over the monetary policy

The recent removal of the governor of Turkey’s Central Bank, which initially sent the lira tumbling by 14% and rattled global investors, has yet again brought into sharp relief President Recep Tayyip Erdogan’s long fixation with a debt-fuelled model of growth. The apparent reason why Naci Agbal, former finance and economy Minister, was eased out barely four months into his recent job was because he had raised the main rate of interest twice and too fast. Earlier in 2019, the term of Murat Cetinkaya, then head of the Central Bank, was ended a year prematurely because he had not reduced the lending rates soon and sharply enough. The legality of the decision was questioned by an opposition politician.

Undermining independence

Both instances underscore the extent to which Mr. Erdogan has systematically undermined the sanctity of the Central Bank’s independence. In a bid to shore up the country’s construction and consumption boom that has heavily relied on inflows of hot money, he has railed against high interest rates, dubbing them both the mother and father of all evil.

In one of the hallmarks of his executive presidency since 2018, Mr. Erdogan has argued, in a seeming negation of orthodox monetary policy, that higher interest rates indirectly stoked rather than slowed inflation. This unconventional stance has underscored Istanbul’s reluctance to draw lessons from the 2018 currency meltdown, when 30% of the lira’s value was wiped off, triggering skyrocketing inflation and the first recession in a decade.

When Mr. Agbal took over as the bank’s head in November, he inherited a much-weakened lira left behind by the former Finance Minister and Mr. Erdogan’s son-in-law Berat Albayrak. The currency had lost a quarter of its value to the U.S. dollar over the previous year, as investors withdrew huge volumes of lira-denominated bonds amid rising unemployment in the wake of the COVID-19 pandemic and more than 15% inflation. Istanbul has spent more than $100 billion to prop up the lira, eroding its foreign exchange reserves, prompting the ratings agency Moody’s to raise concerns about a potential balance-of-payments crisis.

While at the helm, Mr. Agbal introduced a 6.75 percentage point benchmark rate increase, and more recently, a 2 percentage point rise. Both moves were hailed as a return to monetary orthodoxy, leading to an appreciation in the value of the lira. These gains compare favourably with the situation following the 2018 currency crisis. A 24 percentage point interest rate hike resulted in a significant drop in inflation from 25% to about 15% in the following year.

The turnaround in inflation figures has evidently not influenced any real shift in the government’s position. On the contrary, Istanbul had last year taken recourse to proxy measures to raise the cost of borrowing and other unconventional steps to flatter its foreign exchange reserves.

The new incumbent at the Central Bank, Sahap Kavcioglu, a former legislator from the ruling Justice and Development Party (AKP), is known to share Mr. Erdogan’s unconventional monetary policy stance.

Observers, nonetheless, see hopeful signs in the Finance Minister’s promise following the recent slide in the currency to maintain price stability and Mr. Kavcioglu’s willingness to maintain the status quo at least until the next meeting of the Monetary Policy Committee in April.

Investors can do little else than clutch at these straws given Mr. Erdogan’s highly erratic ways, as is evident from the replacement of the Deputy Governor of the bank on Tuesday. The reaction from currency markets towards Mr. Agbal’s sudden removal would suggest that the decision could not have been more at odds with the President’s recent remarks regarding the government’s single-digit inflation target.

There are growing concerns over the implications of a potentially strengthening U.S. dollar following the Biden administration’s enactment of a $1.9 trillion economic stimulus package. The restoration of a semblance of stability to the volatile lira ought to top Turkey’s current priorities.

The author is Director, Strategic Initiatives, AgnoShin Technologies Pvt. Ltd.

New vaccines must be cleared foremergency use as India battles a new surge

The rise in COVID-19 cases as part of India’s ‘second wave’ has the government and public health authorities truly worried. In many ways, the concern is larger than during last year when there were several more cases. V.K. Paul, Member, NITI Aayog, who has been in the forefront of public communication on all matters COVID-19, described the ongoing situation as going from “bad to worse.” The Health Secretary, Rajesh Bhushan, has also reiterated in the last two weeks that urgent action must be taken. On March 1, concerns of a spike were still on the horizon. In a month, however, the situation appears catastrophic. The number of new active cases added on March 1, around 3,000, has now become nearly nine-fold. Daily deaths too have, in that interval, skyrocketed three-fold — from around 112 to 354. As of this month, India has administered nearly 6.3 crore doses of Covaxin and Covishield and since March 20, has been inoculating a little over 2 million every day. What is apparent is that the States registering a high number of cases — Maharashtra, Gujarat, Karnataka, Kerala and Madhya Pradesh — are also those where many are signing up for their first dose. A notable exception is Punjab. The government is also bearing down on local vaccine companies to prioritise delivery to India over their international commitments as several other vaccine candidates line up emergency approvals from regulators. So, vaccine hesitancy is not India’s most pressing problem.

India’s communication of the tides and ebbs of the pandemic has always been below par. The broader strategy by the Central and State governments is to take credit when there is a declining trend in cases and blame people’s laxity for an upward trend. More research needs to be conducted and communicated on whether mortality in the second wave is biased towards the group yet ineligible for vaccination, and whether reinfections are an emerging problem. It was always known, from the vaccine trial data, that the inoculations were extremely effective at addressing severe disease but less so in containing infections. This aspect needs to be amplified and communicated more clearly to encourage vaccination. It is hypocritical on the government’s part to allow large religious gatherings and politicalmelasin election-bound States and also blame normal movement for the second wave. What is needed is messaging that emphasises the realistic protective abilities from vaccination and physical distancing measures. It is also unclear why new vaccines are not being accelerated for emergency use when Covishield and Covaxin were rushed through without any local efficacy data. More vaccines and a sharpening of India’s communication strategy are essential.

India should use its influence to ensure peace within Afghanistan and the wider region

External Affairs Minister S. Jaishankar’s comment that India supports talks between the Afghan government and the Taliban signals a subtle shift in New Delhi’s approach towards the Afghan crisis. At the 9th Heart of Asia Conference in Tajikistan, he said India has been supportive of all efforts being made to “accelerate the dialogue” between the Afghan government and the Taliban, in a rare direct reference to the insurgent group. In the 1990s and 2000s, India was steadfastly opposed to any dealings with the Taliban. But its position seems to have evolved over the years. In 2018, when Russia hosted Afghan and Taliban talks, India had sent a diplomatic delegation to Moscow. In September 2020, at the intra-Afghan peace talks in Doha, Mr. Jaishankar was present at the inaugural session via a video link, reaffirming the long-held Indian position that any peace process should be Afghan-led, Afghan-owned and Afghan-controlled. His latest comments come close on the heels of a new peace push by the Joe Biden administration of the U.S. The Biden plan includes two key proposals — a unity transition government between the warring parties and a UN-led multilateral conference of envoys from India, China, Iran, Pakistan, Russia, and the U.S. India has supported the UN-led process, in an apparent climbdown from its earlier position, and now shown willingness to deal with the Taliban.

The evolution of India’s position is in sync with the evolution of the reality in Afghanistan. The Taliban, no longer an untouchable force, control much of the country’s rural territories. The U.S. has already signed a deal with the Taliban, wherein American troops are scheduled to pull back from Afghanistan by May 1. China had long ago reached out to the Taliban. Russia has hosted talks between the two sides. European powers have also shown interest in sponsoring talks. So, India has to be more flexible and adapt to the new strategic reality. Since the fall of the Taliban, India has cultivated deep ties with the Afghan people and the government, with investments in multiple projects dealing with education, power generation, irrigation and other infrastructure development. The first batch of vaccines Afghanistan got was from India, in February. Recently, India signed an agreement to build the Shahtoot dam near Kabul. Thus, its economic, strategic and security ties could be disrupted if the Taliban were to take over. The question India faces, like the other stakeholders, is how to help Afghanistan end the violence without a total capitulation to the Taliban. India joining the peace process could strengthen the hands of the Afghan government, which is negotiating from a position of weakness. New Delhi should, using its regional clout as well as its deep ties with both the U.S. and Russia, strive for what Mr. Jaishankar called “double peace”, both inside Afghanistan and in the region.

[Madras, March 31] Mr. AL Srinivasan, President of Commerce, will be leaving for Ceylon to-morrow, to participate in the trade talks to be held there between the Indian High Commissioner and the authorities of the Ceylon Government on the import of Indian films into the island.

In a statement to-day, Mr. Srinivasan welcomed the move of the Ceylon Government to canalise the import of films through a State-sponsored agency and said the film industry in India would extend its fullest cooperation to the move.

Eighty per cent of the Indian films imported into Ceylon were in Tamil language while the rest were Hindi films, he said.