Month: October 2016

Posted in Critical Analysis, Environmental Law

Stubble Burning – A threat to the environment?

Posted on by The Law Blog

This article has been written by Plash Mittal. Plash is a student of BCom LLB at University Institute of Legal Studies, Panjab University, Chandigarh.

Stubble burning is the deliberate setting fire of the straw stubble that remains after wheat and other grains have been harvested. The carbon (C) component in stubbles is lost by burning and that the process of burning stubbles even occasionally, seriously affects the organic carbon levels of the soil. Around 80 per cent of the C in standing stubble will return to the atmosphere as CO2. Losses of carbon as CO2 to the atmosphere through burning are often only slightly greater than through natural decomposition, but they are of course immediate.

Advantages of burning

  • Cheap
  • Quick and easy
  • Can assist weed, insect and disease control
  • Reduced nitrogen tie-up

Disadvantages of burning

  • Loss of nutrients
  • Loss of carbon
  • Impact on soil microbes and fauna
  • Reduction in soil structure (soil aggregate stability)
  • Increase in erosion (wind and water)
  • Can increase acidity over time

 

After a bumper paddy crop, the fields are on fire in Punjab and Haryana, polluting the air with hazardous particles. Even the atmosphere of Delhi is witnessing a thick blanket of smog. The resultant haze and low-hanging clouds of smoke, exacerbated by low temperature and slow wind speed are posing serious risks to people with breathing troubles, allergies, asthma and other respiratory disorders 

A major pollutant

Burning straw leads to increase in particulate matter (PM) in the air. The burning causes release of acids like sulfates, nitrates, metals in the air and could cause severe health problems. According to the experts, burning of straw burns out 1 lakh tonnes of nitrogen, 0.5 lakh tonnes of phosphorus and 2.5 lakh tonnes of potash in the soil over the 29-30 lakh hectares in which paddy is grown annually.

 

Ban remains on paper

In Jalandhar district, where 1.6 lakh hectares were under paddy this season, 80% of the farmers burn their crop residue to free their land for the next crop. Haryana Space Application Centre (HARSAC) in a survey found that farmers in Haryana burnt 80% of the stubble for paddy and wheat. After the government banned stubble burning in 2014, farmers reduced it up to 14%.

 

Political will missing

Lack of action is responsible for the continued stubble burning. The farmers are taking advantage of leniency and setting crop residue on fire without considering the threat to human lives or soil health.

Solution

The best use of stubble is as animal feed by conversion of stubble into goat fodder. Converting stubble into milk and meat will add more value than using it as fuel. Humans cannot digest straw at all, but cattle, sheep, goats have four-stage stomachs that digest up to half of it. Goats have the toughest stomachs and best digestion rates. Treatment with urea, alkalis or molasses can improve the digestibility and calorific value of straw.

Zero-till farming is another alternative which sows wheat seeds without removing the stubble. Tractor-mounted happy seeders, rotavators, and straw-reapers simultaneously cuts rice stubble and sows wheat seeds, depositing the cut stubble on top as mulch.

The farmers should be encouraged to adopt conservation farming systems. Alternative options to manage stubble residues, particularly in high rainfall areas, are continuing to evolve.

An all-round aggressive approach is needed on behalf of the government, scientists and farmers in the form of adoption of ‘straw management technologies’.

 

The Existing Law

There is no specific law in Punjab to ban straw stubble burning, but every Deputy Commissioner (DC) in Punjab has the power to ban this under section 144 of the CrPC. The practice, however, continues right under their nose. The DC also has the power under 188 of the IPC to punish violators but that rarely happens. Under the law, a violator may be punished for up to six months jail and imposed a fine of Rs 1,000.

Meanwhile in Haryana, the environment department had banned the burning of agriculture waste in the open fields under the Air (Prevention and Control of Pollution) Act 1981. Till date, prosecution action has been filed against 32 farmers in the special environment courts in Kurukshetra and Faridabad by the Haryana Pollution Control Board for burning paddy in the open fields.

Need for New Law

Like Punjab Preservation of Subsoil Act of 2009, which was enacted to save depleting groundwater and under which no farmer can sow paddy before June 10 or June 15, a similar law is needed to ban paddy straw burning.

REFERENCES

  1. http://www.hindustantimes.com/punjab/the-stubble-trouble-farmers-play-with-fire-shun-ban/story-At8wllN4WFzpnrJC2L3J2J.html

  1. http://agriculture.vic.gov.au/agriculture/grains-and-other-crops/crop-production/stubble-burning

  1. http://blogs.timesofindia.indiatimes.com/Swaminomics/how-goats-can-clean-delhis-dirty-air/

  1. http://www.tribuneindia.com/news/punjab/punjab-haryana-farmers-ignore-ban-on-stubble-burning/311814.html

  1. http://timesofindia.indiatimes.com/city/delhi/Ban-reduces-stubble-burning-caused-air-pollution/articleshow/52895763.cms

  1. http://indianexpress.com/article/india/india-news-india/stubble-paddy-burning-laws-pollution-punjab-haryana-machines-technology-agriculture-3074422/

  1. http://indianexpress.com/article/explained/punjab-needs-law-awareness-to-contain-air-pollution-caused-by-paddy-straw-burning/
Posted in Corporate and Finance, Uncategorized

GST on the way, Labor Reforms on the Anvil!

Posted on by The Law Blog

This article has been written by Amrit K.N. Pradhan. Amrit is a student at Rajiv Gandhi National University of Law, Patiala.

“Precaution is better than cure” – Johann Wolfgang von Goethe.

I have probably heard this fable more than ever in my lifetime, it looks like the trend will continue. It certainly puts my parents and my sister on the brink. I apologise to them.

Changing tracks…

Since the inception of NDA-II under the reigns of PM Modi the business environment has certainly made headway. The World Bank Group’s “Ease of doing Business” (an index which measures the regulations and protections offered by a country.)deserves a healthy share of the pie. The fable has been so much in vogue that now a provincial version of it has been ‘manufactured’.

The first major instance, where NDA-II tried to make its mark in promoting a conducive business environment was by introducing The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015. The bill created five special categories which were exempted from taking consent from 80% of land owners (70% in case of PPP.), a tumultuous process. They were defence, rural infrastructure, affordable housing, industrial corridors and infrastructure projects including public private partnerships where the government is the owner of the land.

The process was a certain hindrance in fast-tracking business investments and projects in the country. The Government in power passed the muster easily in Lok Sabha but same was not the case in the Rajya Sabha, where it did not have a majority like it had in Lok Sabha. It passed ordinances under Article 123 of the Indian Constitution several no. of times, in the meantime they tried to garner the required votes to pass the bill. Unfortunately for Indian economy and business environment, the time gained through promulgation of ordinances garnered zero returns.

Remember, your debut class in economics where one of the first things you learned or noticed that Land, Labour and Capital are the basic factors of production. So, NDA-II also noticed the basic need to make the land acquisition process easier and quicker to have an able base to setup businesses in the country and take the country on the path of “Development and Job Creation” (a plank on which PM Modi won the Elections 2014.). But, it failed.

Next basic thing is Labour. You can criticize them for skipping it prima facie. For a moment, if I tell you it was a wise political move to not to escape the bad impression in the eyes of the general public which LARR Bill had created and jump on easing the capital flow. Then, I am sure the criticism would be repudiated.

The Government eased the capital flows by making it easier for sectoral firms to utilize and attract foreign investment through FDI. SEBI chipped in by easing the regulation environment for FIIs or Foreign Institutional Investors. GST was part of easing the Capital flow, it faced hurdles but ultimately it passed the muster. Fingers crossed! by April 1, 2017 hopefully we will contribute to the governance process by paying our fair share legally under the GST or Goods and Services Tax.

Looks like the script of ‘one single nation, one single tax’ will be played around with to account for four slabs of 6%, 12%, 18% and 26%. I am on the cusp of reading and learning through Emeritus Fellow of Merton College, Oxford economist Vijay Joshi’s latest writing, India’s Long Road – The Search for Prosperity. It has gone quarter of way in appreciating the current reign of PM Modi. However, it also points out frailties in Labour, divestment of governmental stakes in PSUs, vicious tax evasion and India’s reticence in joining the free-trade agreements currently being negotiated throughout the world are some of the lucid pointers which needs quick appraisal for the current government to grow at a rate near to 8% to fulfil the promises of “Economic Development and Job creation”.

First of those suggested by Vijay Joshi, who has been the Special Advisor to Ministry of Finance as well as Governor, Reserve Bank of India is planning to be dealt with by Team Modi & Co. The work had begun when the current government took over in May, 2014 to amalgamate and cull down the various Acts into as few and updated as possible. As per sources, they have been trimmed into four Labour Codes underlining Labour, Industrial Relations, Social Security plus Industrial and Safety Welfare.

The Labour Code underwrites Minimum Wage Act, 1948 as the parameter for wages. The Industrial Code restricts formation of a trade union. Social Security amalgamates 6 acts into one code, Industrial Safety and Welfare does the same with three underlying acts.

This should up the ante of India in World Bank’s Ease of Doing Business Index 2017. Rankings apart, on the ground applicability of the law will be crucial to ‘Ease of Doing Business’.

 

Posted in Critical Analysis, Personal Laws, Social Issues

Uniform Civil Code and Secularism

Posted on by The Law Blog

This article has been written by Chirag Jindal. Chirag is a first-year student from National University of Advanced Legal Studies, Kochi.

 

 

The Law Commission of India has recently released a questionnaire on the matter of Uniform Civil Code. All the concerned citizens of our nation are expected to engage and provide their opinions as well as suggestions for the revision and reformation of family laws in India. As provided by the Law Commission, the object of undertaking this endeavour is “to address discrimination against vulnerable groups and harmonise the various cultural practices.” And the debate is now open to the general public on the issue of Uniform Civil Code.
The debate on “Whether to have a Uniform Civil Code in such a diverse nation with so many social, political, economic, religious and ethnic groups?” is not recent. Ever since the inception of our Constitution, the debate has continued and is still going on. Article 44 of Part III of the Constitution (i.e. The Directive Principles of State Policy) provides that “The State shall endeavour to secure for the citizens a uniform civil code throughout the territory of India.” Although our Constitution lays down the Directive Principle for the Uniform Civil Code, it does not explicitly mention how to achieve this task. Therefore, this issue has been left to debate in public and it continues from the time when India became independent till the present day and is still going on.
Now let’s move further and try to analyse Uniform Civil Code from the view of the fundamental principle of Secularism in our nation. Although the word SECULAR in the Preamble of the Indian Constitution was added by the 42nd Amendment, India was a secular country from the day when the Constitution entered into force. The 42nd Amendment just made explicit what was implied from the Constitution. Before the 42nd Amendment, Secular spirit of India was implied under Articles 14, 15, 25, 26, 27, and 28. Though the addition of word SECULAR was a good initiative, the Amendment has left it open for debate, discussion and interpretation.
On one hand, the Constitution provides for the Secular nature of the country but, on the other hand, it also directs the State to endeavour for the Uniform Civil Code. So, is this contradiction a flaw in our Constitution? Well looking at this problem from the historical front, at the time of adoption and commencement of our Constitution there were so many religious minorities in India and they were so left behind in social, political and economic spheres of life that the Constitution-makers thought it fit to provide for their upliftment in all spheres of life. But as India is one country and we all are Indians, the Constitution makers also provided to endeavour for the Uniform Civil Code. Consequently, the question which arises next is, “Whether it is the right time to implement the Uniform Civil Code in our Country?”
As far as I am concerned, I don’t think that the time has come to implement Uniform Civil Code. There are mainly two reasons for this.
Firstly, till now, neither the legislature nor the judiciary has attempted to define the word SECULAR; what does it mean? There are concepts definitions of Secularism which are accepted in the world. The first is the neutrality concept which means that there should a separation of Sate and Religion and the State should not interfere in any way in the matters concerned with religion. This concept of Secularism prevails in the Western Countries. The second is the equality concept which means that State shall treat all religions equally and should not discriminate among them. Indian model is secularism is mainly based on the equality concept. The argument here is, although the Indian model is based on equality principle, still no satisfactory definition has come up. So, we cannot exactly set up what Secularism actually mean in Indian Context.
Secondly, due to so much diversity present in our nation, it won’t be easy to determine what provisions to be included in Uniform Civil Code. Including a principle in Code which is contradictory even to one of the religions or groups may create a sense of tensions among the people and is also against the spirit of Secularism in India.
Conclusively, it can be said that the time to have a Uniform Civil Code in our country has not yet arrived and the State should still endeavor to provide for the Uniform Civil Code.

Posted in Critical Analysis, Social Issues

Digging up the Third gender Issue: Historically speaking

Posted on by The Law Blog

This article has been written by Abhipsa Upasana Dash. Abhipsa is a third-year student at Symbiosis Law School, Noida.

Since last few decades, there has been a controversy regarding the recognition of the transgender people in the society. They fight for their identity under the cover of a distiction between man and woman. The recent judgment of the Indian Supreme Court pronounced on 15th April 2014 had further aggravated the long-debated controversy all over the world on the rights of the transgender. Without the presence of any concrete definition of the term, everybody tries their own perception for understanding it. Defining the term, the Transgender ASIA says, “Trans people are those males or females of any age who are unhappy living in the gender identity ascribed to them at birth. Transgender, transsexual, or Trans persons are people whose psychological sex/gender, or sense of their own innate gender identity is different from their physical sexual characteristics.”

Origin of the term “third Gender” can be traced back to the late nineteenth century as a way to describe homosexual men and lesbians by sexologists. Not carrying the moral or legal stigma of sodomite, it suggested an innate or biological factor existed in behaviors that was different from traditional categories of male and female. However, it also conflated same-sex desire with gender variance. Karl Heinrich Ulrichs used the word Urning in the 1860s to describe a third sex male being who desired other men; Richard von Krafft-Ebing used the term sexual invert to describe a similar being in his 1886 PsychopathiaSexualis. Havelock Ellis and John Addington Symonds followed suit in their 1896 study, Sexual Inversion, and Edward Carpenter followed the third-sex model in his 1908 work, The Intermediate Sex. The notion of sexual inversion insisted on a two-gender system, regarding homosexual men as women trapped in men’s bodies and homosexual women as men trapped in women’s bodies. The notion of an intermediate sex offered possibilities beyond two genders, allowing for three or more genders, with at least one of these being neither male nor female.

The ascendancy of psychoanalysis in twentieth-century Europe and North America, with its interest in sexual desire, spelled the demise of the third sex model. Homosexual, coined in the 1860s, eventually replaced such terms as urning, invert, intermediate type, third sex, and psychic hermaphrodite to describe subjects with same-sex desires. Female homosexual became interchangeable with lesbian, a term Ellis helped popularize, referring to the same-sex desires of the women of Lesbos. R[1]adclyffe Hall returned to the idea of sexual inversion in her 1928 lesbian novel The Well of Loneliness because it offered her heroine a way to desire other women that was honorable; if one’s inner self was really male, then desiring a woman would be normal rather than perverse. However, the third-sex model largely disappeared. Missing was the notion of gender variance, which might or might not be included in homosexual or lesbian. Gay eventually replaced homosexual as a less medicalized term, and was sometimes extended to women as well. Sometimes the term third sex occurred in pulp novels to sensationalize homosexuality, and to make gay men and lesbians seem freakish and less than human.

The late 1980s and early 1990s saw a resurgence of interest in gender among urban sex radicals, feminists, lesbians, gay men, intersex activists, and people who felt increasingly alienated from sexual categories that erased gender variety. The word queer began to circulate as an umbrella term for those who disavowed normal gender and sexual categories, and more and more people began to experiment with alternative gender expression through hormone therapy, surgery, dress, and gesture. As queer and transgender people began to question sexual taxonomies, the idea of three or more genders caught on once more.

Queer, intersex, and transgender visibility has resulted in the return of the third sex as an alternative to normal heterosexual male and female bodies and desires. Anne Fausto-Sterling (2000) has argued that there are at least five sexes that occur naturally in human beings, and that medical intervention can rob an intersex child of what might otherwise be a healthy gender identity and sexual and reproductive life. Leslie Feinberg (1997) has traced the presence of transgender people back thousands of years in cultures around the world. In the early twenty-first century, the hijras of India, kathoeys of Thailand, two-spirit Native Americans, travestis of Brazil, intersex people among the nomadic Bugis of the Sulawesi, xanith of Oman, fa’afafine of Polynesia, sworn virgins in the Balkans, ashtime of Ethiopia, mashoga of Kenya, and the drag queens, butch lesbians, transgender activists, and intersex people of North America and Europe, all constitute an alternative to the two-sex system, although they do not necessarily see themselves as members of a ”third” sex. Regardless of how they view themselves, however, the presence of so many alternatively gendered people cannot help but expand traditional ideas of what it means to be embodied, gendered, and human in the early-twenty-first-century world.

Posted in Critical Analysis, Environmental Law

Political Ecological Philosophies and Sustainable Development: An Analysis

Posted on by The Law Blog

This article has been written by Chirag Jindal. Chirag is a first-year law student at the National University of Advanced Legal Studies, Kochi.

In the famous Asiatic Lion Case, the Supreme Court of India laid down the following:

“Sustainable Development, it has been argued by various eminent environmentalists, clearly postulates an anthropocentric bias, least concerned with the rights of other species which live on this earth. Anthropocentrism is always human interest focused thinking that non-human has only instrumental value of humans, in other words, humans take precedence and human responsibilities to non-human are based on benefits to humans. Eco-centrism is nature-centered, where humans are part of nature and non-humans have intrinsic value. In other words, human interest does not take automatic precedence and humans have obligations to non-humans independently of human interest.”[1]

In this Article, it will be tried to analyze the concept of sustainable development, in general, and its relation with the different political ecological philosophies that are being followed.

The most frequently quoted definition of sustainable development is as follows:

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”[2]

This definition implies that development goals should be achieved in such a way so as to degrade environment least as far as possible so that the present generation as well as the future generation is able to meet the needs in all frames of time. The definition focus on two key concepts:

  • the concept of needs, in particular the essential needs of the world’s poor, to which overriding priority should be given;[3]
  • the idea of limitations, imposed by the state of technology and social organization on the environment’s ability to meet the present and future needs;[4]

As it has been rightly pointed out by Lionel Robbins in his ‘scarcity definition’[5] of economics that human needs are unlimited but the resources present on the earth are limited. This idea has become more constrained and the gap between unlimited needs and limited resources has been increased mainly because of the two reasons:

  • Increasing needs because of population rise in the world.
  • Limitations on the resources present due to shortage of resources (caused by their extensive uses in past) and imposition by the technology on environment’s ability.

 The principle of sustainable development laid down by the environmentalists to overcome the above problem is an appealing way to reduce the environment degradation. Yet the issue cannot be settled very easily. Though we have a solution, the difficulty arises in how to approach to solve the problem. This is because of the different philosophies of political ecologists in themselves to cope up with the issue of environmental issues and phenomena. Let’s have a look at what type of philosophies do political ecologists have.

There are mainly three types of philosophies that ecologists follow but these three are complemented by many other philosophies too. The first one is the eco-centrism. The ecocentric argument is grounded in the belief that, compared to the undoubted importance of the human part, the whole ecosphere is even more significant and consequential: more inclusive, more complex, more integrated, more creative, more beautiful, more mysterious, and older than time.[6] The second is anthropocentric belief. Anthropocentrism is the belief that considers human beings to be the most significant entity of the universe and interprets or regards the world in terms of human values and experiences.[7] The third philosophy is the technocentric approach to environment. Technocentrism is technological centered belief to protect the environment and the ecologists claim that humans have ability to control and protect the environment.

The question which arises next is whether sustainable development and different political ecological philosophies go hand in hand with each other.

Technocentric belief can be said as a far fletched belief. That humans can control and protect the environment is itself a fallacy. The world has seen many examples where the nature has reached outside the control of humans particularly during natural calamities which are increasing day by day due to human interference with nature.

As we analyze the anthropocentric i.e. human centered belief, we come across the fact that due to the philosophy of anthropocentrism itself, the world is facing the consequences which could have been possibly avoided in the past. Due to the greediness of humans, the destruction and degradation of environment started and continues till today. And to say that anthropocentrism and sustainable development may be a possibility is beyond the thinking of a rational human being who beliefs in environment protection. This can be clearly inferred from the words of Stan Rowe that goes as follows:

 “The “environment” that anthropocentrism misperceives as materials designed to be used exclusively by humans, to serve the needs of humanity, is in the profoundest sense humanity’s source and support: its ingenious, inventive life-giving matrix. Ecocentrism goes beyond biocentrism with its fixation on organisms, for in the ecocentric view people are inseparable from the inorganic/organic nature that encapsulates them. They are particles and waves, body and spirit, in the context of Earth’s ambient energy.”[8]

The Eco-centric belief can be said to be the most concordant belief with the sustainable development. But the belief ties to limit the development in itself. According to the definition of sustainable development, development should also meet the needs of the present generation. But if we go with eco-centrism, it is not possible to meet the needs of present generation which consist of almost 8 billion people in the world though it can manage to preserve the world for future generations.

With the above analysis a new question arises i.e. whether the concept of sustainable development itself is mostly a theoretical concept with a very limited scope of practical applications. The answer again can be two-fold. On one view, it can be said that sustainable development is a hollow concept and humans do not have any control over the happenings in nature. The environment has now reached beyond the ambit of human beings and whatever happens now is in nature’s hand. On the contrary, it can be said that sustainable development is at least a step ahead or a tool to protect our environment in whatever way we can. Though the environment is beyond reach of humans, a least contribution even by least number of people can change the present state of environment.

Whatever the answer is or whatever is the view that can be accepted, the debate is still going on forever. The concept of sustainable development has helped mankind a lot at least in the sense of creating awareness among the people. So, it can be said that the change will happen. But we are not sure about the kind of change – either it will be better or it may even be worse. And in order for a change to be a better one, the first thing which is required is the change in attitude of society. Instead of having so much debates and discussions on policies, philosophies, problems etc, let’s not start doing something, however small it may be. It will be better for the world if each and everyone just not focus on planning, but start doing for the betterment of environment.

[1] WWF-I vs. Union of India and Ors (2013) 8 SCC 234

[2] Brundtland Report, 1987 by Brundtland Commission formally known as World Commission on Environment and Development.

[3] supra

[4] supra

[5] Lionel Robbins defined economics as “the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.”

 Robbins, Lionel (2014) [1932], An Essay on the Nature and Significance of Economic Science (2nd ed.). London: Macmillan. p. 16

[6] Rowe, Stan J. (1994).”Ecocentrism: the Chord that Harmonizes Humans and Earth” The Trumpeter 11(2): 106-107.

[7] Anthropocentrism – Merriam-Webster Dictionary

[8] Rowe, Stan J. (1994).”Ecocentrism: the Chord that Harmonizes Humans and Earth.” The Trumpeter 11(2): 106-107.

Posted in Corporate and Finance, Others

Concocting a Bad Bank

Posted on by The Law Blog

This article has been written by Amrit K.N. Pradhan. Amrit is a student at Rajiv Gandhi National University of Law, Patiala.

 

 

“The More you meander around with things, the more they stay the same”.

It is that time of year again when you are less than a week away from Diwali break. The anxiety levels are at the optimum. There are though things to hold on and calm you down, especially when you are in the hot seat doing what you like.

However, situation is not such rosy in the Mint Street. Even after the Asset Quality Review (AQR) under the aegis of RBI which meant classifying non-payable interest payments into the head under non-profitable assets, balance sheets are still in a bottleneck. October is a busy period not only for business houses but also for stock traders who have their hands full with a a barrage of information from M&A’s to Sales stats etc. The most important however is the financial results of the companies for the just bypassed Q2. Analysts with their hawk-eyes are on their toes to pounce on looking for that extra paisa here and there.

If you ask them about the sectors to keep an eye on for long positions – pharmaceuticals, automobiles and FMCG would do the rounds. On the contrary, if you ask them for short positions –  ITES, banking (especially public sector banks or PSBs) and metals would make up the list. Out of the six sectors banking is what is the oxygen for the other five. And public sectors banks (by market share) contribute more than 70% to the Indian economy.

The problem of PSBs non-performing assets (NPA), far from easing, seems to be getting worse. In the last financial year (2015-16 or FY 16) their gross NPA rose from 9.5% from 5% from FY15. Out of the total Gross NPA (approx. 5 lakh crore) in the banking sector the contribution of PSBs is 88%.

Bank Board Bureau (BBB)

Gross Capital Formation (GCF) refers to the net increase in physical assets (investment minus disposals) within the measurement period. As per the latest figures (as of October 4, 2017) it is 28.3 %, the lowest in the last decade. It hit the highs of 35 % at its peak in 2000. Whatever sub-8% GDP growth India has achieved is due to intervention of the fiscal policy of the Government.

The Government has its hand tied to extend its fiscal intervention due to its aim of hitting the mark of 3% CAD or Current Account Deficit by 2017.

To deal with the situation the Ministry of Finance has already recapitalised banks and aims to influx more of it in the future with the backing of Union Minister of Finance Shri. Arun Jaitley. To deal with situation holistically a BBB has been setup under the hawk-eye of the former CAG Shri. Vinod Rai.

It aims to oversee professional appointment into the boards of the PSBs, check the application of best practices and create a platform wherein such a situation of ‘Trickle Down Credit Growth’ does not occur even after RBI has done its bit for improving the credit scenario in the country.

One of the firsts’ in restructuring the balance sheets of the banks was whether to create a Bad Bank to house these ‘Non-Profitable Assets’ in an independent structure. It would mean wiping of the clog from the balance sheets of these PSBs. However, the repudiation for creating such a ‘bad bank’ is there more than a dozen of such Asset Reconstruction Companies. Creating another under the weather may create an environment for a race to the bottom.

A recent example of such event would be the creation of such a bad bank in ‘sick’ Italy where such a bad bank’s resources were exhausted in recapitalising just one bank i.e. Banca Monte deiPaschi di Siena Spa.

However, the solution to such a problem has already been Made in India. India’s largest bank (as per market share) State Bank of India is on the heels of merging its sister banks to hold it in good stead in terms of balance sheets and to rise higher in the global league tables. This merger is very objective in nature as a smaller bank has extensive local knowledge and functional efficiency. Creation of a centralised organisation would make the decision-making process and the lending process even slower.

The key to solving the bleeding of banks would be to bring in best professional practices and let them compete with the private banks in the sector by divestment of government stakes in these PSBs (For eg. – Check the recently released Financial Results of RBL Bank). Making half-hearted effort in solving the problem like temporarily creating a bypass for reducing the logjam would be nothing but beating around the bush. That is the least Indian economy needs to continue grow at par-8% and build a good base for Make in India.

 Just glance an eye for inspiration on the recent leadership and management skills of Shri. AshwaniLohani, MD of Air India which conjured up an Operating Profit of Rs. 105 crores in FY16 (you shouldn’t rule out thought the effect of culled down global crude oil prices).