Citizens' Issues
No stay on cattle slaughter ban but SC seeks government explanation
The Supreme Court on Thursday did not put on hold an order banning the sale of cattle for slaughter but sought an explanation from the government if the controversial notification, which has invited widespread opposition -- even from within the BJP, was unconstitutional and violated the right to food, privacy and personal liberty of Indian citizens.
 
A vacation bench of Justices R.K. Agrawal and S.K. Kaul, hearing a petition by a Hyderabad-based advocate who had challenged the ban order, asked the central government to file its response within two weeks. The court fixed the matter for hearing on July 11.
 
The lawyer, Mohammed Abdul Faheem Qureshi, challenged the May 26 notification as "arbitrary, illegal, and unconstitutional" and contended that it was "against the freedom of religious practice to sacrifice the animals" and violated the right to food, privacy and personal liberty guaranteed by the Constitution.
 
Qureshi said the notification by the Environment Ministry noted that the "slaughtering of animals for food, the foods and culinary made out of such animal flesh and offering sacrifice of animals is a part of cultural identity of such communities, which is protected from any legislative or executive encroachment (and) is not subjected to any restriction by the framers of the Constitution".
 
The petitioner also argued that the purchaser of cattle "shall not sacrifice the animal for any religious purpose" was contrary to the Prevention of Cruelty to Animals Act, 1960, whose Section 28 says it is not an offence to "kill any animal in a manner required by the religion of any community".
 
As Additional Solicitor General P.S. Narasimha wanted to make a statement on the intent behind the notification, the court asked him to say all that the government had to in response. 
 
Narasimha told the bench that the intent behind the notification was to bring into existence some kind of regime regulating the sale of cattle for purposes other than livestock.
 
The government notification has triggered widespread opposition across the country. Many politicians, including those from the BJP, have also raised concern over the move because it would cause huge economic burden on cattle farmers and traders in India -- the biggest seller of buffalo meat in the world.
 
According to estimates, India exported $4 million worth of meat last year.
 
Union Environment and Science Minister Harsh Vardhan, meanwhile, said the government was trying to clear the confusion and was re-examining the order.
 
"The Supreme Court said what we have been saying for very long. In the days to come, we will give an answer to all of this," Harsh Vardhan told reporters here after the Supreme Court notice.
 
He said the Environment Ministry notification -- Prevention of Cruelty to Animals (Regulation of Livestock Markets) Rules, 2017, under the Prevention of Cruelty to Animals Act -- was "misunderstood" as the government did not intend to force people to change their food habits.
 
"We have already said that whosoever has any concern related to this issue, we will seriously and honestly address those," the Minister said.
 
"We will put a positive action in place to address every concern and ensure that not even a single person has heartburn on the issue."
 
Union Minister for Law and Justice Ravi Shankar Prasad said the government notification was not intended to change peoples' eating habits but there was a need to strike a balance since a very large number of people in India revere cows.
 
"We should not forget that a very large section of people respects and reveres cows... we can't control the food habits of people. There has to be a balance," Ravi Shankar Prasad said.
 
The Law Minister referred to the Constitutional clause, saying: "The State shall... take steps for preserving and improving the breeds, and prohibiting the slaughter, of cows and calves and other milch and draught cattle".
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Deepak Narain

1 week ago


It is the height of ingratitude to kill some one who has fed us, taking the life of those who have sustained our life. A day might come when people will seek legal approval to kill their old parents as an unproductive economic liability. They would seek to kill them (Muslims will do the Halal way) and consume/sell their body parts. It would give rise to an era of approved cannibalism. In the Hindu way, all life is sacred and we must respect it as we expect for ourselves. The animals also feel happiness, fear and pain. Killing is sinful and will be punished by God.

Nifty, Sensex may dip a bit – Thursday closing report

We had mentioned in Wednesday’s closing report that Nifty, Sensex were in no-man’s land. The major indices of the Indian stock markets suffered a minor correction on Thursday and closed with small losses over Wednesday’s close. The trends of the major indices in the course of Thursday’s trading are given in the table below:

Following their global peers, the Indian equity markets fell during the mid-afternoon session on Thursday, a day after the US Federal Reserve hiked its benchmark rates. The rate-hike assumes significance as it is expected to lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India, and is also expected to dent business margins as access to capital from the US will become expensive. Consequent to the late-night US rate hike, the Asian markets traded broadly in the red and eroded Indian investors' confidence in the highly expensive conditions in the domestic stock markets. Selling pressure was witnessed in banking, oil and gas and capital goods stocks. On the NSE, there were 837 advances, 805 declines and 311 unchanged.
 
The US Federal Reserve on Wednesday raised its benchmark interest rates for the third time since December and unveiled plans to start trimming its balance sheet, even as news of the Fed's relatively hawkish stance provoked caution in early trading in the Indian equity markets, which were trading flat on Thursday morning. "In view of realised and expected labour market conditions and inflation, the FOMC (Federal Open Market Committee) decided to raise the target range for the federal funds rate to 1% to 1.25%," the American central bank said in a statement after concluding its two-day monetary policy meeting. This rate is a 25 basis points increase over the current one of 0.91%.
 
Expressing confidence that the US economy is recovering, the Federal Reserve said America's labour market has "continued to strengthen" and economic activity has been "rising moderately" so far this year. Employment gains have been moderate but solid, on average, since the beginning of the year, and the unemployment rate has declined. Household spending has picked up in recent months, and fixed investment by business has continued to expand. The statement also said inflation "has declined recently" and in the next 12 months "is expected to remain somewhat below 2% in the near term".
 
As per data made available, the previous rate hike by the US central bank in May had a 0.77% upward impact on the BSE Sensex, while the decision to hold rates in March was impacted by 0.64%. However, the recent US rate hike has belied fears of capital outflows from India, with foreign funds continuing to pump in huge liquidity into the stock market. Riding on ample liquidity and confidence of the global fund managers, India's market capitalisation has crossed a massive $2 trillion. In fact, such volumes have also provoked calls for caution in handling inflows.
 
Two- and three-wheeler major Bajaj Auto on Wednesday said that it has reduced the prices of its bikes by up to Rs4,500 with immediate effect, in order to pass on the expected GST price advantage to its customers. "The savings will range up to Rs4,500 depending on the model and the state in which the motorcycle is purchased," the company said in a statement. According to the company, the post-GST benefits will vary for each state and differ across motorcycle models. "With GST implementation just around the corner, we felt that it would be appropriate to pass on this significant savings to customers," said Eric Vas, President, Motorcycle Business, Bajaj Auto. After the GST is implemented from July 1, motorcycles with more than 350 cc engines will attract a 28.84% tax, while mid-segment and high-end luxury cars will call for a tax incidence of 32.2%. The company’s shares closed at Rs2,810.00, down 0.54% on the BSE.
 
Taking higher haircuts is the way forward for resolving the bad loans of banks, UCO Bank MD and CEO RK Takkar said on Wednesday. "We may have to take some haircuts. The banks will be prepared for that and moving forward. I think that's the way things have to move. Most of these (non-performing assets) accounts will be having 40 per cent provisions, so the only issue that comes is for the banks to take higher haircuts," Takkar told BTVi in an interview. The Reserve Bank of India (RBI) has given banks a time frame of six months to resolve their bad loan cases, apart from the 12 identified by its Internal Advisory Committee, failing which the cases will have to be dealt with through the insolvency route. "Banks will be examining each NPA case during the six months. It is also to put pressure on the promoters," Takkar said. "It has to be done within six months. The only option left after that will be liquidation," he said. The RBI on Tuesday identified for insolvency proceedings 12 accounts totalling 25% of the non-performing assets (NPAs), or bad loans, of the banking system. The Bank Nifty closed at 23,391.75, down 0.46% on the NSE.
 
Indians working overseas sent home $62.74 billion last year, an increase of 68.6% in the last decade, according to a UN agency. India received the most overseas remittances last year, a report by the International Fund for Agricultural Development (IFAD) issued here on Tuesday said. The money sent by Indians overseas amounted to 3.3% of India's gross domestic product, the report said. Gulf countries were the primary destination for Indian workers going abroad, with the US as a "popular destination". The data is likely to indicate stability of the Indian rupee against the US dollar and British pound sterling and ensure that there is hardly any volatility in the Indian stock markets on account of foreign institutional investors.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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Demonetisation could cause capital erosion for MFIs, NBFCs and SFBs in FY2018
Following demonetisation and political interference, microfinance institutions (MFIs), including non-banking finance companies (NBFCs) and small finance banks (SFBs) with exposure to states like Uttar Pradesh, Uttarakhand, Maharashtra and Madhya Pradesh, faced with asset quality overhang, are staring at significant credit costs and capital erosion in FY2018, says a research report.
 
In a note, India Ratings and Research (Ind-Ra) says, "The current upheaval has validated our earlier opinion of borrower overleverage and idiosyncratic and systemic risks (due to political ecosystem) prevalent in the industry. Furthermore, borrower discipline, a key ingredient for the smooth functioning of microfinance, has severely deteriorated in certain districts of affected states and may take years to be restored. In addition, MFIs need to structurally look beyond joint liability group (JLG) loans for loan growth and product diversification by building capabilities."
 
 
Ind-Ra says as per its interactions with borrowers, unintentionally defaulting borrowers are unlikely to clear four or more equated monthly instalments (EMIs). "...borrower interactions over the last six months indicate that earning members have lost one-three-month wages or income due to demonetisation in FY2017. However, business almost recovered in 1QFY2018. The analysis suggests that incremental incomes of such borrowers in FY18 would be enough to repay three missed EMIs at best. However, MFIs may need to take haircuts on borrowers that have missed more than three EMIs or are intentional defaulters. The extension of loans by three months may work if default is unintentional."
 
 
An analysis by the Fitch Group Company, indicates that aggregate collection efficiency of majority of MFIs with significant exposure to affected states on portfolio outstanding (as of December 2016) was 75%-80% higher in May 2017 compared with a low of 50%-60% in December 2016. "In case collections on portfolio as on 31 December 2016 do not increase from the current level, MFIs with significant exposure to affected states and with aggregate loans under management of Rs1,000 crore and above could incur credit costs and capital erosion and, thus, higher leverage," the ratings agency says.
 
 
 
According to Ind-Ra, collection pick-up is slower than expectation. Maharashtra was one of the worst affected states, with monthly collections in some districts being in single digits, it says, adding, during the revival period after December 2016, the intensity of political interference in affected states was such that demand for loan waivers did not die down in some districts even after local elections.
 
Ind-Ra's analysis indicates that in case collections (on portfolio as on 31 December 2016) do not increase from the current level, MFIs with significant exposure to affected states and with aggregate loans under management of Rs1,000 crore and above could incur credit costs and capital erosion and, thus, higher leverage. "At 80%, these MFIs could require equity of Rs100 -Rs300 crore, depending on loans under management, to ensure their capital levels remain over the regulatory minimum. The aggregate recovery level on the December 2016 portfolio should exceed at least 85% by 2QFY2018-3QFY2018 to prevent capital erosion beyond the regulatory minimum, without additional infusion for some MFIs. At 95% collections on portfolio at end-December 2016, MFIs are likely to witness marginal capital erosion," it added.
 
 
According to the ratings agency, lower-than-worse-case credit costs and equity erosions are supported by the fact that 15%-20% of assets under management of MFIs are off-balance-sheet, where credit enhancements, over-collateralisation and first loss default guarantees could range between 5% and 15% on an aggregate basis.
 
Ind-Ra feels that MFI should now look beyond JLG. "We acknowledge that JLG loans address an important credit need and have an important role in financial inclusion. However, borrower selection and operating processes need to be reassessed. Moreover, MFIs need to develop expertise in other secured and unsecured credit products and roll them out gradually (early experience not pleasant for most MFIs). Instead of pursuing growth, they need to adopt best practices of NBFCs, minimise employee churn, and innovate lending and risk sharing mechanisms," it concluded.
 

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COMMENTS

narasimha prasad

2 days ago

Sir my mom has deposited 2 12,000 rd on 28 Jan. 2017 but we have not received any of the amt.May I know when we will be getting back

Mahesh S Bhatt

2 days ago

Kejriwal is fighting defamation case against Jaitley who has sued him for few crores Ram Jetmalani defending Judge asking Kejriwal to explain word "CROOKED" FOR JAITLEY. Now Demon happened 8/11/16. On 3 years completion televised interview JAITLEY HAS AUDACITY TO tell audiences that RBI is still counting & accounting. Another news was Delhi deposited 55000 cr / Mumbai 22000 cr so it reflects where crooked more people stay Lastly with automatic note counting machine 1 lac denonimation of Rs 1000/would take 1 min, So God knows how is collected back last count was 14.6 lacs crores /Shivsena complaining that Coop Banks 2200 crores to be exchanged. So with this state of Democracy God also cannot support God Bless Mahesh Bhatt

Suresh Kadam

1 week ago

Demonetization was a useless attempt to curb the black money. It has sure slowed down the economy and the signs are visible everywhere from agriculturists protests to non creation of jobs.

Satyadev Verma

1 week ago

Agree that some negative implications r there with demonitisation.
Never the less,I appreciate the bold & couragious step of demonitisation.
No decision can b 100% correct on country level,there will b benefits & pains.
Demonitisation did not bring out desired results for corrupt bank officials & politicians.
It was with good intentions for the country.

SuchindranathAiyerS

1 week ago

As nothing was done about corruption, either in the form of legislation or in the farm of action, the continuing negative fall outs of demonetization will echo past the term of the Modi Sarkar

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