Citizens' Issues
SC raps Centre on Food Act non-compliance by drought-hit states
The Supreme Court on Wednesday slammed the Centre for doing nothing to tell the states to comply with the top court's directions to supply food grain to the poor in drought-affected states under the National Food Security Act.
 
A bench of Justice Madan B. Lokur and Justice N.V. Ramana said: "We will discharge the Union of India (as respondents from the case) if it is not able to do anything."
 
The apex court asked petitioner-organisation Swaraj Abhiyan to file an affidavit to flag five or six court directions issued on May 11 that were not complied with by the drought-hit states across the country for initiation of contempt proceedings.
 
During the course of hearing, the petitioner's counsel Prashant Bhushan said the contempt proceedings should not only be against the states concerned but also the Centre.
 
Taking a dim view of the Centre's approach, Justice Lokur said: "The moment we ask you questions, it is construed as if we are attacking the government of India."
 
As Additional Solicitor General P.S. Narasimha sought to play down the 'small issue' of states not setting up 'Food Commissions' to monitor implementation of the act, Justice Lokur observed: "An Act of Parliament is being violated with impunity. (It) is not a small issue."
 
The bench asked Narasimha to explain what he had said in the affidavit on the matter.
 
Section 16 (1) of the Food Security Act, 2013, says: "Every state government shall, by notification, constitute a state Food Commission for the purpose of monitoring and review of implementation of this Act."
 
However, most state governments, taking recourse to the act's Section 18, have saddled other existing commissions with additional responsibility of the Food Commissions.
 
Section 18 provides for the designation of any commission or body to function as the state Food Commission.
 
Clearly exasperated over non-compliance with the apex court orders and the Centre informing the bench that it had sent a communication to the states on the matter, Justice Ramana said: "If this is the way the matter is going on, there is no need to hear it. We are wasting your time."
 
"An Act passed by Parliament has to be followed by the states. Let them say they don't bother about the Act," Justice Lokur said.
 
He asked Narasimha: "Is there a remedy under the Constitution if states don't comply with the laws passed by Parliament?"
 
The Additional Solicitor General pointed to Article 365 which says that when a state does not comply with the Centre's orders issued in exercise of its powers under the Constitution, the President can hold that a situation has arisen wherein the government of the said state cannot be carried on in accordance with the constitutional provisions.
 
The Supreme Court's strong observations came during the course of hearing on the compliance of several apex court directions dated May 11, given in the judgment on a public interest litigation by Swaraj Abhiyan.
 
The organisation had sought the court's intervention for relief to the poor in drought-affected states, including Gujarat, Bihar and Haryana.
 
The three states have resisted the suggestion that they declare some of their districts as drought-affected.
 
Justice Ramana said: "We are not getting any feel or visible change except that funds have been released. The mechanism has failed. The Acts of Parliament and directions of the (top) court are not being implemented."
 
"Is it possible to monitor the 13-odd states from here," Justice Ramana asked as ASG Narasimha urged the court to monitor the implementation of its directions.
 
Referring to his experience as amicus curiae in the hearing on setting up of fast-track courts and enactment of the Consumer Protection Act, Narasimha urged the Supreme Court to invoke its contempt powers and hold case hearing once a month to secure compliance with its directions.
 
Bhushan told the court: "The Centre is clearly in contempt for violating the undertaking given in the court that it will release food grain to meet the additional requirements of the drought-hit states. Now the Centre is asking for Minimum Support Price for releasing additional food grain." 
 
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.

User

Did RBI make room for a rate cut by shifting goalposts?
The Reserve Bank of India (RBI), on Tuesday cut repo rate (the short-term lending rate charged by the central bank on borrowings by commercial banks) by 25 basis points (bps) to 6.25%. This has surprised the debt market. Most polls had respondents saying that the RBI would stay put. The cut was not only shrouded by a cautious commentary over the future inflation trajectory and importantly, the RBI changed its stance on the neutral real rate and the timeframe for achieving the 4% inflation target, creating room for monetary easing, says a research report.
 
In the note, Religare Capital Markets Ltd says, "Highlighting that neutral real interest rates have been dynamic and declining globally, the RBI hinted at lowering the neutral real interest rate (one-year T-bill inflation) to 1.25%, as against former Governor Dr Raghuram Rajan’s preferred range of 1.5% to 2%. The RBI earlier had a timeline of March 2018 to achieve 4% inflation. This timeline is open-ended and subject to the amendment in the RBI Act, which has a 5-year timeframe. The tweaks in the parameters are aimed at creating space for further monetary easing."
 
Talking about inflationary risks, Religare says it sees medium-term risks to inflation to remain and further rate cuts would depend on MPC member’s views on the new stance. "Though the self-imposed glide path to 5% by March 2017 is now revised to 5.3% while incorporating the impact of the 7th Central Pay Commission (CPC) salary hikes, the journey thereafter, to 4.5% by March 2018, as per RBI staff estimate, seems to be mired in known and unknown upside risks to headline retail inflation. We expect the Consumer Price Index (CPI) to bottom out around 4% during September-October 2017, and thereafter start moving northwards," it added. 
 
According to the report, there are five risks to inflation:
1. Implementation of the housing allowances portion of the 7th CPC; the RBI expects this to push up inflation by about 100-150 basis points (bps). While its implementation date is subject to the decision of the allowances committee, the impact should be felt during the next fiscal.
2. Goods and Services Tax (GST) implementation is likely to be inflationary in the first year, although its extent will depend on the rates that the GST Council decides along with the exemptions.
3. Stickiness in core inflation (between 4.5-5.5%) over last two years. Note that services inflation has averaged at 4.9% during April to August 2016 vis-à-vis 4% in the year-ago period.
4. Upside risks to inflation from rising global commodity and oil prices, more so after the OPEC decided to cut output earlier last week. 
5. US Fed’s rate hike timeline and financial and currency market response and the impact on imported inflation via currency.
 
"The room for further rate cuts would depend on the inflation trajectory and the views of individual MPC members on the neutral real interest rate and the timeframe for achieving the mid-point of the inflation target," Religare concluded.

 

User

COMMENTS

Srinivasan

2 months ago

Yes the new MPC and the new governor need to be observed even more closely. Just one data point would not make a trend.
However the statement that 1.25% differential for savers - is a clear indicator that the new governor is not going to care two hoots for the fixed income savers. So he is going to make life even more challenging for the retired folks!

The next one about the range - looks like intent may not be to hit the sweet spot of 4%, but rather ensure that they will pass the test - by being below 6%... That's how it appears (but then one will wait to see what happens over the next 2 meetings).

Finally the comment about NPA in the financial sector, will have to be seen how it translates over the next 2 quarters... if it means allowing more pile-up - then we have a danger... but for now it's wait and watch with a HAWK's EYE.

But certainly it's a new governor, a new MPC and definitely not the old world.

Chandragupta Acharya

2 months ago

The Monetary Policy Committee (MPC) was unanimous in its decision to cut rates. The purpose of a committee is to discuss and debate differing viewpoints threadbare. The consensus in the Committee is surprising, given the short notice and the fact that the decision is NOT towards the status quo. Of course, the minutes of the meeting are awaited, but I would be watching this aspect closely in future.

REPLY

Govinda Warrier

In Reply to Chandragupta Acharya 2 months ago

Sure. The MPC's actions will be followed by many with interest. There seems to be nothing unusual in arriving a consensus on such issues. We must allow professional bodies some freedom in evolving processes and procedures best suited in given situations. Even those having a different view on decisions like this, may find the majority view acceptable and may fall in line and avoid a voting. This is different from members coming with constituency interests and lobbying without listening to others' views.

B. Yerram Raju

2 months ago

It is the sync between the monetary and fiscal policies that would decide the future course of inflation. The headwinds for future are northwards even on cautionary note due to the 7th Pay Commission hike, and farm production uncertainties. Manufacturing growth is marginal and even services sector growth for the second quarter has declined. Exports are not surging. Credit growth that is sluggish not so much because of lack of resources as of sliding risk appetite bitten by huge NPAs. Therefore, we have to wait and watch whether banks would pass on the rate cut to their clients and whether they would meet up with the rising demand for credit. Banks have been mentioning that there is slackness in demand while the fact is just the opposite. RBI has done what best it could do under the MPC regime. First strokes are good.

Govinda Warrier

2 months ago

More and more research, analyses and comments on the subject from any quarters should be welcomed, as these can turn out to be inputs for future policy corrections. Here, the reference to "change of goal posts", is uncharitable and perhaps motivated. Let us not read too much into RBI's own observations on inflation target, so long as the central bank is within the contours of mutually agreed 4 plus or minus 2. Even in the event of missing the target at any point of time, the only expectation of GOI from RBI is a convincing explanation for that. Now that GOI and RBI are making more efforts to align fiscal and monetary policies, let us wait and watch.

Adarsh scam: HC orders deep probe into 'benami' flats
Expressing dissatisfaction with a Central Bureau of Investigation report on its probe into 'benami' flats in the controversial Adarsh Society, the Bombay High Court on Wednesday directed the agency to probe it further.
 
After going through the CBI report, a division bench comprising Justice A.S. Oka and Justice A.A. Sayed said it was "not satisfied" and asked the agency to probe the matter further and file its report by December 16.
 
Earlier on September 2, when CBI submitted its report, the court refused to accept it saying that the agency had not applied its mind with respect to several issues raised in a public interest litigation against the society.
 
Activist Pravin Wategaonkar, who had filed the PIL, alleged that senior bureaucrats and politicians owned 'benami' flats in the Adarsh Soceity as a 'quid pro quo' for clearing files of the society in violation of norms.
 
He had even demanded that the Maharashtra government reveal the names of two top officials who had dealt with the Adarsh Society files at the relevant period and allegedly were allotted 'benami' flats.
 
Wategaonkar pointed out that during the initial stages of the probe, the CBI had arrested one of the promoters of the society in 2011, Kanhaiyalal Gidwani, and sought his custody as he held 'benami' flats for two politicians.
 
Gidwani and his family owned a total of 10 flats in the society and the sources of funding or their real ownership was still unclear, the PIL said.
 
One of the prime accused in the scam, Gidwani died of a heart attack in November 2012.
 
In his PIL, Wategaonkar said the CBI has not named the two politicians owning two each of these 'benami' flats either in the chargesheet or anywhere else during the probe.
 
He sought the court's direction to the CBI to either produce any documents or police reports, or carry out an independent probe on these missing names.
 
The court had directed the CBI to probe the matter of 'benami' flats further and submit a fresh report on this particular aspect by December 16.
 
The Adarsh Cooperative Housing Society scam was first unearthed in November 2010 and involved grabbing of flats cheap in the upmarket Colaba area which were meant to house Kargil war heroes and war widows.
 
Originally intended to be a six-storied building, it was subsequently converted into a 100-metres tall, 31-storied structure with politicians, bureaucrats and army officers who allegedly conspired among themselves to get the cheap flats.
 
Last April, the Bombay High Court had ordered the Union Ministry of Environment and Forests to demolish the building - which is unoccupied since the scam broke out - and initiate criminal proceedings against the accused.
 
Later in July, the Supreme Court stayed the BHC order and directed the Centre to take possession of the building.
 
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.

User

COMMENTS

D S Ranga Rao

2 months ago

If the CBI is afraid of naming anybody from the incumbent establishment, it is understandable. But how and why it should fear the previous establishment?
Is there any tacit understanding between the big and mighty of various hues of the Adarsh scam to keep the ''caged parrot'' in the 'cage' itself forever?

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)