Structural reforms and the re-establishment of fiscal discipline are needed for the economy to return to over 7% GDP growth rates, says BNP Paribas Asian Instant Insight
Indian GDP (gross domestic product) growth nudged down to 5.3% y-o-y (year-on-year) in Q2 FY2013 from 5.5% previously. Seasonally adjusted, GDP is estimated to have risen by just 4.1% q-o-q (quarter-on-quarter) annualised. On the expenditure side, sluggish consumption growth was noticeable. On the output side, manufacturing and agricultural outputs were weak. GDP growth for FY2013 as a whole now looks on course for 5.4%. These are the main points highlighted in another tepid GDP report, which underlines the marked deterioration in India’s macro-fundamentals in recent years. This analysis is by Richard Iley, Asian Instant Insight, BNP Paribas.
The BNP Paribas analyst points out that the silver lining is in the trend GDP probably still being close to 7%. Considerable slack is opening up, paving the way for some limited easing by RBI perhaps as early as January 2013. But structural reforms and the re-establishment of fiscal discipline are needed for the economy to return to 7%+ growth rates.
There is however, a stark warning from the BNP Paribas analyst that the politicians in power in India may not be ready for the discipline that is required. The chaotic start to Parliament’s Winter Session reinforces how difficult this will be, given India’s dysfunctional and fractious politics. A radical recasting of India’s growth versus inflation mix looks unlikely. And if the reform push stalls, the 5%-6% growth rates seen over the last year will become increasingly locked-in.
Giving reasons while analysing the GDP data, BNP Paribas says that the main reason for the low GDP growth was the weakness in agricultural output. Despite the late improvement in this year’s monsoon, further weakness is probable next quarter in agricultural output. Services output particularly in the hotels and distribution category was also somewhat softer than anticipated. Its growth was sluggish at 7.2% y-o-y. Manufacturing output, up just 0.8% y-o-y, was also an important contributor to the lower growth in the economy. Monthly industrial production data indicate that little improvement is likely next month.
On the expenditure side, fixed asset investment improved a little but, at 4.1% y-o-y, it continues to undershoot overall GDP growth. Kickstarting the investment cycle remains the key to reviving growth, observes BNP Paribas. Private consumption also continued to slow, up just 3.7%, suggesting that slow growth is denting labour market performance even as stubborn rates of food inflation are eating into disposable income. Lastly, export growth was also muted, up 4.3%, reminding that India is not immune from sluggish global growth, particularly the recessionary Eurozone.
According to the prediction by the BNP Paribas analyst, the RBI (Reserve Bank of India) may choose to look through the woes of the economy and cut interest rates as early as January. Given tight liquidity, an earlier (and further) CRR cut at its December policy review looks likely too.
Finally, while the government’s intentions are sincere, there are constraints which the current UPA government faces in effecting even limited reform measures, concludes BNP Paribas.
The PIL filed by retired Karnataka High Court judge, Justice KS Puttaswamy and advocate Parvesh Khanna questioned the government's decision of issuing Aadhaar numbers to citizens while the National Identification Authority of India Bill, 2010 is pending before the Rajya Sabha
Just as citizens are expected to follow all orders which have the sanction of law, government agencies and their officers are equally bound to abide by it and under the RTI Act the PIO can be penalised for not complying with orders or decision of the Information Commission. This is the fifth in a series of important judgements given by Shailesh Gandhi, former CIC that can be used or quoted in an RTI application
The public information officer (PIO) can be penalised for not complying with the orders issued by the Information Commission under the Right to Information (RTI) Act, without obtaining a vacation or stay from a higher forum. While giving this important judgement, Shailesh Gandhi, former Central Information Commissioner noted that just as citizens are expected to follow all orders which have the sanction of law, government agencies and their officers are equally bound to abide by the same.
“...elementary principle of abiding by orders which have been given by statutory authorities or courts cannot be defied by anyone. The Central Bureau of Investigation (CBI) is not above this law and in the absence of a stay, should have complied with the order of the Commission. Given that the CBI is the premier investigation and law enforcement agency of the country, it is certainly expected of its officers to behave responsibly and abide by the mandate laid down by the Supreme Court of India,” the Commission said in its order issued on 7 July 2011.
Delhi-based Krishnanand Tripathi sought information from the PIO, CBI, about the circumstances leading to giving non-resident Indian (NRI) hotelier Sant Singh Chatwal a clean chit in cases filed against him by the agency in a bank fraud case.
The PIO made a very peculiar claim saying though the two cases for which information was being sought had been discharged, there are two other fraud cases which are being pursued in which some of the bank officers were the same. He refused to provide the information claiming exemption under Section 8(1)(h) of the RTI Act.
The First Appellate Authority (FAA) upheld the decision of the PIO. The FAA said, “The undersigned upholds the grounds on which Central Public Information Officer (CPIO), Banking Securities & Fraud Cell (BS&FC), CBI, New Delhi denied to provide the information sought by the appellant as it falls u/s 8(1)(h) of RTI Act, 2005 because two more cases which are connected with the already disposed of ones are pending trial before the same court.”
While both the PIO and the FAA made no claim that any investigation is continuing, and the fact that some bank officers are being prosecuted in two other matters cannot justify refusal to give information in the matters relating to Mr Chatwal, the Commission said.
The Commission, on 11 May 2011 directed the PIO to provide information sought by Mr Tripathi before 30 May 2011. However, the PIO did not provide the complete information before the due date. Subsequently, the CBI filed a petition against the Commission's order and obtained a stay from the high court on 29 June 2011.
The Commission said, “...it prima facie appears that the PIO has flouted the order of the Commission and not provided the information from 1 June 2011 to 28 June 2011”.
The PIO, however, argued that he could not be held responsible for the procedures and delays involved in getting the requisite permissions to file a writ petition in the high court. He submitted that the Commission should give a longer compliance date in its orders keeping departmental requirements and administrative hurdles/exigencies in mind. The PIO felt that once he informed the Commission at the hearing held on 9 June 2011 that the respondent (CBI) intended to challenge the decision, the Commission must not insist on its order being implemented.
Mr Gandhi, the CIC, said, “The Commission is not satisfied with the submissions of the PIO. The PIO was required to comply with the order of the Commission, unless a stay has been obtained on such order within the time limit mentioned in the order. Departmental procedures and administrative hurdles/exigencies cannot be used as an excuse for disobeying the order of a statutory authority and consequently denying the citizen's fundamental right to information. At the very least the PIO should have approached the Commission before 30 May 2011 and requested for an extension in time giving reasons. Even at the hearing held on 9 June 2011, the PIO was given additional time to appear again on 29 June 2011 to give legal arguments as to whether the order of a statutory authority could be defied without a valid stay obtained from the appropriate forum. At the hearing held on 29 June 2011, the PIO merely referred to the stay order and did not give any justification for not complying with the order of the Commission before 30 May 2011.”
“Reliance may also be placed on the observations of Justice SN Variava, in Ghaziabad Development Authority Vs Balbir Singh (2004) - (002) - CPJ- 0012- SC, wherein he stated that unless there is a stay obtained from a higher forum, the mere fact of filing an appeal or revision will not entitle a person who is required to pay the penalty to not comply with the order of the lower forum. Even though the person may have filed an appeal or revision, if no stay is obtained or if the stay is refused, the order must be complied with. In such cases, the higher forum should, before entertaining such appeal or revision, ensure that the order of the lower forum is first complied with. In the present case, the PIO had not even filed for a stay of the Commission's order,” the Commission noted.
Refusing to accept the contention of the PIO, the Commission said, “It is completely wrong to expect that all statutory and judicial orders must take into account the delays of various organizations in deciding whether they wish to follow an order or not. All agencies have to gear themselves to challenge orders within the time in which an order has to be implemented. If they fail to obtain a vacation or stay on a legally valid order, they must comply.”
Section 20(1) of the RTI Act states:
“20. Penalties—Where the Central Information Commission or the State Information Commission, as the case may be, at the time of deciding any complaint or appeal is of the opinion that the Central Public Information Officer or the State Public Information Officer, as the case may be, has, without any reasonable cause, refused to receive an application for information or has not furnished information within the time specified under sub-section (1) of Section 7 or malafidely denied the request for information or knowingly given incorrect, incomplete or misleading information or destroyed information which was the subject of the request or obstructed in any manner in furnishing the information, it shall impose a penalty of two hundred and fifty rupees each day till application is received or information is furnished, so however, the total amount of such penalty shall not exceed twenty five thousand rupees:
Provided that the Central Public Information Officer or the State Public Information Officer, as the case may be, shall be given a reasonable opportunity of being heard before any penalty is imposed on him:
Provided further that the burden of proving that he acted reasonably and diligently shall be on the Central Public Information Officer or the State Public Information Officer, as the case may be."
From a plain reading of Section 20(1) of the RTI Act, it appears that the Commission, at the time of deciding any complaint or appeal, must impose a penalty in the following circumstances:
1) Refusal to receive an application for information
2) Not furnishing information within the time specified under Section 7(1) of the RTI Act
3) Malafidely denying the request for information or knowingly giving incorrect, incomplete or misleading information or destroying information which was the subject of the request
4) Obstructing in any manner in furnishing the information
All the above are prefaced by the phrase, “without reasonable cause”.
In an order issued on 7 July 2011, the Commission said, “The PIO’s action is in clear violation of the principles laid down by the Supreme Court of India. The stay has been obtained on the order of the Commission dated 11 May 2011 only on 29 June 2011, whereas the PIO was required to comply with the order of the Commission before 30 May 2011. Since the PIO has failed to comply with the order of the Commission, without a valid stay, he is liable to be penalized under Section 20(1) of the RTI Act between 1st to 28 June 2011. Anil Palta, CPIO & DIG of BS&FC, CBI has given no reasonable cause for not providing information for 28 days, before a valid stay was obtained on the Commission's order. Since no reasonable cause has been offered by Mr Anil Palta, CPIO & DIG of BS&FC, CBI for not providing the information from 1st June to 28 June 2011, i.e. for a period of 28 days, the Commission imposes a penalty on Mr Anil Palta, CPIO & DIG of BS & FC, CBI under Section 20(1) of the RTI Act at the rate of Rs250 per day of delay, i.e. 28X250= Rs7,000.”
The Commission further asked the CBI director to recover Rs7,000 from the salary of Mr Palta by 10 September 2011.
Later the CBI managed to get a stay order from the high court on the penalty order as well.
CENTRAL INFORMATION COMMISSION
Decision No. CIC/SM/A/2011/000293/SG/12346 Adjunct and
Appellant : Krishnanand Tripathi,
Sr. Correspondent, Live India,
Premnath Motors Complex,
1, Mandir Marg,
New Delhi- 110001.
Respondent : Anil Palta
CPIO & DIG of BS&FC Delhi
Central Bureau of Investigation
5th Floor, CBI HQ, Lodhi Road,