Corruption crisis may hand India 'Eureka' moment on reform!
India's central bank said it may cap foreign shareholding at 49 percent for new lenders for five years as it considers issuing banking licenses for the first time since 2004.Indian private corporates and non-banking finance companies can apply for licences to set up banks.!Corporate India Celebrates ANNA`s Victory as REFORM Drive Pushed Forward Afresh Without any RESISTANCE whatsoever under COMPLETE MIND CONTROL created by the CIVIL SOCIETY MEDIA India Incs NGO generated Blind aggressive Hindu Nationalism Zionist!Political Class fully subnissive to Ruling Manusmriti Hegemony.RBI unveils draft norms on allowing corporates to set up banks!Economic reforms to help check corruption: Government
Finance minister Pranab Mukherjee gives nod for discussion on GST
RBI's new bank licensing norms: Corporates will need a minimum capital of Rs 500 crore to open a bank.
Economic uncertainties present new opportunities to India: Pranab Mukherjee
123 FDI proposals worth Rs 19,711 cr cleared in Apr-Aug 23
Indian Holocaust My Father`s Life and Time - SEVEN HUNDRED TWENTY ONE
Corruption crisis may hand India 'Eureka' moment on reform!
RBI unveils draft norms on allowing corporates to set up banks!
Finance minister Pranab Mukherjee gives nod for discussion on GST,Economic times reports!
123 FDI proposals worth Rs 19,711 cr cleared in Apr-Aug 23
India's central bank said it may cap foreign shareholding at 49 percent for new lenders for five years as it considers issuing banking licenses for the first time since 2004.
RBI's new bank licensing norms: Corporates will need a minimum capital of Rs 500 crore to open a bank
Indian private corporates and non-banking finance companies can apply for licences to set up banks. This is, however, subject to their not having 'significant' income or assets or both from real-estate and capital markets.The much awaited draft rules from the Reserve Bank of India (RBI) that will govern the issue of new bank licences is out. Most of the rules like the minimum capital requirement of Rs 500 crore are along expected lines.
Corporate India Celebrates ANNA`s Victory as REFORM Drive Pushed Forward Afresh Without any RESISTANCE whatsoever under COMPLETE MIND CONTROL created by the CIVIL SOCIETY MEDIA India Incs NGO generated Blind aggressive Hindu Nationalism Zionist!Political Class fully subnissive to Ruling Manusmriti Hegemony.
The government on Friday said that economic reforms, like roll out of indirect tax regime GST, would help in curbing corruption. If the optimists are to be believed, India's huge anti-corruption protests may give impetus to a beleaguered government to push its reform process and help ailing economic growth and plummeting business confidence.
If so, it comes not a moment too soon. Hit by high interest rates and policy paralysis, economic growth in April-June looks set to slow to its worst in six quarters. August business confidence by one leading survey has plummeted to a two-year low.
The fast by social reformer Anna Hazare not only forced parliament to move on an anti-graft bill, it may have woken the ruling Congress party to the fact governance is more important than playing populism with regional and caste-based votes.
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"The last year has been one of drift and policy paralysis and the pummelling of the government by Hazare was the last straw," said V. Ravichandar, chairman of Feedback Consulting in Bangalore, which advises multinationals.
"The government just cannot afford to play dead any more." In power for most of India's independence and with its roots in Soviet-style five-year plans, the left-of-centre Congress emerged as the party of the poor villagers. The rising middle class has often played second fiddle.
Hazare, who ended his fast on its 13th day on Sunday, may have been a turning point. Hundreds of thousands of the urban, middle class took to the streets, confounding those who saw the sector as a political footnote compared to the rural majority of India's 1.2 billion population.
The way to win over that urban, young middle class behind Hazare may be to boost the urban economy and reforms like foreign investment in the modern supermarket sector, making it easier for industry to acquire land and the creation of national, streamlined taxes.
"Now the government may want to take the high ground, and reforms may be one way to achieve that. Congress may realise it can no longer just pander to rural and poor votes," said Ravichandar.
And pander it has, for years. The government spends a huge amount on subsidies for the mainly rural poor, including a rural employment scheme that is widely seen as allowing it to win its second term in 2009. That now accounts for more than three percent of the annual budget.
The cost of food subsidies has roughly tripled since Prime Minister Manmohan Singh first came to power in 2004, to 600 billion rupees ($13 billion), according to a report by Standard Chartered Research.
At the same time, the government has gone slow on reforms like opening up supermarkets to foreign investors, a move that would help India's stubbornly high inflation rate and ease the burden of India's urban classes hurt by rising food prices.
Implementation of economic reforms and regulatory procedures are part of a continuous process undertaken by the government to increase efficiencies and reduce discretionary powers, Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.
"These steps would contribute to decrease in corruption. The implementation of the Goods and Services Tax (GST) should also help in curtailing corruption," he said.
He was replying to a query that whether the image of the country is being tainted and reforms stalled due to rising corruption cases and prolonged indecision of the government.
To another query on time likely to eradicate corruption completely in future, the minister said, "While it is not possible to put a formal time line on this, it will happen soon".
A host of financial sector reform bills, including GST, are pending in Parliament.
GST would replace most indirect taxes at central and state levels like service tax, excise duty, VAT, cess, surcharge and local levies.
: The government today said it has cleared 123 foreign direct investment (FDI) proposals worth Rs 19,711.17 crore during the current fiscal till August 23.
As of August 23 this year, 21 proposals are pending before the Foreign Investment Promotion Board(FIPB), Minister of State for Commerce and Industry Jyotiraditya Scindia said in a written reply to the Lok Sabha.
"During the current year (up to August 23, 2011), the FIPB has approved 123 proposals, in which FDI to the tune of Rs 19,711.17 crore was involved," Scindia said.
He also said that during the April-August 18, 2011-12, period, FIIs made investments worth USD 1.98 billion.
In an another reply, he said that the Planning Commission has been asked to outline the further steps involved in the formation of a Cashew Board.
"The Planning Commission, which was asked by the government to discuss with stakeholders the issues relating to formation of a Cashew Board, had in its meeting held on June 14 taken a view that formation of a board would provide the much needed platform for further growth of the cashew industry," he added.
Replying to a separate question, Scindia said the downgrade of the United States' sovereign debt by credit ratings agency S&P appears unlikely to have any significant impact on Indian exports by itself.
The MoS of Commerce and Industry added that efforts are being made across countries to mitigate risk and prevent any severe impact on the global economic situation, amid fresh uncertainty over US debt and the stability of euro zone economies, among other factors.
Scindia further said the US is not the largest importer of Indian merchandise and its share of total Indian exports was 8.98 per cent in 2010-11. This was a decline of more than 1.50 per cent vis-a-vis the previous year, he said.
According to the draft guidelines, companies which are primarily engaged in the real estate or stock broking will not be eligible for promoting bank."Entities or groups having significant (10 per cent or more) income or assets or both from real estate, construction and broking activities individually or taken together in the last three years will not be eligible to set up new banks," the draft said.On foreign holding, it said the aggregate non-resident shareholding in the new bank should not exceed 49 per cent for the first five years.At present, the foreign shareholding in private sector banks is allowed up to 74 per cent of the paid-up capital.Commenting on the draft norms, Mahindra and Mahindra President (Legal and Financial Services) Uday Phadke said, "The draft RBI guidelines are positive and in the right direction. Our group will be keen to explore a banking licence. Our long experience of two decades provides us with the necessary understanding and strength in the financial services domain." On the corporate structure, it said the new banks will be set up only through a wholly-owned non-operative holding company (NOHC) to be registered with the RBI as an NBFC which will hold the bank as well as all the other financial companies in the promoter group.The objective is that the holding company should ring fence the regulated financial services activities of the group, including the new bank, from other activities of the group that is, commercial, industrial and financial activities not regulated by financial sector regulators, the draft said.
Finance Minister Pranab Mukherjee on Monday said adverse global economic developments, including the fallout of downgrade of US sovereign rating, present new opportunities to India, and the country could become a source of stability for the world economy.
Against the backdrop of overall investor sentiment being hurt by global economic uncertainties, Mukherjee said India could also emerge as a safe haven for global capital inflows.
He was speaking at a function to mark the Golden Jubilee Celebrations of Indian Economic Service (IES) here.
"If India can continue to grow and acquire economic strength, we could be a source of stability for the world economy and provide safe havens for restless global capital," he said.
The recent events such as Standard & Poor'sdowngrade of the US credit rating as well as debt crisis in Europe, have severely dented global markets.
Even though these recent developments are a cause of concern for India, Mukherjee said "at the same time...these shocks are markers of shifting balance in the global economy, presenting new opportunities for us".
"We have to be alert to shape real-time policy responses, reform systems, improve the regulatory framework of our institutions and make the most of the opportunities coming our way," he said.
India's robust performance in difficult times shows that it could actually come out stronger from any international financial crisis, he said.
The Indian central bank on Monday said it will allow private sector companies that do not have large exposure in the real estate, construction or broking sectors to apply for licences to set up banks.
India has not issued a new bank licence since 2004, and the government wants more banks in order to increase access to banking services in a country where more than half of the households are outside the formal banking system.
In its draft guidelines, the Reserve Bank of India (RBI) said companies with a successful track record of at least 10 years will be eligible to form banks.
However, companies with 10 percent or more of their income generated from real estate, construction or broking activities in the last three years will not be eligible to apply for new bank licences, the central bank said.
The RBI said it will be selective in issuing licences. Other rules include a minimum capital requirement of 5 billion rupees ($109 million) and a limit of foreign shareholdings in start-up banks of 49 percent for the first five years. The limit for existing private sector banks is 74 percent currently.
Shares in some non-bank finance companies, expected to seek banking licences, rose sharply following the release of the draft rules.
Bajaj Finance ended 15 percent higher, while Reliance Capital , IFCI , SREI Infrastructure
, Shriram Transport Finance and Mahindra & Mahindra Financial Services ended 2.5 to 11 percent higher.
Corporate houses such as the Tata group, the Anil Dhirubhai Ambani Group, the Bajaj group and the Mahindra group, all of which operate non-bank finance companies, are among those expected to seek banking licences.
The central bank has proposed that new banks be set up under a wholly-owned holding company, which would be registered as a non-bank finance company with the RBI under which the bank as well as all the other financial companies in the group would be registered, the RBI said.
Finance Minister Pranab Mukherjeesaid on Monday India could become a safe haven for "restless global capital" if high economic growth was sustained in the coming years.
"If India can continue to grow and acquire economic strength, we could be a source of stability for the world economy and provide safe havens for restlessglobal capital," Mukherjee said while inaugurating the golden jubilee celebrations of the Indian Economic Service here.
"It will also enable us to develop even faster and spread the benefits of growth to the poor and marginalised," he said.
The confidence of foreign investors in Indian marketswas rising and India was playing an increasingly important role in global policy making, he said.
The finance minister reassured the industry that economic reforms were on track and the government would take all necessary measures to support sustained economic growth.
"It is important for us to understand that government, on its own, cannot deliver on every aspect of our vast economy," he said. "The government's role is to create conditions where people are empowered and can help themselves."
Mukherjee said the economic reforms, undertaken more specifically since 1990s, have led to a rapid globalisation of the Indian economy. "As a result, the nature and the domain of public policy making is undergoing a major transformation."
He said there was an urgent need for building and strengthening public capacity to follow and analyse international economic developments, process information from diverse sources and respond to it quickly in keeping with national interests.
"With the centre of economic activity shifting towards the non-state actors, it is important to reorient government processes towards bringing about greater policy transparency, coherence and coordination across sectors and between different levels of government," the finance minister said.
The Reserve Bank of India on Monday released on its website, the Draft Guidelines for "Licensing of New Banks in the Private Sector". The Reserve Bank has sought views/comments on the draft guidelines from banks, non-banking financial institutions, industrial houses, other institutions and the public at large by October 31, 2011.
Final guidelines will be issued and the process of inviting applications for setting up of new banks in the private sector will be initiated. After receiving feedback, comments and suggestions on the draft guidelines, and after certain vital amendments to Banking Regulation Act, 1949 are in place.
Key features of the draft guidelines are:
(i) Eligible promoters: Entities / groups in the private sector, owned and controlled by residents, with diversified ownership, sound credentials and integrity and having successful track record of at least 10 years will be eligible to promote banks. Entities / groups having significant (10 per cent or more) income or assets or both from real estate construction and / or broking activities individually or taken together in the last three years will not be eligible.
(ii) Corporate structure: New banks will be set up only through a wholly owned Non-Operative Holding Company (NOHC) to be registered with the Reserve Bank as a non-banking finance company (NBFC) which will hold the bank as well as all the other financial companies in the promoter group.
(iii) Minimum capital requirement: Minimum capital requirement will be Rs 500 crore. Subject to this, actual capital to be brought in will depend on the business plan of the promoters. NOHC shall hold minimum 40 per cent of the paid-up capital of the bank for a period of five years from the date of licensing of the bank. Shareholding by NOHC in excess of 40 per cent shall be brought down to 20 per cent within 10 years and to 15 per cent within 12 years from the date of licensing of the bank.
(iv) Foreign shareholding: The aggregate non-resident shareholding in the new bank shall not exceed 49 per cent for the first 5 years after which it will be as per the extant policy.
(v) Corporate governance: At least 50 per cent of the directors of the NOHC should be independent directors. The corporate structure should be such that it does not impede effective supervision of the bank and the NOHC on a consolidated basis by the Reserve Bank.
(vi) Business model: Should be realistic and viable and should address how the bank proposes to achieve financial inclusion.
(vii) Other conditions:
The exposure of bank to any entity in the promoter group shall not exceed 10 per cent and the aggregate exposure to all the entities in the group shall not exceed 20 per cent of the paid-up capital and reserves of the bank.
The bank shall get its shares listed on the stock exchanges within two years of licensing.
The bank shall open at least 25 per cent of its branches in unbanked rural centres (population upto 9,999 as per 2001 census)
Existing NBFCs, if considered eligible, may be permitted to either promote a new bank or convert themselves into banks.
(viii) In respect of promoter groups having 40 per cent or more assets/income from non-financial business, certain additional requirements have been stipulated.
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29 AUG, 2011, 03.23AM IST, DEEPSHIKHA SIKARWAR,ET BUREAU
Finance minister Pranab Mukherjee gives nod for discussion on GST
- States want more sops for GST rollout
- FICCI for bringing down GST rate to a uniform level gradually
- Govt to bring more services under tax net: Official
- Govt to come out with negative list of service tax soon
- Which services should not be taxed? Govt seeks public views
Despite being busy with the Lokpal bill, he approved a white paper on taxation of services that will be put out for public comments soon. The paper will define service, its delivery for taxation purposes and also list services not to be taxed, or shifted to a globally accepted negative list of taxable services.
"The white paper will outline negative list approach in service tax," a finance ministry official told ET.
Though the idea is to launch the negative list regime as part of the GST, if there is any further delay inGST the government may launch the new regime this budget itself.
The 'negative list' approach, followed globally, allows for exemption of some essential services from tax while the rest are taxed as opposed to 'positive list' approach that lists taxable services. The negative list approach helps end evasion of tax.
SD Majumdar, chairman of Central Board of Excise and Customs confirmed the finance minister had approved the paper.
"The concept paper will give some sense of the negative list," he said.
It will mention sectors and the approach to keep some of the services out of tax net. Services expected to be kept out of tax net would include essential services, education and funeral services.
The negative list approach was outlined in the draft discussion paper on the goods and services tax put out by the empowered committee of state finance ministers.
Services account for nearly 60% of the country's total output but contribute only about 10% to the total tax kitty, or about half of excise duty.
India began taxing services only in 1994, going with the positive list approach by taxing only a few select services. The approach since has been one of slow and steady expansion of the tax net.
"Service tax has matured and the sector now contributes more than half to country's GDP. So, barring a few essential services there is no reason why all services should not be taxed," the official said.
FM had already begun the ground work for this shift in the budget. The government proposed taxation of all services provided at ports and airports and also put in place point of taxation system in service tax harmonising it with goods taxation.http://economictimes.indiatimes.com/news/economy/policy/finance-minister-pranab-mukherjee-gives-nod-for-discussion-on-gst/articleshow/9776146.cms
The RBI has said Indian banks will adhere to the globally agreed timeline for implementation of Basel III norms and guidelines in this regard will be issued in the near future.
"The RBI is examining the Basel III regulations and will issue guidelines to the extent applicable for banks operating in India in due course of time," the RBI's annual report said.
Basel III is the new regulatory framework designed to correct the deficiencies in regulation that led to the global financial crisis of 2008.
It is to be noted that in the wake of financial crisis, the Basel Committee on Banking Supervision (BCBS) has initiated several post-crisis reform measures, mainly in terms of building on the Basel II capital adequacy framework.
Though Basel III can be viewed as a modification of the Basel II framework, it differs significantly in terms of its comprehensiveness, it said.
"The RBI would adhere to internationally agreed phase-in period starting in January 1, 2013, for implementation of Basel III," it said.
Implementation of the Basel III norms is scheduled to commence from January 1, 2013, and has to be completed by January 1, 2019.
Apart from revising the definition of regulatory capital, it said Basel III is much wider in terms of its risk coverage clauses and encompasses measures to address systemic risks.
The RBI observed that implementation of Basel III has thrown up significant challenges for both banks and banking supervisors alike.
It said that availability of an adequate amount of capital, both in terms of quality and quantity, "provides significant comfort to begin implementation of the new framework" as per the time schedule fixed by the BCBS.
Industry body CII on Monday demanded that the government should give freedom to the sugar industry to sell sugar in the market and also stop taking the sweetener from mills at a subsidised price for running ration shops.
Pointing out that sugar industry is being "strangulated" by so many government controls and has become a "politically punching bag", CII said levy obligation as well as monthly release mechanism should be removed for vibrant growth of the sector.
The government asks mills to contribute 10 per cent of their production (called levy sugar) at a cheaper rate to run public distribution system. Through monthly release mechanism, the Centre fixes the monthly sugar quota that mills can sell in the open market and ration shops.
"The government should remove levy obligation on sugar industry and instead it should buy sugar from open market for supply through PDS," CII National Committee on Sugar Chairman Ajay Shriram told reporters here.
The industry supplies levy sugar at 60 per cent of the cost of production, resulting in a loss of about Rs 2,500-3,000 crore every year, he observed.
"We are told how much to sell in the market every month. The government should remove monthly release mechanism. To intervene in market, it can maintain strategic buffer stock, which can be stored at mills," he said.
On giving freedom to farmers to sell their sugarcane, Shriram said the de-reservation of cane area can be done in the next phase of reform as he feared that some mills could face the shortage of sugarcane.
Making a strong case for decontrol of the sector, CII said that consumption pattern shows that two-third of sugar demand is from bulk users such as manufacturers of beverages and ice-cream.
The share of sugar is just 2.4 per cent and 1.5 per cent of the total consumer expenditure for rural and urban India, respectively, therefore, some increase in prices would not have much impact on monthly food expense, it added.
"The government is micro-managing the sector. We beg the government to stop micro-managing. We know how to take care of farmers," National Committee on Sugar Vice Chairperson Rajshree Pathy said.
Pathy said that the committee had started pushing for sugar decontrol with the government, which "is looking at our demand with compassion".
"This is the good time for decontrol because of surplus production and there should be some decontrol," she said in an optimistic note.
The production has risen to 24.2 million tonnes in 2010-11 season (October-September) against 18.8 million tonnes in the previous year. Domestic demand is pegged at 21 million tonnes. In next season, output is seen at 26 million tonnes.
29 AUG, 2011, 09.24AM IST, SANTOSH DESAI,TNN
Jan Lokpal Bill: Has Anna Hazare really won?
- Jan Lokpal Bill: PM restores Aruna Roy's place in Lokpal debate
- Anna Hazare must end his fast
- Jan Lokpal Bill: All-party meet fails to reach political consensus on Lokpal Bill
- Hazare's protest reminds 1974-75 mass agitation
- Indian-Americans urge PM to table Jan Lokpal Bill in Parliament
Victory , especially when it comes after a long , hard and unequal struggle , can taste very sweet. The fact that the Anna Hazare-led movement againstcorruption has forced the Parliament to agree to key elements from its draft of the Jan Lokpal Bill is an extremely significant one and can potentially mark a turning point in the manner in which democracy is practised in India.
This has been an instance where people have agitated for something rather than against it, and held out against a campaign of cunning and calumny , the kind which usually wears down its opposition into disgusted submission . Deviousness has been countered by stubbornness , and procrastination by a form of emotional armtwisting ; the movement did not waver , nor did it lower the stakes for itself. It gambled everything , every single time and has finally won .
Or has it? The single biggest stumbling block throughout this whole process has been a marked lack of intention on part of not only the government , but the entire political class . If we extricate ourselves for a moment from the debates about which version of the bill was better and whether fasting was a legitimate part of democracy or not , we might wonder as to why , far from dragging its feet on the bill, did the government not wholeheartedly champion its cause instead ?
For an administration that has been under siege on the issue of corruption , wouldn't a robust act of legislation have been exactly the right signal to emit ? It could have appropriated the protest movement , and used it as cover to navigate the bill through the political class , and emerged as a somewhat belated , but nevertheless , heroic saviour . And yet , it chose to oppose the bill at every juncture , using every means possible but that of honest negotiation .
This continued till the very end , creating a crisis of trust and leading to hardened positions on the other side.
RahulG andhi'sintervention was a continuation of the script . Regardless of the merits of his suggestion ,the manner in whichheentered the debate and the bizarrely delayed nature of the timing made it seem as if he resided on another planet and teleported his way in without any awareness or interest in what happened before .
His disappearanceimmediately after seemingly participating in the Inter-P arty Parliamentary Elocution Contest made it easy for his actions to be decoded asfurther evidenceof the government's lofty disinterest in the issue . The role of the other political parties was no better , with the BJP dancing around the question of the exact nature of its support till very late in the day . To its credit , when it did reveal its position , it seemed not only to stay with it, but eloquently argue the case on its behalf too.
The fact that the Parliamentary debate was sparkling in its range of arguments and thoughtful in its nature indicates that the central problem is not in our institutions , but in the intention that animates them . If treated with the respect that it deserves , which indeed is the assumption on which it is founded , Parliament delivers to us a form of democracy that is as enlightened as it is representative . The problem is thatit reachesthissideof itself ever so rarely , and in this case , it is instructive that it was pushed , virtually at gunpoint ,tofinditsbetter self. Left to itself, it is clear that Parliamentwouldhavedonewhatitseems to do so well nowadays - collude in a conspiracy of mutual recrimination to avoid systemic change .
More stories from this edition of Lokpal Bill
- 2G Scam: Ex-Telecom Secretary declared Swan Telecom eligible: CBI
- Anna Hazare's condition stable: Doctors
- Jan Lokpal Bill: Ramlila Maidan deserted, clean up on
- Anna Hazare movement exposed populist rage towards political class
Right to reject candidates a ticklish affair: Chief Election Commissioner
The Election Commission on Monday termed as a "ticklish affair" the demand for the right to reject candidates in elections.
"We have not applied our mind to it seriously, just heard about it here and there. It is going to be a ticklish affair," Chief Election Commissioner S Y Quraishi told CNN-IBN.
He said the proposed right of people to reject candidates required a "bit of debate" because a situation of majority of the people rejecting all candidates also has to be considered.
"What will happen if majority of people reject all candidates? We will go for another poll? As it is, you have to balance it with the fact that people have election fatigue. How many elections shall we have?" he asked.
Quraishi said the poll authority would rather give voter education and ask them to come out in large numbers to choose a good candidate.
He said the right to recall candidates has not been on the agenda of the Commission at all.
"It has never been proposed to us nor has it been considered. But the right to reject has been before us in some form that there should be a button for 'none of the above' in the electronic voting machine," Quraishi said.
29 AUG, 2011, 02.45AM IST, ET BUREAU
Anna Hazare's call on 'right to reject' and 'right to recall' rekindled debate over electoral concepts
- Anna Hazare to focus on poll reforms after Lokpal, but doubts arise whether he can rally masses aga...
- Battle is won, but war just begun: Anna Hazare
- Anna Hazare says fast only 'suspended', wants electoral reforms
- India against corruption: The UM aadmi could pose a big challenge to traditional politics
- Will lose deposit if I contest an election: Anna Hazare
This idea is also known as negative voting or neutral voting. Currently, if a person does not wish to cast her vote for any candidate, there is an option to record this decision with the presiding officer under Section 49 (o) of the Conduct of Election Rules, 1961. However, this has no bearing on the poll outcome. The neutral voting concept, on the contrary, will have a bearing on
the poll outcome. Various filters can be designed to disqualify a candidate rejected by a majority of the people. Swami Agnivesh and several others have been supporters on the right to reject idea.
In 2007, the Supreme Court rejected a public interest litigation demanding a right to reject option, saying the petitioners should wait for a government decision on the EC recommendations.
Right to recall is a concept that allows the recorded disapproval of a certain minimum section of electorate to recall an elected candidate.
This is most famously exercised by several cantons in Switzerland, even though the right does not exist at the federal level in that country. Some states in the United States also allow people to recall their governors.
Typically, tight to recall works based on a plebiscite or referendum, which is triggered by a petition signed by a minimum percentage of the electorate.
Political scientist Dipankar Gupta says he doesn't consider either ideas as particularly beneficial in the Indian context.
"Right to reject could be there, but right to recall is impractical. If we have a strong anti-corruption law, electoral reforms and police reforms, we don't need either of these.
These are dramatic ideas, but I see little real benefit or a capacity to effect large changes in both of them," Gupta said.
More stories from this edition of Lokpal Bill
- Anna Hazare movement exposed populist rage towards political class
- Lokpal Bill: First victory in a long struggle, says Team Anna
Anna's call for Right to recall has no takersMarya Shakil, CNN-IBNUpdated Aug 29, 2011 at 10:01pm IST
5New Delhi: India's new national crusader against corruption Anna Hazare has ended his fast but not his political campaign. He has a new mission now and it is electoral reforms. He said Indian voters must have the Right to recall MPs and the right to reject all candidates in the ballot paper. The MPs said on Monday said that the ideas are simply unworkable.
"We have to recall the electoral system. There has to be a Right to reject and a Right to recall," said Anna Hazare.
Anna Hazare's new call for the Right to recall parliamentarians isn't receiving much political support. Political leaders and constitutional experts say it cannot be implemented - But is there an example in other democracies?
Having called off his 13-day long fast on Sunday, Anna Hazare is now giving a lot of food for thought to parliamentarians. He now wants to work on a Right to recall - an idea that has already been rejected by elected representatives.
"What if a MP is elected with 30 percent vote, 70 percent would then jump and seek recall. It was an idea that was dismissed by JP," said Subramaniyam Swamy, President, Janata Party.
"It's impractical, can't implement even at Panchayat level. People who are advocating this need to understand India first," said Vyalar Ravi.
The first successful recall took place in 1911 of Mayor of Seattle, the recall of elected representatives is already in existence in 9 states in America.
Hollywood Star Arnold Schwarzenegger was amongst the most high profile individuals to have been elected in 2003, in a special recall election to replace then Governor Gray Davis.
In India, states of Bihar, Punjab, Madhya Pradesh are some of the states that has Right to recall at the Panchayat level.
Anna also wants the government to look at the possibility of evolving a Right to reject for the voters. It implies that at the time of voting, voters should also have the option - none of the mentioned parties.
"Right to reject seems relatively more practical," said Congress leader Salman Khurshid.
"When the larger issue of electoral reforms comes in, it can be considered in the larger interest of politics," said BJP leader Murli Manohar Joshi.
The government would definitely try to avoid another confrontation with Anna Hazare, it would not want to be on the wrong side of any people's movement. So in case of electoral reforms, it may well take a lead and not be caught on the back foot again.
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WHAT'S YOUR REACTION? * 14 * 18 * Anna's next campaign: Right to recall MPs
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* Rajiv assassination: row over death sentence * Cabinet to discuss new Sports Bill tomorrow
29 AUG, 2011, 05.37AM IST, NISHANTH VASUDEVAN,ET BUREAU
Markets may open higher on positive US cues, key economic reforms
- Markets to take cues from sales data
- Sensex slips below 16000 as Bernanke, Anna cloud Dalal Street
- European Parliament set to get tough on debt crisis
- Sensex may dive another 13% in choppy Dalal Street
- Amid S&P downgrade and AAA chaos Dow Jones, Nasdaq nose dive; Indian stock market to remain volatile
MUMBAI: Indian stocks may open higher in the shortened trading week ahead, mirroring the firm US market close on Friday after the American central bank indicated it may not come out with another monetary stimulus soon.
Investors may also cheer the government's decision to give into social activist Anna Hazare's demands on the corruption bill, as it is perceived that decisions on key economic reforms were held back.
But such optimism could be short-lived as investors may cut exposure on every rebound on worries that the worst for the market is farfrom over.
"Any bounceback won't sustain because investors are waiting to sell at higher levels," said AK Prabhakar, senior VP, Anand Rathi Securities. "The US Fed has infused some confidence, but Euro problems are only compounding," he said.
Trading volumes may be lower-than-average as financial markets will remain closed on Wednesday and Thursday on account of Ramzan and Ganesh Chaturthi, respectively.
Fund managers and analysts have always maintained that the European debt crisis is a much bigger concern than the issues in the US. Investors are dismayed by the delay in implementing radical decisions to address the 18-month-old crisis.
A deal that promised to make the euro zone bailout fund more flexible could take several more weeks to be approved; Greece is having trouble convincing private holders of Greek bonds for a voluntary debt swap to rescue the country, according to Reuters.
Though the bond purchase programme by the ECB has managed to avert any major liquidity crisis, delays in economic reforms may keep global markets jittery in the near future.
Back home, technical indicators point to more panic, with benchmarks closing below the critical 200 weekly moving average - for the first time since 2008 - signalling the possibility of a prolonged sell-off.
"This is a rare occurrence and shows investors are unwilling to commit money at this juncture," said Prabhakar.
"Now, a fall to 4400 (Nifty) is a possibility." The 200-week moving average, which closed at 4747.80 on Friday, is at 4830 and for the Sensex, which closed at 15849, is at 16100.
RBI panel suggests 12 pc Tier I capital adequacy for Non-Banking Financial Companies
MUMBAI: Non-Banking Financial Companies (NBFCs) should have a minimum 12 percent Tier I capital adequacy ratio within three years of registration, RBI advisory panel suggested on Monday.
The Reserve Bank of India had constituted a working group in March to examine issues pertaining to the regulation of NBFCs.
Reserve Bank Recommends 49% Overseas Ownership Limit for New Indian BanksBy Ruth David and Anoop Agrawal - Aug 29, 2011 4:27 PM GMT+0530
India's central bank said it may cap foreign shareholding at 49 percent for new lenders for five years as it considers issuing banking licenses for the first time since 2004.
New lenders would have to sell shares within two years and open at least one in four branches in rural areas that have a population of no more than 9,999 people, the Reserve Bank of India said in draft guidelines posted on its website today. The banks may also need to meet a minimum capital requirement of 5 billion rupees ($109 million).
Companies including Larsen & Toubro Ltd. (LT) and billionaire Anil Ambani's Reliance ADA Group have expressed interest in licenses to operate in a market with credit growth forecast at 18 percent for the year ending March. New entrants would compete with Mumbai-based State Bank of India (SBIN), which accounts for almost a quarter of the nation's loans, and ICICI Bank Ltd. (ICICIBC)
"The guideline asking for a listing within two years appears to be a bit impractical," said Hemant Kanoria, chairman and managing director SREI Infrastructure Finance Ltd. "It will be very difficult for branches in the rural areas to start generating profits in the first two years."
The company will wait for final guidelines before making a decision on applying for a license, Kanoria said in a phone interview today. The regulator is seeking feedback by Oct. 31.
India's Bankex index, which tracks 14 stocks including State Bank and ICICI, climbed 4.1 percent today, trimming its loss this year to 20 percent.
Business groups controlled by Indian residents with at least 10 years of experience may be eligible to set up the banks, it said. Companies that got 10 percent or more of their income or assets from real estate or broking in the last three years won't be eligible for the licenses, according to the guidelines.
To contact the reporters on this story: Ruth David in Mumbai at firstname.lastname@example.org; Anoop Agrawal in Mumbai at email@example.com
To contact the editors responsible for this story: Chitra Somayaji at firstname.lastname@example.org; Arijit Ghosh at email@example.com
OurView| New corporate banks: a huge gamble
The RBI's move is important one, in terms of its politics and economics. There are also significant risks in the move
he new guidelines on private sector banks announced on Monday by the Reserve Bank of India will allow business groups to re-enter commercial banking. The move is important one, in terms of its politics and economics. There are also significant risks in the move.
The bank nationalizations of 1969 and 1979 were based on the premise the private sector was doing a poor job in funding the needs of a developing economy. The nationalizations were an initial success, since the spread of bank branches to even remote hamlets helped raise the national savings rate. Credit became available to small businesses and farmers, as against the earlier trend of business houses using the banks they controlled as in-house financing arms.
The 1969 nationalization was also the big indication that Indira Gandhi was breaking free of the Congress old guard, and beginning her swing to the left. Her move to take over the banking system was defended as recently as two years ago by none other than Congress president Sonia Gandhi and finance minister Pranab Mukherjee, in their own muted signals of a left-ward shift in policy making.
The political control of the banking system also created loads of problems, especially terrible credit monitoring standards. Bad debts weighed down most bank balance sheets by the end of the 1980s, the decade that also saw the infamous loan melas. Banks did not have enough capital to support their rickety loan books. The clean up began soon after the 1991 reforms, following the recommendations of a committee chaired by former RBI governor M. Narasimham.
The public sector banks now account for about three-fourths of the Indian banking market. Yet, for all their achievements, the more than four decades after bank nationalization have left around half of all Indians without even a basic bank account. High lending spreads are a sign of inadequate competition.
Meanwhile, it is obvious that the credit needs of a fast-growing economy cannot be met by the existing set of banks alone, especially since the government banks do not have adequate capital support economic growth.
India surely needs a bigger and more competitive banking sector. At the current juncture, Indian business groups are perhaps the only domestic source of the sort of capital needed to build large and efficient banks. The new guidelines stipulate a minimum capital of Rs. 500 crore. More will be needed as the banks build up scale.
The big worry is whether enough will be done to ensure that business groups do not repeat the practices of the 1960s. The new RBI guidelines do have some safety norms, including, for example, exposure limits to the promoting companies, a separate corporate structure with a "non-operative holding company", and the requirement that more than half the directors of a new private sector bank should be independent.
Savvy promoters, through the use of off-balance sheet entities or friendly independent directors, can bypass such requirements. So the quality of supervision of the new corporate banks by the RBI will be a key issue in the years ahead.
New bank license guidelines: Who qualifies & who lucks out?
Published on Mon, Aug 29, 2011 at 20:50 | Source : CNBC-TV18
Updated at Mon, Aug 29, 2011 at 22:10
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- See previous management interviews
- See what other Experts & Brokerages are saying about Mah and Mah
Mah and Mah
BSE | NSE 29/08/11
The much awaited draft rules from the Reserve Bank of India (RBI) that will govern the issue of new bank licences is out. Most of the rules like the minimum capital requirement of Rs 500 crore are along expected lines. But there were some shockers as well. No group of a company with more than 10% of revenues coming from broking or real estate will be eligible.
What's worse, the central bank says promoter groups who want to set up banks must have diversified ownership, professional management, adequate corporate governance and a 10-year successful track record. This, while excluding some young aspirants also makes the entire choice discretionary.
RBI releases draft rules for bank licences for corporates
Uday Phadke, President Financial Services,Mahindra & Mahindra and N Sivaraman, VP – Financial Services of Larsen & Toubro talk about the impact it will have on their respective companies while Abizer Diwanji, Head - Financial Services, KPMG gives his perspective on this development. He also talks about the contenders for the new licenses.
Below is a verbatim transcript of their interview with CNBC-TV18's Shereen Bhan and Latha Venkatesh. Watch the accompanying videos for more.
Q: The central bank hasn't specified what diversified ownership means. Even on the business of professional management versus management of another sort. Is there too much discretion perhaps at the central bank?
Diwanji: Yes, this is one of the most open circulars that I have seen come from the Reserve Bank of India. Frankly, the RBI wants to play all cards close to its own chest and try and govern regulations that way. What is important to know is that the RBI has made these rules broad based for the simple intent that people should not try and play cheeky to the rules.
This is going to be a more qualitative discussion. They have said somewhere in the paper that this is an entity of deposit holders and the RBI wants to have full discretion to ascertain who is the right person. It also places a lot of focus on the corporates itself because somewhere down the circular also, it says that everybody who applies, their applications along with full details will be put on the website. So it's also placing a lot of onus on the respective corporate who is applying, that they need to come out with a case which is to the courage of their conviction.
Q: M&M has been eying this space. On the basis of what you have heard from the RBI today, does it really work for you? Does it meet your expectations?
Phadke: The draft guidelines are very much in the right direction. They are quite positive, they are well balanced that they have taken into account the concerns expressed by all sections interested in the financial services sector.
Q: Do you think you qualify now to apply for a banking license on the criteria that has been laid out in this circular?
Phadke: Certainly, the Mahindra Group is very keen to explore obtaining a banking license. Prima facie, reading of the guidelines suggests that we seem to be meeting most of the requirements. But we will have to study each of the guidelines in depth. There could be some clarifications and some interpretations required. I don't really want to make any conclusive statement. It seems that the guidelines are positive for us.
Q: But do you still aspire to be within this space?
Phadke: Right from the time the finance minister first made the announcement that they may consider banking guidelines, we have always expressed our interest in getting into the banking area because we have successfully run the financial services business which is highly profitable for two decades. The whole business model is based on financial inclusion mainly in rural and semi-rural areas.
We believe that we are eminently qualified, so we are interested. Throwing the hat into the ring will actually mean making application. That can only happen when the Banking Amendment Act is passed by the Parliament and the RBI formally notifies the final guidelines and our own board and shareholders also decide. But in the sense of showing interest, yes, we are certainly most interested in exploring this.
Q: What is your take on what you have seen from the RBI on the bank guidelines?
Sivaraman: Definitely, yes. It's quite positive and balanced. It's been around expected lines in terms of the ownership structure, the minimum capital requirement. Luckily, the business model has also been made a little more balanced where they are saying that about 25% of our branches should be in the rural areas, which is a relief than making it a larger percentage in the rural area. We as a participant in the financial services will definitely look at these guidelines with a good deal of interest.
Q: Do you believe that you qualify on all of the parameters that have been laid out by the RBI? Do you think your aspirations for getting into this space will go forward?
Sivaraman: We are not making a statement as to whether we are interested or not. We seem to be fulfilling the guidelines but it's a question of fine reading. There is a significant amount of RBI subjectivity rightly around here. Other regulators have a prerogative to think so. Definitely, it is subject to that. It seems to be fairly balanced as far as we are concerned.
Q: Comments from Delhi say that it is going to be the Reserve Bank's final decision to see how many licenses are actually going to be doled out. Do you see the floodgates opening up in that sense?
Diwanji: Most people have taken the view and rightly so that there will be two-three bank licenses at least in the next two years and that's all we will see really. What will happen is there will be a lot more people who will put their foot forward in terms of their eligibility. Frankly, this will also give rise to some level of peer pressure. What may happen is there will be quite a few applicants because there are quite a few corporates who are eligible.
There will be a kind of a kind of prioritization by the Reserve Bank, but I don't think they will do more than three bank licenses in the initial tranche which would be the first two years. Even in terms of the do-ability of certain things, for example, a bank going IPO in the next two years. It's only a very credible corporate who can make that happen in two years. Otherwise, to measure a bank's performance in two years is almost impossible.
When you put a lot of these subjectivities together you will find that there are real good winners. One of the things what the RBI is saying everything will be transparently put out. This will also help an element of judgment among people to say that the right guys have been chosen. But I don't think there will be more than three.
Q: Just how will RBI or an RBI committee decide between Tata, Birla, Bajaj, Mukesh Ambani's Group if they apply, Mahindra & Mahindra. How will you qualitatively judge professional management, diversified ownership, is there a problem there?
Diwanji: No, clearly there is. That is the biggest challenge that always has been the biggest challenge, but that doesn't mean that they will go ahead and give 15-20 bank licenses because the system can't take it. At the end of the day, there will be a balance between the two and it is going to be a challenge to see how the Reserve Bank does it.
Even the corporate which is going to apply will do so only when they believe that they have a very good chance of sailing through this subjectivity. I think there is a little bit of a check and balance put in there.
Tags: Abizer Diwanji, KPMG, N Sivaraman, Larsen & Toubro, Uday Phadke, M&M, Reserve Bank of India, capital requirement, corporate governance
http://www.moneycontrol.com/news/business/new-bank-license-guidelines-who-qualifieswho-lucks-out_581144.html21 AUG, 2011, 06.17PM IST, IANS
NEW DELHI: Investment guidelines for private equity and venture capital funds should be suitably relaxed as such investors aim at improving management and operations of companies and nurture companies over the long term, the Confederation of Indian Industry(CII) says.
Currently, private equity and venture capital funds are permitted to only acquire up to 15 percent stakes and cannot buy shares from the secondary markets.
CII said venture capital funds registered with theSecurities and Exchange Board of India (SEBI) should be allowed to invest up to one-third of fund capital through both primary and secondary purchases of equity shares.
"Further, such investments should be construed as complying with prevailing capital market regulations including open offer requirements," said a statement from CII.
The CII report also suggested that private equity and venture capital funds should be allowed to invest 25 percent of the capital of target companies without resorting to an open offer.
"Private equity and venture capital investments are of medium to long term nature aimed at not purely investing but also nurturing the companies in terms of provision of management and operational support," said CII.
The industry body also called for removal of restrictions of investments by such entities in non-banking finance companies (NBFCs).
"Given the role played by the NBFCs, especially in meeting the micro funding needs of the economy, investments by SEBI-registered venture capital funds should not be confined to only financially weak or sick companies but also in equity linked instruments or convertible instruments of all companies including investing in NBFCs, holding companies and buyout SPVs that are classified as capital investment companies."
CII also said that the minimum investment requirements for a SEBI registered private equity or venture capital fund should be raised to Rs.50 lakh from the current Rs.5 lakh to ensure enhanced investor protection.
The report further suggested that the Insurance Regulatory and Development Authority of India (IRDA) should allow insurance companies to invest in private equity funds as an asset class in general, thus removing the restriction of allocation to infrastructure investments only.
27 AUG, 2011, 11.28AM IST, TNN
Banks, Unique Identification Authority to deploy 14 lakh micro ATMs across the countryICICI Bank Ltd.
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MUMBAI: The Unique Identification Authority of India(UIDAI) is working with the Indian Banks' Association to create a network of 14 lakh micro ATMs across the country. While the banks will authorize the transaction, the authentication will be done by UIDAIby biometric association with its database.
The UIDAI is also considering giving unbanked citizens the option to receive a pre-paid payment card issued by banks which can be used for channeling payments from government schemes, including National Rural Employment Guarantee Act.
"The plan is to have at least two micro-ATMs in every village, which means that there will have to be at least 14 lakh of them," said A P Singh, deputy director-general, UIDAI, while speaking at a Prepaid International Forum event on Thursday. He said that every UIDAI registrant is presently given the option to open a bank account. "We plan to give them the additional option to receive a payment card which can be used for electronic transactions," he said.
According to Singh, the cards could be used for transactions in Aadhaar-enabled micro ATMs. The micro-ATMs will be more like point-of-sales terminals which will read cards and communicate with the bank's core banking system and the Aadhaar biometric database. According to Kusal Roy, head of cards and personal loans at ICICI Bank, the pre-paid cards could be used for micro-payment transactions and would have a different charge structure compared to regular credit and debit cards.
The micro-ATMs, which are to be deployed by banks, will be manned by business correspondents appointed by banks. These business correspondents will act as mini bank branches by accepting deposits, enabling withdrawals, fund transfer from Aadhaar-to-Aadhaar accounts and providing statement of transactions. The connectivity will be provided by the Aadhaar-enabled payment system (AEPS) - a new electronic payment network jointly promoted by the National Payment Corporation of India with the UIDAI. Over 60 banks have registered to be part of this network.
Speaking at a FICCI-IBA summit on Thursday, RBI deputy governor HR Khan had said that NPCI has been advised to introduce RuPay cards under the Aadhaar Enabled Payment System (AEPS). "Four banks have started using the RuPay card. These include: Kashi Gomati Gramin Bank, Bank of India DhanAdhar Card, The Gopinath Patil Parsik Janata Sahkari Bank Ltd, and NKGSB Urban Co Op Bank Ltd,"
UIDAI, along with NPCI, has already piloted Aadhaar-enabled Payment System in Jharkhand. Basic transactions permissible over these accounts include cash deposit, cash withdrawal, balance enquiry, and inter-bank money transfer. This system also envisages creation of an Aadhaar-enabled payment bridge which would facilitate direct disbursement of government benefits to the beneficiary by credit to their bank accounts using Aadhaar.
RBI move to help cash flow in emergencies
To ensure that ATMs do not run dry during a banking strike or during a natural calamity, RBI has said that it will open a cash window during such events. To avail of cash, banks will have to authorize RBI in the form of a standing instruction to debit their current accounts with RBI for handing over the cash to the outsourced cash handling agency appointed by them. RBI will allow one bank to withdraw a maximum of Rs 10 crore, but if additional cash is required a bank may approach RBI more than once in a day.
29 AUG, 2011, 03.28AM IST, DHEERAJ TIWARI,ET BUREAU
Government plans big role for LIC in infrastructure financing
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- Government to ask banks to offload infrastructure portfolio to IIFCL
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- IIFCL plans to raise Rs 11,000 cr through bond issues by FY12
NEW DELHI: The government plans to draw in the country's biggest insurer, Life Insurance Corporation(LIC), into infrastructure project financing to boost funding for roads, ports and highways.
LIC is likely to tie up with India Infrastructure Finance Company Ltd (IIFCL) to buy out long-tenure loan portfolios of commercial banks. The practice, called take-out financing, seeks to free up the capital of banks so that they can lend to new projects.
"The issue will be discussed in the investment committee of LIC," a senior official with the insurer said. "It has to be seen that the insurance firm has the scope under the sectoral exposure norm."
The government plans to spend over $1 trillion over the 12th Five-Year Plan (2012-17) on building new and upgrading the existing infrastructure.
The plan to rope in LIC in infrastructure funding was discussed at a meeting convened by the finance ministry recently, two people familiar with the development said. The heads of LIC and IIFCLattended the meeting, these people said.
The proposed venture will allow LIC and IIFCL to buy out 40% of a bank's loan with each taking an exposure of 20%.
IIFCL will carry out the due diligence for the venture and risk factors associated with it, as it has built an expertise in this area.
The Insurance Regulatory and Development Authority guidelines require life insurers to invest at least 15% of their controlled funds in infrastructure and social sectors.
The rules also mandate that exposure to a single company should not exceed 10% of the insurer's funds, or 10% of the paid up capital of investee.
LIC and IIFCL will also have to work out the proportion of liability they will take in case the loan turns bad or non-performing.
However, the venture may not take off if banks do not participate.
Last week, ET had reported that the government will now nudge banks to sell their infrastructure portfolio to IIFCL through take-out financing to create space for them to lend to the sector again.
The take-out financing scheme has remained largely grounded with only 70 crore of funds disbursed so far.
IIFCL, the dedicated infrastructure financier created by the government, is sitting on a cash pile of about 8,000 crore to buy out loan portfolios of banks.
There is an inherent asset-liability mismatch in banks funding long gestation infrastructure projects, as their capital is largely sourced from deposits that have three to five years maturity.
Take-out financing allows banks to shed their loan portfolios after retaining them on their books for a few years. This frees them to fund more projects.
IIFCL has also modified its take-out finance scheme recently to make it more attractive. It now proposes to take on projects immediately after their commercial operation date, as against the earlier norm of one-year waiting period.
It has also scrapped the 0.3% take-out fee, which it used to charge the lender using the scheme.
The company has so far sanctioned 3,000 crore spread over 15 projects.
26 AUG, 2011, 04.45PM IST, PTI
Government 'soon' to come out with forest certification policyKOCHI: The Union government is likely to come out with a forest certification policy "very soon" which would be applicable to all states and Union Territories, a senior WWF-India official said.
The new policy is expected to be ready in a month's time, T R Manoharan, Head Forest Programme WWF India, told reporters here.
Forest certification is a mechanism for forest monitoring, tracing and labelling timber, wood and pulp products and non-timber forest products where the quality of management from environmental, social, economic perspectives is judged against a series of agreed standards, B S Corrie, additional principal chief conservator of forests, who was also present there said.
The Indian Institute of Forest Management was working on Criteria and Indicators (C&I) for sustainable forest management since the last 10 years.
C&I was presently being field tested in various parts of the country, Manoharan said, adding, some of these indicators are likely to be incorporated in the new policy.
Forest certification in India is still at a growing stage.
No forests in India are certified except 644 hectares of private rubber plantations in Tamil Nadu which secured 'FSC' Forest Management Unit Certificate, Manoharan said.
To promote forest certification, WWF, one of the world's largest conservation organisations, has advocated a "step wise approach" and developed suitable methods and tool kits which can be used by forest or plantation managers and traders.
29 AUG, 2011, 01.09PM IST, NEW YORK TIMES
Anna Hazare movement exposed populist rage towards political class
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- Jan Lokpal Bill: Anna Hazare leaves Tihar Jail to fast at Ramlila Maidan
NEW DELHI: For the nearly two weeks that Anna Hazare staged his hunger strike, the question hanging over India had been, "When would it end?" After Hazare triumphantly broke his fast Sunday, a different question arose: "What now?"
It applies not just to the fate of the remarkable popular anti-corruption protest movement that coalesced around Hazare but also to the political status quo in India. The Hazare movement exposed a populist rage toward India's political class and a lack of public confidence in the efficacy of India's democratic institutions, if not a lack of confidence inIndian democracy.
Hazare, 74, a longtime social activist who lost more than 15 pounds during a 13-day fast, is now an exalted figure in much of India. When he lifted a cup of coconut water and honey to his lips on Sunday morning, aided by two young girls, the moment was broadcast live across the nation. Thousands of supporters cheered at Ramlila Maidan, the public ground in New Delhi that has served as his fasting site.
He gulped the juice for a moment, and no doubt it tasted sweet. He and his advisers, known as Team Anna, had triumphed in a standoff against India's political establishment after Parliament on Saturday capitulated to his key demand for creating an independent anti-corruption agency, known as a Lokpal.
"This is a moment of glory for our country," Hazare told supporters Sunday morning, praising them for remaining peaceful throughout nearly two weeks of rallies, marches and demonstrations. "This movement has created a faith that the country can be rid of corruption and we can go ahead with implementing laws and the Constitution."
India's political leaders emerged from the past two weeks far less exalted, especially the governing Indian National Congress, which seemed outmaneuvered and uncertain throughout the crisis. For months, leaders of the Congress Party had failed to effectively tackle different corruption scandals, creating an impression that the party lacked the will or the interest to address the issue.
When Hazare staged his hunger strike, the public outpouring of support seemed to throw Congress Party leaders off balance, and they never quite recovered. Prime Minister Manmohan Singh made a dramatic appeal in Parliament for Hazare to end his strike - yet was rebuffed. Rahul Gandhi, the Congress Party's presumed prime minister-in-waiting, made a rare parliamentary speech in which he rejected the notion that a Lokpal was a cure-all for corruption. Two days later, his party folded to Hazare's demands.
For Gandhi, the Hazare crisis interrupted what was widely assumed to be his own coming-out moment as the new leader of the Congress Party. His mother, Sonia Gandhi, the party's president, has been recuperating in the United States from surgery. Gandhi left her bedside in America to return to celebrate India's Aug 15 Independence Day, and presumably to begin taking a more public posture in Congress Party affairs.
Instead, Hazare upended the political landscape, and Gandhi disappeared for days before his speech in Parliament.
"This could have been an opportunity for him to assert his leadership," said Pratap Bhanu Mehta, president of the Center for Policy Research, a group in New Delhi. "Instead, it does raise questions about how much leadership he has shown."
More stories from this edition of Lokpal Bill
- Lokpal Bill: First victory in a long struggle, says Team Anna
- Lokpal Bill: Govt made 'errors of judgment,' says Salman Khurshid
Anna's Fast for LokpalCong slams Anna's demand for 'Right to Recall', BJP differs
The Congress party on Monday said the right to recall elected representatives and reject candidates as demanded by activist Anna Hazare is "not practical" as "50 per cent of the people do not vote" in the country.Congress backs Rahul Gandhi's Lokpal stand
New Delhi: Dismissing suggestions that Rahul Gandhi's idea of giving constitutional status to Lokpal Bill was a delaying tactic by the Congress, the ruling party made it clear that it was for the collective wisdom of the Standing Committee and Parliament to accept the proposal.Hazare's condition stable: doctors
Gurgaon: Anna Hazare, who was admitted in a hospital here after he ended his 12-day fast for a strong Lokpal Bill, is stable and moving towards normalcy, doctors said on Monday.Privilege notices in Parliament against Om Puri, Kiran Bedi
New Delhi: Members in both Houses of Parliament have given Privilege notices against actor Om Puri and civil rights activist Kiran Bedi for using "derogatory and defamatory" language against politicians and the matter is under consideration of the Chair.Rs 70 lakh and counting, donations still pour in for Anna
New Delhi: Donations have been pouring in from across the country to support social activist Anna Hazare's anti-graft movement. India Against Corruption (IAC), the NGO spearheading it, has so far received more than Rs 70 lakh in cash donations and more is still coming in an activist said.Anna Hazare: A fasting activist turns a national icon
He drove a truck for the army during the 1965 India-Pakistan war, but when Anna Hazare broke his fast on day 13 Sunday after the Indian parliament agreed to his three demands for a stronger anti-graft legislation the school dropout had won for the people a war against the powerful establishment.Anna power stuns doctors
New Delhi As Anna Hazare broke his 12-day fast Sunday, eminent cardiologist Naresh Trehan said it was his inner power that helped him sustain for so long. "He maintained himself, he had some power in him, through which he could regulate his own fluids and has been able to maintain his balance," Trehan, who monitored Hazare's health during the agitation, said Sunday.Agnivesh web clips spark row
New Delhi: Activist Swami Agnivesh, who was a key member of Team Anna till the ninth day of Anna Hazare's 12-day fast, has courted controversy with video clippings appearing on social network sites allegedly showing him criticising the anti-corruption campaign. Agnivesh has dismissed the footage as doctored.Lokpal bill may come up in Parliament in November
New Delhi: A redrafted Lokpal bill may be brought in Parliament during its winter session, that usually starts mid-November, after the parliamentary standing committee on law and justice deliberates over various drafts of the proposed anti-graft law, government sources said Sunday.
In Pictures: India Erupts for AnnaThousands celebrate Anna's victory at India GateBollywood backs AnnaAnna's fast heading towards climax: PicturesDrama over Anna's fast in DelhiAnna's call reverberates across India
ExclusivesDo we have the leaders to pull us out?
Obama and Manmohan procrastinate, Sarkozy is on a permanent honeymoon and Berlusconi is busy planning the next bunga-bunga party. Call them leaders?
Other Top Stories
- Components of Gandhi's Leadership: Part 1
- Where are the women Gandhians?
- Dr Singh, how do you want to be remembered?
- The relevance of Gandhi today
All About the MahatmaThe Words of the Mahatma
- On the eve of his last fast: January 12, 1948
- The BHU disrupted speech: February 4, 1916
- On the eve of Dandi march: March 11, 1930
Great Men talk about Gandhi
- Quit India — The Do or Die speech: August 8, 1942
- On Kashmir: January 4, 1948
- Gandhi ashrams around the world
- Anna Hazare breaks fast after 288 hours: Anti-corruption crusader Anna Hazare broke his fast on the 13th d... http://t.co/qlRTnUS
- DTN India: Only deferred my fast, protest goes on: Anna Hazare: New Delhi, Aug 29: Minutes after anti-corruption... http://t.co/zSFDUGL
- Anna Hazare breaks fast after 288 hours: Anti-corruption crusader Anna Hazare broke his fast on the 13th d... http://t.co/H9p6mS5
- Anna Hazare breaks fast after 288 hours: Anti-corruption crusader Anna Hazare broke his fast on the 13th day at ... http://t.co/oyKhCB5
- The 12 day fast for anti corruption law ends with a victory note! http://t.co/UR0CSPq #lokpal #anna #hazare
- #Anna #Hazare & movement rattle Indias politicians. Ends hunger strike as gov't pledges tough #Lokpal anti #corruption. http://t.co/QVaJX1V
- #Anna #Hazare & movement rattle India's politicians. Ends hunger strike as gov't pledges tough #Lokpal anti#corruption. http://t.co/QVaJX1V
Top StoriesWe made no mistakes: Salman Khurshid
New Delhi: Law Minister Salman Khurshid, a key negotiator with Team Anna, on Sunday said there may have been "errors of judgement" in handling Hazare's fast but there were no mistakes. "Errors of judgement have been made; errors of judgement are made whenever you are involved in a difficult situation. Errors of judgement are not mistakes", Khurshid told CNN-IBN in an interview with Karan Thapar.
- Hindu-Muslim unity in Anna's support
- BJP says it's with Anna in anti-graft fight
- At Ramlila, a mini India watched Anna break fast
- How they kept Ramlila Maidan clean -- only for Anna!
- Hazare admitted in Gurgaon hospital for check-up
- Team Anna thanks media
India Speaks: Poll
Govt says Anna is misusing a Gandhian tool on fast as a form of protest. Your views:
- Yes, Anna is misusing the form of protest
- No, Anna is right; fasting is a legal and constitutional form of protest
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Mahatma Speaks on Issues, Life and Matters
"India is essentially karmabhumi (land of duty) in contradistinction to bhogabhumi (land of enjoyment)."
The Barack Obama-Mahatma Gandhi connection
If the world's most powerful man looks upon someone as a hero, think the power that hero has on the minds of people. That's the power of Gandhi
Om Puri should declare if he took money by cheque: ThackerayMumbai: Blasting Bollywood veteran Om Puri for allegedly decrying politicians while making a speech at the Ramlila Maidan during Anna Hazare's fast, Shiv Sena chief Bal Thackeray today asked the actor if he accepted all of his remuneration through cheque.
"Om Puri should declare if all the money he took for his work in films was legally through cheque," Thackeray said in an editorial in party mouthpiece 'Saamana'.
"It should be noted that the maximum black money and underworld funds are (invested) in the film industry," the Sena chief said.
Cases should be filed against those who maligned Parliament and politicians from the stage at Ramlila, Thackeray said.
On Hazare's fast, Thackeray said, "people have doubts in their minds whether all of Anna's demands were fulfilled and whether the mission for which he was ready to die at Ramlila has been accomplished."
On Lalu Yadav's comment about Hazare being fit even after 12 days of fast, Thackeray said "social activists in Maharashtra do not eat fodder that is why they glow even after fast."
During the debate on Lokpal resolution, Lalu's comment about Hazare remaining fit even after 12 days of fasting had earned the loudest applause. "Annaji is 74 years old. Despite 12 days of fast he is quite vocal. Doctors should research. He should also tell us what to take so we can also fast for such a long period," the RJD leader had said.
Land case: HC asks UP, Noida Authority to file counter affidavitAllahabad: The Allahabad high court on Monday asked the UP government and Noida Authority to file their counter-affidavits on hundreds of petitions filed by Gautam Buddh Nagar district farmers, who have challenged acquisition of more than 3,000 hectares of land for development of Greater Noida and Noida Extension areas.
A full bench of the court comprising justices Ashok Bhushan, S U Khan and V K Shukla, which is hearing a total of 491 petitions filed by farmers, fixed September 12 as the next date of hearing in the matter.
The petitioners have alleged that their land was acquired by the state government by invoking the "urgency clause" which deprived them of an opportunity to raise objections and bargain for adequate compensation.
Later, the land was sold to private builders for constructing housing complexes even though the acquisition was carried out in the name of "planned industrial development" of Greater Noida and Noida Extension areas, the petitioners submitted.
Besides, impleadment applications were moved by several builders and flat buyers, who had prayed for being made a party in the case as any order in the matter was likely to affect them.
Though the court passed no order on the applications, it observed "all the allottees of the acquired land are free to file their affidavits by the next date of hearing".
The court also said that from September 12 onwards, it would proceed with hearing on the 491 petitions that have already been filed and that "any new petitions relating to this matter shall be kept aside and heard separately so that decision on other petitions is not delayed".
Aggrieved farmers from Gautam Buddh Nagar district have been moving the high court in droves ever since it quashed the acquisition of more than 150 hectares of land in Shahberi village and, subsequently, an appeal filed by the state government challenging the order was set aside by the Supreme Court.
Global investors renew interest in Indian realtyWith their home markets in turmoil, large global investors such as Blackstone, Carlyle, Morgan Stanley, JP Morgan and the Government of Singapore Investment Corporation are actively scouting for and signing deals in the Indian property sector.
Take, for instance, the Carlyle Group, which has $153 billion in assets under management. The group invested $26 mn (Rs 117 crore) in former Citibanker Jaithirth Rao's low-cost housing project 'Vaibhava' in Bangalore. The investment was made from the $1.04-bn Carlyle Asia Growth Partners IV (CAGP IV) fund.
Although Carlyle's investment in the Vaibhava project was its first in the Indian property sector, the group has been an active player in the real estate segment across many Asian countries, including China and South Korea, since the year 2000.
A Carlyle spokesperson said: "As you may notice, this investment was made from our growth capital fund because they see strong growth prospects in this company and the demand for affordable housing, rather than purely targeting the property sector, although this is indeed our first investment in the property sector."
Another global private equity (PE) giant, Blackstone, which gained exposure to Indian real estate through its 2008 investment in Synergy, a Bangalore-based architectural company, is looking for opportunities to invest in the property sector, said two executives privy to the talks.
In what could be its maiden investment in the Indian property sector, Blackstone is in advanced stages of negotiations with DLF, the country's largest realty company, to buy the latter's land in the information technology special economic zone in Pune for Rs 900 crore. Blackstone is also financing the Embassy group's purchase of 22 per cent stake in Manyata Business Park, Bangalore, for Rs 540 crore.
"As a policy of the Blackstone Group, we do not comment on industry speculation," was the response of a public relations executive, when asked to confirm.
According to sources in the market, Morgan Stanley is looking to invest $100 mn in the Century Group, the Bangalore-based property developer. Morgan Stanley made headlines in 2007 when it invested Rs 675 crore in Mumbai-based Oberoi Constructions, in one of the largest entity-level deals in real estate. An email to Morgan Stanley did not elicit any response.
Although the property market is abuzz with the news that JP Morgan has launched a $350-500 mn India-focused realty fund, a senior executive of the investor denied the development.
Jan Lokpal Bill
The Jan Lokpal Bill, also referred to as the citizens' ombudsman bill is a proposed independent anti-corruption law in India. Anti-corruption social activists proposed it as a more effective improvement to the original Lokpal bill, which is currently being proposed by theGovernment of India.
The Jan Lokpal Bill aims to effectively deter corruption, redress grievances of citizens, and protect whistle-blowers. If made into law, the bill would create an independent ombudsman body called the Lokpal (Sanskrit: protector of the people). It would be empowered to register and investigate complaints of corruption against politicians and bureaucrats without prior government approval.
In 2011, civil activist Anna Hazare started a Satyagraha movement by commencing an indefinite fast in New Delhi to demand the passing of the bill. The movement attracted attention in the media, and hundreds of thousands of supporters, in part due to the organizational skills ofArvind Kejriwal. Following Hazare's four day hunger strike, Indian Prime Minister Manmohan Singh stated that the bill would be re-introduced in the 2011 monsoon session of the Parliament. Accordingly, a committee of five Cabinet Ministers and five social activists attempted to draft a compromise bill merging the two versions but failed. The Indian government went on to propose its own version in the parliament, which the activists rejected on the grounds of not being sufficiently effective (see Highlights below) and called it a "toothless bill".
The word Lokpal was coined in 1963 by L.M.Singhvi, a Member of Parliament during a debate in Parliament about grievance redressal mechanisms. His son Dr. Abhishek Singhvi is now the head of the Parliamentary Standing Committee reviewing the bill. The prefix Jan(translation: citizens) was added to signify the fact that these improvements include input provided by "ordinary citizens" through an activist-driven, non-governmental public consultation.
The Lokpal bill was first introduced by Shanti Bhushan in 1968 and passed the 4th Lok Sabha in 1969. But before it could be passed byRajya Sabha, Lok Sabha was dissolved and the bill lapsed. The Subsequent versions were re-introduced in 1971, 1977, 1985, 1989, 1996, 1998, 2001, 2005 and in 2008, but none of them passed. The bill was inspired by the Hong Kong Independent Commission Against Corruption (ICAC).
Key features of proposed bill
Some important features of the proposed bill are:
- To establish a central government anti-corruption institution called Lokpal, supported by Lokayukta at the state level.
- As in the case of the Supreme Court and Cabinet Secretariat, the Lokpal will be supervised by the Cabinet Secretary and the Election Commission. As a result, it will be completely independent of the government and free from ministerial influence in its investigations.
- Members will be appointed by judges, Indian Administrative Service officers with a clean record, private citizens and constitutional authorities through a transparent and participatory process.
- A selection committee will invite short-listed candidates for interviews, videorecordings of which will thereafter be made public.
- Every month on its website, the Lokayukta will publish a list of cases dealt with, brief details of each, their outcome and any action taken or proposed. It will also publish lists of all cases received by the Lokayukta during the previous month, cases dealt with and those which are pending.
- Investigations of each case must be completed in one year. Any resulting trials should be concluded in the following year, giving a total maximum process time of two years.
- Losses caused to the government by a corrupt individual will be recovered at the time of conviction.
- Government officework required by a citizen that is not completed within a prescribed time period will result in Lokpal imposing financial penalties on those responsible, which will then be given as compensation to the complainant.
- Complaints against any officer of Lokpal will be investigated and completed within a month and, if found to be substantive, will result in the officer being dismissed within two months.
- The existing anti-corruption agencies (CVC, departmental vigilance and the anti-corruption branch of the CBI) will be merged intoLokpal which will have complete power and authority to independently investigate and prosecute any officer, judge or politician.
- Whistleblowers who alert the agency to potential corruption cases will also be provided with protection by it.
Difference between government and activist drafts
|Jan Lokpal Bill (Citizen's Ombudsman Bill)||Draft Lokpal Bill (2010)|
|Lokpal will have powers to initiate suo motuaction or receive complaints of corruption from the general public.||Lokpal will have no power to initiate suo motu action or receive complaints of corruption from the general public. It can only probe complaints forwarded by the Speaker of the Lok Sabhaor the Chairman of the Rajya Sabha.|
|Lokpal will have the power to initiate prosecution of anyone found guilty.||Lokpal will only be an Advisory Body with a role limited to forwarding reports to a "Competent Authority".|
|Lokpal will have police powers as well as the ability to register FIRs.||Lokpal will have no police powers and no ability to register an FIR or proceed with criminal investigations.|
|Lokpal and the anti corruption wing of the CBI will be one independent body.||The CBI and Lokpal will be unconnected.|
|Punishments will be a minimum of 10 years and a maximum of up to life imprisonment.||Punishment for corruption will be a minimum of 6 months and a maximum of up to 7 years.|
Comparision SlideShow uploaded by India Against Corruption.
|Issue||The Jan Lokpal Bill||Government's Lokpal Bill|
|Prime Minister||PM can be investigated with permission of seven member Lokpal bench.||PM can be investigated by Lokpal after she/he vacates office.|
|Judiciary||Can be investigated, though high level members may be investigated only with permission of a seven member Lokpal bench.||Judiciary is exempt and will be covered by a separate "judicial accountability bill".|
|Conduct of MPs||Can be investigated with permission of seven member Lokpal bench.||Can be investigated, but their conduct within Parliament, such as voting, cannot be investigated.|
|Lower bureaucracy||All public servants would be included.||Only senior officers (Group A) will be covered.|
|Anti-corruption wing of the Central Bureau of Investigation (CBI)||The Anti-corruption wing of the CBI will be merged into the Lokpal.||The Anti-corruption wing of the CBI not be merged into the Lokpal.|
|Removal of Lokpal members and Chair||Any person can bring a complaint to the Supreme Court, who can then recommend removal of any member to the President.||Any "aggrieved party" can raise a complaint to the President, who will refer the matter to the CJI.|
|Removal of Lokpal staff and officers||Complaints against Lokpal staff will be handled by independent boards set-up in each state, composed of retired bureaucrats, judges, and civil society members.||Lokpal will conduct inquiries into its own behaviour.|
|Lokayukta||Lokayukta and other local/state anti-corruption agency would remain in place.||All state anti-corruption agencies would be closed and responsibilities taken over by centralised Lokpal.|
|Whistleblowerprotection||Whistleblowers are protected by Lokpal.||No protection granted to whistleblowers by Lokpal Mahima.|
|Punishment for corruption||Lokpal can either directly impose penalties, or refer the matter to the courts. Penalties can include removal from office, imprisonment, and recovery of assets from those who benefited from the corruption.||Lokpal can only refer matters to the courts, not take any direct punitive actions. Penalties remain equivalent to those in current law.|
|Investigatory powers||Lokpal can obtain wiretaps ( to make a connection to a telegraph or telephone wire in order to obtain information secretly), issue rogatory letters, and recruit investigating officers. Cannot issue contempt orders.||Lokpal can issue contempt orders, and has the ability to punish those in contempt. No authority to obtain wiretaps, issue rogatory letters, or recruit investigating officers.|
|False, frivolous and vexatious complaints||Lokpal can issue fines for frivolous complaints (including frivolous complaints against Lokpal itself), with a maximum penalty of Rs 100,000.||Court system will handle matters of frivolous complaints. Courts can give 2–5 years imprisonment and fines of Rs 25,000 to 200,000.|
|NGOs||NGOs not within the scope due to their role in exposing corruption.||NGOs are within the scope and can be investigated.|
Timeline of Lokpal and cost
- 1968 – Rs 3 lakh (300,000)
- 1971 – Rs 20 lakh (2 million)
- 1977 – Rs 25 lakh (2.5 million)
- 1985 – Rs 25 lakh
- 1989 – Rs 35 lakh (3.5 million) – PM under lokpal
- 1996 – Rs 1 crore (10 million) – PM under lokpal
- 2001 – Rs 1.5 crore (15 million) – PM under lokpal
- 2011 – Rs 1700 crore (17 billion)
Campaign for the Jan Lokpal Bill
The first version of the Lokpal Bill drafted by the Government of India in 2010 was considered ineffective by anti-corruption activists from the civil society. These activists, under the banner ofIndia Against Corruption, came together to draft a citizen's version of the Lokpal Bill later called the Jan Lokpal. Public awareness drives and protest marches were carried out to campaign for the bill. However, public support for the Jan Lokpal Bill draft started gathering steam after Anna Hazare, a noted Gandhian announced that he would hold an indefinite fast from 5 April 2011 for the passing of the Lokpal/Jan Lokpal bill..The government has however accepted it.
To dissuade Hazare from going on an indefinite hunger strike, the Prime Minister's Office directed the ministries of personnel and law to examine how the views of society activists can be included in the Lokpal Bill. On 5 April, the National Advisory Council rejected the Lokpal bill drafted by the government. Union Human Resource Development Minister Kapil Sibal then met social activists Swami Agnivesh and Arvind Kejriwal on 7 April to find ways to bridge differences over the bill. However, no consensus could be reached on 7 April owing to several differences of opinion between the social activists and the Government.