Editorial 1 : The budget’s dilemma
Introduction: The political backdrop against which the upcoming Union budget will be presented is remarkably different from that of the previous 10 budgets. How the ruling dispensation has read the fractured election verdict, and what it perceives its chances are in the upcoming state elections could well have a bearing on the contours of the budget proposals.
Finance Minister will think about doubling down the welfarist measures
- More recently, governments in states such as Maharashtra and Haryana also seem to have opted for this approach — their proposals range from providing a monthly cash transfer to women to free bus rides, along with filling up vacancies in government posts.
- It is the government’s good fortune that its revenue constraints have been eased with the RBI transferring a larger-than-expected surplus.
- Along with the other budget proposals, how this surplus is utilised — whether it is used to ramp up welfare or capital spending or bring down the fiscal deficit — will not only indicate the government’s views on the changed political landscape, but also on the state of the economy and how it may have played a role in swaying the voters.
The growth numbers are hiding the big questions
- The 8 per cent growth lies several uncomfortable questions.
- Growth isn’t as robust as many argue.
- And the distribution is perhaps worse.
- The fact that the Centre’s fiscal deficit was at 5.6 per cent of GDP last year only underlines that government spending remains a key driving force in the economy.
- An increase in employment largely via self-employment — which essentially involves one-man roadside shops and unpaid work in household enterprises — is not a sign of a healthy labour market.
- Stories of unemployed and underemployed youth trading during the day and gaming during the night only indicate the opposite.
- Alongside, they also incur the tax of high food inflation.
The recent election has also showed the limit to welfarism in attracting votes
- The election result has also posed a rather uncomfortable question to political parties on the possible limits of welfarism.
- And that perhaps the public provision of private goods might not always be enough to sway the electorate.
- Sooner or later, governments will run up against the wall of structural transformation, of inadequate job creation and deepening labour market duality.
The manufacturing sector is stagnant despite the PLI scheme
- So far, the government’s approach to push up manufacturing — a pathway to more productive job opportunities for low and semi-skilled workers — has largely relied on a combination of raising tariffs and providing subsidies through the PLI scheme.
- While there has been some success in mobile phones — Apple in particular — beyond that, progress has been modest, if at all.
- The sector’s share has remained stagnant at around 17 per cent of GDP for the past two decades.
- The contradictory approach of raising tariffs, trying to become atmanirbhar, while wanting to be part of global supply chains isn’t helping.
- While the government has shown some urgency in signing trade deals, succumbing to pressure groups and not joining RCEP, when almost every competitor in the China-plus-one play has, or is planning to, calls for serious introspection over the trade policy.
The private investment is subdued
- Overall, corporate investments remain subdued despite the use of all fiscal levers available to the government.
- While the emphasis on national champions may be part of a well-thought-out strategy, it is unlikely to move the needle significantly on either investments or jobs.
- For instance, as per reports, Goldman Sachs has estimated capital investments by Reliance Industries at around $125 billion over the past 10 years, implying an average of $12.5 billion per year.
- To put this in perspective, total investments in the economy were in excess of $1 trillion last year.
- A much broader base of companies is needed to drive the capex cycle, especially if some of the national champions largely resort to inorganic means of expansion.
- While some believe that with healthy bank and corporate balance sheets, the private sector is ready to embark on a new investment cycle, for the moment, fear — or caution — is trumping.
- Animal spirits remain caged, not unleashed.
The recent current account surplus substantiates the view of dropping investment in economy
- In the fourth quarter of the last financial year, the country posted a current account surplus.
- While some have viewed this as a triumph, it is not.
- The current account is the difference between domestic savings and investment in an economy.
- A surplus essentially implies that savings exceeded investment, and that rather than borrowing from abroad to finance domestic investment, as India normally does, domestic savings were invested abroad.
- Not an ideal situation for a capital deficit country, when in fact, household savings are under pressure.
Other sectors of economy are showing different growth stories
- Subdued investments, and a consequent weak labour market, where millions remain trapped in low-productive jobs, imply that overall consumption demand is likely to remain anaemic.
- Some segments, however, will thrive on the back of higher spending by the affluent.
- There are several markers of this deeply splintered domestic market.
- FMCG volume growth remains muted, two-wheeler sales are well below the pre-pandemic highs, and the entry-level car market has all but collapsed.
- On the other hand, sales of high-end cars and premium real estate are racing ahead.
- The top is soaring, the middle is stagnant, and a vast majority faces near-stagnant real wages.
Conclusion: The coming union budget will be challenging for Modi government. The coalition partner will ask for their share in the budget. The coalition government will also not be very decisive in radical reforms. The elections results will certainly drive government to introspect its economic policies. Only time will tell what government has learnt from the elections results- more welfarism to attract votes or more employment.
Editorial 2 : A process more punishing
Introduction: The Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) has replaced the Code of Criminal Procedure, 1973 (CrPC). As Indian criminal laws have undergone a change, a provision need more exploration, that is the protection against long periods of “police custody”.
Types of custody
- The custody of an accused is broadly divided into two kinds — police and judicial.
- The former means that the police have principal control or physical custody over you, while the latter typically has you placed in a jail which has its own institutional rules and regulations, including visiting hours, access of the police to the accused, mealtimes, and sleep time.
- It is police custody which is typically the harshest experience for any accused.
The change in police custody in new criminal laws
- The BNSS appears to do away with the 15-day limit on police custody prescribed under the CrPC, nullifying safeguards against police excesses and violating an undertrial’s rights under Article 21.
How does the new law manage this?
- Section 167 of the CrPC authorised custody up to a maximum of 60 or 90 days, depending on the extent of punishment prescribed.
- Further, it contained a proviso to section 167 (2) which limited police custody to 15 days out of the 60 or 90 days (depending on the punishment imposed).
- The proviso read “(a) the Magistrate may authorise the detention of the accused person, otherwise than in the custody of the police, beyond the period of fifteen days, if he is satisfied that adequate grounds exist for doing so….”
- It is evident from this that the attempt was to limit police custody and protect the accused from police excesses by mandating that police custody would only be up to 15 days.
- Section 187 of the BNSS does otherwise.
- It retains the timelines of 60 or 90 days and the concept of default bail, as in the CrPC.
- However, it omits the maximum limit of 15 days of police custody that was in the CrPC.
- This omission creates a situation where the Magistrate can authorise police custody detention for a period exceeding 15 days.
The long policy custody in BNSS
- Section 187 (3) of the BNSS states: “The Magistrate may authorise the detention of the accused person, beyond the period of fifteen days, if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorise the detention of the accused person in custody under this subsection for a total period exceeding—
- ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of ten years or more;
- sixty days, where the investigation relates to any other offence, and, on the expiry of the said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail,”
Comparison of police custody in BNSS and UAPA
- To give you some context for how astonishing this extension of custody is, let us compare a harsh statute like the Unlawful Activities (Prevention) Act, 1967 (UAPA), which prescribes a maximum limit of 30 days for policy custody.
- Further, section 43 D of UAPA mandates that the investigating officer is required to file an affidavit providing reasons for seeking police custody, if the accused is in judicial custody.
- By contrast the BNSS, which is a statute pertaining to general criminal law, enables a three-fold increase of the maximum period of police custody as compared to even UAPA.
- This is a constitutionally burdensome provision that will impinge on the rights of an accused.
- Spending up to 90 days with the police having unimpeded access to an accused is debilitating from the point of view of rights to life, health (including mental well-being) and fair trial.
- Under the CrPC, for any period beyond the 15-day limit for police custody, a judge can have the accused detained in judicial custody or order other custodial arrangements.
The police custody provision of BNSS nullifies the Right to life
- The BNSS, thus, nullifies safeguards against police excesses and violates an undertrial’s right under Article 21 of the Constitution.
- For an accused to be held in police custody for such a long period can make her susceptible to custodial violence/torture.
- In D K Basu v State of West Bengal, the Supreme Court held that Article 21 includes the right to live with dignity and thus also includes within itself a guarantee against torture and assault by state functionaries.
- Further, it held that the protection of Article 21 cannot be denied to convicts, undertrials, detenus and other prisoners in custody, and that any form of torture or cruel or inhuman treatment would fall under inhibition of the said right.
- BNSS seems to be at odds with this.
Conclusion: By providing for extended police custody, the Bharatiya Nagarik Suraksha Sanhita violates an undertrial’s right under Article 21 of the Constitution.