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Narendra Modi’s Financial dream,progress Slows down

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By Himadri Ghosh

“Never before in economic history would 15 million bank accounts have been opened on a single day. Never before has the Government of organized a program of such scale,” Prime Minister Modi said on August 28, 2014, launching the Pradhan Mantri Jan Dhan Yojana (Prime Minister’s People’s Wealth Programme/PMJDY).Seventeen months later, in January 2016, the scheme reached all Indian households, according to official data, bringing 200 million additional families to the banking system.

But the primary goal, direct transfer of government subsidies to people, has not overcome two challenges: linking the unique identification (Aadhaar) card to PMJDY; and getting beneficiaries to use the bank account. The speed of adding accounts, as IndiaSpend reported earlier, was outpacing the delivery of benefits, and Reserve (RBI) governor Raghuram Rajan, in 2014, cautioned banks against focussing on numbers alone.

Less than half the 210 million Jan Dhan accounts were seeded with Aadhaar as of January 31, 2016, the data indicates. More than 30 percent of these accounts have been at “zero balance”, meaning the account holder was not using the account.

States struggling to link Aadhaar to PMJDY include Andhra Pradesh, Chhattisgarh, Jharkhand Karnataka, Kerala and Maharashtra. These states together linked less than 40 percent accounts to Aadhaar.

It is important that these states fall in line, as subsidies on cooking fuel, auto fuel and food grain impose a multibillion-rupee subsidy burden, the government has said.

The government is estimated to have spent Rs.266,700 crore ($45 billion) on subsidies in 2015, of which Rs.122,700 crore ($20 billion) was spent on food, Rs.71,000 crore ($12 billion) on fertilizer and Rs.60,300 crore ($9 billion) on oil.

Up to half of these subsidies are misappropriated, according to various estimates.

“One of the biggest reforms that India has embarked upon is moving to a market-pricing mechanism across a variety of products such as cooking fuels, auto fuels, food grains and fertilizers,” a Kotak strategy report said.

‘A policy does not work by itself?people must know how to use it’

“It takes time to properly implement policies in India, more so for financial schemes like PMJDY as a lot of people are unaware of words like bank, loan, subsidy,” said Santosh Kumar, professor of public policy and administration at FLAME University, Pune.

The integration of PMJDY, Aadhaar and Mobile (JAM) could be an important component of structural reforms. The idea of JAM, as propounded in the 2015 Economic Survey and the union budget, was to identify the beneficiary and deposit subsidies directly into his/her bank account.

“A policy does not work by itself,” said Kumar. “The government must have a strong political will to implement the policy properly by scrubbing it of discrepancies.”

“There are two aspects to financial inclusion: one is bank accounts and the second is access to credit. The scheme announced by the prime minister addresses the first problem. The issue of making credit available to small borrowers remains,” wrote C. Rangarajan, former chairman of the Economic Advisory Council to the prime minister, in The Hindu.

An article published by RBI in May 2013 revealed that more than 42 percent of rural credit is sourced from non-institutional agencies. “Rural credit markets in India is characterized by the coexistence of both formal and informal sources of finance and the market is fragmented,” RBI concluded after four rounds of survey.

“The scheme is a step forward but a lot needs to be done before calling it successful,” said Anindita Roy Saha, associate professor of economics at Delhi University. “People from rural and urban areas need to be treated separately. For achieving the objectives, people should be educated about the financial system.”

The United Progressive Alliance (UPA) government had opened nearly 60 million so-called no-frills accounts, but RBI data have shown that more than half of them remained dormant.

“The basic idea of financial inclusion is to include most of the vulnerable sections of society in the banking system,” said Kumar. “People need to know the potential of the scheme and the documents they have in possession; otherwise, they can’t exercise their rights.” (IANS/indiaspend.org)

 

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CJI faces revolt from four senior most SC judges

The four judges -- Justices Ranjan Gogoi, Kurian Joseph and Madan B. Lokur besides Justice Chelameswar -- released a letter they wrote to Justice Misra a couple of months ago

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Supreme court went into a frenzy as four senior judges revolt against CJI. Wikimedia Common
Supreme court went into a frenzy as four senior judges revolt against CJI. Wikimedia Common
  • The sudden revolt against Chief Justice of India (CJI) by the four senior-most judges of Supreme Court has sent the whole judicial system into an uproar.
  • The four judges accused the CJI of corruption and breaches in a surprise Press Conference.
  • Judge Loya’s death’s controversy, supposedly, sparked this reaction out of the other judges.

Divisions in the Supreme Court burst out in the open on Friday when four senior-most judges took an unprecedented step of addressing the media to accuse Chief Justice Dipak Misra of breaching rules in assigning cases to appropriate benches, with one of them pointing to the plea regarding the mysterious death of Special CBI judge B. H. Loya.

The hurried press conference was called to reveal CJI's corruption. Pixabay
The hurried press conference was called to reveal CJI’s corruption. Pixabay

At a hurriedly called press conference at his residence, Justice J. Chelameswar and three other colleagues said the Supreme Court administration was “not in order” and their efforts to persuade Justice Misra even this morning “with a specific request” failed, forcing them to “communicate with the nation” directly.

The four judges — Justices Ranjan Gogoi, Kurian Joseph and Madan B. Lokur besides Justice Chelameswar — released a letter they wrote to Justice Misra a couple of months ago, conceding that he was the master of roster but that was “not a recognition of any superior authority, legal or factual of the Chief Justice over his colleagues”.

Asked specifically if they were upset over reference of the matter seeking a probe into the suspicious death of Judge Loya, Justice Gogoi said: “Yes.”

Judge Loya's death is said to have happened due to a conspiracy. Pixabay
Judge Loya’s death is said to have happened due to a conspiracy. Pixabay

Judge Loya, who was hearing a case relating to the killing of gangster Sohrabuddin Sheikh in an alleged fake shootout in which BJP chief Amit Shah was named an accused (later discharged), died of cardiac arrest in 2014. His family has raised doubts over the circumstances in which Judge Loya died and have sought an independent probe into it.

Plea’s seeking probe came up for a hearing in the Supreme Court on Friday when the top court expressed concerns over it and said it was a “serious issue”. It asked the Maharashtra government to produce all the documents related to the case before January 15.

In a seven-page letter, the four judges said they were not mentioning details of the cases only to avoid embarrassing the institution because “such departures have already damaged the images of this institution to some extent”.

The clash among the judges in the highest court also comes in the wake of a controversial order in November in which Justice Misra declared that the Chief Justice “is the master of the roster” having exclusive power to decide which case will go to which judge.

The CJI called himself 'master of roster' further enraging other judges. Pixabay
The CJI called himself ‘master of the roster’ further enraging other judges. Pixabay

The CJI had given the order a day after a two-judge bench headed by Justice Chelameswar had passed an order that a five-judge bench of senior most judges in the apex court should be set up to consider an independent probe into a corruption case in which bribes were allegedly taken in the name of settling cases pending before Supreme Court judges.

Holding that the Chief Justice was only the first among equals, the four judges contended that there were well-settled and time-honoured conventions guiding the Chief Justice in dealing with the strength of the bench required or the composition thereof.

“A necessary corollary to the above-mentioned principle is the members of any multi-numbered judicial body, including this court, would not arrogate to themselves the authority to deal with and pronounce upon matters which ought to be heard by appropriate benches, both composition-wise and strength-wise with due regard to the roster fixed,” they wrote in the letter.

They said any departure from the two rules would not only lead to “unpleasant and undesirable consequences of creating doubt in the body politic about the integrity of the institution” but would create “chaos”.

The four judges also touched upon another controversial issue, the Memorandum of Procedure (MoP) on the appointment of judges over which the Supreme Court had locked horns with the government.

The four judges also touched upon other problematic issues. deliason.files.wordpress.com
The four judges also touched upon other problematic issues. deliason.files.wordpress.com

The government, the letter said, had not responded to the communication and “in view of this silence it must be taken that the MoP has been accepted by the government on the basis of the order of this court”.

Justice Chelameswar told the media that they were “convinced that unless this institution is protected and maintains its requirements, democracy will not survive in the country or any country… The hallmark of a democracy is independent and impartial judges.

“Since all our efforts failed… Even this morning, on a particular issue, we went and met the Chief Justice with a specific request. Unfortunately, we could not convince him that we were right.”

Justice Gogoi said they were “discharging the debt to the nation that has got us here”.

The government appeared to distance itself from the controversy, saying the judges should sort the issue themselves.

Minister of State for Law P. Chaudhary said: “Our judiciary is one of the known, recognised judiciaries in the world. It is an independent judiciary. At this stage, I think no agency is required to intervene or interfere. The Chief Justice and other members should sit together and resolve. There is no question of panic.”

the matter should be resolved among the judges themselves, says P. Chaudhary.

The Supreme Court split had an immediate political fallout, with CPI leader D. Raja saying after meeting Justice Chelameswar that Parliament will have to devise methods to sort out problems like this in the top judiciary.

Two judges, Justice S. A. Bobde and Justice L. Nageshwar Rao, are understood to have called on Justice Chelameswar. IANS