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Editorial Today (English)
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- Spending proceeds of monetisation
Amidst weak recovery and heightened global liquidity, it is welcome that monetisation of infrastructural assets is gaining speed here. Notice that the National Highways Authority of India (NHAI) is reportedly seeking to monetise 7,500 km of road projects for a staggering Rs 3 lakh crore by 2024-25. But it would be downright suboptimal to earmark the proceeds solely for building more road projects nationwide, especially if superior social and economic benefits are to be obtained by gainfully investing in, say, a rail track, an education scheme or a health project, so as to augment infrastructure across the board.
Hence the pressing need for an innovative platform for independent appraisal, multi-stage review and time-bound approval of projects in the pipeline, akin to the Gateway Review Process in the UK. We do need to involve multiple stakeholders in project vetting, with the express purpose of eschewing conflict of interest of the entities involved in project preparation, appraisal and approval. The Public-Private Partnership Appraisal Committee at the finance ministry surely needs a more broad-based review mechanism. A robust policy framework is called for, with the requisite institutional capacity.
Reportedly, asset monetisation at NHAI would include greenfield expressways and access-controlled highways. About 18% of the ?111 lakh crore infrastructure investment pipeline is expected to be in the roads sector, primarily to augment road length and safety features. What’s clearly required is adoption of international quality standards for Indian roads, including such vital parameters as surface roughness index and large-scale use of automated road-condition monitoring systems. Meanwhile, toll collections at NHAI have grown at only a modest pace, and with reported debts of over Rs 2.5 lakh crore, it is now excessively leveraged enough for the Prime Minister’s Office to express concern. Monetising its real estate development rights would make perfect sense. Instead of excessive debt, take the road less travelled, NHAI.
- The TReDS route to trade credit
A Parliamentary Standing Committee wanting to make the Trade Receivables Discounting System (TReDS), an online factoring platform, mandatory for all the arms of the central and state governments makes eminent sense. This is a necessary but insufficient condition to infuse life into the MSME sector, hit hard by demonetisation, the subsequent slowdown and, then, the pandemic. Already, all companies with a turnover of ?500 crore have to mandatorily register on TReDS. Adding to this lot the railways and defence, with huge outstanding payments to MSMEs, will help ease the latter’s working capital shortage.
Failure to come on to the TReDS platform, which puts an end to the monopsony power of large buyers vis-à-vis small vendors, must be declared an offence. This will ensure compliance. Around 20,000 MSMEs and 1,600 buyers (with a turnover of over ?500 crore) are now registered on TReDS. The total value of dues settled over the platform is estimated at over ?30,000 crore. The process involves small suppliers raising invoices on large buyers, with participating banks and non-banking financial companies carrying out factoring, that is, taking over the bill collection and paying small suppliers their dues upfront minus a discount pegged to the creditworthiness of the large buyer, to whom the finance provider turns creditor. Realising the full potential of TReDS will reduce working capital costs and boost liquidity.
However much TReDS smoothens MSME access to trade credit, the sector still needs more capital, preferably as equity that needs to be serviced only when profits are made. The fund of funds, announced by the government last May, was meant to mobilise over ?50,000 crore to invest in MSMEs. It must be operationalised swiftly.
3.Map the future: Liberalising access to geospatial data is a welcome step helping multiple industries
Most of us unthinkingly use location-based, or geospatial data, while navigating roads or ordering a delivery service that uses it. This basic data, which is used as an input across industries, is sourced from overseas companies that produce location maps and sell their services over the internet. This is probably one key reason why last mile costs of delivery in India are an unusually high proportion of the total cost. Finally, that is about to change. In an important reform measure, government this week announced that India’s mapping policy will be liberalised. Existing restrictions on use of geospatial data will be junked to encourage domestic industry.
A sentence from the government statement captures the absurdity of the law thus far. It says that what is readily available globally does not need to be restricted in India. Therefore, restricted geospatial data will now be freely available for companies to create value added products. India’s mapping policies and geospatial regulations have been carrying the burden of 19th century realities when maps had high strategic value that justified secrecy. With the advent of satellites, cartography has changed dramatically. Therefore laws, including the 2016 legislation on geospatial information, were out of sync with contemporary reality.
The current change should be viewed as part of a larger push to help the economy benefit from India’s early public investment in space technology. More than 500 companies provide Isro with equipment for its space programme. There is a compelling case to expand this dimension and help Indian technology companies gain global competitive advantage. Creation of Indian National Space Promotion and Authorization Center (IN-SPACe), a vehicle to allow private players to use Isro infrastructure, is in the right direction. These measures will not just help domestic companies but also allow Isro to recoup some of its investment.
India’s private enterprises have been held back by compliances that long outlived their utility. Burdensome compliances are perhaps the bigger deterrent to nimble young firms emerging. Economic activity will get a big boost if sclerotic regulations are repealed. As in the case of geospatial regulation, it requires no additional effort or public investment. Opening access to valuable data with the government is one way of monetising assets. Resulting commercial opportunities give rise to larger tax collections. The government deserves credit for changing its approach to geospatial data.
4.Process as punishment: Supreme Court must scrap sedition, consider bail in long pending UAPA cases
Invoking sedition against 22-year-old green activist Disha Ravi, just days after politician Shashi Tharoor and six noted journalists were booked, flags a fundamental infirmity in the sedition law. Police officers cursorily reading Indian Penal Code’s Section 124A are quick to slap sedition on those whose actions and words incite opposition to the government. The guard rails imposed by the Supreme Court, requiring direct and immediate incitement to violence to qualify as sedition, have had no effect.
The zeal to invoke sedition brooks no meaningful opposition – in other words dissent – against any state or central government. Indeed, flawed application of sedition disregarding SC strictures qualifies for invoking contempt of court, if not outrightly quashing this archaic provision from the era of kings and colonial rule. SC must also take note of sedition cases spiking year-on-year from 35 in 2016 to 70 in 2018 and 93 in 2019. No less egregious is a concurrent trend of wielding the anti-terror Unlawful Activities (Prevention) Act (UAPA) against political activists.
Its unique provisions forbidding judges from granting bail where the case diary/ chargesheet show “reasonable grounds for believing” the accusations as “prima facie true” deny accused persons the usual grounds for bail. If trials were speedy, such provisions could have been countenanced. But NCRB data reveals 5,922 UAPA arrests between 2016 and 2019 against a mere 132 convictions. At 2019’s start, 3,908 UAPA cases were pending investigation from previous years in which police filed 257 chargesheets in 2019. Meanwhile, against 1,876 cases pending trial from previous years and 485 cases sent for trial in 2019, courts completed trial in just 113 cases, with a 29% conviction rate. Such a glacial pace with no prospect of bail heightens the injustice towards pretrial/ undertrial prisoners and those ultimately acquitted. In UAPA cases of political activists with no apprehensions of them absconding, bail not jail must be preferred.
5.India’s new mapping policy is a good step | HT Editorial
The government has announced radical changes to the country’s mapping policy by liberalising regulations on geospatial data and maps. With this constructive step, the Centre aims to make geospatial data and modern mapping technologies available to Indian companies so that they are not dependent on foreign resources. The existing regime is outdated since it imposes significant restrictions on the mapping industry, and requires Indian companies to follow a cumbersome system of pre-approvals and permissions to get licences.
In recent years, there has been an increase in the use of geospatial data by many businesses such as app-based delivery companies, telecom and banking, to name a few. The private sector has been demanding a more comprehensive, accurate, granular, and constantly updated representation of geospatial data. The government too needs similar data for national infrastructure projects such as the creation of industrial corridors, deployment of smart power systems, modernising urban transport systems, and emerging initiatives such as Digital India and Smart Cities. But it is nearly impossible for the government alone to map the entire country, that too with high accuracy and quickly.
With more players coming into the fray, this process will speed up. While Indian entities will be free to use this data and build on it, foreign entities and foreign-owned or -controlled Indian companies can license from Indian entities. This can augment public-private partnerships. The government also expects an increase in investment in the geospatial sector by private companies. The next generation of mapping technology is coming into its own, and the policy will enable Indian innovators to create substantial advances in mapping domestically, and eventually play a role in the sector globally.