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Demonetization: Ruling LDF in Kerala to organize protest against currency ban



The abrupt demonetization move by the Modi government on November 08 ostensibly to track black and fake money in circulation without any proper plan to save the common people has made the common people go mad. While making this important announcement the Modi government obviously refused to take both people and the Parliament into confidence, thereby causing additional existential worries to common people.

Parliament is turmoil over the issue but neither PM Modi o not the ruling BJP is worried about the negative consequences of the seemingly ill-fated move.

The ruling CPM-led LDF in India’s Kerala state will organize a ‘human chain’ across the state on 29 December as part of its plans to intensify protests against hardships faced by people due to the strange demonetization scheme of the Modi’s BJP government. The protest is meant to force the Modi government to withdraw the currency ban announced on 8 November and compensate the people for their loss of revenues and suffering following the demonetization announcement in midnight by PM Narendra Modi.

The ‘human chain’ would be formed from northern district Kasargod to state capital in the south, Thiruvananthapuram, LDF convener Vaikom Viswan said.”Not only party workers and sympathizers but everybody who share the same sentiments on the issue can participate in the human-chain protest,” he said.

Before organizing the ‘human chain’, the front would conduct conventions in all panchayats across the state on 20 and 22 December to create awareness among people about the drawbacks of abrupt withdrawing high denomination notes. Party volunteers would also conduct house visits at the booth level on 27 and 28 December in this regard. Alleging that only corporates have benefited from the demonetization, Viswan said the decision to withdraw currency was taken by the Centre with “political motives.”

CPM party held the PM Modi “singularly responsible” for the “mess” in the economy due to demonetization and it has renewed its contempt notice against him for ignoring Parliament and continuously making policy statements outside Parliament and “running away” from a debate in the House.

Referring to Modi’s 8 November demonetization announcement, CPM leader Sitaram Yechury MP said, “The Prime Minister is singularly responsible for the entire mess in our economy and the harm it caused to common people because it was his announcement, as his personal decision and not that of the Union Cabinet. Let him be accountable to the House. Why is he running away from Parliament?” Observing that Modi was not present in Rajya Sabha when questions on the PMO were listed to be answered, he said, “The Prime Minister avoids coming to the House, but continuously makes policy statements outside in public speeches. He is continuously violating parliamentary norms and practices.” Parliamentary democracy is derailed.

Yechury added: “Even today, there was clear violation as the waiver of service tax on credit and debit card transactions was made outside Parliament. No tax proposal can be made anywhere else but in Parliament,” Yechury said, adding that the Consolidated Fund of India “will now get less service tax receipts because of the Prime Minister’s proposal”. “That is why it is contempt of Parliament. It is completely against the norms and traditions of Parliament. I have renewed my contempt notice today and urged the Upper House (Rajya Sabha) Chairman Hamid Ansari to consider it and give his ruling. A meeting of the Privileges Committee has been called,” he told a press conference in New Delhi.

Referring to Finance Minister Arun Jaitley’s statement that there was no rule to make the PM sit through any debate in Parliament, the CPM General Secretary said there are precedents when the then Prime Minister Manmohan Singh sat through two debates on the 2G spectrum allocation scam and the coal scam and replied to it.

“But here this Prime Minister is running away from debate,” he alleged. He said the demand for a Joint Parliamentary Committee to go into “all aspects” of effects of demonetization including “the deaths of over 100 people”, the “harassment” caused to the public and “several” BJP leaders allegedly being caught with large amounts of cash, has been supported by several major Opposition parties in Parliament.

The CPM leader said the demonetization move, according to Modi, had the objectives of fighting blackmoney, corruption and counterfeit. However, now the Reserve Bank of India says 82 per cent of the value of currency notes withdrawn have come back to the banking system, totaling about Rs 11.86 lakh crore and the old notes can be exchanged till 30 December. “At this rate, more notes than the value of counterfeit currency have been deposited and become legal in the banking system. So the PM has successfully converted black money into white and legalized counterfeit currency. None of his objectives have been achieved,” Yechury said, adding it “reveals a deliberate attempt to legalize counterfeit money and convert black money into white”.

Referring to French queen Marie Antoinette’s infamous quote ‘if you don’t have bread, have cake’, he said the PM Modi has become “Modi Antoinette as he is saying ‘if you don’t have paper money, use plastic money'” when 98 per cent of Indian economy is cash economy. Even in the USA which has the reach of banking system and internet network is vast, 46 per cent of the economy runs on cash, he said, adding Modi has been “talking of a cashless economy and probably living in something like a fool’s paradise”.

Meanwhile, many cash lords with huge sum of unaccounted money and gold reserves have been booed across the nation, though not everyone fraud is targeted by the government. A lot of crores of cash and gold have been taken away by the officals from the famous Reddy gang of Andhra Pradesh/Telengana in Chennai with strong political links and patronage. The Central Bureau of Investigation (CBI) has arrested a senior special assistant of the Reserve Bank of India in Bengaluru for alleged involvement in a currency exchange racket, Media reports said nine men were arrested in connection with alleged exchange of Rs 1.50 crore worth of banned currency notes.

The government had on 24 November stopped over-the-counter exchange of old currency notes at bank counters, but continues the facility at RBI windows until 30 December. There has been suspicion that old notes are being exchanged at a premium, helping the black money holders to whiten their ill-gotten wealth. The rich people use the poor for exchanging their black money with white ones from banks   by paying them some money. A report in The Times of India said the arrested RBI official and others were exchanging the notes at a 15-30 percent commission for exchanging the notes. While arresting some, however, the government seems to let others to continue to enjoy the exchange business, increasing their illegal wealth.

The Bangalore incident is another proof that illegal exchange of old notes is rampant despite the government and its investigative agencies keeping a hawk’s eye on all such activities after the demonetization of Rs 500 and Rs 1,000 notes on 8 November. A report in The Economic Times , however, said the premium for such illegal exchange of old notes have fallen drastically now and the money changers are even ready to pay an interest to black money holders in return for a one-year lock-in.

This reversal of trend, according to an economist quoted in the report, indicates that the black money has already entered into the system. Another reason being spoken about is that holders have found new ways to convert their black money into white.

Over years of practice allowed by the government, blackmoney has become an insuperable part of currency system of India. The debate on whether demonetization is a boon or blunder for 125 crore Indians is turning intense with former finance minister P Chidambaram and noted economist Jagdish Bhagwati joining with their views and allegations. Chidambaram said PM Narendra Modi’s currency ban is the biggest scam of the year and an “absurd, thoughtless move” that must be probed while Bhagwati has said demonetization is a “courageous and substantive economic reform that, despite the significant transition costs, has the potential to generate large future benefits”. But Bhagwati, like Modi and other BJP leaders, is drawing a clear political line and has not explained the “benefits” of suffering by the people of India. He is just confusing the affected masses of India.

Bhagwati’s argument, that the currency ban will check counterfeit notes “with the new notes being much less prone to counterfeiting” doesn’t have much support of evidence on the ground since there are already reports that fake Rs 2,000 notes are in circulation. Given the past experience, it is just a matter of time before fake notes enter the scene again in a major way. Bhagwati’s optimistic views on the currency ban is a booster dose to the Narendra Modi-government currently struggling to face criticism on the massive, overnight currency ban

Chidambaram’s allegation that currency ban is a scam with an ill-intent has generated debate in the media and the former FM has asked some right, pointed questions. For instance, Chidambaram questions the large-scale leakage of new Rs 2,000 notes to hoarders at a time when new currency is scarce even at bank branches. The incidents of new Rs 2,000 note bundles surfacing across the country to the tune of crores of rupees point to major lapses in implementation by the Modi government. These instances must be investigated and the likely involvement of bank officials needs to be probed.

Chidambaram is bang on when he says what calculations went to the government decision of setting the Rs 24,000 weekly withdrawal limit from bank branches when enough isn’t cash available. Similarly, his point that blanket ban on district cooperative banks has hurt the farmers is true given the experience in rural areas, especially in states like Kerala where cooperative sector plays a key role. The Modi government owes an explanation on these and has faced severe criticism for lack of planning, in turn, causing difficulties to public.

Chidambaram defending the Congress’ opposition strategy in Parliament — the PM should be present and speak on the issue—isn’t an unreasonable demand. Given the critical nature of demonetization for India’s economy and the hardships it has caused to its common people. There is no excuse for PM Modi or BJP for not taking the Parliament into confidence, stating the objectives, progress and rationale of the demonetization scheme.

Bhagwati notes that “around 80 percent of the currency in higher denominations has now been deposited back into bank accounts. Since individual deposits will now be matched with their tax returns and unaccounted deposits will be taxed, this will yield a windfall for the government, permitting large increases in social expenditures.” But this is something many other economists have questioned cautioning one should wait and watch as to how much of the unaccounted deposits the tax department is able to recover ultimately. For instance, take a look at what another world-renowned economist and former RBI governor, Raghuram Rajan, said on demonetization. “Black money hoarders find ways to divide their hoard into many smaller pieces. You find that people who haven’t thought of a way to convert black to white, throw it into the coffins or hundi in some temples. I think there are ways around demonetization. It is not that easy to flush out the black money.”

The Modi government could have introduced the demonization without harming the common peole and helping the rich and corporate lords.

While it is a fact that the demonetization has nudged several hesitant people to start using electronic payment tools, the idea of using large scale demonetization (sucking out 86 percent of currency by value all of a sudden), is contested by experts, who have been saying that such a push should have happened over a period of few years, rather than through a shock-treatment such as this putting lives at difficulty. Also, India needs to have strong laws to ensure customers and common people are protected in the event of losing money while making payment through mobile or laptop. As of now, that isn’t the case.

Chidambaram has raised certain important points on demonetization. His posers expose the government’s implementation flaws and immediate challenges on making the transition process smooth to end the cash-crunch.

PM Modi’s shock therapy has caught the common people unaware and hence they have no idea about the move and how to go about, while for the rich and corporate lords money is not at all a problem.

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Ethiopian airlines pledges to plant 9 million trees: “one for every passenger”




Exploring innovative ways in which the airline industry can be combined with a sustainable business outlook, UN Environment and Ethiopian airlines have forged a partnership that will focus on greening the airlines operations.

The MoU, signed in Addis Ababa this week, outlines several action areas to promote sustainability, most notably the development of the ‘Plant one tree for every passenger flown’ project, in collaboration with UN environment’s ongoing REDD+ programme in Ethiopia. The objective of the project is to plant 9 million trees in the name of Ethiopian Airlines in different regions of Ethiopia.

“We’re delighted to launch one of the first such agreements of its kind, with Ethiopian Airlines really raising the bar on environmental responsibility and green business,” said Erik Solheim, Head of UN Environment. “This sends a strong, positive message across the aviation sector.”

Other areas of collaboration include:

  • Greening Ethiopian Airline business through the provision of training on sustainable consumption and production, integrated waste management, hazardous chemical treatment and capacity development on air quality monitoring.
  • Development of environmental awareness raising materials for use in- flight entertainment.
  • Support for the Ethiopian Aviation Academy, with the introduction of a course on the UN Environment Sustainable Consumption and Green Economy Programme.

“Because UN environment and Ethiopian Airlines share common goals and objectives […] we wish to collaborate in areas of mutual concern,” said Juliette Biao, head on UN Environment’s regional office for Africa.

The signing of the MoU took place in the margins of the African Civil Aviation Biofuel Summit held in the Ethiopian capital this week, and follows the adoption of the “Single Air Transport Market” by African nations last January.

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World Bank Signals Strong Support for Nepal’s Transition to Federalism




The World Bank today signaled strong support for Nepal’s ambitious transition to federalism when its Board of Executive Directors approved a $200 million credit to improve public financial management.

The Fiscal and Public Financial Management Development Policy Credit is the first in a two-part program to support the Government of Nepal in establishing a framework for fiscal federalism and improved public financial management.

Nepal today is at a historic juncture as it transitions from a unitary to a federal democratic republic. Expectations are high that the new structure will deliver on greater equity and accountability,” said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan and Nepal. “This operation will help establish a fiscal framework that will ensure that the newly elected governments can deliver better services to all Nepali citizens.”

This operation will support implementation of the Intergovernmental Fiscal Arrangement Act; establishment of the National Natural Resources and Fiscal Commission; adoption of the Fiscal Responsibility and Budget Management Bill; strengthening of public financial management systems; improvements in budget execution; and reforms to improve revenue collection.

Commending Nepal for successfully concluding local, state and federal elections under the new constitutional framework, the Executive Directors welcomed the Bank’s strategic shift to supporting federalism to help avoid disruptions, improve service delivery and promote transparency and accountability. Directors encouraged the Bank to fully support Nepal’s transition to achieve inclusive development, especially in traditionally underserved areas, in coordination with other development partners.

This Development Policy Credit approved today is one of several components in the World Bank’s overall support on federalism in Nepal. Other support includes policy advice, new investment lending to improve service delivery and improve capacity, as well as restructuring of the existing portfolio to align with the new federal structure.

The World Bank also approved a $66 million credit to modernize Phase 2 of the Rani Jamara Kulariya Irrigation Scheme. The project will modernize sub-branches, tertiary canals and water courses so that irrigation water can reach farmer fields with optimal flows.  It will also help strengthen Water User Associations and provide agriculture production support.  During Phase 1, which closed in September 2017, the project upgraded intakes and feeder canals and initiated an agriculture development program.  Spread over a command area of 14,300 hectares, the project will benefit one of the poorest areas in the southwest of the Karnali basin in the Tarai.  Nearly half of the people benefitting from the project belong to the indigenous Tharu community.

The World Bank Group and Nepal

The World Bank Group (WBG) fielded its first economic mission to Nepal in 1963 to assess the country’s development prospects and challenges. It approved its first credit in 1969 for a telecommunications project. Since then, the World Bank has provided Nepal $4.75 billion in assistance ($3.48 billion in credits and $1.27 billion in grants). Nepal is eligible for concessional financing support from the World Bank’s International Development Association (IDA). During the IDA17 period (17th replenishment of IDA covering FY2015-2017), the World Bank committed $1.2 billion. This amount included additional financing of $300 million from the IDA Crisis Response Window to respond to the emergency needs after the 2015 earthquake. During IDA18 period (FY2018-2020), Nepal may access approximately $1.3 billion in IDA financing. This includes additional financing from the IDA Exceptional Risk Mitigation Regime financing window. The current portfolio comprises 22 active projects with a net commitment of $2.32 billion. In terms of the number of proj­ects, the energy sector makes up the largest share (5 projects) followed by agriculture and education (4 projects in each sector).

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Somalia: Poor rains forecast put food security, livelihoods at risk




Below-average rains forecast for Somalia could lead to devastating cattle losses and intensify malnutrition in the Horn of Africa nation, the United Nations food security agency has warned.

The grim scenario follows massive livestock deaths due to drought – up to 60 per cent of herds in some areas – that have severely damaged pastoralists’ livelihoods.

“Somalia is traditionally an agro-pastoral economy [and] livestock losses have severely affected its economy and people,” Daniele Donati, the head of the UN Food and Agriculture Organization (FAO) programmes in the country, said in a news release Wednesday.

“It is crucial that we continue to support pastoralist households build resilience against climate-related shocks by providing timely veterinary and feeding assistance for their animals,” he added.

According to the UN agency’s Global Information and Early Warning Report, while the country’s overall food security situation improved to some extent in early 2018, primarily due to large-scale and sustained humanitarian assistance, the number of Somalis suffering severe food insecurity still remains 170 per cent above pre-crisis levels.

Furthermore, recent cattle losses have also resulted in sharp rises in prices of livestock and livestock products, including milk. Pastoral households in the worst-hit northern and central regions have also reported increased household debts, drive by credit purchase of water, food and for care of their animals.

The losses have also severely hit Somalia’s exports, a country where the livestock sector accounts for approximately 40 per cent of the Gross Domestic Product (GDP).

FAO response

Responding to the situation, FAO stepped up its response, providing health services to some some 38.3 million animals, supplementary feeding interventions to close to 1 million, and delivered over 53 million litres of water in 2017.

In 2018, the UN agency aims to support some 2.7 million rural Somalis and has appealed for $236 million to sustain its livestock interventions, help farmers secure a good harvest and provide cash transfers to the most vulnerable so families can afford to eat while restoring their own food production.

“Providing livelihood support and cash in rural areas not only fights hunger, but minimizes displacement and the sale of productive assets that ultimately feed people and sustain their livelihoods,” it said.

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